
Machine Money and People Money - runesoerensen
https://medium.com/the-wtf-economy/machine-money-and-people-money-29b497eeb9d0#.b283x4mz7
======
weddpros
France already has something that smells a lot like UBI, except it's not
Universal (RSA). France also has free education and health.

Now if you judge by the numbers, it's not really a success: high unemployment
and low people satisfaction... plus even higher expectations about "the
State". Administration is huge, costs a lot, and imposes a very rigid barrier
between people and "the State": it's a country of bureaucrats. Employers and
businesses are designated as "ennemies" in peoples minds, and the USA
represents the ultimate Boss in the game.

In addition to RSA, France has every social benefits you can imagine...
because RSA can't adjust to each situation: disabled? single mother? 6 kids?
tough job?

So if you want to imagine your country with UBI, study France first. Then ask
yourself if you'd like your country to be even more like France than France
itself. A country where equality is the buzz word, and Liberty is totally
absent of every speech.

I made the decision to leave this country because what I have in mind for my
life is not 5 kids with no job... I want to work, to innovate, to create value
for people, and France was making it much harder to achieve. But they have RSA
and strikes. Their choice.

I do understand it sounds romantic to an american, just like USSR always
sounded romantic to french people.

~~~
ucaetano
[Expat living in France, leaving soon]

France is a very bad example of UBI. I see it as a society where everyone
expects their rights, but no one sees anything as their duties. People see all
public (as in owned by the society) assets as responsibility of someone else,
not themselves. In other words, it is a terrible place to implement UBI.

It is the worst type of selfishness: instead of "everyone should take care of
themselves" it is "someone should be forced to take care of others, but not
me". It is easy to see how that leads to the very bad Nash equilibrium of the
tragedy of the commons.

Is that a product of the social support system, or is the social support
system a product of that?

That being said, there is a lot that worked in the French system, specially
around making maternity economically sustainable: France has one of the
highest fertility rates in the developed world, while maintaining a high
female workforce participation rate. This should be copied by other countries,
specially ones (such as Germany) facing a population crisis.

I agree on your point about innovation, I see France as a country far too
worried about protecting its past: every tradition is sacrosanct and protected
by law. When you protect the past, you outlaw the future.

~~~
weddpros
When you expect your very subsistance from the State, when you start to
believe that "it costs nothing, because the state is paying" (said french
president lately), then you lose what the french have lost: responsibility.

As for maternity, it has to be seen if population growth is better than
prosperity for happiness. The Swiss are at the other extreme: prosperity and
aging population... yet they are the happiest in the world.

~~~
ucaetano
We all know that having no babies isn't sustainable in the long term. Having
babies is an extremely important social function, that most developed
societies are leaving behind.

I'm not advocating for the French model (I do advocate the Swiss model), but
to dissect it and try to adopt what works, ignoring what doesn't.

Of course, sometimes they're two sides of the same coin, so you can't have the
cake and eat it too.

~~~
drewrv
Continued population growth isn't sustainable either. The economic problems
caused by low birth rate can be solved through immigration.

~~~
ucaetano
Yes, they can! And IMHO they should. But that's a very controversial
suggestion these days...

IMHO the largest problem humanity will face in the next 100 years might be
decreased fertility rates. Unless our robot overlords solve that first.

~~~
vkou
Why would the human population shrinking to, optimistically, say, 3 billion
people be a problem? Looking at our productivity, and unemployment rates, we
have the labour, and the productivity to assist the elderly.

~~~
ucaetano
Because of the dependency ratio. An inverted age pyramid would wreak havoc in
social welfare systems, unless you were able to triple or quadruple labor
productivity.

Today we barely have the labor and productivity to assist the elderly, imagine
if the situation worsens dramatically.

Sure, there's always the chance that AI and robotics and singularity will
change everything and scarcity will be over and so one, but we shouldn't bet
our chips on that.

~~~
vkou
We have already quadrupled labour productivity, compared to the 60s. Including
agriculture, we have multiplied it by more then a factor of ten, compared to
the start of the 20th century.

We barely have the labor and productivity to assist the elderly for the same
reason we barely have the labor and productivity to fix potholes on my street,
or keep human waste out of a San Francisco alley (All while we sit at 7%
unemployment.) We don't care to.

~~~
ucaetano
And how certain are you that we'll do the same in the future?

~~~
vkou
I don't have to be. Since we're far more efficient now then we were half a
century ago, even if workforce participation goes down, we would still produce
a lot more then we did in the 1960s. Relatively speaking, regressing to that
level of consumption would be a relatively minor lifestyle adjustment. Let's
also not forget that the elderly can, and do useful work.

Compared to the problems of overpopulation, this doesn't even register as a
crisis.

~~~
ucaetano
Sorry, but that doesn't make sense to me. Look at today's highly unbalanced
budgets around the world, and heavily deficitary pension systems. How would
that work if you decreased revenues by 10% and increased payouts by 70%?

You're missing out on the dependency ratio. Take the Euro area, for example,
today, for every 2 people in work age, there is 1 person being sustained
(youth or pensioners), by 2060, for every 4 people in work age, 3 will have to
be sustained, an increase of 50%, and it will be far more expensive than
today, due to health care costs for the elderly.

Work age population will fall from 335M people today to 300M in 2060, while
elderly will increase from 90M to 150M and youths will stay roughly the same.

So 35M fewer people paying taxes, and 60M more people needing support.

~~~
vkou
This goes right back to my earlier point with respect to what our society
prioritises.

There are more empty homes in America then there are homeless people, but that
doesn't mean that the richest country in the world cannot afford to have a
roof over its head.

This is not even considering the easy way out, which is more immigration.

------
vminkov
Guys, most people commenting here are having at least 2x the avg income of
their home country and are dangerously wrong about the motivations and the
right incentives for the poor.

You are shooting yourselves and the economy in the leg if you give everybody a
UBI. People need to be given incentives to become more productive and that's
the only right path in the world's prosperity. One day when automation reaches
that state of the art form, everybody will have lots of food, energy and
shelter not because they are GIVEN for free, but because they are PRODUCED
almost for free - because of technology and competition.

We can reach that state if we focus our efforts in those essential areas and
the government can help by providing incentives and (maybe) cheaper credit to
the venture funds in those areas.

P.S. I have been raised in a post-commie country in a poor family and have
gone through the path of breaking out of poverty. I have received lots of
"free" stuff and welfare along the way, both for nothing and for the promise
of educating myself. The first is dead wrong, the second is the deal breaker
to me.

~~~
rglullis
> People need to be given incentives to become more productive.

That is the issue. With increased automation, we don't need _people_ to become
more productive. We just need people to continue being consumers of all of the
crap that we keep producing for super cheap. And this is the case in most
developed countries.

Think of the amount of bullshit jobs that we keep around just for the sake of
justifying one's worth as a productive member of society. Think of all of the
"me-too" apps that we see for every closed platform. Think of all of the
overpriced espresso you pay at the hipster cafe to some barista that might be
$100k in debt for their French Literature B.A, and dreams of becoming a
journalist writing for $150 a piece to HuffPo.

None of these people are actually needed by the system, except for their
capacity to _consume_. UBI can be a solution for it. If it actually becomes
_universal_ and it is used to _replace_ the broken means-tested welfare
methods, I'm all for it.

~~~
petra
True there are any bullshit jobs. But is this really the majority of the
economy?

Advertising share of gdp is at ~2%. Healthcare share is ~20% and rising. And
from my experience as a non- It worker, most of the jobs deal with useful
stuff (however inefficiently they do so).

~~~
jessaustin
_Healthcare share is ~20% and rising._

Ask anyone who works in healthcare: the portion of their work that is growing
is _mostly_ "bullshit". Insurance companies and other payers like Medicaid are
constantly innovating in new techniques for delaying and denying payment. It
isn't clear how much of that is just a feedback loop, as providers hire more
admin staff to deal with billing and then feel pressure to increase billing to
pay for that staff, in response to which payers feel more pressure to deny
payment, but there's definitely a lot of "bullshit" going on.

------
apatters
As it happens I'm reading this piece from Savannakhet, Laos PDR. No disrespect
to Tim but when you spend time in places like Savannakhet, it's easy to see
just how detached from the reality of the world population some of these self-
proclaimed "alpha geek" futurists really are.

A few points I take issue with:

1) Like Keynes before him, O'Reilly misses the point that the majority of the
world's population doesn't participate in open, free, or global markets. They
are permitted limited access to local markets by oligarchs, who rarely grant
that access out of benevolence, and maintain enough military and police power
to revoke it if necessary. This is probably the single biggest reason that
poor countries stay poor. Technology hasn't solved this problem because it's
political. The article doesn't consider it.

2) Tim thinks that more automation is going to change the world. And of course
it has already changed the developed world and will change it even more. But
in much of the world, the labor of many people can be had for very very cheap.
When you can hire an unlimited number of people for a few dollars a day, which
in many developing economies is easy, there is little incentive to automate.
In fact there is a disincentive -- you would rather keep everyone working
because unemployment leads to unrest. So subsistence economies, developing
countries with big rural and agricultural economies plus a big workforce --
they are not automating and have no interest in doing so. The pace at which
these places change will remain slow.

3) The article touches on our great struggle ahead to overcome climate change
-- as these articles written by humanity's great thinkers always do nowadays.
But as the economies under these oligarchs develop, how will we convince them
to do climate-friendly things when it would increase the price they pay for
energy and slow their rate of growth? Climate studies alone won't do it --
some combination of political pressure and the direct economic impact of
climate change might, but they will fight it hard.

All this is not really a refutation of the article, which makes plenty of
valid points -- but it also makes these rosy predictions about the whole world
being rich and automated in two generations' time, which makes sense if you're
talking to tech heads all day, but totally ignores the non-tech realities that
dictate the lives of most of humanity. The future is not evenly distributed,
and the future future will probably be even more uneven.

------
brenschluss
The notion that premium money is paid for 'authenticity' and 'creativity' is a
laughable misreading of current marketing tactics.

More like: branded 'creativity' is a way to create artificial scarcity through
market segmentation, to create goods that don't easily compete with each
other. That's why people can drink 'artisanal coffee' for $5/cup and a Dunkin
Donuts for $1/cup and not feel ripped off even if one store is next to
another.

To take this at face value and to think about "Creativity money" is to be
completely ignorant about the human labor in creating things that are "not
Creative". That Dunkin Donuts coffee, your underwear, a television, a
utilitarian tool, anything in the 'basics' were all made with some
amalgamation of human labor and machines/tools.

So sure, machines get cheaper, human labor doesn't. So everything is a mix of
things that get cheaper and and things that don't. "Creativity" has nothing to
do with a human vs. machine money issue and just muddles the conversation.

~~~
visarga
It's not like creativity is the sole domain of humans. AI is becoming more and
more creative, too. There are AI systems that paint, compose, play games and
music, dance and even write poetry. They are evolving rapidly. Much of the
creativity of the future will come from machines, or teams of human and
machine.

~~~
brenschluss
You miss my point exactly. "Creativity" is a marketing myth because it divides
the world into 'Creative' and 'not-Creative' disciplines.

Anecdata: Most of the artists I know hate the word.

~~~
TeMPOraL
> _Anecdata: Most of the artists I know hate the word._

Not surprising, since most of the "creative" work has nothing to do with
creativity. You don't have much room for creative expression when you're paid
to paint UIs or make magazine layouts or make cheap landscapes for sale.

The artists I know say that creativity doesn't pay the bills; it's something
they'd love to do, but struggle to have time/means for.

~~~
riprowan
I can't get paid for the musical intellectual property I create, so I get paid
for the software intellectual property I create.

Meanwhile everyone around me coding is listening to streaming music at
$0.000003 per minute not imagining that one day their intellectual property
might be similarly valued....

------
mindslight
I suspect essays like this one will come to be viewed as leading indicators of
the ultimate failure of Keynesian economics. Hopefully within a few decades,
rather than a century.

The chief economic problem we face today, disempowering the middle class [0]
and keeping them working full-bore, is the creation of _rent_. UBI seems like
a solution because it proposes to alleviate some of this rent - but in an
urban area (in-demand housing), housing rent [1] will just increase to eat up
the UBI. This will further cement the divide between urban rat racers and
rural poverty.

What we need is _sound_ money - an end to this 45-year policy of forcing
inflation. In a sane technological economy, the price of goods and services
should trend _decreasing_ \- after all, price is _the metric_ by which an
economy optimizes. Technology has become so powerful that the decreases are
still somewhat occurring for many things, leaving anything that can be
financialized (and thus used to conjure new money) shooting through the roof
to keep the average increasing.

If the middle class actually had a place to _save_ [2], their marginal utility
for each dollar would drop and they would gain negotiating power (liquid
savings creates runway), letting them naturally demand higher compensation or
lower working hours.

[0] The term is a bit overused, but for a good reason - sustainability. Only a
few can ever be upper class, by definition. And the lower class does not see
their own situation as desirable.

[1] Including both money directly paid to landlords, as well as rent payed to
banks based on valuations only constrained by said rent.

[2] As opposed to be fleeced by the Wall St bubble casino over passive
"investments".

------
k__
Universal Basic Education is what we need.

It should be possible for everyone at any age to aquire every skill.

~~~
reustle
Isn't that roughly what we have already? Half of my day though high school was
spent at a tech school learning programming and networking, for free. Kids
were learning dental, medical, carpentry, electrical, automotive, etc.

~~~
k__
Not for people who didn't have good education and lost their 10 years job to
automation.

------
known
[https://en.m.wikipedia.org/wiki/Chiemgauer](https://en.m.wikipedia.org/wiki/Chiemgauer)
is alternative to UBI

~~~
damptowel
Bernard Lietaer has written a lot on complementary currencies, such as the one
above. His basic point is to have a heterogeneous money market, as opposed to
the current monoculture. Every currency needs to fulfill a social goal, or
number of those, and the complementary (not "alternative") currencies can by
designed to act countercyclical to the dominant currency, attenuating the
business cycle (he notes the Swiss "Wir" Bank as a good example of that).

[https://en.wikipedia.org/wiki/Bernard_Lietaer](https://en.wikipedia.org/wiki/Bernard_Lietaer)

------
negamax
Universal basic infrastructure is what we need a push towards. Next to free
energy, education, medicine.

~~~
atemerev
There was a country with all these things already implemented. Education was
free on all levels, medicine too, nearly free energy and infrastructure.

This utopian place was called the "USSR". And all was rosy and shiny there.

~~~
throwanem
There is a perception, common across pretty much the entire US political
spectrum, that we have nothing to learn from the history of the Soviet Union,
and no reason to fear any similarity of outcome.

I won't comment on the origins of this perception, or its accuracy. I'll just
say I sure do hope it turns out to be correct.

------
bawana
Money was a fungible proxy for stuff people made/harvested/gathered. The first
distortion was its use on speculation/investment/insurance- in a word,
finance. These instruments allowed value to change in the absence of
supply/demand of the real product they represent. Markets were invented for
these instruments. And ‘financial’ money now dwarfs all other kinds of money.
Take forex for example. We need to restore the purpose of money as a tool for
living. Financial money should only be used for real transactions. Not more
finance. And not transactions with machines either(machine money). As we
revalue humans this way, our lives will return to balance.

------
jondubois
Separating currencies into machine money and people money won't make any
difference - People will just create exchanges on which they will be able to
trade between the two and it will basically reach an equilibrium - Same as
before, except more complicated (and more wasteful).

The real solution to inequality is to introduce a tax on capital holdings. The
more assets are owned by an entity in terms of total dollar value, the higher
the tax bracket should be.

You could have 0% tax per year for asset holdings below $1 million and the %
would progressively increase to 100% tax for companies with a capital worth of
$10 trillion or above. That would make sure that corporations don't get too
big and will encourage people to invest their money in smaller companies.

This would also encourage large corporations to break themselves up into
smaller parts (to avoid taxes) - But that will be a good thing, there will be
more CEO/executive jobs available and it would be more interesting for
investors since they will now be able to be more selective about which
specific parts of a previously huge corporation you want to invest in and
stock price would move independenty.

Extremely wealthy individuals (billionaires) will be incentivized to give away
large parts of their wealth to charity in order to reduce their taxes down and
bring their asset holdings to an equilibrium.

This policy needs to be enforced globally (E.g. a UN resolution/international
treaty) to avoid flight of capital.

But I think even with flight of capital factored in, countries that enforce
this tax will be much better off economically due to the massive
inefficiencies of large corporations.

~~~
Ntrails
I will never understand why people think answers to things like this are
_simple_ and can be resolved with a single magic bullet sans unintended
consequence.

> This policy needs to be enforced globally (E.g. a UN
> resolution/international treaty) to avoid flight of capital.

The UN does not have the mandate to impose tax laws on independent nations.

If it did, you have to re-write the entire legal framework countries to deal
with pensions, trusts etc. Oh, and that's before you find interesting new
kinds of charities being set up in various domiciles with different laws for
qualification... So we now need to impose our version of those laws too.

Basically your solution is to have a global dictatorship where everyone does
what you say, which is for their own good anyway - _because your vision of
what is right and proper is the only valid one_. We're going to impose these
laws and we're going to back it up with this Gun borrowed from the UN.
Democratic governments controlling their own tax laws? Psssh. Sod that eh? And
since we have this power, let's get everyone on the same page in some other
important things. Police powers, information gathering and sharing,
biometrics, so on and so forth. It's for the best right?

>But I think even with flight of capital factored in, countries that enforce
this tax will be much better off economically due to the massive
inefficiencies of large corporations.

What inefficiencies are these? All you've now done is move all the money off
shore, and agreed to collect less tax because the subsidiary in your country
has no assets to tax. They're all leased. No profits are made due to IP costs
going to offshore companies (or a million subsidiaries or some other soln that
doesn't involve paying stupid tax rates).

------
js8
Machine Money, aka why use a simple solution when we can have a complicated
one? Ahh, humans.. :-)

Machine Money, compared to Universal Basic Income, will require lot of
government regulation regarding classification of what is produced by machines
and humans and at what cost. Although I am sure, figuring all this out will
create a lot of jobs.

------
phkahler
There's a contradiction here. If the machine money is taxed and redistributed,
but the cost of the items produced by the machines is exponentially going to
zero... Your revenue source for UBI is going away unless they artificially
keep the price of those goods up. If you just let the price of machine
produced goods approach zero, then everyone benefits from the lower cost of
stuff. I have yet to see a mathematical analysis of UBI, just hand waving.

------
riprowan
Why Milton Friedman supported guaranteed basic income:

[https://medium.com/basic-income/why-milton-friedman-
supporte...](https://medium.com/basic-income/why-milton-friedman-supported-a-
guaranteed-income-5-reasons-da6e628f6070#.jo2utxhf6)

Most people are shocked to hear that Friedman held these views.

------
hamilyon2
I always thought that there in fact is two or more kinds of money, but for
another reason. It is strange that we pay for irreplacable natural resources
with same money which we pay for easily copyable information.

~~~
bksenior
Why? Demand is demand. It doesn't care where or what it is demanding.

------
wearenotfooled
UBI is a scheme to create even more suckers working super hard to give 20% of
their income to sharing economy oligarchs

~~~
bkmartin
I think that is rather cynical. I think that UBI is an attempt by some to
solve a problem that society has had a very hard time dealing with. How do you
make sure everyone's needs are provided for while also keeping them
incentivized to be productive members of society so that there are enough
people creating real value in the world to keep it all in motion. The struggle
of poverty is real, I've lived it and seen it first hand. The solutions are
certainly more complex than UBI (as if that would be simple). This discussion
is paved with good intentions, even if you disagree with what the outcomes
will be.

------
thedlade
I think legislations should be brought in to prevent machines from taking over
most of people's jobs but just a percentage in different sectors.

With human nature, UBI is never going to work, it is just over-glorified
welfare.

