Ask HN: What can startups do to increase prosperity for everyone?
I think basic income is important to do but decreasing the cost of living is a critical component as well. I'd be very interested to hear thoughts from the HN community about what we could be doing here.
Edit: please respond in the main thread so we don't get an unbalanced comment tree. I'll be in the discussion here for a couple hours, but if it feels like there's momentum in the ideas we might do a proper Ask HN about it next week.
Things that would help everyone, regardless of income, without depending on a radical restructuring of entitlement spending, that seem like things startups could actually do:
* Equally credible alternatives to university education for professions that don't involve students shouldering $100k-$200k in debt based on decisions they have to make when they're 18 years old.
* Empirical, blinded, skills-assessment based turnkey hiring solutions that outperform interviews for non-technology roles like marketing, purchasing, &c, so that people who avail themselves of alternatives to universities can get good jobs regardless of social signals.
* Tools that make it possible for companies that today exploit the 1099 labor classification to cost-effectively offer benefits and handle taxes, to make on-demand employment legal and fair while remaining competitive.
* Alternatives to patient-present doctor-mediated health care to cover the 80% case in which doctors are expensive overkill; some combination of telemedicine and nurse-practitioners.
* Technology-mediated services that drastically improve outcomes in K12 education.
* Modern logistics-driven solutions for inexpensive high-quality child care.
* Products that offer serious competition for incumbents in the financial sector to bid down the 7-10% of the economy taken by financial services.
* Tools to improve engagement with local elections and make it easier for people to take flyers on standing for election.
* Modernized fee and fine collection for things like traffic and parking tickets, which currently default out to "charging minimum wage workers $2,000 to get the boot off the car on which they happen to owe 3 parking tickets".
* Similarly: a way to do things like enroll a credit card with your local government to automatically pay fines and fees at their reduced early-payment rate --- which is something you might be able to do without getting permission from local governments.
Financial desperation squeezes the cognitive juice right out of you.
In 2013, Harvard researchers did a study of how financial stress affects decision making. Denise Cummins, Ph.D. explains their findings in Psychology Today:
"When the cost of [a car] repair was increased to $3,000, a very different picture emerged: The cognitive performance of those at the upper end of the income distribution was unaffected by the increase. But those at the lower end suffered a 40% decline! The authors interpreted this to mean that scarcity impaired people’s ability to think clearly. The threat—even an imagined threat—of a large bill made it difficult for poor people to focus on the cognitive tasks at hand."
Financial stress impedes human thinking / problem solving. People get consumed by the short term challenges in front of them, and can’t see the big picture.
I was thinking about that, and about the story of Ferguson Missouri, where some huge portion of the (largely African American) population had arrest warrants over petty fines that had blossomed through late fees and default judgements into financial catastrophes levied by the (largely middle class white) municipal government, with the last few suggestions.
Instead of Universal Basic Income, how about Universal Basic Food Stamps?
It feels like, rather than a basic income, we need two orthogonal currencies: one for necessities (food, rent, utilities) and one for niceities. Everyone would just have two numbers in their bank account, for each of the country's two official currencies. Basic income would be paid in one, while all income from trade in the economy would be in the other.
Economists liken money to votes for demand in a decentralized allocation scheme. They liken taxes and fines to punishing people by taking away their voting-weight in said scheme, relegating them to suboptimal options that they wouldn't have voted for. (Basically, the equivalent of pairing them up with a non-first-choice partner in the Stable Marriage Problem.)
This works fine at a theoretical level where every agent is participating in economy X without depending on economy X (e.g. an economy consisting wholly of foreign investors), but falls apart when people are expected to also eat and live in some of the things they vote for, because those things have inelastic demand—taxing/fining people doesn't make them consume any less of those things, because they need to consume those things; and frequently inelastic supply—there just aren't options for places to live below a certain cost, because all the suppliers' prices are being "floated up" by said inelastic demand.
If, instead, we said something like:
• A new currency—"necessity dollars"—is allocated to people by the government each month to pay for a basket of goods with inelastic demand. The original currency persists, renamed "nicety-dollars."
• Necessity-dollars can only be used for goods and services with inelastic demand (as found by the BLS during CPI calculation), though they are not restricted to goods with any particular "moral cleanliness" value (so cigarettes are just as applicable as bread†.) This is enforced by only permitting certain sellers to accept necessity-dollars, and only on certain transactions.
• At point-of-first-sale, necessity-dollars are actually sent off to the government and the seller receives nicety-dollars instead. There's probably some exchange-rate involved, that the government can manipulate to some interesting end. Thus, companies never hold necessity-dollars, or pay out in necessity-dollars; they're just a thing individuals have and transparently give back to the government at payment-processing time.
• You can't tax or fine anyone in necessity-dollars. People just receive them, hold them in an account, and spend them voluntarily, and that's it: no other operations are valid. Importantly, banks aren't allowed to impose necessity-dollar fees on necessity-dollar accounts for holding them, and so forth. (They could impose nicety-dollar fees on fancy necessity-dollar accounts, but see the next point:)
• If you get taxed or fined or liened or collected on for anything in nicety-dollars, and you don't have enough nicety-dollars, this doesn't "spill over": you can't pay a nicety-dollar cost in necessity-dollars. You're not allowed. This means that if you run out of nicety-dollars, you're effectively bankrupt (in all the current meanings of that word—all the same machinery kicks in), while still being able to afford necessities. Your niceity-creditors get chased off/annulled by your bankruptcy, without disrupting your ability to afford necessities.
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† Addiction causes need just like hunger does. You can't really economically disincentivize addicts from seeking a fix; that's basically definitional. Addicts under pressure commit crimes to get the money to pay for their fix, rather than going without. Just freakin' build the infrastructure to treat addiction, if you don't want people spending taxpayer money that way.
This sounds like unnecessary complexity as well as something that could cause problems. I don't think there is a need to restrict people to necessities when paying them a minimal income, they'll do that themselves.
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.
> I don't think there is a need to restrict people to necessities when paying them a minimal income, they'll do that themselves.
I don't actually want to restrict people from deciding what to buy; I want to restrict the government and corporations from wielding the tool of economic incentivization—a tool that works in most of the market—near the margins, where it just becomes a punishment to no end.
Left to their own devices, UBI will be treated as "free votes" in the economy: it will be entirely soaked up by corporations raising prices, because people will still have all the same "non-free votes" they had before, along with the free ones, and everything will adjust to the expectation that people spend both.
Along with this, the government will continue to levy harsh fines, liens will continue to be applied, etc. In UBI, these will take away the money that was supposed to be people's social support. (In fact, in the "pure" UBI most advocate for, these will take away more their social support than is possible today, since we'll have also disassembled welfare, disability assistance, medicare, pensions, etc.)
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Now, you're right in that people's needs vary. I don't agree that (pure) UBI is the best possible solution to this problem; it's just an easy one to conceptualize.
Do note that, of your hypothetical scenarios, I'd posit that the "fancy chair" is probably a medical device (and the entire healthcare system would be paid only in necessity-dollars; all demand there is inelastic.) And the book is probably a nicety. (Why not use a library? Unless it's a textbook—those are really, really inelastic, which is why they've gotten to be as expensive as they are.)
The flight situation is the truly confounding one. I would agree that this is something that people should be able to do. Yet most flights are for leisure or business, and it's nearly impossible to distinguish from any sort of government-verifiable context why someone is flying somewhere. There's no component of the economy-wide pricing of flights to pick out as being inelastic demand. It's a good example.
I'm not sure what to do about it, though. Even if you allocated people regular (nicety-dollar) UBI along with the necessity-dollars I've been talking about, that UBI would still suffer all the same problems plain UBI does. Flights (and anything else you could spend the UBI on) would just get more expensive by exactly how much everyone was getting.
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Now, maybe I'm coming at the problem all wrong. The problem is that suppliers of goods with inelastic demand right now get to charge $(elastic demand + inelastic demand), whereas everyone would be better off if they could only charge $(elastic demand), and then get the $(inelastic demand) paid from some other source.
You probably don't need a separate currency to do that. You don't need UBI, either. You just need, basically, the cheapest house in a market to cost $0, and for all other houses in that market to be shifted down in price by that same adjustment. That could be accomplished with simple government rebates, probably. Find products+services with inelastic demand, write people rebates for the amount of that inelastic demand, done.
Yes, having more to lose can make people more cautious. But if you're worried about money's effects on the poor then you should be even more worried about its effects on the middle classes and the rich, since they have even more to lose, right?
The idea that the poor can't handle money or would somehow be better off without it is silly paternalistic thinking of the sort that basic income is supposed to do away with. The income streams we're talking about are pretty modest and all the evidence so far is that most people can handle it.
Its effects on inflation are overblown too. Other than real estate, we're not seeing much in the way of inflation. And on the margin, an income that's not tied to a job makes it easier to move to cheaper places. (Why do you think so many retirees live in Florida?)
> it will be entirely soaked up by corporations raising prices, because people will still have all the same "non-free votes" they had before, along with the free ones, and everything will adjust to the expectation that people spend both.
Is there any evidence for this, or is this purely conjecture?
There is some evidence, e.g. Government childcare subsidies in Australia. On the other hand, targeted subsidies may be worse than basic income in this respect.
To my mind, Universal Basic Income (UBI) is the most radical attempt to
address the complexity that is introduced by trying to only give
benefits to the "deserving": there's often a view that social benefits
(food stamps, income support, child benefits, health care, etc, etc)
should only be given to those who "need" it. So then you need to:
- decide who actually "needs" the benefit
- figure out how to recognise these people ("means-tested" benefits!)
- catch the people defrauding the system
Instead, you could just say, e.g. for the case of child benefit, that every
child receives $400/month and get rid of:
- the complexity in deciding who gets $400/month
- the enforcement of fraud
The "underserving" middle- and upper-income will receive this money too,
but it doesn't matter - it's effectively coming out of the higher taxes
they are paying already.
UBI is just a generalization of this idea to all benefits.
Introducing two kinds of dollars smacks, to me, of the same mindset that
introduced means-testing/etc in the first place: "we don't want fraud", "we
want this to only go to deserving purposes". Lots of complexity, hard to
manage, and for no convincing benefit.
Yes. Even structuring a two-tier payment type implies central planning and the thought that some group of people in front of a whiteboard can choose best for others who they have never met.
Even if some people waste the money on drugs the net benefit is still higher. The person determined to waste whatever income, in whatever form, will do so. The person who just needs cash to make ends meet doesn't need ever changing rules and calcified structures to try and work around.
Just give everyone the money, including the entire buildings of people who follow around making up rules and then making sure the rules are followed.
Welfare by basic income can be run by a set of scheduled tasks in a server. It's sheer simplicity outweighs all other drawbacks. Add a flat tax rate to the income side of the ledger and shackles are really starting to fall off.
I don't see how this will get rid of the need to enforce fraud.
Such a system will still require systems to prevent multiple claims, ensure people aren't claiming for others and making sure people aren't claiming on behalf of dead people.
Sure you remove means testing, but that is only one part of it. The measures which will need to be in place will still require a lot of bureaucracy.
#1 One system, one set of rules, easier to administrate. Much like single payer healthcare systems have less fraud.
#2 Uniquely, correctly identifying every single person participating in the economy is currently being done by data aggregators like LexisNexis (nee Seisent), ChoicePoint, others. Basically a private (non govt) RealID. This could and should be a government function.
Do you agree with the fact that UBI means less fraud and less bureaucracy? I can safely assume that you do. Attempting to reject solution by calling it imperfect is a strawman.
Nowhere in my posts did I seek to reject UBI. In fact, I am excited at the possibilities it may bring.
The claims made by davidgay are flawed and if UBI is a good policy, it should work despite those claims.
Making weak, unsubstantiated claims about anything is a good way of undermining it.
My criticism here is to stop muddying of the waters and focus the discussion on the core arguments around how social protection should be done.
For a pretty balanced fictional treatment of a future with UBI I recommend James S. A. Corey's novel series "The Expanse" (now a SyFy TV show). Specifically, the novella "The Churn" deals with characters living in a society with universal basic income, and to a lesser degree "The Vital Abyss".
One comment on higer taxes + UBI. This curve is interesting to think about, slowly ramping or fixed percentage? I prefer simpler when it comes to large scale concepts, but maybe it needs to ramp up and affect all income equally (long term capital gains as well).
I get paid 20% of my salary in "food stamps"/"food vouchers" (they're more lightly taxed both for employees and employers so companies try to foist as much as possible upon employees). And they suck, a lot.
They're called "Ticket Alimentación", and they're provided by Edenred. They're electronic these days to prevent the easiest ways to convert them into real money.
- most places don't accept it, so you HAVE to go to the places where they accept them. That sucks a lot (nowadays I can't go to the small local places as they don't have the infrastructure to process them, since government heavily monitors their use)
- you can only buy essentials with them, but that does not include stuff like paying rent.
- all taxes and stuff are taken from the "real" money, and you can have a negative "real" income while having too much in food vouchers (which can't be used to pay rent or utilities or transportation).
- you're basically forced to spend them (I make more than what I'd like to spend on food & essentials), you can't save unless you do some kind of hoarding or buy-to-sell scheme. I'm pretty sure some kind of black market would emerge where your proposed "necessity dollars" would be exchanged for "nicety dollars"
I don't have enough leverage to individually negotiate not getting paid in food vouchers, but it's definitely a factor I'm going to consider.
* This is enforced by only permitting certain sellers to accept necessity-dollars, and only on certain transactions.
there are so many reasons why this wouldn't work. The whole point of UBI is that you are not creating a judgemental system by which certain products are or are not reified by the system. 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? How would you validate a product as being "for a given use"? How much political maneuvering would be required to get a permit for a product?
* inelastic demand (as found by the BLS during CPI calculation)
Pray tell how does one measure demand elasticity[0]? And if you're entrusting the BLS to do this, will they apply fudge factors? Why or why not? Who gets to influence the BLS to get the 'stats right' on their
* You can't tax or fine anyone in necessity-dollars
one word: Arbitrage.
[0] usually a merchant does this by dicking around with the price.
> Pray tell how does one measure demand elasticity[0]?
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.
> 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.
CPI tells you how much prices have changed, it doesn't explain the source of the changes (and, particularly relevantly, it doesn't measure isolate effects of changes in the supply of dollars chasing the good -- that would be attributed to the degree of elasticity -- vs. other influences on the price of an item.)
It also doesn't tell you the elasticity. How much the demand would change if the price were increased by a unit increment. The only way to truly know that is... to change the price. The CPI can only measure how the price changed, which is a dependent variable, not an independent variable. You may be able to infer the elasticity, but it is at best a weak inference.
The gap that I see in this approach is everyone has a different definition of what is a nicety and what is a necessity.
To go with your tobacco example, I personally don't believe that tobacco should be considered a necessity. (Though I have no problem with Nicorette / nicotine gum being in that category, which could be used by someone unable to buy cigarettes to satisfy their craving.) Someone else may have a different definition of a necessity vs nicety altogether.
It's much simpler IMO to just give people ordinary currency, and let them decide how to spend it best.
Note that by my specific definition above, it doesn't really matter what's a "necessity"—that's just a cute flavor-word. They're really "inelastic-demand dollars."
And my point was that even UBI falls over when someone gets their UBI taken away by a fine. Starving is starving.
Not sure on the viability of it, but couldn't there be something in place that states that fines can only be levied at a maximum 10%/month of the UBI?
So if you get a parking ticket (presumably <1% UBI), you can just pay it, but if you get a large fine (20% UBI), you'd pay it off in two monthly payments of 10% each.
You'd probably need something in place to intervene if someone's constantly paying 10% every month due to multiple fines to prevent people racking up daft amounts of fines and just 'living on 90%'
Everyone has a slightly different demand elasticity for certain goods. To use myself as an example, I would buy the same amount of coffee if the price doubled tomorrow, but someone else may choose to cut back on their coffee consumption.
There is a long track record and large body of research on this topic in economics, and there's no need to reinvent the wheel as the results are well known and largely uncontroversial. TL;DR: Money outperforms vouchers and stamps.
I am. How does it work? I assume someone with cash who really wants groceries buys stamps at a discounted rate so they end up having more grocery buying power?
It can work in many ways. In my country(India), it was common for people to collect subsidized rations and sell them to hotels. Hotels get the rations at subsidized prices, and people make money on the free rations they recieve.
You could also see food stamps as a parallel currency. You get work done, you fix the payment as N food stamps. The guy who takes this, uses the same method to pay others... and so on, until the final guy in the chain exchanges those N food stamps for actual rations. This has other side effects, since there is a parallel currency, it can't be regulated, its supply cannot be controlled. You can't levy taxes on it and so on...
These sort of parallel currencies already exist in India.
The way I've heard of it working (third-hand, so grain of salt and all that) is basically that an unscrupulous grocer fails to report some cash transactions. He then "sells" those groceries to someone with food stamps, in reality trading some fraction of the cash for the food stamps.
According to "Debt, the first 5,000 years", that's pretty close to how things worked in prehistoric societies.
Necessities were more or less shared communistically, while "money" was mainly used to elevate status within a social group.
There was little to no trade surrounding necessities.
Your suggestion might or might not be impractical, but I think the general thrust is correct.
If you provide UBI and people can have fines, interest, judgements, etc. levied against it, many predatory practices will render people destitute even with it.
>It feels like, rather than a basic income, we need two orthogonal currencies: one for necessities (food, rent, utilities) and one for niceities.
There isn't really a difference here. Need vs. want isn't a binary classification, even though we treat it as one. It is a spectrum. Even worse, it is a spectrum where ever people with choice don't always make the choices of need. Take someone thirsty who is drinking soda. Enough so that they are lowering their life expectancy. They have a need for water, not soda. Soda is worse, comparable to slightly dirty water in how it impacts their life expectancy, but they choose it for other reasons.
It would be far easier to give people money and let them choose how to allocate it. If someone's immediate needs is a safer location to shelter in then they can decide what do they need less (maybe reduce their food budget to compensate). The only issue needing government involvement is with ensuring parents meet the needs of their children (but once again, needs isn't a distinct classification).
Doesn't this just set up a complex laundering scheme? Safeway can accept necessity dollars and cash them in for nicety dollars at 1:1. A startup wants to sell their new gadget which isn't approved for nicety dollars. They accept nicety dollars anyway and pay Safeway 1.1:1 to be a back door exchange.
We have something along those lines where I live. People without jobs can apply for job at a local municipal job center. They centralize demands from people for small jobs like lawn mowing, cutting the bushes, painting, etc. People buy checks from them and pay the worker with those checks (with a fixed price per hour). Then the worker goes back to the center to deposit the checks. Then the center forwards the checks to the social welfare administration that converts them into real money for the worker.
I knew someone in a rough spot that went there and spent a day building a rabbit cage or something. When he got back to the center he was told that his SO earned too much for him to work there, they had failed to mention that when he got there first. So now he has checks worth nothing hanging on his walls.
Not really. Smoking went down as it became less socially acceptable to do so. Case in point: cigarettes are $6/pack in California, but very few people smoke because those who do are seen as unhealthy louts. Meanwhile in New York cigarettes are $13 yet it's much more prevalent.
If the necessity payments are biweekly or whatever, and actually scaled to necessities, and spending of them is actually limited to necessities, it shouldn't be possible to save many of them up, and not very beneficial either. So there isn't a huge benefit to making them survive bankruptcy (the court could even award an extra necessity payment right after adjudicating the bankruptcy).
So I think that is a good argument against them being, uh, necessary, and then there is the whole thing where if it is a real currency, it will be fungible, so people will still be able to use them stupidly on things that aren't necessities.
1. Buy allowed item with necessity dollars.
2. Merchant credited with nicety dollars.
3. Return item to merchant.
4. Receive refund as X% of the nicety dollars.
1. Buy $X banana with necessity dollars.
2. Merchant credited with nicety dollars.
3. Give $Y rebate card to merchant.
4. Receive rebate in nicety dollars.
Your well-intentioned scheme fails utterly at the third bullet point, because as soon as you allow the exchange to general-purpose currency, you no longer control how it is spent.
That is a crazy complex system. Compare this to the current Food Stamp system where the government loads money on a pre-paid card (for free - no transaction fees), and that card can only be spent on certain types of goods.
That's a really interesting idea, but another issue to consider is that a lot of food/housing could be considered "nicety" rather than necessity: sushi, craft beer, luxury penthouse apartments, etc. How would you decide how much of your mansion is covered by necessity money, and how much is nicety?
See my sibling comment: figure out how much inelastic demand there is for a good-category, rebate that amount off of all prices using necessity-dollar allocation, and then whatever's left over is the true nicety-dollar (i.e. elastic demand) cost.
One interesting effect of this is that if you calculated it per-market, then different goods would have different inelastic-demand floors in different markets. In e.g. Vancouver, where tiny one-bedroom detached homes can cost >$1mm, there'd be a pretty large necessity-dollar allocation for rent/mortgage. In Cleveland, where houses go for $65k, it'd be much lower.
You might not want this effect—you might want to incentivize people to move to cheaper markets instead. But the network-effect of cities is another of those things economic incentives just don't seem to work very well to treat.
It feels like, rather than a basic income, we need two orthogonal currencies:
one for necessities (food, rent, utilities) and one for niceities. Everyone
would just have two numbers in their bank account, for each of the country's two
official currencies. Basic income would be paid in one, while all income from
trade in the economy would be in the other.
I think this would be bad, as you limit a persons ability to choose and as such you're limiting freedom by government planning. Basically as was described by F. A. Hayek in his book "The Road To Serfdom":
… that in a planned society "political democracy can remain if it confines itself to all but economic matter". Such assurances are usually accompanied by the suggestion that by giving up freedom in what are, or ought to be, the less important aspects of our lives, we shall obtain greater freedom in the pursuit of higher values. On this ground people who abhor the idea of a political dictatorship often clamour for a dictator in the economic field.
The arguments used appeal to our best instincts and often attract the finest minds. If planning really did free us from the less important cares and so made it easier to render our existence one of plain living and high thinking, who would wish to belittle such an ideal? If our economic activities really concerned only the inferior or even more sordid sides of life, of course we ought to endeavour by all means to find a way to relieve our- selves from the excessive care for material ends, and, leaving them to be cared for by some piece of utilitarian machinery, set our minds free for the higher things of life.
Unfortunately the assurance people derive from this belief
that the power which is exercised over economic life is a power
over matters of secondary importance only, and which makes
them take lightly the threat to the freedom of our economic
pursuits, is altogether unwarranted. It is largely a consequence of the erroneous belief that there are purely economic ends separate from the other ends of life. Yet, apart from the pathological case of the miser, there is no such thing. The ultimate ends of the activities ofreasonable beings are never economic. Strictly speaking there is no "economic motive" but only economic factors conditioning our striving for other ends.
What in ordinary language is misleadingly called the "economic motive" means merely the desire for general opportunity, the desire for power to achieve unspecified ends. If we strive for money it is because it offers us the widest choice in enjoying the fruits of our efforts. Because in modern society it is through the limitation of our money incomes that we are made to feel the restrictions which our relative poverty still imposes upon us, many have come to hate money as the symbol of these restrictions. But this is to mistake for the cause the medium through which a force makes itself felt. It would be much truer to say that money is one of the greatest instruments of freedom ever invented by man. It is money which in existing society opens an astounding range of choice to the poor man, a range greater than that which not many generations ago was open to the wealthy.
Those last two sentences are textbook non-sequitur, and use a depressing collection of rhetorical tricks to make a point that's entirely fact-free.
Money is a good way to avoid abject poverty, but it doesn't give poor people freedom, because poverty for most is a matter of education and socialisation. Basic income can pay your bills and put a roof over your head, but it won't create opportunity.
Nor will free markets. Left to its own unregulated devices, no form of social organisation is quite so good at destroying economic freedom for most of the population as a laissez-faire zero-regulation regime.
Most of the civilised world has affordable health care precisely because it offers financial freedoms that market-based "solutions" reliably try to destroy. The cost of health insurance in the US is literally crippling. It's a prime driver of personal bankruptcy, it makes would-be entrepreneurs think more than twice about setting up - and none of this is an issue in countries where public health care is available.
Likewise with student loans. Who has more freedom - a student with $100k of debt, or a student with no debt?
Who benefits from a generation of students with huge debt burdens? It's certainly not the students.
The real road to prosperity and economic freedom is a regulated market in a broadly prosperous economy with minimal cost of entry for entrepreneurs. That means easy and cheap access to investment funding, plenty of high quality blue sky government-funded seed R&D, a strong culture of academic research and independence, serious investment in public infrastructure, a broad variety of independent media, free unrationed access to world class educational resources, and seed level support for entrepreneurs and business creators from all social backgrounds.
It doesn't mean the "freedom" that makes the proverbial 1% extremely rich while everyone else's economic and personal freedoms are diminished.
>>The threat—even an imagined threat—of a large bill made it difficult for poor people to focus on the cognitive tasks at hand.
This issue happens because one has to constantly juggle many priorities in the mind all at one time. This can come down very heavily on a person. To have to make decisions to chose one over the other, a.k.a making sacrifices can be soul depleting if done for a very long time.
There are often conflicting priorities many demanding attention at the same time. In case of trade off you often stand to lose something for the other.
"When the cost of [a car] repair was increased to $3,000, the cognitive performance of those at the upper end of the income distribution was unaffected by the increase. But those at the lower end suffered a 40% decline! The authors interpreted this to mean that scarcity impaired people’s ability to think clearly. The threat—even an imagined threat—of a large bill made it difficult for poor people to focus on the cognitive tasks at hand."
That's me. I was recently fired for having severe narcolepsy. (Irony: The medication that might help with this condition for the first time in my life arrives tomorrow, a few days before our health insurance runs out.) It's been surreal to be excluded from most life aspirations due to being unable to participate in the 9 to 5 that society expects. Part of why it's hard is that no one can relate to this at all. When you throw your back out and are unable to work, people understand. When you arrive at 1pm because you have no memory of waking up and turning off all three of the alarms you'd set, no one cares why. You're damaged goods.
A basic income would at least assist with searching for my next job. My wife and I are now in a situation where we either start receiving income within three months max, or completely run out of money.
I know intellectually what needs to be done: Port a webapp from an older framework to a next-gen framework, then write a detailed post about how it was done and what the benefits were. That would be enough social standing to at least get some freelancing gigs.
Trouble is, I'm completely frozen. It's not quite fear -- closer to profound loss of hope. When a medical condition excludes you from society, it's easy to let it get the better of you, or feel bitter. Those are precisely the opposite feelings that will result in income.
In that light, it's not strange that a $3,000 bill would reduce someone's performance by 40%. Even if it's not a disaster, you end up wishing that you could take your wife on that honeymoon you've talked about for four years. When it took 6 months to save up $3,000 dispite a decently high salary, you know that your future will never be free from the "money problem," and that it will permeate every aspect of your life.
So what do you do? Try to be intelligent, of course. Try to see your situation as amusing. Amusement, yes; anger, no. It's easier to deconstruct a problem when it feels like a puzzle rather than a prison.
Easy to say that. What do I do? Pull up React docs while trying not to cry.
None of my ambitions matter anymore. Life is a years-long process of trying to recover from a tailspin. I'm 28; blink a few times and I'll be 50.
A basic income might help. When the company fired me without notice, they mentioned that our health and dental insurance will expire at the end of the month. This translates into a few things: (a) an extra $350/mo of bills, which accelerates our impending bankruptcy; (b) choose to remove my wisdom teeth and get a root canal right now, this week, which will knock me out for at least two weeks when I have to perform, and will cost at least 15% of our reserves anyway, so I'm not going to do that. Maybe it will result in messed up teeth for life, but that's an abstract problem that Future Me will deal with later.
On the other hand, maybe a basic income would hurt. I don't want handouts. I want to participate in life and to add value to my pursuits, just like you. It's easy to imagine feeling like maybe this basic income should be my lot in life. At least if I know we'll hit a brick wall in 3 months and that my wife won't be able to graduate, I can sort of force myself to try to use React / etc, and to otherwise hustle.
But I miss being 13, when life was an endless intellectual playground, and that "forcing yourself to have fun learning a programming framework" was an absurd contradiction.
Why post this? I don't know. It's not a sob story, and it's not really a warning. It seems like no one else will learn a thing from any of this. But at least it won't seem so mysterious that a $3,000 bill can subvert you.
I have chronic fatigue that, until treated, was quite disabling. I have some other more private health concerns that add up to about twice my rent. If you have a chronic health condition, access to health care is a major and fundamental concern: I just left a job that was killing me, and am temporarily unemployed, and COBRA with a $500 premium is my cheapest option by far. If I hadn't spent the last year saving as much as I could, I'd be in a lot of trouble.
I didn't choose to be sick. I don't want handouts either. I am very fortunate. But I do think it's a damn shame that health insurance is so tightly coupled with employment when employers come and go but your health follows you everywhere. I can't imagine that a public option would be worse than this.
I'm not actually sure what the criteria for subsidies are; I made too much to qualify last year, I hope to get back to work soon and make too much to qualify this year. I don't know how "annual income" shakes out in this situation.
Either way I had a $2500 out of pocket max on my old plan that I usually met in January. $6k a year in premiums + $2500 out of pocket + some out of network costs is a relatively palatable deal.
Allowing someone to come into work more than half way through the day (presumably with no way to get a concrete time from them in advance) may not be considered a "reasonable accommodation" depending on what the job is.
Even for software development it's not always reasonable.
I'll second that. I'm not 'hiring', but as a freelance web developer I'm always open to people working with me for an hourly rate.
EDIT: and while I don't currently have a steady stream of work available, when I do, I favor working with people who for whatever reason have trouble finding or keeping 'normal' work (having dealt with my own share of issues in this area).
I don't see why narcolepsy should be a problem, especially in our area. I mean sure, meetings and stuff like that might be harder to do, but our industry is/should be lenient to things like office hours. There have been tons of times where I go to the office at "late hours" (e.g. 1+ PM), and as long as I turn in my deliverables on time (or let my lead know I won't be able to), there is no issue.
So again, very sorry to hear that.
Also, if I may, I would like to give you the following suggestion.
What about, instead of porting something and then writing about it for the PR, why not take the lowest hanging fruit you can find and do some local web dev/mobile dev, even if you only get a small fraction of the money you need each month.
I am saying this not without reason. I have a friend that is doing bad financially, and doing only one gig that got him around 1k USD (different country and situation of course, but at the current exchange rate, it's about that amount) gave him some hope.
And the thing is that he got a big relief when he saw with his own eyes that he could basically turn code into money. Not enough money necessarily, but at least some amount. That in turn lowered his stress and things started to look less bleak.
Just to tell a bit of his situation: he has kids and a wife that for medical reasons as well, can't work, so he is the sole wage earner at home. His job is very likely going to end soon, and has about 1 month runway.
So just in case you check back the comments, and if you are willing to take some random advice from a random guy on the Internets, why not try this? Just take a gig, very very simple one you can find through friends, your local laundromat/liquor store/etc, family, that consists of doing a simple but sleek-looking webpage or something very low hanging-fruity, and after you get your first few bucks, rinse and repeat.
Hopefully the boost in morale will be enough to get you to try maybe a bigger gig, etc, or at least buy you some time while you get to find another job.
Sorry if this is of no use to you, since I know that this route might not afford you the medical care you need and that definitely sucks. But I truly feel you and I was hoping I could chip in at least a very very minor idea in case it's helpful in any way.
Not sure what else to say except to try to keep going as hard as you can, and that I can definitely lend an ear if you are so inclined (let me know and I can send you an email or something). If not, I sincerely hope things get better soon.
I don't see why narcolepsy should be a problem, especially in our area. I mean sure, meetings and stuff like that might be harder to do, but our industry is/should be lenient to things like office hours.
I blame scrum. Or, more specifically, people who drink the cool-aid and don't understand the actual purpose.
I've interviewed at I-don't-even-remember-how-many companies that claim to offer extremely flexible hours, or don't care about telecommuting, just make sure you deliver... until you tell them that you can't promise to be there for the daily stand-up at 9am. This is typically justified by "it's only one meeting a day!", but if that one meeting is in the middle of the night for you because you work in a different time zone, or you can't make it in till 10 because you've got kids to take care of, etc., etc.... that doesn't really seem so reasonable anymore.
Code up an "instant stand-up" team status web page, such that everyone on the team can see at a glance what everyone else is doing, what they just finished, and whether they have any blocks. Update your status once per day.
Congratulations, you have now saved 10 minutes per day for everyone in the office. Oops, now they have to come up with some other reason for everyone to be physically present at 9 AM sharp.
"Flexible hours" have always been BS at almost every company I have worked for.
> Code up an "instant stand-up" team status web page, such that everyone on the team can see at a glance what everyone else is doing, what they just finished, and whether they have any blocks. Update your status once per day.
Basically, kanban, sure; but you've also missed what is (IMO) the main values provided by the "Daily Scrum", and the reason something like it is useful even in systems that use better methods for communicating status of progress items:
1. Coordination and conflict resolution on next tasks, and
2. Early and rapid identification (and, ideally, resolution or escalation) of barriers/issues.
(That's not to say that there aren't ways other than a daily in-person meeting that could be proposed to meet these goals, just that a status board doesn't replace the functionality of the Daily Scrum.)
I second this (with absolute 0 expertise in the matter). If the problem is a lack of hope, then doing things that demonstrate to yourself that you are in control of the problem should be a big help.
I am not sure of your location (US, etc.) but I would imagine that you might be able to get unemployment benefits, which I hope would help tide you over financially at a minimal level while you focus on the next steps. Again, assuming US location: you might be able to use COBRA or a plan from healthcare.gov to help you continue the medications that you need.
Regardless, I hope you are able to recover from this setback and do better than ever. Please don't lose hope - there is always an option.
Depending on the actual terms of the termination he may not be eligible for unemployment. Chronic lateness might be considered being fired for cause, which typically means you cannot claim UB.
Well, IANAL but given that he has a prescription for the situation that caused him to be late, I can see a case for unemployment. It should be worth filing.
>>It seems like no one else will learn a thing from any of this.
There is a ton to learn from your story.
Most people think retirement is what you do when you get old. Retirement planning begins on the day you get the first pay check of your life. In fact the whole purpose of working should be to eliminate the need to work.
If you are not doing this already. You are sitting on top of risky avalanche which will go downhill any day.
I know a person fired from his Rails dev position who had a sleep issue on the job. They later came under new management and switched to a remote team and let him have his own hours. If you are competent you can do fine with a remote job. You can probably good money and move to a cheaper area.
It also has an option to resound the alarm 5min after being disabled.
I have used it and it was effective for me even on 'easy' difficulty challenges, though I don't have a condition like yours, just sort of heavy sleeper. If you haven't, you should definately give it a try.
> I suppose another person would solve this issue?
No. The right dose of the right medications for the individual affected might mitigate the issue, but another person wouldn't solve it any more than puzzle alarms would (which is not at all, essentially.)
> Or is it an even worse condition than I think it is?
It is of varying severity, with various interventions available that may mitigate the effects to a greater or lesser extent for some sufferers, but its a different kind of condition than you seem to think it is. That is, its not like being a non-narcoleptic heavy sleeper except superficially to outside observers, at least, based on what I've read and the narcoleptics I've known.
Your employer sounds like a real piece of shit if they're firing you over a medical condition you're just starting treatment for. If nothing else, they should consent to just deducting your pay for the time you've been sick, but I guess that would mean acknowledging that you're sick and exposing themselves to liability or something. Hang in there.
Sorry, but all of those sound like things that are going to help people who were already going to be successful to be even more successful.
College debt, for example, is a problem for those who were successful enough to get into college into the first place, and who, simply by getting into college, are already increasing their lifetime earnings by millions of dollars.
Technological services for K-12 ed is pushing a string. The largest predictor of a student's performance is the educational level and socioeconomic status of their parents, not any in-school factor. Classroom technology offers the most benefit to the students best equipped to make use of it, which is again the privileged and better-prepared students.
Increased political engagement helps those who already have enough leisure and status to spend time following and engaging politics.
I'm not a big believer in minimizing college debt. I'm a believer in minimizing college.
People who grow up in wealthy families naturally find themselves on a college track that seamlessly routes them to elite schools when they're 18 years old.
People who grow up in poverty aren't on that track and might not even have much agency (due to their circumstances, requirements to work young, entanglements with the law) until they're in their 20s.
The fastest growing stable white collar jobs all require a 4-year degree. Even if college were free, people of reduced means wouldn't have equal access to it, because taking 4 years off the workforce isn't an option for most people. Meanwhile: a 4-year degree has actually not much value in predicting one's ability to perform as e.g. an HR director.
So what I'm suggesting is the startup that finds a way to turn smart, enterprising 24 year olds working in retail jobs into HR directors, credibly enough that they'll be competitive with Russian Lit majors.
(I'm not picking on Russian Lit; it's just, that's the undergrad degree my sister got at UChicago before becoming a lawyer, so it's the first one that pops into my head).
College in Poland is free and there are options for very limited stipends which can sustain you (albeit on a poverty level). That did lift me from a poor, but educated, family into the world of computer software and a relatively successful career it seems. As it did for countless of my peers.
Please don't discount free education as "not changing much", in the US I would be probably working at Mc Donalds or dealing crack and in jail.
I'm not opposed to free education. I'm certain free education is better than $150k education. But gating stable employment on 4-year degrees is problematic for reasons other than tuition costs, and, equally important to this thread, startups probably can't make college free, but they might be able to replace college for a pretty big set of white collar jobs.
I think colleges should educate people and not only train them for a job. This is only really viable with free education and much harder to do with the alternatives which are discussed right now.
Probably yes but I feel that general education is, especially in this community, a little undervalued. Democracy fundamentally depends on its population being educated and in more ways than just STEM. Better socioeconomic decisions are made if more voters are educated in areas other than programming (figuratively) and this is only achievable if this type of education is a viable path for young people, for example through tuition-free universities
We should better fund community colleges, and make pursuing a technical degree free. That is the degree whose goal is a job.
For a BA, MA, etc, the goal shouldn't be a job, but the pursuit of knowledge. Part of that is the value in knowledge itself, but it also gives you a broader skill set that can be applied to many kinds of jobs, where a technical degree is much more specialized.
> I'm certain free education is better than $150k education.
Is this really the case? Sure for identical education free is better than non-free, but I know even in software development if you're applying for jobs in the US and your degree is from Poland there are places that won't interview you, let alone hire you.
In Argentina, the University of Buenos Aires is free and I know plenty of people who went from there to Google. They got better scores than Harvard in ACM last year. So yeah, free education can be as good in quality as paid education, at least in some cases.
Not to nitpick, but in my experience growing up in the Midwest of the US most "poor, but educated, families" like mine pushed children into state schools where they pay in-state tuition and graduate with $10-40k in debt. Most careers are open to them and you would almost definitely not be working at McDs or in jail.
So ok, we're comparing realities that might not be comparable. I also didn't have as bad as others, but in my case something like "in-state tuition" was essentially unthinkable as well as any sort of debt. If you have nothing, first it's unlikely someone would borrow you the money and second it's a terrifying prospect and a lot of money.
The US poverty line is about 15k for a two-person family. That would mean that earning that much would make 1-3 years of family income in debt.
Not only that, but the degree to which you have nothing directly affects the amount of aid (loans) they are willing to provide.
I have a twin sister whom was better at saving than I. When it came time to apply for FAFSA loans, she had $2k in the bank and I didn't. She qualified for exactly $2k less in loans than I did.
Absolutely. In the book "Ahead of the Curve" the author describes his MBA classmates at HBS emptying their bank accounts by buying BMWs so that they qualify for more student aid. I've also seen medical doctors in private practice leave for a public health or VA job when their children are nearing college so that they can qualify for more aid, then return to private practice after the children finish college. When the system is set up to charge a high sticker price and then discount based on an "ability to pay" formula, people will do everything in their power to adjust their finances to appear unable to pay.
The lesson there is that those whom are irresponsible get further ahead (by having the irresponsibility discharged).
This is what always irked me about how the bailouts were handled. They should have been controlled government regulated destructors that would tear off and re-attach resources that were viable to other companies and leave the investors with none of their investment.
For many people who have nothing and earn little, being free of debt is an absolute core value, far beyond the mere numberical delta. To people who perceive zero debt as a central measure of personal achievement and self-valuation ("at least I am not in debt"), going deep into the negative for some quasi-entrepreneurial investment that may or may not pay off feels extremely wrong.
People on HN may ridicule them for being stuck in an optimization for a terribly low local maximum, but the danger of feeling "rich" on a fat loan is real: "if it's ok to burn through a decade worth of low wages to get to where I can easily pay it pack, what difference does it make if I burn through a few years more?" Valuing debtlessness is the established safeguard against that and going deep to exit high would be perceived as close to amoral by their peers.
If people have the means to support themselves while studying for 10 years, why not let them study for 10 years? They are certainly not receiving a scholarship for these 10 years.
In Spain the first time you take a subject the University is almost free. The second time (if you fail) you have to pay 40% of the price and the 3rd+ times you pay 100%.
Note: in Spain it is expected to fail some subjects in Engineering
Maybe the trick is to view college not as a service you must buy, but as a service you must perform. An educated populace is a productive one. Maybe we should pay people a living wage to go to college. I can think of far worse ways to spend taxpayer money.
I have a theory that making education free and universally accessible, meaning anyone who is willing to put in the time can get a bachelor's degree in any major they want, would remove the majority of the signaling effect that a 4 year degree has. There would still be some signaling from holders of elite college degrees, but I argue that it is a separate problem.
I do agree with you in principle about the HR director thing. College is treated too much like a white collar vocational school.
Coming from a place with free university education I don't think that is right. More accessible university education, more people get university education, this raises the bar in all fields.
HR still prefers somebody who went through the trouble of getting the paper as it signals putting the effort in.
Now many jobs that previosly didn't need university education have such applicants and it becomes more mandatory to get one in order to compete. And why would you not, it is free after all.
In the end more people get higher education. it won't necessary help you getting a better job but I think it is good for society anyway.
For many others this "useless over education" is one of the reasons to introduce fees to schools. To make vocational studies worth more again and force people to think education more like an investment.
The signaling from a college degree comes directly and only from the fact that getting that degree is difficult. If you make getting the degree easier, you reduce the efficacy of the signal (assuming all the relevant people are aware of the change in difficulty). Of course, employers could start looking at other things, like grades or other academic achievements, to use as new signals.
Yes that's true. I meant making education more accesible in terms of making it free not making it less difficult. It becomes cheaper for people to give it a shot and more people end up graduating. It's true that this devalues the achievement and nobody really can hire you just because you graduated. On the other hand in a society where most of your peers have (devalued) university education you won't even get to job interview without one.
Making it free does make it less difficult, and thus weakens the signal. Many (probably most) college students go through financial hardship or at least financial inconvenience during college.
One concern is that, especially during the transition, job descriptions requiring "4-year college degree" would become a de-facto (and legal) means of discriminating by class or social status, assuming that the rich would overwhelmingly continue to send their kids to college.
<People who grow up in poverty aren't on that track and might not even have much agency (due to their circumstances, requirements to work young, entanglements with the law)>
Why do you equate poverty with inevitable entanglements with the law?
In my experience, those of us who had to work (formally employed) young are less likely to have entanglements with the law, as one natural result of spending time working is having less idle time in which to get into trouble.
It would be helpful if white-collar employers were more willing to hiring eighteen-year-olds. Many of my twenty-something (and older) peers at $Megacorp actually started this way, with some earning a bachelor's degree part-time.
I think you're right it doesn't help those who don't have a culture of education. I.e. people who "are first in the family to attend college/uni" of which many are minorities but also a great many are poor whites.
But.... It does help a lot of kids who find it hard to afford college/uni while also having other responsibilities.
Those people who sell a pint here and there to afford gas to get to class, etc. It's not an insignificant amount of people.
So chip at this first, then chip away at the abjectly poor or who simply don't think they have a chance at college/uni.
Of course there is always the danger of human nature wanting to claim, I went to uni as told but still can't get a job. That is it's not just a rite of passage, you have to show personal progress.
Another thing that would be helpful to most people is fixing the affordable housing issue. The problem is that lots of people are deeply invested in making housing increasingly less affordable (alternatively phrasing as "improving home values"). Housing is the single biggest expense for many people, especially those in economically productive high wage cities, and cutting that would dramatically reduce the remaining gap that something like basic income would have to fill.
It's a matter of supply and demand. If the zoning laws enable the building of affordable housing then the supply would rise and overall prices would decline. What you'll find in places with high housing cost is that zoning laws or geography prevent massive expansion of housing supply.
Right, and there's a reason for that: a decline in housing prices would be seen as a disaster, because so many people have so much of their wealth tied up in home equity. Of course, it doesn't have to be that way: if you happen to own a single family house in SF, and it gets upzoned to allow apartment buildings, you can expand your house and become a landlord, or just sell the house to a developer to replace with an apartment building. But both of those options are harder than just sitting on your land and watching its price grow, which is part of the "American dream" of housing as a store of wealth that people were sold.
Agreed. Nothing is more financially difficult to deal with than a sudden shift in income rendering your current housing suddenly very expensive. With a reasonable price of housing, you have more capacity to save for potential disaster.
> Products that offer serious competition for incumbents in the financial sector to bid down the 7-10% of the economy taken by financial services.
The limiting factor here is the regulatory regime, which makes it all but impossible to move money around without using a bank as an intermediary. That gives the banking cartel effective veto power on all new financial services.
The key reform here is to separate the movement of money from the provision of credit, and to have access to money transfer be classified as a basic human right along with food, water, and internet connectivity.
I think you're reading this suggestion more ambitiously than I intend. I'm just saying that financialization has eaten up more and more of the economy while providing a dubious return on investment and creating a large NYC-based elite, and that anything startups can do to bid the costs of financing businesses down will probably help.
That's actually pretty much what I understood you to mean (though I actually read it more narrowly than that). What I'm saying, broadly, is that the "large NYC elite" has achieved regulatory capture to the point where it is effectively impossible for any startup to enter the market. This is the reason that they can continue to eat up more and more of the economy while providing a dubious ROI.
"Access to money transfer as a basic human right" is a brilliant way to reframe the conversation around financial services. I'm gonna start talking about transaction fees from that perspective now.
And yeah, good luck extracting the banks from the profit-making niches they've carved out in that process. They will fight that to their last breath.
It seems to be a very American thing to not have banking as a basic right (or at least assumed right).
Here in New Zealand, there's pretty much no restriction on getting bank accounts. It's almost unheard of to not have a bank account.
Transaction fees aren't really a thing either. Most people only have to pay to withdraw money from other banks ATMs. There's no fees for bank transfers (regardless of whether it's to the same bank or a different one). Bank transfers are within the hour in the same bank, and either within the day or overnight for between different banks.
One thing that definitely has helped in this situation (somewhat counter intuitively) is that we have an oligopoly of banks, so standardisation and cooperation is simple. That's why we have chip and pin cards as standard here (and contactless cards). It's also meant that almost everywhere accepts EFTPOS.
Hell, I had to cash my first check ever today. I don't even carry cash, unless I have a specific reason to need to carry it.
We certainly have a long way to go here. I found it endlessly frustrating trying to get an expense card for my nanny. I wanted her to have access to a set limit of my money to pay for things for the kids but not an endless supply. I wanted it to just be there. I never found any banks that had anything even remotely like that. I ended up just getting a reloadable debit card that I have to keep topping off for her. And the biggest kicker... it takes 5 business days for the money to show up on it. How does it take 5 days to move some 1s and 0s from this account to that account? And why "business days?" Do their computers not work on the weekends? Crazy and frustrating.
Thats part of the debit card providers business model. They are making money on the float between the accounts. They are incentivized by this to make it slow.
These are pretty small amounts. I suspecdt they make more money on the overdraft fees, which puts it in the "not merely lazy or incompetent, but evil" category for me. Payday loan companies are the worst offenders in this category, I'd love to see an "uber" for that.
> Payday loan companies are the worst offenders in this category, I'd love to see an "uber" for that.
Me too, but it's very unlikely to happen. Payday loans (according to http://thehill.com/regulation/237538-borrowers-default-on-ne... and the study linked there) have a default rate of about 46% in the first two years, making them risky plays; to compensate for that, they have to increase interest rates and fees, which is a huge part of what makes them evil in the first place. Of course, the fact that 80% of payday loans are due to loan churn itself (paying off a payday loan with another) contributes to that in a big way, so maybe it could be done somehow.
I'd be interested in seeing a saner way of handling payday loans than exists right now, but I'm skeptical that it could be done in a way that isn't -- in some way -- predatory.
Did you ask any of your existing credit card issuers if they will allow additional cardholders on your account? Several of mine outright invited me to add other cards (under other names, not just dupes in my name) at no charge. It's trivial to set spending limits on such alternate cards.
I have no idea if you can get expense cards here, but it's easy to just get another card and connect it to another account, and then load funds onto it as you need.
Several of my friends have their cards attached to an account that's usually empty, and transfer funds when needed to the card. It takes literally seconds to transfer the money, you can do it on your mobile phone in the store.
You might want to check out True Link Financial (https://www.truelinkfinancial.com/). Not sure what the current state of the agreements are but you can use it technically for this sort of thing.
Thanks for the link. I looked at them. They even have one targeted specifically for Caregivers. (https://www.truelinkfinancial.com/caregiver-card) While it sounds like a decent option, I'm turned off by a $10 monthly fee. I know they have to make money somehow but I have never been keen to pay fees for my money. :/
American banks seem unable or unwilling to follow the simple algorithm "process the transaction immediately, if the sender does not have enough money to complete it, decline it."
Instead we depend on forms of payment which have latency measured in days (checks, direct deposit) and we process debit card transactions on a delay of hours to days. If you are playing close to $0 it's very easy to make a mistake and then fall below $0. The bank has effectively trusted you not to do this, and you did it, so they charge you a fee as punishment. Except you have less than $0, you can't pay the fee.
If you do this, then your bank might close your account and put you on the ChexSystems blacklist, which will prevent you from getting any new accounts for a few years.
AFAIK ChexSystems blacklisting is pretty much the only reason to be unbanked (except by choice as a form of protest, I guess?) Simply doing proper OLTP would eliminate the weird artifact that is overdraft and entirely sidestep the problem of unbanked people.
I've often wondered about the reasons someone might be unbanked. I've only ever considered the lack of immigration status or proof of address, as most unbanked people I've come in contact with were Latin American immigrants to the United States. I've never considered the "playing close to $0" and the effect it could have if your account was closed and you were placed on a blacklist. That would seem to underline the parent commenter's assertion that money transfer should be treated as a right.
An anecdotal example of my own: I was 'playing close to $0' and my bank (BofA) was clearly manipulating the order of my transactions to maximize overdraft fees [1].
After fruitlessly disputing the fees, I simply opened an account elsewhere and changed my direct deposit through my employer, leaving my BofA account in the red. After about two months without issue, my new bank informed me that they would be closing my account because I'd been reported to ChexSystems by BofA and blacklisted. They wouldn't tell me the reason for the blacklisting (though I obviously knew what it was). I was not even allowed to withdraw my existing funds and had to wait for a check to be sent to my home in 7-10 business days.
I ended up getting a TD Ameritrade debit card through a pseudo-checking/brokerage account they offer and have been getting direct deposits there ever since. It was an infuriating and dehumanizing process overall.
Please note I'm not trying to belittle your answer, but New Zealand is a very small place. In the US there are Credit Unions (the smaller, less popular non-profit bank alternatives in the US) that have more members than the entire population of NZ.
If you were to only bank amongst one Credit Union here in the states you'd see similar levels of service to what you mention (other than chip & pin which is only recently deployed).
1. Loads of free ATMs, the ones that charge are privately owned/run typically and in shops. While banks may run them and slap their logo all over it, it's effectively just advertising, it doesn't matter which one I go to. The idea that it would matter seems really weird.
2. No fees for bank transfers, most will complete within the hour I think and are generally immediate.
3. Chip & pin has been required for quite a while now, contactless cards are extremely common.
4. Pretty much everyone has some kind of bank account, I'm not sure how it works if you're homeless or have absolutely no proof of identity/address, but there might still be things that can be done there.
Most accounts are also free, though sometimes with usage requirements (deposit at least £X + have two direct debits is common), and many will pay you ~£100 to switch to them.
To be honest, that doesn't seem any less secure than requiring a signature.
It's a lot more effort to make a spoof card like that, more effort than the 5 minutes of practice required to vaguely copy someones signature and get it past a disinterested, minimum wage store clerk.
Implanting a second chip successfully into the card seems a bit above the regular "found the card and made a squiggle like the signature on the back". And that vulnerability at least was fixed.
It's not like the magnetic stripe is particularly secure either, you could pretty easily clone someone's card and then even use your own signature.
Even then, if someone is required to take the card, put it in a reader and type in the correct pin it's a bit harder to 'skim' a bit extra at the till.
The question should not be "is chip and pin entirely secure" but "is it better than a magnetic stripe and a pen marking".
> The UK, for example, has seen a nearly 70 percent decline in counterfeit card transactions since adopting chip cards, according to Barclays.
Yup, it's not about security, it's about liability. With chip&pin you're virtually guaranteed that the bank will say "too bad" if your PIN gets stolen. But then again with the (possibly) lower fraud levels it may be worth it? And yet again, do you see the banks passing on those savings to consumers? ;)
Australia's a bit bigger, but with similar forward-looking banking systems.
I was floored when I had to sign my name (on a brand new touchscreen) in the US but EMV wasn't deployed.
Contactless payments were brand new too (I couldn't use Android pay at that point), but we'd had "tap and pay" in Australia for two years at least. In Canada, someone took a carbon copy imprint of my card. An imprint, in 2015!
I can't find the exact dates, but EMV has been in Australia for at least a decade, signatures were "deprecated" at the end of 2014 and cheques are pretty much gone now.
https://www.commbank.com.au/about-us/news/media-releases/200... says that NFC payments started in 2006, but they took a few years to really take off. Last year I could finally use my Android phone to pay pretty much everywhere (and it's more secure than an NFC credit card, because I need to unlock my phone and enter a PIN to make a payment)
Also, what's the deal with interbank money transfers in the US? All I need to send money to someone in Australia is the BSB (Bank-State-Branch) and an account number. It takes about 2 days for the payment to clear.
Everyone should be allowed to secure a bank account, but fees is a separate story. You have a right to freedom of movement (as in speech), but you don't have a right to free (as in beer) movement.
This is a great list! I will, selfishly, riff on you 6th point to add:
* Modern logistics-driven solutions for inexpensive high-quality elder care.
If working this sort of thing sounds interesting to anyone then check out hometeamcare.com and ping me. We're hiring for basically every role in the company. It's a very interesting business!
Both child and elder care are very labor intensive (assuming you don't want to just warehouse bodies). Perhaps robotics with fantastic AI will improve things in the future, but I'm skeptical.
Ya, we're definitely not focused on robots. But there is room for tremendous, tremendous improvement in the current standard of care delivered by actual people.
I agree with most of the points, but to be honest the list is not for "everyone".
For example: University education changes don't help most people over 30 at the moment. (some indirectly because of children / family) Similar restricted set for child care. (provided someone has a need for childcare because they're employed) Both won't help people who were already affected by current system and are post that phase.
I don't mean these are bad ideas, but it's a list of specific issues in a comment about basic income which actually supposed to help everyone. People had decades to provide solutions to those specific issues - why are they relevant now?
Equally credible alternatives to university education for professions that don't involve students shouldering $100k-$200k in debt based on decisions they have to make when they're 18 years old.
Why not just free university education for people who have the prerequisite academic qualifications?
I hail originally from Spain, a country with extremely cheap college education compared to the US. Did free college provide better outcomes? Only to a point. Spain is a country with over 20% unemployment. The country is full of people with college degrees who can't get a job anywhere near their field. Given that degrees are so common, they become artificial gates: You are asked for a degree to do jobs that do not need a degree at all!
How do you really find a good job then? Mostly through family networking. And who has a good family network? The same kids that could afford college regardless. Many college educations are just years wasted, not unlike bad degrees in the US. No matter how many people might think about the wonders of classical educations, and how college taught them to learn, and similar drivel, in practice, those things only matter if you have opportunities handed to you anyway. For people that do not get the opportunities, college is only helpful if it helps them get the opportunities! Whether that's through non-family networking, or because what they studied in college is something in demand in the job market.
When studying the effects of any policy change, we have can't just stop at the first level: We have to see how the rest of the world will react to the primary results to the policy change. It's a bit how student loans didn't really make it that much easier to go to college: What they really did was make all colleges a lot more expensive, making a mistake in major and/or institution that much more dangerous. I think of a friend of mine, Ph.D in Biology with a 6 figure college debt, and no good American jobs that would take her. She's teaching technical english in Japan, because it pays marginally better than her American options! All those years of study, all that money, to go unused, along with being saddled with terrible debt.
So all I am saying is, bad outcomes can happen in a whole lot of cases. Want better outcomes? Create more jobs.
* There are limited seats available at the highest-status universities, so admission to those schools will remain a privilege disproportionately available to wealthy parents who can pay to game the admissions process.
* Simply attending a 4-year university has costs beyond tuition and books; there are plenty of people who don't go to college because they can't afford 4 years out of the workforce.
* The 4-year university system is extremely brittle, in that it creates good outcomes primarily for people who are in the right place (somewhere they can easily attend a good university) at the right time (right after they graduate high school) --- do anything to get off the college track during your high school years and it becomes extremely hard to re-engage with it.
> There are limited seats available at the highest-status universities, so admission to those schools will remain a privilege disproportionately available to wealthy parents who can pay to game the admissions process.
Funny, where I come from, going to a school that takes tuition means you're too dumb to graduate from a "real" university. Most notably, most universities don't accept for-profit faculties. This means that you can at most pay for a "4 year degree", but not for a "university degree".
I don't know if it's like that in all of, or even most, Europe. But it's definitely like that in all the countries I've heard about from friends who live there.
Yes. I'll also add the 4-year education is incredibly inefficient, in terms of skills added over time. Even in highly technical STEM degrees, you probably don't need 4 years "full time" to gain all of the skills an employer expects a fresh-out-of-school STEM graduate to have. The same is even more true of less technical degrees.
It shouldn't be, but there are a lot of people who don't give a damn about a liberal education for themselves, and just want a degree to improve employment opportunities. For them, I think it's kind of a sham to say that the only way to get the jobs they want is to sit through lots of non-employment-related material.
Would our society be better if more citizens were liberally educated and thusly enriched? Perhaps. But that doesn't invalidate the desire to offer students greater opportunities at lower opportunity cost.
I know I'm at risk of sounding tremendously disparaging but, how critical is it to actually go to college to get a liberal arts education?
Can most of these aspects of a "more well-rounded education" not come from reading, travelling and extra-curricular activities (like music lessons and trips to the theatre)?
I agree completely, and that is my approach. But not everyone agrees. I would prefer to study history, philosophy and literature because I enjoy them, not for class. On the other hand, not everyone who would be interested in those things would do that without some place to make it official, so I still see a reason for schools that make it their focus to exist. However trying to improve the populace through underfunded, half baked, required courses taught by rote memorization specialists... I don't really agree with that since most students are just there for "job skills" anyway.
Many pieces of education, both the purely educational bits and the well-rounded bits, can come from experience and other sources. A degree often operates as a third-party certification that an individual has completed these tasks, and/or can stick with something for x years.
One conversation I had with a senior employee at a very large company said that university was very important for signalling. They knew that someone who went to (for example) MIT was admitted to MIT, which indicates a certain amount of raw intelligence. Their legal department would not allow administering any sort of IQ test, so the school one went to was a proxy for IQ.
I know I'm at risk of sounding tremendously disparaging but, how critical is it to actually go to college to get a liberal arts education?
Can most of these aspects of a "more well-rounded education" not come from reading, travelling and extra-curricular activities (like music lessons and trips to the theatre)?
The same entity should not be responsible for both education and certification/credentialing. It creates a serious conflict-of-interest, and a better system would be to separate the entities that grant degrees from entities that sell education. This is especially important if the purchaser of the education is a third-party like a government or a bank, and not the actual student. (i.e., when the education is "free")
Everyone bemoans the increasing in tuition and increase in admin staff.. these things are intimately tied. The cost of education on a per-student basis hasn't increased very much in the US. Most of the cost burden has just shifted from taxpayers to students (for better or worse). Much of the admin staff is necessary to handle all of the financial aid, grant applications, etc.
Simply providing tuition-free education would eliminate much of the bureaucratic overhead.
Much of the increase in admin staff and university spending has come from all of that free government aid money we keep giving them. If we make tuition "free" for everyone, then universities will get a bottomless pit of money to spend on useless things. They will be almost totally divorced from the incentive to keep costs low. Right now, universities don't compete for funds on the basis of the quality of education. They compete on a political basis to collect as much money from the government as they possibly can.
We didn't have a problem paying for college in the US until everyone decided that the government should help pay for it. Throwing more money at the problem won't fix it; in fact, it's been a huge part of the problem!
This isn't supported by much.. The cost per student hasn't increased, only the proportion charged to tuition rather than taxes. It's easy to blame easy government money for the increase in admin staff, but during my grad program I GA'ed in the office and half of the staff were dealing with financial aid / loans / scholarships. They would be there regardless the source of the cash.
I've fought this battle on HN before and nobody wants to believe that college isn't any more expensive than it previously was, so I'll leave this here -- but do a bit of research and you'll be surprised.
Edit;
Since everyone seems to be downvoting this point, here's the inflation-adjusted cost per student in California from 1987 - 2013:
It actually costs about $2,500 less per student today than it did in the late 80's -- yet during the same time, tuition has increased by upwards of 5x. That delta used to be carried by taxpayers but has been shifted to tuition.
As Unimpressive pointed out, that's the cost of tuition. The total cost (tuition + state expenditures + fees + endowments) per student has roughly paced with inflation over the same time frame -- and in some cases, dramatically decreased. You have to dig a little deeper to see those numbers, but several states have done their own analysis. Here's one for California:
Seemingly nobody understands, or wants to understand this point.. College used to be an investment made by the working class in the youth paid for via taxes (state expenditures >> tuition), it's now flipped to an investment made by 18-year olds in their own careers (tuition >> state expenditures) -- Both approaches have their own merits, but focusing on cutting the cost of education misses the forest for the trees when those costs haven't increased over time.
This is very enlightening, although very counterintuitive.
So it looks like the cost of college is yet another burden the boomers have placed on our doorstep (and even more, the doorstep of those younger than me). I'm skeptical that saddling 18-year-olds with mounds of irrevocable debt has any merits to speak of, but am curious what argument could be made in that direction.
The premise at least is that if you hold kids responsible for their own educations, they'll choose careers and topics of study that lend to paying off that debt. If you let kids mess around in college for 4 years with no financial incentive, they might all study underwater basketweaving.
I don't buy that line of thinking at all, but some surely do.
No. His argument is that the actual total costs paid by all actors to provide the service has not changed, the share of the pie paid by students has changed. Which would look exactly like the cost rising in that table.
The rate of college attendance and graduation increased dramatically with the introduction of state universities and financial aid programs - it was no longer just the province of the wealthy. This obviously had good effects on the economy, and on society.
When my daughter was attending a private university, she had an enlightening conversation with a professor who worked on pricing for her university. He told her their prices were not going up in response to increased costs, but rather to maintain a certain price relative to in-state tuition. Of course, in-state tuition has been steadily increasing because it is becoming less subsidized.
In other words, the cost increases are a response to cutting government funding, both for private and public.
>The rate of college attendance and graduation increased dramatically with the introduction of state universities
Could you clarify this statement? It seems like you could be saying the state universities are a relatively recent phenomena. If so, could you give a few examples? I suppose Alaska and Hawaii, being the newest states, have the newest "state" university system, but even the University of Alaska predates Alaska becoming a state.
This word "Free" amuses me. I am curious why you think that something can be offered for free with no payment associated with it? Will the Professors work for free? Who will pay the electricity bill to heat or cool the buildings? What about the course material?
Free? There is no such thing. Someone will always end up paying for it.
Well, if you want to get abstract, the money itself is "free," printed by the Fed almost arbitrarily. By any number of mechanisms that money ends up primarily concentrated in one group of very wealthy people.
You can divert that "free" money and have "free" things for the middle class. That the wealthy would then be "paying" for it is a philosophical perspective that presupposes the status quo for wealth distribution is somehow "correct"
Ultimately this is just mixing up definitions of "value" in disguise. It's the reverse of assuming price is tied to some kind of intrinsic "value" of the good. Here, you're assuming nothing can be free (in economical sense) because physics. But it's not true. If you give stuff away no strings attached, it's free, period.
In the specific example being discussed of government funded "free" college education it most certainly is not being given away with "no strings attached".
There's a very real stipulation that regardless of whether an individual actually attends a university or not they will be having the monetary products of their labor forcibly taken and used to pay the professors, construct the facilities, and heat the buildings.
It just happens by means of taxes instead. Right now, banks get a pretty hefty profit off those that can't afford it upfront, it's a tax on the poor (and often middle class) more than the rich.
I think for me one of the open questions is are "prerequisite academic qualifications" as they currently stand, the right precursors to the kinds of educations we might dream up in the future.
Einstein famously (and actually) had poor grades in subjects he had no interest in, and did great in subjects he enjoyed. It seems to have delayed his progress that no one recognized his skill and passion early on.
Bad filters look for weaknesses and good filters look for strengths. Anyone who excels in at least one area has potential to do great things.
University education has become such a bloated juggernaut, I don't feel its sustainable or sensible to continue to feed it growing amounts of free government money. Im hopeful that free/inexpensive/subsidized online education, packaged into degree/certification programs and sanctioned by educational institutions, will be able to take the place of much of what is really being offered at traditional 4-year schools.
I don't know enough about Denmark to evaluate your comment, but stipulate that it's true, and then, if you'd like to reframe my list as "a list of things startups could do to use the market to make the US more like Denmark", I would have no objection.
Sure but Basic Income is about something else, something bigger.
It's about solving the fact that everyone is going to be out of a job.
If you only go to it by thinking you have to find a solution to the current workforce and income distribution problem then you are missing the real problem.
Denmark pays a lot in taxes, free healthcare, free education (even university), students get paid to study, redistribute wealth quite a lot and so on.
Problem is still there. The rich get richer compared to the poor while everyone is getting richer overall.
I'm not interested in litigating basic income; I'm confining my responses to the terms 'sama set up: "things startups can conceivably do". That doesn't mean I believe startups are the most important vector in improving public policy.
The population of Denmark is lower than the Bay Area. Some things are just easier with a small population and land area and relatively homogenous population.
The same reason smaller teams can accomplish things that large teams can't. The solutions don't scale. Corruption, fraud, abuse, bureacracy and enforcing regulation gets in the way of actually addressing or better yet SOLVING the problem. This is why large companies cannot innovate but instead buy small companies that do and that government does not actually solve problems.
Maybe. I'm not sure the analogy to companies holds, however. Small companies are innovative since they are growing, usually out of startups -- there really isn't an analogy of a "startup" for governments. At the very least, Denmark doesn't match that description.
The distance issues becomes a problem. What works for the Bay Area doesn't work for North East. It's both because all politics and business is regional, and because information flows are affected by distance.
A cursory search doesn't reveal a where-to-be-born [1] or human development [2] index for the lower half or quartile of a given nation's population. It would indeed be an interesting thing to view. I suspect that there's something to be said about the mean score vs the spread of values across the various quartiles of the populations of the countries.
* Alternatives to patient-present doctor-mediated health care to cover the 80% case in which doctors are expensive overkill; some combination of telemedicine and nurse-practitioners.
Doctor salary only makes up ~8.6% of overall Healthcare spending. Since, right or wrong, people want to see doctors rather than nurses when they bother to go into the hospital in person, I predict this tech will actually increase healthcare spending. The main change will just be that people seek nurse advice from home for minor issues they would have ignored previously. That may more may not be a net benefit.
Doctor salary only makes up ~8.6% of overall Healthcare spending.
You're missing the secondary costs. What are the costs of people having to sit at the hospital all day waiting for the doctor to see them. And what are the costs of people putting off seeing a doctor since they can't get an appointment?
Since, right or wrong, people want to see doctors rather than nurses when they bother to go into the hospital in person
Only if the 'costs' are them same. If you just ask people when they come in if they want to see a nurse (short wait and pay $X) or a doctor (long wait and pay $3X), I think you'll find many people opting for the nurse.
One thing to consider is prescriptions. In some cases doctors provide no value and are only present because of laws governing who can and can't prescribe medicine.
Another thing is liability. There are cases where a triage nurse could easily tell a patient "you're fine, go home and rest". But that can't happen right now because everyone's scared petrified about liability issues.
It's an interesting list... To me, improving provision of medical service and education definitely seems possible, as a lot of current problems are due to the fairly artificial constraints in the system. Removing them, or going around them, can really do a lot.
Things like child care and finance are not as obvious to me though: these are already competitive industries, with very price-sensitive clients too, and (IMO) mostly sensible regulations, so if something both cheap and competitive was possible, why hasn't it happened yet?
Also, as for "Equally credible alternatives to university education": I'm not sure if I get this one right, wording is a little confusing -- you mean the problem being that people feel forced to spend lots of $$ to study things they won't actually need for their jobs? IMO, to answer that, we also first need to answer why exactly is it the case currently: e.g. no government sponsorship of community colleges is going to help if the reason is that education is primarily used as a signaling device... (Edit: I see your response to another question -- namely a startup offering an independent alternative to screening on education -- and I agree that this can be promising. Not easy, but promising.)
Childcare is dying for some automation. 1 person can care for ~3 very young children(<15mo) which is freaking expensive. That grows to ~8-10 starting at ~4 years old.
Worse, these are all minimum numbers. You need extra staff to cover someone being sick, or turn people away.
No, it doesn't make sense to spend lots of high-value human attention on small children. For a pretty huge part of the day, small children are better off exploring the world on their own, and making social connections on their own. What's needed is safety, comfort, and some degree of monitored structure.
Again: once your kid turns 5 (4, if you're rich and you send your kid to private all-day preschool), you're generally sending them somewhere where one adult will watch as many as 30 kids concurrently, all the while educating them to the point where they can creditably pass standardized tests. That's a harder job than just making sure kids are happy and engaged, and yet we pay far less for it than we do for child care.
Child care is a huge part of why people get crappier jobs than they might. You can't go back to school if you have no savings and need to pay at least $15/hr for child care; in fact, you can't even speculatively take a lower-paying job for career advancement if that job doesn't pay enough to offset child care.
This is one of the scariest posts I have read. Infants and small children definitely need high-value human attention. I don't even know where to begin, just wanted to let the world know that I'm horrified by your comment.
High-value human attention, but not High-value human attention 24/7.
Sure, if we want to subsidize stay at home parents for young children that's a reasonable choice. But, pushing daycare out of reach of most low income family's pushes people into poverty which also has significant long term negative impacts on those same children.
Not who you're asking, but this is clearly a problem for infants and young toddlers (the data is fairly strong for under 18 months, and gets less clear the older you get from there), though it still gives the children the human interaction they need.
Results are best when there is a single primary care-giver and a small number of other regular care-givers, and day-care tends to not allow for this.
Things get much worse, however, when the staff of the day-care is either too few or too neglectful, as human contact and interaction is so important for early development.
It is possible that we could create a sufficient facsimile of a human to allow for automated care of a child that would fulfill these needs, but there is a creep factor in that, and there remains the question of how one would ethically test the efficacy of such a system.
You state things with conviction but no evidence. There is a big difference between the brain and therefore needs of a 4-5 year old and a 0-3 year old. I'm not sure why you assume you can infer anything about the needs of a toddler based on the way school works for older kids.
Here in Australia child care is also very expensive, and I agree this is a problem for disadvantaged families (there is some means-tested subsidisation but it only helps to a degree). However: the government has recently lowered the required educator:child ratios, despite the extra cost, because research shows it is important for education (and health, not just when young but into later life). More than this: the research suggests these improvements are most significant for disadvantaged kids.
It might not make sense to you, but do a little research and you'll find your conclusion is unfounded.
By law (usually state), the ratio of caregiver to child is much lower when the child is under 5. There's documented rationale for it too.[0] Also, there is a ton of research now suggesting the importance of education at that age as a function of interaction of words with parents.[1] So to suggest that "small children are better off exploring the world on their own, and making social connections on their own" is IMHO a very dangerous conclusion without understanding all of the implications associated with it.
Direct personal interaction is how small children acquire language. This is the only way that children can acquire language, and a language-rich environment is crucially important for children. This is something that simply cannot be automated.
People often automate human interaction. Getting an email reminder a few days before a wedding anniversary or a friend's birthday is hardly dehumanizing. If a scheduling assistant means a daycare worker can care for 4 infants instead of just 3, that's a huge savings for many working families.
How about dippers that can wireless notify you when there wet? Or for something that exists, a baby monitor so a caretaker can keep up with a crying child while another sleeps.
PS: Don't forget it's not just daycare workers who can use assistance, actual parents are also run raggid while caring for infants.
Yea, automating social coordination is fine, and technology and automation clearly enables use to increase our level of communication. Which is great.
That's different from automating the content of our relationships. It is dehumanizing to have to navigate an automated phone tree rather than speak to an actual person. Now, sometimes it is more efficient to not deal with people, but when you are talking about real human relationships, then dealing with real human people is the point.
Child care isn't just changing the diapers, it's about talking, interacting, and playing with children. Personal interaction is the only way that infants acquire language and language skills, for example.
The regulatory bar for childcare is absurdly high, and I can't imagine how much of it serves a constructive purpose (source: my sister, who is a teacher, once looked into opening a daycare center). But like the "war on terror", it's regulation we can't get rid of because nobody wants to be the guy who made kids less safe.
This is obvious, right? A K-12 teacher handles ~30 kids at a time, starting at age 5-6. Their job is more rigorous than the one a child-care professional does. Meanwhile, most parents are happier about the time their kids spend in school than they are about the time they spend in childcare.
* Empirical, blinded, skills-assessment based turnkey hiring solutions that outperform interviews for non-technology roles like marketing, purchasing, &c, so that people who avail themselves of alternatives to universities can get good jobs regardless of social signals.
Marketing desperately needs some sort of empirical way of hiring. Unfortunately, I think you'll find that half the people currently in marketing roles though would lose their jobs.
Alternatives to patient-present doctor-mediated health care to cover the 80% case in which doctors are expensive overkill; some combination of telemedicine and nurse-practitioners.
We have police departments and we have fire departments. We should have "nurse departments" that are clinics but much more structured as are fire and PD services for each given area.
(I know there is a grey version of this with EMT/clinics/hospitals etc... but this is something that could be made better.)
---
Modern logistics-driven solutions for inexpensive high-quality child care.
We talk a lot about "getting more women in tech" for example...
Getting more women JUST TO BE ABLE TO WORK involves insuring child care!
Sending a kid to child care full time costs MORE than many women can make per hour! Its ridiculous.
If you have ever tried to look for child care services on Care.com or otherwise, sitters all want ~$25/hour in the bay area.
It was hard for me and Erin to do 7 years ago (our kids are teenagers now), and we're economically very fortunate. I can't imagine how hard it must be for people trying to provide for families on $15/hr to manage child care.
I've had friends who are reasonably well off compared to the rest of the country and in doing the math realized it was just easier for one parent to stay home for X years raising the children.
Of course then they are out of the workforce and 'unhirable' when they try to re-enter it.
Pro tip: Have the full time parent take classes part time and do volunteer work. These days, blogging and online freelance work can also play a part.
Those things help preserve your employability. They give you something to put on a resume. The one and only thing that has the ability to increase your earning power while you take time off work is education. I read that somewhere and I have experienced it firsthand.
I got my first full time paid job at age 41. It paid better than minimum wage and I worked for the largest company in town. Any time I made small talk while buying myself lunch or getting a haircut, telling people where I worked got oohs and aahs. They didn't even know my job title or that I was stuck in an entry level job and never managed to get promoted. Just having a job there at all was statusy and a ticket to a real career.
I wasn't making the kind of money my ex made, but I wasn't doomed either. I ultimately left (for health reasons). I now do freelance work and, with my health issues resolving, my income is going up. At some point, I expect to live comfortably.
And that's where two parents are involved! Since I became a parent (luckily with a very capable spouse) I've been amazed at the tenacity it takes for the single parents I've met to juggle child care and jobs. Good, inexpensive care would make a huge difference for parents with precarious finances and living situations. The USA's patchwork of county welfare programs is hard to navigate and offers limited alternatives in many regions.
Solution: Childcare Visa. Many women in other parts of the world would LOVE to come to America. We need a special visa for them, and perhaps they can take care of your children from 8 to 6PM M-F in exchange for room and board and weekends, or some type of arrangement.
My guess would be they meant "ensure" rather than "insure." It is difficult to have both parents working if they aren't certain they have adequate child care.
None of the ideas address basic income. They are incremental not quantum. I think that reflects the difficulty in changing our frame of reference from what is to what might be.
If we look at how much technologies have advanced over last decades, the economy produces more than enough output for basic needs, which can be distributed to everyone without much burden.
We can simply offer basic income for everyone, then we can get rid of most special rules, such as food stamps, minimum wage, all kinds of deductibles, flexible spending, childcare. We can tax all incomes at fixed rate and be done with it. All these can be trivially tracked by simple computer system, the only thing needed is identify verification once a year or two.
We would have a much greater society and economy, and avoid the need of "job creation like Walmart".
Joke answer: totally, if you're going to play seriously!
Serious answer: besides the ongoing need of the 'elite' for childcare, most proponents of basic income argue that people would not just play video games all day. If you think about everything you or other people might want to do in your free time today, even - how many of those would you prefer to do without simultaneously minding children?
I understand the stigma against people "wasting their time" by playing video games all day. I don't play many games myself, and spend most of time on creative hobbies like music and photography. Actually that's a lie, I spend a lot of time reading Reddit. But apart from Reddit, I do creative things.
When I was a kid, I used to ask why poor people don't just start a business, or go out and get a better job? That was before I understood the way that poverty traps people in a cycle. And the fact that we don't all possess the capacity to become entrepreneurs and creative thinkers.
I think a basic income is most important for the uncreative people. The people who don't really have any talents, and never had any big aspirations. The 50% of all people who have a below-average IQ. Maybe they can't think of something productive to do, but in a post-scarcity economy, why should they need to? When the whole farm-to-table pipeline is completely run by autonomous machinery, then I think there's nothing wrong with just relaxing and enjoying life.
I'm worried that this YC research program might end up making the wrong conclusions, if the results are only analyzed by startup people who are hell-bent on "changing the world" and being ultra-productive all the time. So what if a recipient just chills out all day, goes for walks, swims at the beach, takes some photos, and plays some video games. I hope they wouldn't call that a failed experiment.
>Serious answer: besides the ongoing need of the 'elite' for childcare, most proponents of basic income argue that people would not just play video games all day.
Unfortunately this is not the case. What do students who live on student loans and/or parental stipend as a "basic income" do? You can expect more of that when the government becomes the parent doling out the stipend.
Students are busy - they are attending classes, doing homework and studying for tests. When they have free time, it's unsurprising that they don't have much excess mental energy or money for pursuing hobbies. And even then it seems to me that a lot of activist groups are mainly student-run. So I don't think you're right.
This really depends on the school, program, and students. I teach video game programming courses, and these seem to attract many video game addicts who can't even stop playing games during class.
And why is this bad? At least they get the fair chance to make something of themselves, regardless of their social / economic backgrounds. Too many don't get that chance.
There's a more trivial alternative to "equally credible alternatives to university" - just ban education based discrimination.
Same way US so nicely enforces regarding race or martial status. Make it illegal to ask.
Simple change with 100% guaranteed positive outcome.
Whether I agree or not with this (mostly, I don't), it fails my test of "being something a startup can do".
Whereas a startup that had a really good solution for inculcating the kinds of skills and values white-collar employers are looking for could outcompete universities instead of legislating them out of the picture.
When people discuss the value signaling provided by elite universities, their first example is usually "the diligence and hard work it takes to get into the university". That strikes me as the kind of value you can find ways to signal just effectively without asking for $150k.
> When people discuss the value signaling provided by elite universities, their first example is usually "the diligence and hard work it takes to get into the university"...
Graduation rates at universities for the elite are nearly 100%. Getting into the club is the only hard part and everyone involved knows that.
Empirically, what's required to get into the club is being wealthy enough to afford the private schooling, tutoring, and extra circular activities necessary to help your child game the admissions process.
As long as people value these prestigious brands, the elite will continue to buy them for their children. It's got nothing to do with education itself, which could be obtained any number of ways already.
If their process was an "Empirical, blinded, skills-assessment", and they funded anyone who met their predefined requirements, we'd have a real alternative to class-based universities. At least for anyone willing to create their own business.
YC is already more fair (less gameable) than the elite universities, but it's still far from being fair enough or big enough to really change things.
If getting into an elite university is the signal. Why not apply to elite universities (or the best that the student can get into) and then shrug admissions when accepted?
The student can then turn around to some great companies and say "I got into X university, but am thinking of waiting a semester and want to learn a bit about your business. Would you be open to some sort of internship?"
I don't know if that is the correct solution though. Much of what I learned came from being at school, but not necessarily the classroom. I learned a ton about alcohol and drugs and sex and other things that simply being in an environment with so many of my peers produced. Additionally, I'm a designer. If I weren't an editor for the school paper, I'd never have picked up a copy of creative suite and probably would be working a miserable corporate job somewhere otherwise.
It'd be easier than you think. Much like IQ testing, requiring a college education is already illegal under "disparate impact" arguments (unless it's a bona-fide occupational requirement - eg, an electrical engineering degree for an EE position). The difference is that employers expect to be sued if they give job applicants an IQ test, but they don't expect to be sued if they want a competitive alma mater.
The way to fix this is to sue lots of employers for requiring or discriminating based on college education. Or at least win a few high-profile cases.
> Much like IQ testing, requiring a college education is already illegal under "disparate impact" arguments
This is the first I'm hearing that IQ testing is illegal as a basis for employment. AFAIK the military and many police forces employ IQ/aptitude tests as part of their hiring process.
Though sometimes we're trying to tech-fix things which are broken on a whole different level. Education is effectively free today. You pay to get the certificate. I think that's a broken system.
I agree that it's a broken system. But when systems are broken because of egregious market inefficiencies, as in the case for "pay $150k for a certificate from a university" case, I think you have an opportunity to make a large amount of money while improving the world. Things that can make large amounts of money can be funded by the markets, rather than requiring legislative fixes.
(I am not opposed to legislative fixes! I'm a statist liberal Democrat. I'm confining my response to the terms 'sama set out.)
I disagree. While college is becoming less of an important step for many careers, education, especially post-graduate, is vital for many others. For example, if I were a large tech company hiring physicists for R&D, I really don't think it's unfair to expect some sort of post-grad education, nor do I think these instances really contribute to any sort of problem right now.
What's important is that the skillset exists, not that a university has been given a considerable sum of money to provide certification that it exists. University was not the normal way to establish credibility until very recently. University is too expensive to sustain in its current form -- the whole thing has to be reworked to be affordable.
So don't ask yourself "What degree does this guy have?", but "How much physics research has this guy done? Can I see his body of work? Is it high-quality stuff?" The latter is performed anytime a competent person performs a hire anyway. It's fine to skip/ignore the education when someone can demonstrate competence. The problem really comes in "soft" degrees like business, marketing, communications, etc., where it's not really possible for a body of work to be presented as evidence that the individual knows what he/she is doing.
I think the parent is saying that if someone can demonstrate they can handle a physicist position for R&D, does education even matter? It would really depend on the criteria used to determine the ability to perform at the job. If the criteria is good enough I see no reason why someone without a PhD could take the job.
Can you devise a filter that's as rigorous as all the tests and projects that a student would have successfully completed over the X years it took to earn the degree?
Seeing the degree is a shortcut to verifying that the basic level of knowledge in the applicant's major has been satisfied. The testing necessary to verify that independently (and redundantly - one for each company being applied to) seems prohibitive.
For physics? Probably not. But physics grads don't make up a particularly big part of the economy; it's actually not an especially great degree to get if your primary concern is a STEM-y career.
For HR directors, purchasing managers, corporate controllers, practice managers, financial advisors, and jobs like that? Yes, I think you can devise filters for anything colleges filter for that would be both more effective and far cheaper than college.
> Can you devise a filter that's as rigorous as all the tests and projects that a student would have successfully completed over the X years it took to earn the degree?
Eventually I don't see why not but I don't think it's an easy thing to do nor do I know how to do it for a physics R&D type of position. Obviously education isn't the only criteria people use today anyway (I can't tell you how many CS grads I've interviewed who really struggled or flat out didn't know a lot about CS).
It's an age-old problem: how do tell if someone can do what you need them to do without wasting your time and money? As the skill and knowledge requirements go up this becomes harder and harder to do, with or without the degree shortcut.
Physics is a field that is almost entirely taught within the traditional college system and probably would get less of a benefit than other fields. The problem is the college system is so expensive that those who COULD become physicists aren't because of economic reasons, and those who want to more than anything are being saddled with debt and a lot more burden which probably doesn't help them advance the field.
I am not sure I understand this. If you are going to a doctor, you would want to make sure she is qualified, isn't it? And the only way (currently at least) to make sure is that degree that proves she knows what she is doing. Of course this doesn't apply to all professions.
I think that's true to some degree but most types of doctors still require going through an internship (sometimes), rigorous and lengthy residency program and passing their specialty boards.
It's true if someone can do those 3 things without going to medical school they may be missing a great deal of knowledge passed from medical school that maybe they were not explicitly tested on or experienced in the field. I'm not sure what to do about that. If you could find a solution for that then banning from asking or considering education could actually work, I think...but that's a hard problem to solve.
There is still a path to become a practicing lawyer without going to law school. You need to pass a test and become certified, but going to school is only necessary for the pedigree. Arguably the simplest solution is to remove undergrad degree requirements from med / law school.
In terms of education there are two options. Ban mentioning degrees only credentials, or ban mentioning school names which deflates the ivy name recognition. In both cases schools would need to focus on education not name recognition.
Interesting, one of the top tier schools in my area has a little trick: they give you a ring. The idea being you wear the ring to interviews, so that they know you're from the school. Of course, if they looked at your application form they would know your school, but for other areas where they cannot ask for your school this gets around that. I personally find that very elitest but people will go to lengths to make their reputation known (they ban wearing school uniforms, but rings are exempt for example_
In reality, there's no good path to a career in the law that doesn't go through a small subset of the big law schools, because there's a huge glut of lawyers. A starting point for looking into this is the Google search "third tier toilet".
The thing that unlocks legal professions from the grip of $200k law schools is going to be something that reimagines the role of a lawyer, creating a new kind of legal professional that makes radically less money than a BigLaw lawyer.
Qualifying tests and apprenticeships can make that work for almost all cases. Some of that is already in place for professions that need practical experience.
Interview based discrimination is really where it is at. Also, since it is almost impossible to remove indicators of protected statuses such as gender or race, it will help ensure no such discrimination occurs. Best we couple it with a ban on performance based discrimination once hired.
Wow, this is such a simple, practical, and subversive idea that my mind has been too boxed up for coming up with that. Whether I agree with this genius, devious and trivial idea... not sure yet.
The flipside to your first point is that employers can probably get an edge these days by simply ignoring college degrees. If you're skilled enough at hiring to actually find good people, ones without degrees are probably undervalued by a significant margin.
That's true in technology, which is why I qualified the second suggestion with "non-technology jobs". It's much less true in other fields, where the work hasn't yet been done to create evaluation rubrics that don't depend on signaling from college.
on your last point, I've wondered if it would be within the scope of 18F or the US Digital Service to create a local.gov site/platform that is a repository for all local government information and vector for engagement. Figuring out who all the locally elected officials are and what they are supposed to do is nearly an impossible task.
That's probably outside 18F's scope, as they are cost recoverable and must be hired by a federal agency. So getting that done would require convincing a federal agency to spend the money to hire 18F to build the platform. USDS could do it if it were a presidential priority, but while creating a one-time snapshot of that list would already be an incredibly huge task, actually keeping it updated would be very difficult just because of all the points of contact involved. Especially if it went down to the city council and school board level, which would certainly be useful to local communities, but really difficult to keep track of on a national level.
*I'm an 18F employee speaking in a personal capacity.
Absolutely - it is certainly a HUGE undertaking. Though the value to the society/community/voters would be equally enormous it's unlikely we'll ever find the resources to have such a thing executed in a thorough, responsible (unbiased) manner. I suppose this is the part where I motivate myself to design and build it because nobody else will...
Sidenote - high-five for the stuff going on at 18F :)
> Equally credible alternatives to university education for professions
You're talking about trade schools? Good. That's a step in the right direction. It doesn't go far enough though. One unfortunate reality of our existence is that people differ markedly in cognitive skill. These differences are innate and immutable. Not everyone can benefit from an education.
If we pitch education as the way to address to inequality, we're not only going to waste a lot of money on useless education, but we're also going to give these negative-marginal-value people false hope of economic success.
We need to figure out an alternate way of living for people who are intellectually incapable of contributing to a modern technologically advanced economy. A basic income is a good start.
I think you're underestimate the number of jobs that can be done with extremely little cognitive skill, and over-estimating the speed with which technology will make them go away.
I agree on the education front, but disagree that there are significantly many negative-margin-value people. Personally I think a huge amount of that perception comes from the fact that people just don't fucking move to better economic opportunities. That problem may be solvable as things like distributed call centers and other location-independent work becomes more common.
We need to figure out an alternate way of living for people who are intellectually incapable of contributing to a modern technologically advanced economy. A basic income is a good start.
There is another dimension to this problem though; national borders and status.
There are a TON of really smart mexicans and other immigrants of every nation who are stuck into an effective caste system based on their status.
In fact, modern American society would literally fall apart if all the mexican service workers were raptured.
My point is that while we look at those who cannot contribute to a technologically advanced economy, we also are pigeon-holing many many others who are based on the complexities of citizenship status problem.
We already have programs for granting preferential immigration to high-skilled foreigners. Every advanced country does. Unrestrained immigration is incompatible with a welfare state. Which would you rather have?
There's not necessarily a conflict between the two. One middle road would be to maintain the welfare state, but to add a rule saying that only people whose ancestors were citizens before year X could receive welfare.
The result would be extremely visibly racist, but I think the right response to that is to understand that existing immigration laws are in effect equally racist. It's the visibility that would change, rather than the degree.
No, I am not talking about trade schools. The jobs staffed by trade school grads already do a decent job of not being beholden to university signaling. I'm talking about white collar professional jobs that rely on those signals for reasons having nothing to do with job aptitude.
I agree with that too. A big part of the reason for that outcome is that for-profit universities are pin-compatible with the university education system --- which, as noted upthread, is often really just a means for wealthy people to purchase status for their offspring --- which allows them to capture student loan subsidies, enabling them to bid prices up the same way universities do.
The alternative to college education isn't going to look like a college.
In what respects would it differ? On-campus residency is an optional feature, and MOOCs can help education scale better, but in the end, you need to somehow 1) compensate experts for the time they spend teaching material and evaluating students, and 2) even more importantly, implement a robust accreditation system to eliminate the temptation to loosen standards in order to raise enrollment.
What you end up with ends up looking a lot like a college. Now, we can talk about changing how funding for college works, but that's a separate discussion from changing the fundamental model, which I don't see as a practical goal.
I don't think it's true that the dominant input to prestige university education is courseware and delivery expertise, nor do I think it's the case that a 4-year degree or something that purports to duplicate it from a computer screen is the ideal vehicle for inculcating the skills and values white-collar employers are looking for.
There doesn't need to be one universal answer to this suggestion; it would be a boring suggestion if that were the case. Instead, you could look at the market for white-collar jobs and break it down looking for lucrative subsets, and then devise some kind of apprenticeship scheme.
If you could eliminate the 4-year degree requirement for HR directors, company controllers, purchasing managers, or jobs like that, replacing it with something tailored to the specific job, you could allow people to get an early start on a white-collar career while offering them opportunities later in their career to get something like an MBA or a JD.
But because the only current credible signaling mechanism we have is a 4-year degree, there is currently no good way to get the kind of job that might legitimately demand an MBA or a JD without first getting a degree in Russian Lit.
I get in trouble with HN by suggesting that general intelligence is both real and important in life outcome, but I really can't help point out how, when we require a four-year degree for an HR director candidate, we're not really filtering for candidates with a particular body of knowledge, but filtering for candidates with the intellectual capacity to acquire one.
Any college replacement scheme is going to have to perform the same kind of filtering if it's going to be useful, and anything that performs this kind of filtering will be subject to exactly the same controversies the college system is subject to today. This outcome is because disparities in intelligence matter, and as long as we these differences exist and we need jobs with a certain cognitive threshold, we'll need something like college to indicate that certain candidates possess the needed traits.
It's important that it be very hard to lie about these qualifications, because anyone who could, would, due to the clear economic benefits of doing so. The only surefire way to determine whether someone has intellectual chops is to make him or her do something intellectual. That's what college is.
You'd get into trouble (meaning, pointless unproductive argument) with me trying to bring general intelligence into a discussion about HR directors as well, so that's a topic we're better off ignoring.
The good news is, we don't have to dig into that. All I'm saying is that it's calamitously expensive, across multiple axes (direct cost, opportunity cost, brittleness of opportunities) to assess capacity to perform the job of "HR Director" by looking for a 4-year degree.
I doubt that you believe a UMich Russian Lit degree is intrinsically an important qualification to work in HR (HR: one of the fastest growing white-collar jobs in the US, hence that example). I'm saying: that's a market inefficiency, and if you could find a way to arbitrage it, you could make a mint while making it possible for more people to get stable white-collar employment without reading Solzhenitsyn in a dorm room.
One unfortunate reality of our existence is that people differ markedly in cognitive skill. These differences are innate and immutable.
Leaving the defeatist mentality aside, instead of saying they do not fit our current model, why not work on personalizing education. People go to school and meet a few professors with this attitude and they leave convinced they cannot be made good for anything. Not good.
and of course, a little bit of taxes to redistribute YCombinator money made from startups-that-don't-help-people-to-eat to those people who'd be relieved by basic income
President Ptacek, elected alongside new House Speaker Ptacek, would add more than a "little bit" of taxes, but startups can't do that, so it's outside the scope of the question. :)
"What can startups do to increase prosperity for everyone?"
I think cheap quality housing is a huge area that would help everyone. Taxes and housing together eat up the vast majority of the earnings most people make.
What could make a difference?
- applying technology to building denser housing. for example, imagine cheap robotic excavation, so every house and building could bury all their parking lots and long term storage areas below ground instead of occupying valuable real estate.
- improvements in transportation. Making transportation faster and more comfortable means more people can affordably live within commute distance of prosperous urban areas (say, the SF peninsula)
- advocacy: pushing for changes to zoning rules to allow dense, livable communities, bringing more housing to our cities. For example, imagine turning a shopping center + parking lot into a pedestrian-only mixed-use urban area, modeled on the best dense cities out there (like Tokyo, Munich, Stockholm, etc). This requires a combination of property developers with a strong vision, changes to zoning laws, and a strategy for overcoming NIMBYs.
A good first step would be for governments to stop doing everything in their power to make sure the cost of residential housing increases every year more than the rate of general inflation. I understand _why_ they do so, homeowners are a big and powerful constituency, but it is an incredibly inefficient and counterproductive way to go about doling out pork. This means things like eliminating the mortgage deduction, property tax deduction, special cap gain rules, getting rid of Fannie, Freddie, FHA, forbidding the Fed from buying up MBSs, eliminating the homestead exemptions, and getting rid of no recourse rules. Not sure how much of a role start up can play in this sort of political reform.
A good next step would be decoupling education from housing so that the purchase or rental of a home doesn't implicitly include quasi-private school tuition. Here I see a good role for the private sector. While for-profit charter operators can be very controversial, excellent charter schools with scalable models are a necessary precondition to selling the public on a voucher system which implicitly buys you larger catchment areas and has the desirable decoupling effect. If the private sector can do that, godspeed as far as I'm concerned.
I don't think eliminating subsidies will make housing much more affordable or accessible, but it is probably still a good idea (since tax deductions tend to favor people in higher tax brackets).
Conversely, I don't think that eliminating subsidies should really be a first priority, since I don't believe it will have a large impact, though I can't really say I know what should be beyond relaxing zoning rules.
Just create areas with relaxed zoning. Inspect only for service and building quality and let people build what they want. This will create affordable housing. The incredibly high fixed costs on development push the model towards high priced units.
Regardless of basic income, fixing housing is super important since it's one of the biggest drains on everyone's income and the fixed nature of it suggests that just giving everyone more money will cause a lot of that money to just end up in landlord's pockets.
I think a lot of the change must be policy change though and cannot be purely free-market oriented since there is a public interest in seeing more housing stock built than a capitalist would want.
So much this. We've see this over and over. If we get more productive the rentiers take it. We need to squash the rentier starting with land value tax. And stop taxing labour.
Then you have the true choice because you can achieve financial autonomy through work and then tell the man where he can stick his job if he refuses to pass on enough of your value added.
Cheaper land will see less people forced to work which will mean higher wages and more disposable income. And all the people doing nothing other than "investing" in extorting money from workers for the right to occupy space will have to suck it up.
This topic basically terrifies me. When I see people asking for basic income without addressing land issues (and money creation) it just shows they are on the wrong track. Big time. Basic income will just become "landlord income". In the UK we have "housing benefit" which sets a floor on rent and guarantees land owners get more than the market can support. It's "landlord benefit".
BI could have an impact because it could relieve the pressure on job centers (SF, NYC, LA, etc...) as people wouldn't be forced to move to look for work (and I imagine plenty of folks would leave those areas as well, because they are no longer as dependent on their job as they once were). At least in the US, there are a ton of midwest and rustbelt towns that have really cheap cost of living and plenty of land, but due to lack of jobs, are in really poor shape. BI could allow for people to relocate there, and the new influx of people (and income) could lead to revitalization.
Agreed BI would save on admin costs for benefits. But it's not going to solve the greater problem of economic rent extraction through land.
If we have more money they will take it off us via land. Saving on job centre costs makes us more efficient. Efficiency flows to the rentier. You'll be right back where you started with BI. Up BI and they'll up rent. And again.
In your example once you have your revitalisation and all the people pay taxes to build more roads and hospitals guess who's waiting for you with a big hat to shovel all the gains in? The land speculator. Up go the rents, up to the level where people have enough to live but no more. And back to square one.
Surely they deserve the gains, after all they are investing their hard won money? No! Fiat money takes no resources to create and the bankers will have your shirt. Private banks create money from nothing and "lend" it out if you promise to give them a cut of your labour as "interest" for 30 years.
I'd say the housing problem in the UK is a lot worse than the US, at the average income (£26,500) you won't be able to afford a house in 91% of the country:
I think BI could mean the end of homes as an asset class. Mortgages will become a super low risk loan meaning that interest rates will go through the floor, in turn making home ownership supremely affordable. If everyone can afford a mortgage then why would anyone rent?
They would be super low risk because everyone would have a guaranteed way of paying them every month. If you have to ask why they aren't low risk now then I assume you have no experience in being broke and not being able to make rent. High demand with unmatched supply means higher prices. Rates can influence demand but if you take the majority of rental properties out of the market because people sell them due to low rental demand it will sort itself out.
> High demand with unmatched supply means higher prices.
You've just negated your own argument that home ownership is more affordable under BI. BI would increase disposable income across the board, increasing demand for purchased homes that is not necessarily coupled with an increase in supply. Prices go up overnight.
And home mortgages are low risk now - rates are about 3.5% which is among the lowest you can get for any loan, especially one multiple times higher than the borrower's yearly income over multiple decades, and any responsible person will be paying their rent long after they've switched their diet to PB&Js and ramen noodles. It's the first thing coming out of every check.
In the short term you are right but long term rental market could drop out as people choose to buy instead of rent freeing up lots of housing (people selling their rental investments as their returns dwindle) so that supply matches demand.
Regarding low rate mortgages... you remember 2008 and the years leading up to it?
If everyone pours much of BI income into mortgages but the supply of housing stays limited, then the price of existing houses will just go up-- and much of the BI income will get eaten up by housing price inflation.
Supply is limited in large part because everyone wants to live in the same place (ie where there is lots of work). BI will change that too, allowing people freedom to move where they can afford to live without worrying whether there will be jobs waiting for them. The free market in action. The impact a BI will have on society means that many of the patterns we see now will be flipped on their heads.
I don't think there would be any additional value created by giving them more money, they would simply be capturing more of the value that exists, and I don't think enriching moneyed special interests with no gain to the general populace is good policy.
And I also don't think they are creating any significant value so much as extracting rents.
Why not have startups have their employees work from home? Much simpler and easier to implement solution. I don't have the obsession of wanting to live in a city but I'm aware most people I know who don't have that obsession either still have to because their bosses does not let them work from home. If you only have to come in once a month or less you can live in a region where housing is affordable; I could buy a livable house every 2-3 months in my region. It's not for everyone but it would provide greater quality of life for many and would certainly allow people to own their own houses / land without having the risk of the bank to throw them out no matter what goes wrong (you don't need a mortgage).
Instead you have companies like YCombinator and Facebook requiring people to move into an already overpopulated area to do work that could just as easily be done over the wire.
But technology is no longer a blocker. Often times companies will use this as an excuse instead of just coming out and saying "we prefer asses in seats because it looks good to our bosses".
With regards to remote work technology , we've done pretty poorly:
1. Normal video chat is awful. We can't create eye to eye contact. We can't see body language. It's not very useful to build trust or bonding that way , and this is critical. There might be solutions but they're only availble to very expensive telepresence suits.
2. We haven't managed to create an informal environment via video chat , say like lunch or the water cooler.
3. Working from home requires a lot of self-discipline which is hard . Social face-to-face pressure works better as a motivator for people in general(see battle units) , and it rarely translate well into electrons.
4. Working from home is isolating, and it might be due to limits of the technology.
1. I disagree. You can draw a lot from phone conversations and I've developed a great amount of trust in all the remote employees I work with on a daily basis. Certainly you should meet face to face at least 2-5 times per year (once per quarter seems like a great fit), but it's not a requirement to bond with co-workers.
2. I'm not sure you need informal video chat with co-workers. #random/#ideas channels seem to do just fine.
3. Couldn't disagree more. Working from home requires the same amount of discipline as a location-dictated workplace. The difference is that a remote job is much more enlightening because there's no burden of a commute. You also don't have to put on some fake act for a lousy boss that wants you in the office at a certain time.
4. Again, I completely disagree. It's only isolating if you let it be. Get outside for a hike or a walk. Go to a coffeeshop. Find some friends to grab lunch with. I shouldn't have to point these things out. It's pretty obvious that the only way you'd be isolated is if you deliberately lock yourself in the house and never go outside.
I've worked remotely for two years now and honestly I'd have an extremely difficult time going back to location-dictated employment.
In the past when I had a bit rougher edges I often asked after 30 minutes in a meeting face-to-face why we were in that meeting still; was there anything to discuss we didn't discuss in the first 5 minutes? The answer was almost always no. People with these face-to-face urges and (too long) meeting urges usually just want a break from work (but paid) and/or social interaction. I like that as well, but we have bars & restaurants etc for that, not the office. I rather work flat out (focused and organized) for 4 hours and then take off or go to a bar or take a walk for the 'meeting' instead of loitering in the office for 8 hours and commute for 2.
I haven't worked in an office in 10 years. If I do visit one I find it takes incredible discipline to actually sit down at your desk and work, and not take part in all the water cooler-ing that goes on.
I have made friends with people I have never been ina room with. We talk about the weekend, sports, tell jokes, etc. all over video chat. If you aren't creating that informality, it's the people not the tech.
Also , if you turn the screen/camera 90 degrees , you may be able to capture body language.
With regards to #3/#4 would working in a local communal center, remotely to your job would work ? Is it possible to design some culture that would help with the motivation problem ?
Anyway, it feels like something that deserves a sub forum of it's own, with a community experimenting and sharing, right ?
The illusion of trust is easier to build in person. Actual trust is always damn fucking hard work to create. It doesn't matter the medium through which it occurs.
I have taken online classes. I generally found them better than classes that thought my ass keeping their chair warm was somehow valuable.
It is hard to design a good remote environment, but it is hard to design a good anything.
I agree. There's too much to list, but here a few things to note about remote work:
- You need to hire people that are great self managers. This needs to be clearly communicated to the employee.
- Document everything. The internal wiki is an invaluable tool for a remote company.
- Quarterly team meetings are a requirement. You need some face to face time. Getting together at the beginning of each quarter for one week to plan is a great way to reset every 4 months.
- Send employees random gift packages and swag. This is a great way to make sure people don't fee left out.
It is! A while back, I was talking to a former colleague and pair-programming partner, and he was singing the praises of using desktop sharing software for pairing, even if when in the same room. It reduced the "driver/passenger" effect and made pairing more effective.
Strangely this is not the first time I've heard folks sing the praises of using collaboration tools, even when in the same room. Maybe because headsets and cameras keep you 'in contact' in a way that seems personal, but tones it down below the level of the shared documents. So the work 'volume' is higher than the personalitys'.
They must employ the wrong people (or, more likely, the wrong managers) IMHO. I cannot see how it is vital to sit together every day or even most days of the month. Sure you need it sometimes but so often you need to buy/rent a house 'close' to the office cannot be true. Maybe they are doing something different than the management/development I do?
Housing is almost impossible to fix at this point. Housing is seen more as an asset class than a social requirement (although, not everyone thinks this way there are enough people with money that it doesn't matter what they think, it is an asset class). The majority of the issues you highlight are caused by the amount of capital moving into real estate and the amount of resistance to change is directly proportional to how much the house is worth. Almost any change in housing will be universally opposed by owners unless it improves their house values (sometimes a change may improve one set of owners while diminishing another but that just makes for more media friendly conflict).
Tenements and social housing have been tried and mostly failed. Interest rates and taxation only have a marginal affect until they reach extremes. Emigration from an area has been shown to lower prices but at great social and economic cost.
Then there is demand, everyone needs somewhere to live. Don't just consider local demand, consider international demand. How culturally, economically or socially appealing an area is to an international audience (that is, does nearly everyone want to live there).
I view it as almost impossible for housing to improve for everyone while it is an asset and there would need to be utterly draconian or utopian changes to switch high quality housing from an asset to something universally available.
A thought experiment: What about building a new city in the middle of nowhere, with the sole goal of extremely reducing living costs , and designing the laws specifically for that ,including making housing costs extremely cheap?
You will always have a chicken and egg problem with jobs. Company towns are one solution and as people pointed out, they can be horrible. But I think a fantastic idea would be developing an empty area, say, 45 minutes from a job hub, and running bus shuttles or trains there. Imagine a stop along the California High Speed Rail project that could get you to San Jose or San Francisco in 45 minutes.
From there, I think you'd want a few things:
- Henry George-style taxation by the local city on land values
- Maximize the place:non-place ratio. Maximize space for parks, buildings, plazas and minimize space for parking lots, roads for cars etc.
- Small lot sizes, row houses, and 4-6 story apartment buildings with excellent noise insulation
- Dense enough so that cars are not necessary most of the time. Saves lots of land and the costs of operating cars
No need for thought experiments, we have history. Company towns are good examples of this (see [Roxby Downs](https://en.wikipedia.org/wiki/Roxby_Downs,_South_Australia)) as are cult headquarters. An oil rig is another example, housing costs are usually free (covered by employment), living facilities are provided free of charge and costs are usually fixed through corporate oversight and union opposition to changes. The funny thing is, most people don't want to live in places like that.
The UK government built a bunch of "new towns" in England in the '50s and '60s, to take pressure off the housing situation in London at the time. The biggest is Milton Keynes, near Bletchley Park. It's a bit soulless in the same way as US suburbs, being built for the age of the car (roundabouts as far as the eye can see!), but it's 45 minutes from central London on the train, and was affordable for regular people to buy houses there. The new towns schemes seem largely successful 50 years later, and I can only imagine the reason we've not continued is because of the change in political taste for large infrastructure projects since then.
If we don't change this you can forget it. Land is the issue, it's been the issue for hundreds of years.
The ability to expand into free land was what made the USA different. You could take a job for the man on subsistence wages or set up yourself. That's why you had to have slavery. In the UK with land enclosure the prison is the country.
We should tax land and stop the exploitation of workers by rentiers.
Except that like everywhere else on the globe that isn't Antarctica there were already people there that needed to be displaced. Someone else's asset was stolen and sold (for very little initially, but sold nonetheless). Land (in absolute terms) has little to do with property prices compared to where the land is geographically, politically and socially.
Land tax will help marginally with inequity but the majority of the cost will just be passed on to renters (like what happens now). Taxing vacant buildings higher will increase supply which should depress rents slightly. None of that stops housing becoming an investment and a financial asset though which is the root cause of unaffordability.
LVT is set by location. Property prices are set by location.
LVT can't be passed onto renters. It does stop land speculation. It's the opposite of what you say.
If LVT could be passed onto renters then why, given the market can apparently bear higher prices, are our genius landlords not charging us more already? That's how prices are set my friend, they don't sum up the input costs and add 5% profit.
I often think about big cities where people have reasonably priced housing options available. Two great examples for me are Tokyo and Berlin. I think a big factor in both is a combination of dense traditional city planning, and transportation. I really enjoyed this piece on traditional cities:
http://www.andrewalexanderprice.com/blog20130330.php
To drive down the cost of housing you'd have to drive down the cost of land in places where lots of people want to live. The house is the smaller part of that equation, unless you're looking at the third world and there a whole pile of other problems come in to play.
And to do this you'd have to stop the banks financialising people's lives. They are simply working out how much of labour they can possibly take and then that is how much the land is.
In the UK women going to work saw banks change their lending criteria from:
* 3 times primary income
to:
* 3 (or 4) times household income
voila prices double, the rentiers get more interest and the govt sees more money printed via mortgage lending and call it "growth". Meanwhile the man on the street hands over all his labour to the money creation monopolists.
Building up and downsizing unit size is the natural solution to expensive land (i.e. just use less land per home). While building up has some costs it is zoning/planning regulations that prevent this in practice.
This is the key because it drives up the cost of everything in a vicious cycle.
This is theoretically the one of the easiest big problems to solve - just stop preventing developers from building new housings and they will gladly build as much if not. Ore than we need.
Unfortunately in practice it would take something like a revolution. Are there any examples of this happening? I only know of examples where we make the problem worse and worse.
I wonder if we are thinking about the housing cost problem properly. I live in NYC and there are a lot of affordable options. That's certainly not the case about the most desirable locations. But ipso facto those locations will continue going up in price. Perhaps the problem is not so much about housing cost but transportation and access to services (eg uber, doordash), which seem to be advancing and making a lot of progress. Would love to hear your thoughts about this.
It's kind of a modern take on boarding houses. Actually, I think that the optimal situation is much closer to a boarding house.
Take 10-15 units, remove the kitchen and laundry entirely. Use the savings to pay a full time cook and laundry staff (2-3 people) to cook at-cost meals and do laundry.
I feel like it wouldn't work as well once you consider the politics that goes into shared resources. What does the cook cook? Why should a person who doesn't eat there pay for the cook?
In many apartment buildings in southeast asia (especially those that cater to foreigners/wealthy immigrants) there'll frequently be a shop and a small restaurant at the first level that mostly caters to the people who live in the building. No reason we couldn't have something like that here, though admittedly the cost of running both those types of services are probably pretty high given regulations. Expect a lot of politicking at the condo boards though.
I mostly eat professionally prepared food for breakfast and dinner but make my own lunch. I've seen plenty of claims that it saves money to cook, but as a single person every time I actually go to make something it ends up costing a bunch. Maybe if I perfectly planned meals so that every ingredients was used in many dishes across a week, or if I were willing to eat the same thing reheated 3 or 4 days in a row, but otherwise I don't see it. Taste-wise the professionals beat me hands down. The only area where homemade wins is health-wise.
The math may well work out differently for a family of four.
Any idea of how long those initial cost savings will provide those services? Do you charge a certain monthly fee for food, energy, laundry supplies? Who decides the menus? It is really quite the logistical challenge to create a set of rules and procedures that people will be able to agree to. This is especially true when you start mixing omnivores with vegetarians with vegans with the myriad food allergies. I like the concept, but I'm skeptical that it could be successful as a cultural shift in general.
Factory-produce modular housing units that fit inside a 40' high cube shipping container. Factory-produce the 88"L x 40"W X 30"H modules and the 4"L x 80"W x 90"H bulkheads that separate them. Each unit would have four internal bulkheads and up to 18 room modules that aren't a 40" wide pass-through space. Each "room" would consist of three or six stacked modules, and each module is small enough to fit through the doors when disassembled. Side doors can be opened on each side of rooms 2 and 4.
On-site construction consists of a concrete foundation pad, steel racks, and an outer weather shell appropriate for the region. Utility hookups are provided for each berth.
When a new housing unit is needed, it arrives in an intermodal shipping container, rolls into an open berth in the rack, is anchored in place, and the utilities are connected. If anyone needs more space, the internal doors and modules can be reconfigured to join multiple units internally.
Current manufactured housing in the US is premised upon hauling the pieces to the site by truck. If housing could also be moved by container ship and stacktrain, it is more easily importable and exportable.
A size standard for home modules opens up a huge aftermarket. Don't like the factory-installed kitchenette or don't cook? Swap it out for an exercise room or workbench or hydroponics garden or nursery or whatever else you may want in its place. It fits. The utility connectors are in the same place.
The number of berths in a rack and the size of the outer weather shell can be different for different housing markets. One near a city might have multiple levels, cramming dozens of units into a single shell with a fashionable brick facade. One far out in the country could have space for as little as just one unit--and it might not even be filled all the time--but it might also have a tornado-resistant outer concrete shell.
If you change jobs, rather than pack up your possessions, you could just secure all your loose items inside and ship your owned housing units to an empty berth in a new rack, across town or in a different city.
The major problem is lack of elbow room. You just can't cram very much living space inside a shipping container, so even if you connect many units, your home still consists of a maze of doors joining a bunch of 48 sq.ft. rooms.
I looked into this for a weekend home in the country. It's just not cost effective, nor is it faster to build right now. I was in South Africa recently where they are building mass housing for those in townships (aka slums). They are building in the traditional on-site way. If it's faster and cheaper to do modular, than there might be an opening there.
In the US, according to HUD and other sources, the existing methods for constructing and installing factory-produced homes or partially prefabricated homes cost 45% to 90% as much as on-site stick-built homes per square foot, depending on the type of construction.
A home that can be moved post-construction can also enable arrangements where the home itself is owned, but the installation site is rented, which can make housing more affordable in places where property area is very expensive.
We also have a problem in the US where all the good quality and low cost lumber has already been harvested. The 2x4 studs typical of stick-built construction are now cut from fast-growing trees of relatively small diameter, such that you can see the curvature in the grain at the end of the stud, the grain is mostly parallel to the longer dimension, it's full of knots, and it changes shape whenever the humidity level changes. You just can't squeeze a good 2x4 out of an 8" diameter log, no matter how you try to cut it.
And yet the overwhelming majority of new single-family homes are still built with wooden 2x4 studs. This is one reason why doors start sticking in their frames after only a few years since a new house was built.
A lot of this is driven by local building codes that will not adapt to newer building methods. There are better, more cost-efficient ways to build houses, and people are literally forbidden from using them. Manufactured homes are instead ruled by the HUD building codes and inspectors, so building something off-site and trucking it in may be the only way to get a home with a particular construction method in a given place.
NIMBY zoning also prevents them from appearing where they would be most useful. Separating the building architecture from the interior design is the same concept as office cubicles.
From the outside, it would look like an ordinary apartment building, which seems more palatable to most folks than a row of slightly angled transportable manufactured homes.
I am not sure if i have anything more intelligent to add, but i will post some of my experience for being poor, I guess most here dont have such experience in their life.
First I would say It is not only "critical", I argue it "IS" the problem of basic income.
For those who has been crying out about property pricing in your area, you should take a look in Hong Kong. The most ridiculously expensive location on earth.
A lot of people here are going on about Health Care, and Education System. But to me, those are different part of the equation. Do you ever see poor people buy insurance for health care or get a book to read to "enrich" themselves? Poor People only cares about a few things, whether they have enough money left this month, How long will these savings last them to pay for food and rent.
There are 3 things that is what I think should be needs of basic income, Clothes, Food, Housing.
Clothes are commodities these days, you can get all the clothes you need for a tiny amount of money. As long as you dont care about fashion. What needs to be done here is clothing for extreme weather, namely Cold weather.
Food, at one point in my life i spend average less then $2 USD per day on food. For nearly 12 months. People here claiming their Basic Income should cover their meal for McDonald or other outgoing dinning. ( May be in US only ) But that is not the point, real poor would care about savings. You can buy your food in bulk for extremely cheap prices, pasta or spaghetti, then get some Hams or Vegetable. As long as you go to supermarket and watch your pennies, there is no reason why you cant feed yourself for less then a Fiver a day. You just have to cook it yourself. Nutrients being another problem on $2, you should get by ok with $5.
Even without such thing as basic income, it is not hard to see as long as you get a Job today, as a hard working labor intensive job or part time, you can can enough for clothes and food and not worry about starving to deaths.
The problem then, lies down to Housing. Renting leaves you with the feeling you may get kicked out any day, and you will spend hopeless amount of hours trying to find a place that fits your budget. I suggest anyone who has never been through living on the streets to watch the "Pursuit of Happiness" by Will Smith. Although most people would had an different ending then the movie. Rent also cost you the largest percentage amount of your income. Where you can save a lot on Clothing and Food, there is no such thing as saving on Rent. Food and Clothes as commodities, it happens the most expensive out of the three is not a commodities but instead an Monopoly.
For Example what is the point of having $1000 basic income when $800 of it goes to Rent? And rental prices is being driven up by lots of factors.
Therefore as long as Housing market remains an investment asset, susceptible of being driven up by insane amount. ( Think about Rent in 2008 and now ), it will remain an unsolvable problem no matter how you price the Basic Income. Germany and some other European countries has rule to protect tenants from rent price hike. Some even take % of Housing Market profit as tax on top of the tax in place.
Government needs to provide basic housing, small even 15-20 meter square will do, with basic such as hot water, electricity and Internet ( Soon to be a basic need ), at rate that relate
to their basic income percentage. And a promise they wont be kicked out unless they do things silly.
And if all these are too government related, we need technology to built public housing cheaply, and efficiently in short space of time. And open up the cost structure to let people know they are not being ripped off. Property market is an monopoly that derails much of our society.
All of those problems are political; ie, we already know how to build more densely, how to make better trains, how to zone, etc. etc. For that matter, I doubt Uber for Houses would be successful (ignore all permits and just build).
You know those capsule hotels in Japan? I could easily see the same thing being implemented, except as appartments, in the US.
- You get there, strip down, leave your stuff in a locker, put a clean bathrobe on.
- Go to your room to sleep, browse the web on a tablet, watch a movie.
- Go to one of the many restaurants to eat a breakfast, lunch or dinner.
- Go to one of the many theatre rooms, to watch a movie, watch a live event, watch the news, etc.
- Go to the bathroom or shower (soap, shampoo, razor, deodorant, toothbrush included).
- Go to the gym, pool, spa, sauna, etc.
- Meet people. Play chess. Have a coffee.
You basically come back from work/life to a simple indoor resort every single day, and get to relax and disconnect for a while. You don't have anything to maintain or worry about. Calm, by yourself or with others, at the end of each day. That's the dream.
Those capsule hotels aren't meant for long-term occupancy. Such extreme confinement may be a dream for you but I think most people would consider it torture.
Nevertheless, I do think it's worth trying as temporary housing. I certainly might be willing to drop into one for a night or two if I had a job interview somewhere.
The most important factors are going to be as follows:
- Freedom to come and go at will
- Security for personal possessions
- Safety for all occupants
- Affordable price with utilities
- Permanent mailing address
Also, I think 250 sq.ft. per couple is the absolute minimum viable apartment space in the US market. Anything smaller will always be seen as transient housing, except for those committed to lifelong celibacy or those who are trained astronauts.
It may well be that renting your own coffin is psychologically better than borrowing someone else's couch, or camping out somewhere. But once you've been in it for a while, you're eventually going to want enough room to stretch out without banging into a wall.
If you reduce your maximum occupancy by a factor of 32 on the same floor area, you would probably increase duration of tenancy from days or weeks to years.
Excavation is expensive and that's the main reason people don't use it. Trains are hard to build in established areas but self-driving cars, ride sharing, and hyper loop point to new ways enabled by technology. I agree that zoning is the big political obstacle. But I feel like some development entrepreneurs could convince some cities and make some great examples of dense livable neighborhoods.
In can't help but think that the only real answer to getting housing to be appropriately cheap is to manufacture it 100% off site and bring it to the site in easy to assemble pieces.
edit: The more I think about it, the more I think this is important regardless of the cost of land. If it became cheaper to "start over" and redevelop underused lots, you could scale up density a lot faster. In that vein, technology to make demolition cheaper/faster would help too.
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original:
That's definitely part of it. But cost of land often dwarfs the construction costs. And some things like excavation (which lets you avoid wasting land on low-value uses) need to be done on site.
The major cost in time is also weather related. Materials are damaged if they sit in the rain, things have to be done in a specific order, in many places the livable build season is short (in the rocky mountain states, eg.) and the opportunity fir error is huge. If things arrive as a mostly prefab kit, then things are faster to put up on site, which avoids tons of complexity. It especially avoids a lot of the challenges with multiple subcontractors and scheduling.
Making demolition cheaper and easier would be a major improvement. Of course, demolition is one area where care is very important, for safety of the workers and the environment. It is amazing the types of hazmat that are in old buildings and houses. (Asbestos, lead, mercury, etc.) Containing it all is very hard.
It does seem attractive, all the empty land out there.
But the point of cities is to be near lots of other people all the time. There's a tipping point of human flourishing from the intermingling.
Great cities outlasted empires. Interaction density is the important thing, and it grows combinatorially with human density. There's no way you're going to get rural logistics to that level.
Also there's a significant problem of infrastructural efficiency. There's research indicating that city infrastructure follows a 3/4ths-power distribution, where doubling the population only increases the need for infrastructure by 68% [1]. The more generalizable format of this is Kleiber's Law [2], which notes that animal metabolisms scale along that same distribution by body mass. The implication is that cities like Detroit that are rapidly contracting in population and per-capita income are getting a double-wammy of decreasing tax revenues and increasing per-capita infrastructure costs.
Its possible the internet has solved some of that benefit of closeness, but that socially we haven't yet caught up, but will gradually.
eg. Having good broadband plus good VR goggles and cameras might make remote working much more immediate and a viable replacement for all those commuter cars on the road.. the technology to make that effortless might be here in 2 years and our social norms might catch up in 10 years after that..but maybe its much longer, and/or a carbon tax or higher fuel or road use tax is needed as an incentive.
Logistics will make a big difference. But distance will always matter for transportation. Also, walking on foot will always remain a core human experience of cities and buildings (I hope)-- and technology can't change walking speed much. Finally, an increasingly large part of the population want to live close to a vibrant neighborhood -- and you need density for that.
- applying technology to building denser housing. for example, imagine cheap robotic excavation, so every house and building could bury all their parking lots and long term storage areas below ground instead of occupying valuable real estate.
You need to watch this: Digging down is for the 1% it would seem.
Yup, it's expensive so generally only used in expensive projects. But it's a way of manufacturing land (or rather, saving land that would otherwise go for garages, storage, or other facilities that don't need windows). This makes housing cheaper because you then need to pay for less land per housing unit.
> applying technology to building denser housing [...]
The technology for this isn't anything new, the first underground carparks opened in 1930s [0][1]. It's not so much a technology problem as it is a people problem. People (NIMBYs, the middle classes) don't want massive blocks of housing in the middle of their cities, and what is being built 'affordably' is tiny and/or poor quality (in the UK at least). [2]
Keen to see the improved use of space that you describe. It's senseless to have driveways and garages taking up prime real estate. Or room on residential rooftops used only by a TV aerial rather than gardens.
The experiment allowed households to opt out, and after a while most did. However this result is convoluted by the fact that the income was not inflation indexed, and inflation rates in Canada in the 1970s got quite high.
The main conclusion from this is, basic income is going to have to be VERY carefully implemented to work at all.
"An income of $300 per week is just over the average (mean) benefit income – therefore a plausible
minimum income. However, paying a guaranteed income of $300 per week to every New Zealander
aged 16 years and over, excluding superannuitants, comes at considerable fiscal cost. The fiscal cost
of the GMI proposed in the first model (Model 1) is $44.5 billion (including the cost of all social
transfers – in particular, New Zealand Superannuation payments, would cost $55.5 billion), requiring
a flat personal tax rate of approximately 45.4%. Note that this tax rate and the others considered
below are cost-neutral – not fiscally neutral – as personal taxes currently raise approximately $6
billion in excess of current social assistance costs."
"Although the Gini coefficient improves under all models, many beneficiaries (including the disabled,
carers and sole parents) currently receive more than $300 per week and would be made financially
worse off under a GMI scheme. Therefore the GMIs considered could distribute money away from
those most in need of government assistance and toward those who have choices and opportunities
but choose not to work."
this is actually a really good read about it. Perhaps a lot of comments on HN is skewed towards the young tech worker who sees himself as victimized in a souless wage slavery, but we don't hear any opinions on UBI from the truly needy - the homeless, the chronic unemployed etc.
The "truly needy" is a subjective concept. Determining who should get more money from the government is always going to be a judgment call necessitating the presumption that we're not all equal. Most people who oppose welfare, corporate welfare, or their implementations do so because they perceive the recipients are not "truly needy". UBI is the only just and democratic way to provide welfare.
In the USA, if Basic Income were to be implemented, where would the money come from? Currently the rate of monetary inflation is quite high- we've gone from $11T to $18T in the monetary system during the Obama administration. If we were to start printing even more money to pay people a basic income, this monetary inflation would cause prices to rise to wipe out the benefit of the program, most likely.
In fact, the reason people are suffering now is the level of monetary inflation (Which has been high going back to the Reagan era, so it's the fault of both parties. This is not a partisan issue- it's an economics one. And the problem is that politicians get elected by promising stuff, but to produce the stuff, they can't raise taxes, so they do the equivalent by printing money.)
> the reason people are suffering now is the level of monetary inflation
I don't think any respectable economist actually agrees with you on that. The increase in the monetary base during QE was paired with a collapse in the money multiplier. Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves'). Price inflation is nowhere in sight; inflation is below historic levels and even slightly below the Fed's inflation target.
As for the original question, the general idea seems to be eliminating most other forms of government welfare programs (TANF, SNAP, social security, etc.) since basic income will replace them, along with redistributive increases in income/capital gains/wealth taxes.
> Most of that cash stayed in reserve at banks (see 'Repeat After Me: Banks Cannot And Do Not "Lend Out" Reserves').
This is a very misleading use of terminology. It is true that banks can't lend out "reserves", if by "reserves" you mean the 3% reserve that banks in the "upper reserve tranche" at the Fed (which is basically any bank you've ever heard of) have to keep in their accounts at the Fed and not lend out.
But the actual balances of those banks at the Fed are far in excess of that 3% reserve requirement; they are being kept in "reserve" by the banks not because the Fed requires them to but because the banks choose not to lend it out. Why would they do that? They aren't saying, at least not publicly, but the obvious hypothesis is that it's because their expected rate of return from lending it is lower than the rate of interest the Fed pays on their balances. In other words, they are worried about borrowers defaulting and driving the banks into insolvency and then bankruptcy, and the government refusing to bail them out because it wouldn't be politically acceptable this time around.
So the reason inflation has been so low is that most of the several trillion dollars the Fed has printed in the last few years has never actually been put into circulation. (The doublespeak about "collapse of the money multiplier" is just a roundabout way of saying the same thing.) Which says nothing at all about what would happen if that amount of money were put into circulation, as it certainly would be if printed money was used to fund a basic income program instead of "quantitative easing".
Depends on which inflation figure you count. When I think of inflation, I think of the largest costs first -- housing, which can easily be 30 to 50% of your earnings for most people. Check out the Housing Price Index -- does that look flat to you?
http://us.spindices.com/indices/real-estate/sp-case-shiller-...
There's a very relevant section in this book ( The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies - http://amzn.to/1KFJ1Iu ) , that I just read last night:
> "His view is strongly supported by the work of economist Andrew Oswald, who found that joblessness lasting six months or longer harms feelings of well-being and other measures of mental health about as much as the death of a spouse, and that little of this decline is due to the loss of income; instead, it arises from a loss of self-worth."
The idea being that a basic income is fine, but having people sit around idle probably isn't.
I've always wondered if its actually the joblessness that degrades people's self worth or the job search that must not be going to well and thus keeps them jobless. Would a person without a job but with a basic income and thus not feeling pressure to get a job experience the same hit to their self worth?
I think a good source of data could be the population of retired people. I'm pretty sure if I could afford to be retired, I could easily keep busy the rest of my life.
People who retire earlier die sooner; for each year earlier that one retires, life expectancy is shortened by two months (and the results are robust against different assumptions).[1] This would lead one to believe that working is good for your health.
Two months per year? To me that's worth it. I want to live as long as possible, but that is strongly based on how much I enjoy life. If the things people enjoy happen to be a little unhealthy, it may be worth it.
Mathematically, it might be close to average but I don't think that's a great way of putting it either. If you click through to the study, it was actually only men that died earlier. The lifespan of women was unchanged.
Damn, this is not good news, but thanks for sharing that.
I would hope that this is not relevant to people who just want to be financially independent at an early age, and never really "retire". Maybe a lot of people just don't know what to do with their time, so they turn to unhealthy activities like drinking and sitting on the couch all day watching TV.
That's a big part of what I wish I had more time for. My list of things I want to watch is long and growing all the time. If I were retired, I would love to be able to sit down and finally watch The Wire or Sopranos.
People value money they earn more highly than money they are given (, about twice as much from what I've read). In addition to that, many people get a sense of purpose from their work, as they feel they are contributing to something, and through a sense of fellow-feeling with their fellow workers, even though they may find it stressful and/or tedious.
There are some forms of work that are useful to society and rewarding, which don't pay enough to live on - volunteering in a hospice or school for example.
In this case the person doing the work might both derive self-worth and view the basic income as being 'earned' .. and hence value it as much as a traditional salary [ and not 'waste' it ].
I think basic income could fill a lot of little niches where the market economy is not perfectly efficient in allocating money to value - some of these are being explored thru approaches like Patreon and IndieGoGo and freelancer sites.. but maybe Basic Income is an even better way to reach more of these niches ?
I was a homemaker for two decades. I did lots of volunteer work. I strongly disagree with you.
You should Google "emotional labor metafilter". A lot of "caring" work has traditionally been done by women and we are expected to do it for free, out of the goodness of our hearts. If we expect to get compensated for it, we are taken to task as harpies, gold digging whores, etc.
I was one of the top three students of my graduating class. I have done many things that enhanced the lives of other people. I have struggled with trying to figure out how to monetize my work. The main thing I need is work that pays adequately and doesn't keep me sick. A lot of people who have benefitted from my volunteer work, public writing, etc. are offended and outraged that I desire financial compensation.
I have been homeless for just over four years. The people who expect me to do nice things for them because I "care" generally do not give a damn about that. Plenty of people have made it abundantly clear that I should shut the fuck up about how poor I am and how hard my life is. They seem to think that telling people I am homeless amounts to trying to panhandle them.
I am pretty pissed off about it because I am not a beggar. I have only ever asked for help in trying to figure out how to turn the work I do that benefits others into an income source for me. The idea that I deserve compensation gets pissed on, often by the very people who seem to think I am after their money as a beggar.
We need to pay for these jobs if we want them done. No one should be expected to live in poverty on an allotment of Basic Income while taking care of others. It is a shitty, shitty expectation.
"Fuck you, pay me" should apply equally to the kinds of work you describe. If society NEEDS this work done and it doesn't pay adequately when handled by the private sector, then create a government service. This is why fire and police are public goods, not private sector services.
Did you mean to reply to someone else? It doesn't sound like you disagree at all.
If there was a basic income, people who do things that currently aren't paid for, like what you mentioned, could be done and "paid for" by the basic income.
If you like the work, but just want to be paid, that should solve your problem.
If you don't like the work, don't do it. The basic income would mean that jobs that people don't like doing would have to increase what they pay until someone is willing to do it. Nobody would be forced to do work they don't like for a barely or non-livable wage.
I want to chime in that mz is making a great point which never would have occurred to me.
UBI could serve to further entrench an existing exploitative pattern, which currently exists because some things are "paid" work and other things are not.
I think it's also interesting to think about the exploitation of low paid workers. There are lots of jobs that very few people want to do that are low paying because anyone can do them. With basic income people will no longer be forced to work these low wage jobs just to get buy.
I could foresee lots of people quitting to learn skills for more rewarding jobs. You might see that jobs like a janitor, garbage man, and service reps at abusive companies start commanding higher wages since people don't want to do them.
Now workers have the leverage to decide not to work doing something they hate unless they are paid enough for it.
Creating free education programs for careers in demand would really strengthen this effect and I think would improve society as a whole. People will be rewarded for doing menial or dirty jobs rather than looked down on by society.
Precisely this. Basic income is a fantastic safety net and gives a lot of freedom to people. That's its whole point (that and it's a starting point to solve the problem of increasing automation eliminating jobs, but we don't know for certain if that will happen).
Jobs that are currently mostly done by people with no other choice, and hence can pay as little as they want, will have to pay better or be part time or some other benefit if they really need to get done.
And then, if a crappy or mindless job ends up paying $30/hour, people might do it because they want the extra money, not because they need it to survive.
Nope. To my mind, Basic Income = permanent slavery for women, with no hope of getting free as the expectation that we should "care" out of the goodness of our hearts will just become more entrenched and more doors will close to us.
If women want male privilege, they need to take the entire deal, including the risks of failure.
“Those who surrender freedom for security will not have, nor do they deserve, either one.” -- Benjamin Franklin
You were very vague about what this "care" work is. For child care, as in your own children, somebody has to do it. It shouldn't be assumed to be women but it makes no sense for this to be a paid thing.
If you mean something like elder care, for example, and you don't feel it's worth doing it for free, then just don't do it. I don't know why you feel (or you feel anyone else) would be expected to do this work
With a basic income, if you think elder care is important and/or something you want to do, you can afford to do it for free. Because you have a basic income. If you want more than a basic income you have to do something that people want to pay for. But you have the freedom to walk away from any job without fear of homelessness and poverty.
Your worries about permanent slavery seem to have very little to do with basic income. In fact, the main reason for basic income is to free people from the wage slavery we have now. People are stuck in barely livable wages because they don't have the time away from work to get into a better paying career.
Extremely long discussion here about how women get expected to do a great deal of "caring" labor for free, by all of society, in every imaginable situation (the discussion is so long it may have trouble loading):
http://www.metafilter.com/151267/Wheres-My-Cut-On-Unpaid-Emo...
I was one of the top three students of my graduating high school class. I am a woman and 50 years old. This is a problem space I have studied for decades because of my own personal frustrations with the fact that people expect a great many things from me, those things improve their lives, and I am not supposed to want compensation for them. I don't know how to make that any more clear to you. I think a Basic Income will make this a more entrenched problem. It will not alleviate it. Men already are nigh impossible to talk to about this, even with measurable negative impacts on women's lives that we can point to.
The fact that you can't see it just makes me feel all the more strongly that your idea that Basic Income "pays" women (for basically being society's slaves) is just going to make things worse.
Yeah, I'm more convinced this has nothing to do with basic income. You are just repeating over and over that basic income will make it worse but with zero proposed mechanism.
Unpaid house work isn't going to get worse if women get the (new) option of leaving situations they previously were stuck in.
The problem of unpaid "emotional work" is caused by a sexist society. More social safety net either does nothing to alleviate that problem, or it helps. It makes no sense to argue it makes things worse. Unless you provide even a shred of an argument for how it could make things worse, it sounds like you're just yelling into the void of the internet. Unless by "men are impossible to talk to about this" you really mean "men don't accept my assertions on faith".
Edit: Also, it sounds like possibly you don't know what basic income is. Or you mean something different by it. This[1] sums it up neatly in the first paragraph. I'm not trying to be insulting, it just sounds like you're talking about something different.
It makes it worse by making it less painful for the status quo to continue forward. Currently, women are making a great many hard choices in order to stop the pain of being poor because society does not want to hire them, promote them, etc for "men's work" while expecting us to continue to "care" without compensation. Give women what amounts to permanent welfare and a lot of them will not make the hard choices involved in questioning the status quo and trying to find another answer.
There are plenty of examples of populations given some kind of permanent welfare. They never result in some sort of golden era. They result in people who are overweight, out of shape, demoralized, with no goals or aspirations.
Hmm, I think there are actually zero or very few examples of populations given permanent welfare where something bad happened. In fact, the exact opposite. I really feel bad for the people in permanent welfare in Sweden where health care is free and standards of living are extremely high. Yeah, that's terrible.
I read a lot of that discussion on meta filter, and it was extremely unconvincing. I empathize with women who marry crappy people who expect them to stay at home and don't want to listen to their problems and want them to send birthday cards to their family. But the whole conversation was about a non issue. Basically like the argument any roommates would have about who has to do the dishes. Or who left the toilet seat up. It was complaining about personal things that they really just need to deal with themselves. And maybe they need help learning to do that, but "emotional work" isn't a thing. It isn't, it shouldn't be compensated, it doesn't exist. These aren't big societal dilemmas. Women aren't perfectly equal now but it is perfectly acceptable in most of the western world for women to get real jobs.
Or maybe it would help to hear an example (any example, you still haven't given one). What is one hard choice a woman might have to make to escape the pain of being poor? The hard choice not to have children? How is that a hard choice and how could it possibly go away in any imaginable future without the reality of biology being worked around with external wombs and robotic child care? And what, please tell me, could that have to do with a basic income?
I can barely begin to imagine what you've been thru, I was evicted from a flat once and that was incredibly stressful - but we had a support network and were helped out and got back on our feet. This is one of the reasons I feel viscerally that Basic Income is important - it would have made a massive impact in working thru this.
Yes, as a society we don't value that kind of work that traditionally women have done the majority of - child rearing for example. Maybe as a single dad I can now have some empathy or appreciation of that, that I wouldn't have otherwise as a middle class white male.
Looking after my kid and making paintings have probably been the most useful things I've ever done - neither of them paying anything, unlike programming work which does provide an income. I have to wonder what more useful things I could have spent my time doing, rather than some projects which paid ok, but were unlikely to be of much use to anyone.
I can relate to some of your comments - when I see people who want an Uber clone developed, or who think programmers should get 5 bucks an hour because they enjoy their work anyway.. or who dont understand how much skill it takes to draw a plausible figure, who think a one off oil painting should cost 70 bucks. But then these people are using apps that cost 20 million bucks to develop but are free to use, or they can buy a print for 30 bucks and a chinese replica for 150..
There are some economists and even politicians who have been talking about the value of all the work that is done which is not paid for - value and money don't match up, in many cases. I hadnt seen the term 'emotional labor metafilter' but I'd heard of the concept [ as I listen to people like Piketty, Paul Krugman, Elizabeth Warren and lately Bernie Sanders ]
My hope is that a Basic Income might be a way of partly fixing this flaw [where real work is undervalued], rather than entrenching it - if the free market is not efficient enough to pay you for the useful work you are doing, basic income might at least cover the cost of living.
Its not a solution to every ill.. teachers will probably still be paid less than their true worth, stay at home parents will probably still have to sacrifice a lot of income. It wont solve sexism, racism, ageism .. but it might alleviate some of the worst symptoms, some of the current pain ?
Maybe the government service is in fact BI, because it covers so many special cases where individuals can do useful work, that the government wont ever be able to implement an overall program ?
> No one should be expected to live in poverty on an allotment of Basic Income while taking care of others. It is a shitty, shitty expectation.
I agree.. but I assume the Basic Income is more than being poor, that it was high enough to cover living expenses so that you are free to function without stress.
So the question is how much should BI be - equivalent to 15 bucks an hour ? 25 an hour ? Should the minimum wage be set at the same level as BI ? Location dependent on average rent ?
One of the points you are missing is that there are two kinds of poverty: absolute and relative. Even if you could eliminate absolute poverty, there is no means to eliminate relative poverty. The minute you have a UBI, anyone who only has that is de fact poor relative to others.
Many years ago, I saw a study that asked people in different countries to define poverty in terms of things like how many meals per day a person ate, what kind of shelter they had, etc. The study concluded that less than 0.5 percent of Americans were poor by the standards of people in India at the time the study was conducted. Meanwhile, Americans routinely conclude that 12% to 14% of us are living below the poverty level.
As a homeless American, I have regular access to electricity via a public library. I have access to public toilets. I have access to cheap goods. My quality of life is likely higher than that of many people in the world who live in countries without consistent supply of electricity and other basic infrastructure that I take for granted. There are countries where women are fairly routinely raped and sometimes murdered while attempting to relieve their bowel or bladder in an open field because there is insufficient infrastructure.
My quality of life is likely higher than that of kings of old, who had no electricity or Internet or antibiotics etc.
Humans are a social animal. If you eliminate physical hunger but cut us off from freedom of choice, social connections and a great many other things that money cannot buy, you do us egregious harm.
We need to invent the 21st century's version of the 40 hour work week. I believe the answer here is currently being called The Gig Economy. We need to make sure the Gig Economy empowers ordinary people to work when they want, as much as they want. We need to make sure "gig" work can create a middle class lifestyle if you do it decently for about 40 hours a week.
This will empower homemakers, single parents, etc to create a comfortable life that works for them without being cut off from Society and the halls of power.
We need to worry about empowering people to readily and easily make the money they need. Giving money to people will never provide the same quality of life as earned income. It is qualitatively different. It will always be qualitatively different. You cannot change that fact.
> The reduced sense of self-worth is likely a result of the cultural stigma against joblessness.
And is this a problem? Societally speaking, shame and stigma are great motivators. If we remove them as motivation for work, will society really be better off?
Isaac Newton was neither shamed nor stigmatized into developing calculus. Most of that work was done during "idle" time, while his university was closed for the Plague.
I daresay society's great achievements are not derived from shame and stigma. What real benefit does society derive from meaningless jobs [1]? We've tried shame and stigma. We should see whether society is better off when the thinkers and doers are free to use their time thinking and doing what they feel called to think and do.
Plenty of people voluntarily leave work. I did it last year for eight months to travel. It didn't hurt my self worth, nor those of my friends who've done the same. But if I had wanted a job and not been able to get one, I think that would hurt my self-worth even if I didn't need the money.
Basic income doesn't aim for people to sit idle, and in practice basic income doesn't seem correlated with idleness. Some studies show an increase in work hours [0], and another showed a slight decrease in work hours among new parents and teenagers [1].
Loss of self-worth need not occur when people are given the freedom to say "no" to unfulfilling and unproductive jobs, the freedom to take time off to care for their own or another's health issues, and the ability to pursue their passions -- teaching inmates, launching a startup, or becoming a world-class gamer.
One big difference between basic income and negative income tax is who receives them. Basic income is given to everyone, and negative income tax is only given to those below a threshold amount -- creating two classes of people: givers and receivers, us and them.
The negative income tax experiment in New Jersey showed that the negative income tax created a disincentive to work, and increased family breakups. [0]
Negative income tax, by virtue of being tied to the tax system, operates on a year-based system and pays retroactively. Regardless of whether the year's overall income would qualify for negative income tax, the individual still needs to self-fund any time off. A negative income tax does nothing to help those who are temporarily out of work, or who only want a few months off to help with childcare, learn a new skill, or address an illness.
A negative income tax is basically equivalent to a basic income funded with a progressive income tax. No matter how you pay for it, some people are going to pay more in taxes than they get from the basic income, and some will pay less.
For people who have a job, we already have a system for them to pay taxes with each paycheck (withholding). By reversing that, you could make negative income tax payments year-round rather than at tax return time.
> By reversing that, you could make negative income tax payments year-round rather than at tax return time.
Withholding adjustments would help those in low-paying jobs, part time workers, etc. But how does it address temporary or long-term joblessness without requiring individuals to self-fund until refund time?
> A negative income tax is basically equivalent to a basic income funded with a progressive income tax.
I disagree. The funding structure is substantially similar -- some people pay more in taxes than they receive. However, by only distributing the payments to a subset of the population, there is a social stigma associated with receiving benefits. With a universal payment, there is no stigma.
Consider food stamps. The funding structure is set up so some people pay more in taxes than they get from food stamps, and some pay less. But because only some people receive food stamps, there is a stigma associated with them. By contrast, consider the Alaska dividend, which is given equally to every citizen, regardless of income. There is no stigma associated with receiving or using an Alaska dividend. It isn't seen as welfare, but as a right.
> However, by only distributing the payments to a subset of the population, there is a social stigma associated with receiving benefits. With a universal payment, there is no stigma.
People aren't so naive that they would ignore the fact that their basic income is being immediately taken out of their pockets to pay for other people's basic incomes.
Certainly. With a tax-based universal basic income, the vast majority of individuals would be net beneficiaries.
As of 2011, an individual paying >$12k/yr in USA federal taxes is in the top 25%. [0] With a basic income of $1k/yr, anyone in the bottom 75% would effectively be receiving a 100% refund of all taxes, not only the funds earmarked for BI.
There is also the option of voluntary basic income systems, which have the advantage of being immediately implementable. [Disclosure: currently developing a voluntary basic income project/study]
Agreed, something different would have to be done for the jobless.
I only claim economic equivalence, not political or marketing equivalence. On the other hand, we already have a negative income tax for working people (the earned income tax credit) and no national basic income, so maybe the marketing advantages aren't a slam dunk.
Is increased family breakups necessarily a bad thing? There are plenty of people who are stuck in abusive marriages because they are financially dependent on the abuser.
Ability to leave bad relationships is one of the proposed benefits of basic income and similar ideas.
The linked article hypothesized "reduced pressure on the breadwinner to remain". Too many fights over money, financial ability to leave a bad relationship, and no need to "stay together for the bills" could all be causes.
>creating two classes of people: givers and receivers, us and them.
You get the same effect with basic income. Those who pay more in taxes than basic income gives and those who don't. You could effectively create a negative income tax that gives the exact same payouts as basic income.
x is income, b is basic income, F(x) is tax someone has to pay at x income under the basic income scheme, G(x) is the tax scheme someone has to pay out without basic income that includes some negative taxes.
If G(x) = F(x) - b, then x + b - F(x) = x - G(x). Yes, they are coded up on law a bit differently, but the outcome on everyone's pay would be the same. All that is different is the talking points. Kinda like how people are charged higher tax rates for not having children currently in the US.
Related though not necessarily helpful section from Brave New World (1956):
> of course we could give them shorter hours. Technically, it would be
perfectly simple to reduce all lower-caste working hours to three or
four a day. But would they be any the happier for that? No, they
wouldn't. The experiment was tried, more than a century and a half
ago. The whole of Ireland was put on to the four-hour day. What was
the result? Unrest and a large increase in the consumption of soma;
that was all. Those three and a half hours of extra leisure were so far
from being a source of happiness, that people felt constrained to take
a holiday from them. The Inventions Office is stuffed with plans for
labour-saving processes. Thousands of them." Mustapha Mond made a
lavish gesture. "And why don't we put them into execution? For the
sake of the labourers; it would be sheer cruelty to afflict them with ex-
cessive leisure. It's the same with agriculture. We could synthesize
every morsel of food, if we wanted to. But we don't. We prefer to keep
a third of the population on the land. For their own sakes-because it
takes longer to get food out of the land than out of a factory. Besides,
we have our stability to think of. We don't want to change. Every
change is a menace to stability. That's another reason why we're so
chary of applying new inventions. Every discovery in pure science is
potentially subversive; even science must sometimes be treated as a
possible enemy. Yes, even science."
In a broad sense, the shift towards a services-based economy is a type of "make-work" in the shadow of heavy automation in first agriculture then manufacturing. This is very much Parkinson's Law writ large: https://en.wikipedia.org/wiki/Parkinson%27s_law
This assumes people on basic income without jobs are idle. What about stay-at-home spouses and parents? What about community volunteers? What about people who take care of sick friends and relatives?
Furthermore, what is the economic benefit of the activities listed above? What would be lost if those activities were either abandoned or required to be paid at a fair market price? I know, charging grandma by the hour is a silly idea, but I say so to illustrate the benefits to society by activities not reflected in GDP, and to invite discussion about whether society would be better served by individuals living on basic income alone who spend their time helping others, without having to worry about making next month's rent.
Aaand, it is not currently the imperative of gov't to provide people with a sense of self-worth. That may be a worthy thing to shoot for, but it isn't currently a purpose of government. Even if one accepts uncritically the self-worth imbue-ing power of labor it's not necessarily the only way to impart a sense of self-worth to the individual.
Well, that's exactly my point. A lot of people do things that satisfy themselves and can often help others, but when you need to work to live you get greedy with your time and money. A state that provides basic income frees people to find their sense of self-worth, not assign it to them.
There are long term studies of unemployed in multiple countries that have social safety nets that would be worth reviewing (for example: http://amzn.to/1nosUtx Cultures of Unemployment: A Comparative Look at Long-Term Unemployment and Urban Poverty published by Amsterdam University press in 2006) For many the impact of unemployment (for instance following closure of UK coal mining and steel industries) its not just the loss of job in the economic sense, but the disconnect from the workplace, community, changes in sense of self-worth for individuals and long term cultural and regional impact. There are proven strategies that work and lots of examples that failed. Learning from these and seeing which opportunities map to actions that start-ups can effect through mobile, social and learning technologies might be a useful starting point.
I think if a basic income is eventually introduced nationally it will be the result of a hard-fought political battle with many proponents and detractors, and there are plenty of cases of laws like that being reversed within a few years.
I don't know this would be too unrealistic for the study.
Studies typically have a set duration. If you offer people a basic income for the duration of the study, they'll need to plan differently than if they have some reasonable chance of having a basic income indefinitely.
This is certainly true. However, for many cases there may be little difference. A year or two of basic income is sufficient to start a business, learn skills to enable a career switch (exceptions, of course), care for a newborn, deal with short-term illnesses, etc.
That's always a hard thing to tease out of psychological studies. The tests have to be very clever to do so, and they'd have to be wide ranging. Essentially, yes, but it'll cost a lot of money.
Indeed, I'm skeptical of anything that promises to free people from work. I think of it as a mobility scooter for healthy people - the idea of not having to walk and be tired might sound appealing, but the actual use will leave you in much worse shape.
Japan seems to have one solution to this problem. It's a culture that highly discourages idleness, yet also aims to look after people's welfare, so they have a very large number of (practically speaking) quite useless jobs - crossing guards on parking lot exits and streets with no traffic, platform attendants, park attendands, etc. It was quite weird seeing this at first, but once I started thinking about it as a socially acceptable form of welfare, it made a lot of sense.
I don't think their system will work here (serving people is seen quite positively there, whereas here it is often looked down upon here), but it is a good working example.
We have to clearly start differentiating between "work", and a "job".
You can work hard at something which provides immense satisfaction and personal value (perhaps even value to others). But a job is strictly something you do in exchange for money.
A job doesn't necessarily contribute to your self-worth. Meaningful work, does.
Way to miss the point. If you don't have a job, even if you have some kind of meaningful work or hobby on the side, your self-worth will still suffers from that.
How do you know that? That seems like an unfounded conclusion. For example, a lot of people here on Hacker News don't have a "job", but they're building startups and working on products. I wouldn't call that a job, in the sense that they're not performing work in exchange for money. It probably does have some effect on their self-worth, but I don't think it has anything to do with the lack of an employer. And to follow on from that point, someone can be retired and spend 8 hours on art, music, writing, or any other creative endeavor. I don't think those are the kinds of people who live shorter lives after retiring.
> That seems like an unfounded conclusions. For example, a lot of people here on Hacker News don't have a "job", but they're building startups and working on products. I wouldn't call that a job, in the sense that they're not performing work in exchange for money. It probably does have some effect on their self-worth, but I don't think it has anything to do with the lack of an employer.
That's because you are drinking the koolaid without reading the warnings all over HN about the entrepreneur porn lalaland echo chamber it is at time and succumbing to the game of redefining common words to fit a specific story. Also, very specific and small population sample here. You can't exclude the majority of the population to deny the fact that self-worthiness is linked to employment (edit: whether it is a good thing or not).
> And to follow on from that point, someone can be retired and spend 8 hours on art, music, writing, or any other creative endeavor. I don't think those are the kinds of people who live shorter lives after retiring.
But that's the thing. Retirees have a different status to hold than the unemployed. Plus, you forget that the transition from a working class member to a retiree can be really hard.
My point is that if we're going to introduce a concept like basic income then we need to start being really clear about the difference between effort in exchange of money, and effort which contributes to your satisfaction. Not sure how I'm missing the point.
> A job doesn't necessarily contribute to your self-worth. Meaningful work, does.
No, having a job like the vast majority of others around you (or the supposed ideal) contribute actively to your self-worth way more than have a meaningful hobby or unpaid meaningful work on the side. It has to do with the humane need of feeling integrated in the group.
You really have to work hard on yourself to keep your self worth for ten years by not « working » and having only a meaningful job/work/hobby.
It's not the job or the hobby or the meaningfulness that matters to your self worth. It's the sense of belonging to the group.
With that said, I completely agree with that:
> if we're going to introduce a concept like basic income then we need to start being really clear about the difference between effort in exchange of money, and effort which contributes to your satisfaction.
Benevolent activities are going to be cast under a different light.
Personally, I think this is a big part of the reason UBI will work.
Most people want to do something, and generally want to feel productive. How many stories have you heard about unhappy office drones leaving a job where they spent all their time on the internet to something more rewarding?
But where will this productive energy go? Plenty of people will still have jobs, likely doing something more in line with their interests. Others will volunteer their time and participate in the community. I think lots of people would love to spend more time mentoring young people, being with their families, etc. It could be a revolution in community participation and lead to a more healthy society.
Satisfying and productive work doesn't need to be paid work.
I think the key here is to help people redefine who they are. There's not a huge material difference between people who call themselves "starving artists" vs those who call themselves "unemployed", but it is a huge mental difference.
I have a standing offer to buy a beer for anyone who visits me here in Bend with the entire 10's of cents I get every month with those links. But hey, at least it's a free beer for someone, rather than Jeff Bezos.
I'm thrilled Deschutes Brewery has started distributing here in DC. Also, count me among the many who have no issue with the use of Amazon affiliate links.
Deschutes Brewery is just the tip of the iceberg - they're the 'big company' brewery these days! I actually get a discount at 10 Barrel because I signed up for their bike team, so one beer could probably become several before exhausting my vast haul from affiliate links.
Is there any evidence that shows that Basic Income (that you DON'T lose if you happen to find work, as in the USA system) will cause people to sit around idle?
Not "idle" exactly, but in the Canadian Mincome experiment, teenagers and new parents decreased work hours (to focus on studies and childcare, respectively).
But studying and caring for children is not idleness. We're talking about "sitting around idle" which, admittedly needs to be defined, but I'd argue doesn't include productive activities.
Defining "productive" and "unproductive" activities is difficult.
Sitting around playing video games is a classic example, but it's a way to become a better video game developer or a world-class player, both of which are fulfilling and well-paying endeavors. Even sitting and doing nothing (i.e. meditating) can be one of the most productive things an individual can do. [0]
What constitutes a "productive activity" is quite subjective. And even seemingly unproductive things can be productive: if they help de-stress and refocus, they're still contributing to productivity.
Productive is really hard to define because we all value what we produce differently.
If I'm playing minecraft and optimize a factory in an hour, that is a productive hour of gaming. But to my father, that entire time was wasted because he cares naught for video games and would instead be out working his farm. But I look at the small scale farm and realize that for what it produces, it would be cheaper to just buy the produce and thus don't see it as productive.
Is watching football and prime time TV productive? What if you have someone who doesn't like either but is doing so only so they can be a better culture fit at work since that is what everyone else at work is doing?
This is a huge component that should be considered when arguing for / against basic income. Does this lack of self worth stem from actually not having a job? Or simply not putting quality time into something valuable? Did they study people who found other ways to spend their time on something productive and interesting, like volunteering or learning a hobby? Did they measure people who were jobless by choice?
Based on what happens in remote communities here in Australia the result is not pretty. We basically have a basic income here in Australia via our welfare system. What we have found when everyone is jobless is there are huge levels of drug use, domestic violence, child abuse and general criminality. Other than this it works quite well.
negative income / social welfare are packaged in a way that telegraphs dependency and low self-worth.
[ I would also be really interested in seeing an economic analysis of how much money and time is spent on administering social welfare ]
Basic income needs to be marketed as a positive way : here's some money - it is your share of the basic wealth from the land/resources and the benefits of our technology to the country - do something useful with it.
[ I also wonder how many of those 'lazy-dole-bludgers' now on social welfare would have a better sense of self-worth, and actually get off their arse and do something useful if we didn't make it so clear to them they were total failures from school age ]
This is a huge problem with no simple solution. The problem in the Australian remote communities is there is an entrenched culture that is not conducive to any productive activity.
Changing this sort of culture once it has formed is really, really hard. People much more dedicated than me have poured in enormous resources without make a dent in the problem.
I think this is a really good point I haven't heard in the discussion before. I would imagine that simply changing the name from "welfare" to something that implies motivation would make a difference.
Imagine: You're 18 years old and your Dad gives you $500. He says, "You don't make any money and have to rely on me. Here is your spending money" or "You'll be making a lot of money (value) later on in life, this will help you kickstart it."
I can't say I know much about Australian welfare systems, but here in the US it can be a bit of a trap, since welfare benefits drop fast once your savings or income rises, resulting in a huge disincentive to get off welfare, and furthering the sense of hopelessness, and presumably, the drug and alcohol use.
To what extent does Australian welfare gradually taper off as a means to incentivize saving, instead of punishing it?
The Australian welfare system has lots of perverse incentives, but the tapper off is not too bad. The effective marginal tax rate is quite low and we have a very high minimum wage by OECD standards.
The real problems come when everyone in the community is unemployed. We really need to work on new societal structures to make sure that we don't follow the same path our remote communities have fallen into.
I'm not sure how well it would work, but one of my longest-standing justifications for basic income is capitalism itself. If you have enough to live on from what you get from the state, then you'll be content at best, or spin your wheels and with racks of VB at worst. But if your neighbor was in the same situation and works to increase their earnings, and you see them driving nicer cars and wearing nicer clothing, then you'll want to live at that level as well.
Then again, it might remind them of their own failures and they get double drunk that night. I'm not sure.
It's definitely an excellent point that a basic income would only solve part of the problem associated with lower need for labour. I'm sure there are many more startups that could be founded around the expected increase in numbers and breadth of retired people. There are plenty of things that people can do to be active and engaged when not working; it's just that often they don't. Making these activities more accessible, or accessible in different ways, surely provides some opportunities.
Oswald's research was published on 2004. Andrew Oswald is a British economist who earnestly tried to study happiness with statistics, and government data. The study tries to corollate government data, excludes detailed information on black wages, and tries to draw conclusions based an statistics, and questionable government data.
What jumped out of the paper(around page 25) was that Europeans have been just Happy! Why are first 12 members of the EU Happy over time? I'll let you speculate.
Now to entitled--usually white upper class men--who have been telling the poor what to do since biblical times. Dummy up!
I've had seen too many people die early because they became homeless.
I think what most of these researchers fail to comprehend is the difference between poor, and poor with no safety net. No parents. No friends couch to crash on. Just the inviting, wet thicket of Scotch Broom to crawl into, and being woken by gently nudge of a police officers' latest extension of their authoritarian arm. Real poverty is homelessness. It's ugly. I don't know why we are even debating someting, like a minimum income, at this point in time. I have seen friends die way too early because of their homeless stints. It seems by the time they get a little help, it's too late. They just die early?
I'm not going to list off my gripes about making a living in this enviorment, but a lot of us tech workers are very succeptable to being homeless. At least half the guys I know without roofs over their heads were former Programmers. At one time they we happy, and young, banging away with Fortran.
(Willie Brown is actually the first one I heard, wondering out loud, exactly what we are going to do with all the future homeless tech workers.
They now sit in coffee shops fiddling with our discarded toys.
Basic income at this point--yes. I actually think if some of these poor people were given a little bit of help, they might just start business, and who know where it will end. There's only one benefit from being poor; some of you see the world a different way.
We have never had a basic income in the United States. Let's give it a shot? I look around at what's happening in the United States, and I don't like the trend. It was better in the past.
(Yea, what if it gets worse. Go back to this wonderful system of privileged elitism. I won't be back, so any comments--I will miss out on. Oh, yea as to sitting idle--the subsided poor I know, are busy. See the world is funny place. Even if you get the couch in the subsidized house, you are expected to do/fix all sorts of things, including being a amature psychiatrist. The poor always pay in some way. Think about it. Did you really ever get a completely free lunch, outside of maybe grade school, or when you were young and pretty. Pretty is gender neutral.)
The thing is, the subsidised poor already have a huge system of entitlements in most developed countries. Governments combat homelessness with social housing (net value far more than $10k per annum where I live) and direct despondent former Fortran programmers into jobs or onto retraining schemes whilst paying them enough to live on.
Arguments for universal BI (as opposed to tweaks to benefit entitlement rules) are in effect a suggestion that people on those programmes should have less so that we can afford to extend subsidies to middle class stay-at-home wives and twenty-somethings on gap years, because rich people that don't want to work obviously deserve the same as people with nothing going through a crisis. And you have the temerity to intemperately accuse anyone that questions it of being elitists.
And yes, BI is something which has been chiefly advocated by privileged white men.
There are a long list of reasons I do not want Basic Income. I really don't feel like writing an opus in comments here today. I think my last three blog posts have been about my objections to Basic Income. You are welcome to read those if you wish to get an inkling of my opinion on the subject.
What I want to know is whether Basic Income implemented with our current housing and laws about land ownership will just run afoul of the Henry George Theorem:
IE, the aggregate value of public spending in an area tends to soak into the land value -- give everybody $X,000 a year and the landlords will dutifully raise annual rents by $X,000.
Partially it will, but mostly it won't, because it won't be an aggregate change, as you will need to increase taxes to the middle and upper income thresholds in order to pay it.
It also is being given people, not directly to the area, so if rents are raised in one area, people can move away from it. This isn't the case with infrastructure improvements such as road/rail/schools/electricity improvements.
The likely effect will be that cheap housing will increase in price, but it will be bounded by moderate housing (i.e. for those people who don't see a real terms change in their post-tax/benefits income).
The other point, is that that the sector most dramatically affected by this will be the homeless and unemployed.
An interesting question is to what extent the basic income should be linked to inflation and differential cost of living (e.g. should it be more for people who live in San Francisco as San Francisco is expensive, or should it be equal because we don't care where people live).
The CoL problem is currently "solved" in Unemployment and Social Security by tying it to past wages (which probably correlate with this). I think we do need to replicate that in some way.
A similar metric might be to tie it to the minimum wage of a region, which will hopefully capture inflation and CoL.
I think it will. To avoid it, a significant portion of Basic Income would have to be paid out as goods and services vouchers with redemption limits.
Rather than getting $50 a day as cash, you might get 4 nutritionally balanced but generally unpalatable meal rations, two payment vouchers for one day in one state-owned 250 sq.ft. housing capsule, 30 kWh of metered electricity, 100 gallons of potable water, 10 Gb of network bandwidth, etc. But you put redemption limits in place so that you can't use vouchers to pay for more than 1000 sq.ft. of capsules, 60 kWh of electricity, 200 gallons of water, or 20 Gb of electricity per day. It places limits on the amount of benefit any single person could suck out of the system at the expense of everyone else in it.
The state would also have to be a major wholesale buyer for those things, and sometimes also set up and spin off new competitive suppliers, otherwise the incumbent suppliers might be able to jack up the price and capture a portion of the benefits intended for the end consumer. Taxes and subsidies have a different mechanism of action economically than the entry of a new supplier firm.
If the basic tenants and studies that have called basic income into the forefront are to be believed (and the actual spectre of central state control that people are afraid of in some circumstances is real, and it is), the best way to benefit people in need is to give them cash. Most of the time, people spend it on things they need. If they don't, they are either suffering from a mental or addiction issue and need treatment, or they made mistakes and its their own damn fault, and nobody needs to pity them.
But on a grand scale, where everybody knows that everyone is getting the same amount of free money, the market adjusts accordingly, within minutes.
You can give 20 people $100 each to spend as they see fit, and it wouldn't affect the price of a Happy Meal. But if you give 100000 people $100 each, you can bet that the price of that food is going up a bit, just because more people can more easily afford a higher price.
Subsidy affects market equilibria differently than using the same amount of resources to lower costs or increase supplier firms, or do industry-advocacy advertising.
This is true, however, at a point in time where we are desperately attempting to induce inflation in anything but assets (which was the end result of QE), perhaps "helicopter money" in the form of a UBI would end up stimulating more demand than QE did. Sure, we would experience some mild inflation in basic goods prices, but in net, I think it would be a benefit. Isn't the Fed trying to stimulate inflation anyways, and utterly failing?
"We"? I do not share your opinion that the price inflation resulting from monetary policy is in any way a good thing.
You can't stimulate demand with a subsidy. You can't depress demand with a tax. Both of those things are manipulations to the natural equilibrium price, and generate guaranteed deadweight losses.
The only way to "stimulate demand" is by changing what people's desires and priorities, such as by advertising. People have to want now-things more than potential future-things. Tricking them by pretending that they can have both more now and more later and then revealing only after they buy that they will actually have less later degrades trust, which causes more saving and stockpiling, which reduces the velocity of commerce. That reduces the economic leverage of controlling the size of the money supply.
You can't fool all the people all the time, and the ones you can't fool leak their information through the market. Most people know by now that the market can stay irrational longer than you can remain solvent. But we also know that you don't need to outrun the tiger, you just need to outrun your friend. So consumers are paying down debt, and companies are hoarding cash, hoping to be the best-prepared survivors when the whole house of cards falls. Fed policy is not taking into account the fact that it can't just print more confidence.
Will it cause inflation, probably. But they don't have to live in the most expensive areas. They can move to a cheaper area. There will be places above and below the inflation curve. Housing is the largest expense so other things would not be affected as much.
A public good is a technical term in economics. One useful way of categorizing goods is to place them along two axes - excludability and rivalry. Public goods are categorized non-excludable and non-rival. Non-excludable means you can't stop people who don't pay for the good from consuming it - like clean air. Non-rival means that one person's consumption of a good does not affect another person's. Digital goods are typically non-rival.
A cash transfer doesn't really meet these conditions - it's excludable, in that you can restrict access to citizens or to whomever. And it's rival - there are only so many dollars to go around.
That said, I think inflation is a very real concern for any basic income scheme.
Agreed. Another way of looking at it is that a pure cash exchange would filter through the market demand for all goods, and as a result the nominal value of all goods would increase through the mechanism of inflation, not just land rents per the Henry George Theorem. However, there is an input consideration of identifying where this cash infusion is coming from, whether from printing money or from selling accrued assets on the open market (as what the YCombinator crew would probably be doing, if they don't already have liquid assets devoted to this endeavor).
True, although it aligns with the Law of Rent. And the Law of Rent is what shows that, when there is no freely available land, then land value gains tend to nullify any nominal increases in wages or interest from production.
The only caveat is that there are other possible "rentiers" that can capture the rent before it winds up in land. Such as patents, barriers to entry, etc.
But exclusive use of land is the first and most basic barrier to entry.
It works as long as the land isn't effectively free.
The theorem's theoretical basis is pretty spherical-cow: a government that governs land centered on a single point with people trying to minimize distance to the space. (Which is to say, it models best to the idea of a city-state rather than a federal government.)
From wikipedia: "Allister Heath, deputy editor of the The Daily Telegraph, wrote that the book shows how the “remarkable work ethic” of Scandinavians has been eroded by large welfare states over time."
(Of course, don't take wikipedia's word for it-- read the book yourself)
My take-away: Heavy socialism has absolutely stifled economic growth in Scandinavia. During the peak of welfare in Sweden, for example, net private sector job growth was ZERO.
If you want to stimulate economic activity, instead of giving everyone $10,000 per year, why don't we just cut taxes and removed red tape.
(I know that Scandinavia didn't technically have a basic income, but I still think that this material is completely relevant and very telling).
Edit: I said "During the peak of welfare in Sweden, for example, net public sector job growth was ZERO". I meant private sector. Major mistake, my apologies!
Does a 0% public sector job growth necessarily indicate a failure, in and of itself? To me, that's not probative at all. What if Sweden had simply reached a level where everyone who was employable and wanted to have a job, had one?
"Removing red tape" has been tried quite a bit, as a sole means of stimulating growth. Not only has it failed over and over again, but the negative consequences dwarf even the fantasies of growth by proponents. "Cutting taxes" has also been tried, and has failed, over and over again.
Removing red tape has indeed been tried in America... but almost exclusively for the benefit of already large near monopolistic corporations. It has rarely happened to the benefit of small/medium businesses. Especially if you're talking about deregulation that happened in the financial industry in the 2000s.
The companies that most struggle with red tape aren't mega-corps but the smaller companies who can't afford teams of lawyers to fight through them, or the
lobbyists to implement them in their favour.
There has been very little significant deregulation in the USA in the past two decades outside of Wall St/big corps.
Context matters, except when discussing politics it seems...
Seems like "It has rarely happened to the benefit of small/medium businesses." and "The companies that most struggle with red tape aren't mega-corps but the smaller companies" are contradictory. Not sure if I understand if you are for or against removing red tape.
Politicians are the ones acting contradictory. By removing red tape for mega-corps - for companies who already have the financial capacity to hire lawyers and staff to deal with regulation - instead of removing red tape for the small companies who would really benefit from it.
Well, having been through the ridiculous temporary worker / immigration process in America - coming from Canada with a solid job offer and even an American lawyer, I'd say that would be a great place to start.
The American tax system is riddled with complexities that make business difficult. A flat tax as proposed by Ted Cruz (the only good thing he has proposed) would make doing business vastly simpler.
But the vast majority of regulatory hurdles are industry specific and there are thousands of them. It would take a serious political-backed task force to go through them all to find the worst.
Here is a good article on the subject, featuring good examples:
> Under Massachusetts regulations, a hair salon owner who wants to sell her shop to an employee must first temporarily close down. A funeral director can't hire a part-time apprentice—only full-time is allowed. The state's legal size for a sea clam differs from what federal requirements specify.
"Doesn't technically have a basic income" is doing a whole lot of work, here.
The key component of it is that it doesn't phase out with higher income, which would otherwise cause a strong disincentive to work. How strong compared to no phase-out is a good question, but that's exactly what research like this is good for.
> The key component of it is that it doesn't phase out with higher income
I have never seen a version proposed where everyone receives more money after tax. I thought the key component was that there is no complex means testing (simply phased out through income tax).
The prototypical model would be a lump sum X, unconditionally granted to every adult citizen/resident on a regular basis, regardless of income.
Tax rates are kind of a perpendicular issue. If you view benefit phase-outs as a kind of implicit tax rate, this would make the tax code flatter (and more progressive, if you're counting benefit phase outs as a kind of implicit tax).
You do realize that book is ideologically motivated? There is a wave of neo-thatcherite-reagan-pinochet wannabes who want to replicate the agressive liberal policies of US and UK from 70-80:s in Scandinavia.
I'm not saying they are necessarily wrong, but that their goal is not to be 'right' in the scientific sense but to rather to drive policies which steepen the income inequality (which - as it is- is still quite low).
This is true (although basic income is not exclusively a left-wing idea). But I was not trying to use his quote as evidence-- I was using it to explain the thesis of the book.
So, I'm sure this will get buried, but in the hopeful event of responses: How does this prevent people from spending up to their means?
People who make 20k, spend to their means.
People who make 50k, spend to their means.
People who make 100k, spend to their means.
People who make 452k, spend to their means.
This is a sincere, non-snark question: people spend to their means. It's similar to packing a bag, a person has a tendency to fill the bag, regardless to if they need all the things they put into it. I'll dig up sources, but people who make 452k a year, they'll tell you they're not rich. They don't feel rich.
This. How is this resolved?
Everyone wants a vacation to an island every year, and the best things for their kids, the best food on the table, the best cable channels. How is this fixed?
For example (and for the record, I hold these people in the highest regard) how do we replace trashmen, postal workers, the guy who pumps my sewage, that dunkin donuts worker? The guy who cuts lawns, or sells firewood?
Basic income, in my opinion, is a good idea. People living without the stress of of worrying about paying rent, I really like that idea. I have siblings, and their life is upside-down because they can't pay the bills and keep food on the table (I help as much as I can) how do we fix that? Would my brother just get a nicer apartment, and eat nicer food, and still be broke? He is a welder by trade, and makes a living. Paycheck-to-paycheck, but he makes it work.
If he had an extra 15k a year, I am fully confident, he would still be living paycheck-to-paycheck. He is my brother and I love him, this is his reality.
UBI isn't supposed to fix the problem of money mismanagement. If everyone was spending up to their means, that would be a success because the economy would be flourishing. If they were putting that money into savings, the experiment would be a failure. UBI is designed to solve for the future economy where human labor's value diminishes. In 20 years your brother's welding job may still be paying but whatever job you (or your children) do on a computer will likely be much better handled by AI. UBI is to bail you (and most of our economy) out, not necessarily your brother.
Some people just don't act rationality, including in their money management. There is nothing to fix here. You could say, "if they are unhappy at the end, there is something to fix".
Most rational people don't understand this because of the logic: you don't want to produce a future unhappiness.
Let's take a softer example: in a winter morning, how should you dress up?
Well, a rational mind would look at the weather forecast, open his window to feel the outside temperature and dress up accordingly.
But some other people won't care. The "effort" required to make the right decision is too high, the gain is too low, why care after all?
For those people, there are three outcomes possible:
1. they took a good decision without the information and will be happier than the rational guys, because they did not have to care about taking the decision and the outcome was good
2. they took a bad decision but still it was not worth the effort and even if they got a little cold during a few hours, they'll make it at the end
3. they took a bad decision which they must turned into bad enough consequences so that they should have cared (eg. they got cold)
And the best is that in category #3, a rational person would learn from what happened and avoid to reproduce it, but being irrational allows the person to not learn from its experience.
The conclusion to this is that since most of our decision making in everyday life is rational, it is hard to understand those who don't act the same way. Also we all are more or less rational, because that's what society forces us to be in respect of the others. But some topic, like how to spend money, or dress in the morning are left to one's freedom, and must not be controlled by some higher rationality.
Nothing proves us that the irrational outcome won't be better that the rational one. What if outcome #1 is the most realistic one?
Let me bring front and center something that has gotten a surprisingly (to me) small portion of this discussion:
ENABLE MORE REMOTE WORK. Why am I living in a high cost area? Because this is where the jobs are. Why are costs high? Because thousands of other engineers essentially _need_ to do the same thing.
So to answer Sam's original question with another question, in addition to merely making this a one sided "businesses must be more accommodating"; What can engineers do to increase remote worker availability for startups? (Companies in general, but inverted Sam's wording for more poetic "fit") What pain point solvers, major technologies, processes, etc are missing that would make truly distributed teams less of a risk, or more desirable? While I certainly think there are already great reasons (you get access to more talent potentially lower cost, more "diversity" out of box, more flexibility from your workforce and less overhead per employee) I'd be curious to hear how this dovetails with what the powers that be think are missing.
(In the case that one thinks there are intractable problems re: remote, I'd also be curious to hear those for the purpose of confronting this problem regardless.)
From my experience working with remote workers, problems tend to be bucketed under "loss of context". The remote worker misses so many ad-hoc (e.g. lunch with a colleague) workplace conversations that they end up knowing less about what is going on.
Time zone differences further complicate thing (misalignment of working hours).
Secondly, and something perhaps tech could solve, is difficulty of working on problems together. I haven't seen a good video conferencing solution that comes close to two people in a room drawing on a whiteboard.
Sort of like have an 'office' room of standard size and layout (no one deviates on the placement of furniture; decorations and quality might change).
The slip on some immersive 3D thing and have an actual avatar that's mapped to the worker's actions. This includes drawing on the virtual white board. It probably also includes a decent face-rig and several other non-verbal communications.
Really glad YC is pushing for research into this. This is a fascinating topic that deserves more research. There have many points in my life where many of my friends and I needed welfare just to purchase food. For all of us, we experienced unbelievable amounts of shame even considering the idea. As a result, two things happened.
i) Some of us didn't go on welfare to our detriment. Not eating = decreased ability to be a productive citizen.
ii) Some of us had to 'over-sell' to others and to ourselves our disabilities, out of the fear that we would be denied access to these services or be accused that we were gaming the system. The effects of overselling these disabilities were devastating on one's mental health.
Having a shame-free way of getting welfare could be a great thing.
When I talk with people about basic income, my gut reaction and primary argument is that it contrasts with that fundamental human nature that's been show time and again throughout humanity - given a guaranteed, fixed reward no matter how much or how little you work for it, disincentivizes work. It follows along the same lines as why government instituted communism fails. Or why the first version of the mayflower compact failed - whatever was produced was put into a common warehouse and all the land, buildings and end product were communally owned.
I just think that socialism and communism (which basic income basically is - it's paid for by the working class) ultimately leads to the destruction of the economy.
...given a guaranteed, fixed reward no matter how much or how little you work for it, disincentivizes work...I just think that socialism and communism (which basic income basically is...)
Wrong. Basic income lifts the floor. It does not concern itself with the ceiling. Calling it communism is utterly wrong and completely missing the point.
At $1 the second dollar is useful, at $50,000, I'm good for the year and will not pursue additional dollars. Replace $50,000 with whatever amount you need to feel content.
But that's different from basic income. The idea with basic income is that you shouldn't fear dying of hunger and being homeless because you literally can't pay, but at the same time you will have to work if you want that plasma TV and iPhone on top of your basic survival money. Basic income should give everyone just about enough to survive and pay rent, but not enough to have a high quality life that most people want.
Food and shelter are limited resources which cannot be given freely. If the cost is not remunerated to the provider (in this case government) it imposes an unsustainable burden on the provider to find new resources. There are only so many houses that can be built on this planet and only so many people willing to do it.
I didn't say there isn't a diminishing value of each dollar, but your comment seemed to imply that at a certain point, people will be "content" at a certain income level and not try to get more money.
Rich people are a counterpoint because there are people with incomes the size of a small country, and they are still striving for money. Given the diminishing utility of familiar pleasures, I think its likely that constantly reaching for "more" is the norm, rather than the exception.
Though I'm several orders of magnitude less well-off than Mr Buffett, I still have more than enough that I could stop working now and survive well enough the next 50 years.
I continue to work because I genuinely enjoy what I do.
I'd go as far as saying that it is a liberal (in the sense classical liberal) idea.
Basic income recognizes the idea of a labor market, but admits that this market is neither pure nor perfect: the jobs seeker are in an unstable situation that they have to get out of to pay their bills.
Therefore the employer has an edge in the market.
By decoupling the revenu and the employment, the job seekers can make better decision for themselves.
A basic income doesn't remove variable rewards for work. It just sets a minimum. Very few people reading this could continue their current lifestyle on a basic income, so how is this going to make people stop working?
I think one of the main arguments I've heard for basic income is that welfare is a pit of failure. Where you can make more on welfare then you can at a minimum wage job.
However, if you have a basic income that "replaces" welfare then no matter what job you get you always make more money. So it's better to have the basic income and work then to just have the basic income.
Of course the problem is MUCH more complex than that, and that is also dependent on replacing welfare not adding basic on top of welfare. Hence the research but this is the basic idea I grab onto to think of how a basic income could be better then welfare.
I would think that it depends on what you consider "basic income". If it's just enough money to scrape by (tiny living quarters, food and a tiny amount for clothes/toilitries, etc) then people won't be worried about survival, but they'll still want to get more money for things like having a house, cell phone, vacations, etc
I think that going forward, communications are a basic need. There was a startup in ~2008 that was attempting to provide "free" cellular service to its users who agreed to watch ads on their phones. If they interacted with the ads, they would get more service time...
The Facebook phone was an utter flop - however, if they wanted to surveil the population, they may have done better by creating a cell service company and allow people to be spied on in exchange for a free phone....
That damages my DNA saying that -- but it would be a workable model for the long tail of poor people that love facebook.
Why is this a problem? The market allocates work, the market has decided that a large and growing number of people's work is worth $0, the market is still producing enough to keep everyone happy and fed.
Why should someone be incentivized to work when their work has no value?
Put another way, we have made an amazing collective achievement: 100% effort from 100% of people is no longer necessary or even desirable to maintain/improve standards of living. Life has collectively gotten much easier, and coerced labor (yes, starvation and homelessness due to unemployment are coercion) is no longer necessary.
It incentivizes breeding. The more resources are freely available the more our population will grow until we reach equilibrium. Although we usually overshoot and end up with a Malthusian outcome.
"Yet in all societies, even those that are most vicious, the tendency to a virtuous attachment is so strong, that there is a constant effort towards an increase of population. This constant effort as constantly tends to subject the lower classes of the society to distress and to prevent any great permanent amelioration of their condition".
— Malthus T.R. 1798. An Essay on the Principle of Population. Chapter II.
We don't know what effect basic income would have on GDP, only that it would affect distribution of wealth.
Income equality might rise while GDP falls in a re-distributive system. High GDP does not imply high income equality. That graph is misleading in this context.
It's usually considered bad form to point this out, but there is no divine mandate that makes human breeding a process beyond the control of human societies.
> the market has decided that a large and growing number of people's work is worth $0
Or rather is worth less than the legal minimum wage, which is not the same thing.
> Why should someone be incentivized to work when their work has no value?
Very few people's work has no value, especially if they're allowed to do what they like to do. Typically the problems arise when the value is lower than the costs involved (salary, ovehead of managing them, etc).
Reducing such costs should be a pretty important part of a basic income setup.
> coerced labor (yes, starvation and homelessness due to unemployment are coercion) is no longer necessary
The interesting question is what the end game is here. If we get to a situation where 100% effort from 100% of people is no longer necessary, but 100% effort from _some_ people is still necessary, how do you ensure that the people who still need to work keep doing so? And how will those people feel about it and what will the try to do as a result? A worst-case-ish scenario that seems all too likely is bans on emigration of "productive citizens" (defined as the ones whose 100%, or even 80%, effort is in fact still needed) who would otherwise decamp for other countries with lower taxes.
There's a false equivalence between basic income and communism in your reasoning. Under failing communistic systems, that fixed income was generally the only allowed income, whereas basic income is guaranteed at a minimum level with other income allowed.
The capitalistic harnessing of greed still applies in the basic income situation - i.e. the motivation of going to work to get more income is still in effect.
I don't think this is equivalent to socialism and communism _at all_. Socialism and communism propose an alternate _structure_ for the economy - one of state-directed planning. This has been demonstrated to fail pretty spectacularly.
Basic income is an extension of the welfare state, which is itself a capitalist construct. It does not presuppose a state-planned economy or really threaten capital ownership or free exchange at all.
Yes, many communist countries have attempted some kind of unconditional income. Was this what sapped people's desire to work? Not really. What sapped their desire was a complete lack of a reward structure. A universal income doesn't destroy the reward structure; it destroys the penalty structure. The big question is whether or not the economy survives that.
On top of that, though, most communist economies imploded because decoupling production from market forces also destroyed incentives towards efficiency, innovation, and satisfying demand. Those are the biggest failures of the state economy and those are not related to universal income at all.
> I just think that socialism and communism (which basic income basically is - it's paid for by the working class) ultimately leads to the destruction of the economy.
Trouble is, isn't some form of socialism inevitable? As automation continues to progress, more and more no-to-little-skill types are eliminated which then requires people to gain further education and experience to continue to qualify for some type of job. At some point we're going to automate so much that you'll essentially have to be an expert in a field to be employable.
At least that's how it looks like to me. Today socialism doesn't work (at least to a degree; some socialism-like services I could see working today like health care) but in the future where every job but the ones with the highest skill requirements are automated, what do you do?
Aside from all the other stuff that people are pointing out, the 'human nature' and motivation argument is a bit stale at this point. We existed in communal hunter-gatherer societies for millennia before our current system emerged, and tons of research has shown that money is a cosnsitently bad motivator for creative productivity. People like pretty pictures so here's an old RSA animate on the issue: https://www.youtube.com/watch?v=u6XAPnuFjJc
There are shortcomings with ideas like basic income, but I don't think the ones you've mentioned are particularly valid.
My gut feeling is actually similar, but I'm not sure it's quite correct. One big difference from what you are describing is that it while reward is guaranteed, it is not fixed -- any earnings are on top of that. I can see how it might actually result in people being more productive -- or it might not, that's why an experiment like this is a nice thing to do.
Also it doesn't imply communal ownership. It does not even imply communal consumption decisions -- unlike, for example, government-provided services: people themselves decide what to pay for and how much.
I don't think this is a great argument without the data to back it up. People are operating at the gut level and, well, that's not the right level to disabuse powerful economic ideas.
It could be argued that there are many other aspects of human nature that would drive many (but certainly not all) people to work and earn increase their income - such as altruism, ambition, personal goals, greed, vanity, wanderlust, nest-building (e.g. wanting a bigger house), etc
If I am a participant in this subject and I am told that I will be receiving Basic Income for 5 years I might act differently compared to if I was told that I am entitled to Basic Income for the rest of my life.
The observation bias alone might motivate people to do work and strive to achieve something with all of their time. Or, it might even cause them to lie about the things they're working on.
It will be very interesting to see how they design the study, I think it has to be a little bit more nuanced than "Here's 2000 dollars a month for 5 years, bye."
One way to fix that problem is make the experiment last the entire lifetime of the "test subjects". It would be more expensive, but much more informative. They aren't worrying about what they'll do after the money runs out. Randomly pick X people who begin to receive their basic income at 18 years old and let them do whatever they want with it. You'd probably want to provide full health care too. Of course it's not a perfect experiment because they're surrounded by people who aren't receiving a basic income, which could affect their attitudes and actions in many ways.
And if you wanted to extend the experiment a bit you could create stipulations like, any literature, art, music, etc. that they produce must go into the public domain. (They could still make money off it in other ways if they want).
Yeah if it's 5 years i would be very worried about finding employment the day after and having a 5-year gap in my resume. Would the hiring manager care that I was working on my art?
Why would there be a gap in your resume? Just because you receive a basic income doesn't mean you won't work. I suppose there will be some who would minimize their lifestyle to live off of the basic income but I suspect many will continue to earn far more.
If it's only 5 years you will feel pressured to find a conventional job that would look good to whoever would be reading your resume if/when you apply for a new job after the experiment is over. If it was guaranteed for life you might do other stuff, not necessarily non-income-producing, but how it would look to HR would be irrelevant.
Seems to me that five years is a long time. I could work on a degree for the first four. Or I could work on retraining myself for the first two. Or I could just take the first six months off.
Five years is a long enough time to let you do whatever you're going to decide to do with the first part, and then work on recovering employability/resume credibility/whatever with the last part. An interesting question would be how peoples' behavior changes through the five years, though...
I would add to the article's list of reasons why minimum income is a good idea the very Roman purpose behind public aid: to prevent civil unrest.
And I'd second sama's mention of controlling cost of living. In addition to universally obvious importance of it, with minimum income there is the added possibility that prices for low end necessities could rise commensurate with the size of the minimum guaranteed income.
A third point I'd raise is to ask about medical costs which, unlike Finland or Canada, if this test is carried out in the US, would be a very significant factor. If the minimum income needs to cover this too then healthy, and generally the young may tend to have vastly more disposable income while an unexpected illness for anyone could far exceed anything the minimum income could hope to cover.
Related to the cost of living factor: what about research on the interplay between guaranteed income and rents? I get the impression that rents will increase to take up most of the guaranteed amount, based on how people allocate for living vs. discretionary expenses, but would like to see something rigorous.
Example of the dynamic: Winston Churchill liked to give a story [1] about do-gooders who saw that a bridge's tolls were a burden on the poor, so they bought out the owner ... only to find that rents right afterward went up by the exact expense of crossing the bridge twice daily.
Considering the necessity of this crossing, that was like a sudden basic income of the cost of crossing the bridge, and got eaten up by rents. But I'd like to see something more rigorous and what can be done about that phenomenon.
I wonder what basic income would do to cost of living? If everyone ends up with x amount of guaranteed income, does the cost of living eventually rise by the same amount across the board and basically negate it? It seems like rent-seeking behavior would come in to play here.
Inflation is the obvious issue here IMO. If basic income is X, then X really just becomes the new zero. We either need to provide products themselves (free food, housing, healthcare) or somehow lock the price of those things. I suspect both of those tactics will have identical challenges in terms of implementation though.
I continue to believe that the best way of 'locking' a price is to ensure that the market remains with the correct supply to buyer ratio.
As an example: to decrease the cost of rent in a city, an increase in rent-able locations and attached commercial business and non-retail jobs need to be in those locations.
This is also related to suggestions that say controlling medical care could be achieved by allowing more agents at all (doctors or not) to be able to treat obvious conditions. I agree that in the short term the suggestion would be viable, were it not for regulations; however I think that artificial diagnosis neural networks will probably achieve adoption before the regulations catch up.
I often have the same inclination of thought with regards to university education and government-guaranteed student loans. If I'm a university executive, and I know that the average student can afford $X, and I know the average student can also receive a guaranteed $Y in student loans... Why would I not set my price at $(X+Y) and take the full rent that I can?
According to a study be the federal reserve, it actually is happening right now. Education isn't a commodity product so this kind of pricing doesn't require collusion between different schools.
Can you explain why "price creep" will not occur, i.e., universities increasing their prices with small amounts (say $10 a year), so that eventually, all of them will end up at (X+Y)$ ?
The money for the basic income comes from taxation. Even though everyone would get it, higher tax rates on people with middle or high incomes would mean they were no better off, or worse off. This isn't supposed to be a way to make everyone $x per month better off, it's a way to change incentives and replace welfare.
What I'm curious about is what's stopping a large portion of the population from simply quitting their jobs to live off basic income, thus decreasing the potential pool from which taxes to pay for basic income can be extracted?
If it really worked out like you say it would, where people with middle or high incomes are no better off, I wonder what they would think when suddenly large swathes of the population are able to live off the dole without busting their humps.
If someone is willing to do this, they are likely to be people who currently are on low incomes and thus unlikely to be paying much tax if any. I think it would have the opposite effect though. In most countries, the welfare system harshly punishes people who do a small amount of work, withdrawing benefit at a very high marginal rate. This is a massive disincentive to finding work. With a basic income, people can for example do voluntary work. People on sickness benefit can gradually try to go back into work, doing a few hours per week. If you can top up your income without being penalised for it I reckon quite a lot of people currently on welfare would start working a little.
>thus decreasing the potential pool from which taxes to pay for basic income can be extracted.
Basic income proposals usually work something like this (numbers all made up, but close to those I've seen):
Each person gets something around the poverty level (say $10k -$15k per year). The taxes that are raised to pay for it would increase gradually based on income up so that it would be a wash for someone making $55k a year, and once you start making more than $75k a year, you start paying more.
If you look at those numbers anyone who decides they can live off of the basic income was unlikely to have been making enough to pay any federal income tax at all, much less enough to have been contributing to the extra UBI tax.
> where people with middle or high incomes are no better off, I wonder what they would think when suddenly large swathes of the population are able to live off the dole without busting their humps.
They will be living off the dole at the poverty level, not living middle class lifestyles.
But remember, living off the dole also means not contributing anything back to society. These people could be doing something of value, but are incentivized not to.
It's not really quite that simple though. You have to look at a UBI in comparison to our current system.
How many more people will quit their jobs instead of working if we replace our current system with a UBI? Small scale preliminary studies seem to indicate not that many.
>But remember, living off the dole also means not contributing anything back to society. These people could be doing something of value, but are incentivized not to.
That's not true at all unless you think people on welfare and disability are incapable of contributing anything back to society.
Lets say we have a single parent who can't afford day care. He parks his kids in front of the TV, or pawns them off on inattentive relatives, so he can go to McDonald's 30 hours a week and make $8 an hour. I think that he would contribute more to society in the long term by staying home and raising his kids than he does making minimum wage at McDonald's.
Then we look at the economic upsides to a UBI. It is likely that a UBI will reduce crime. It will also likely encourage more entrepreneurial risk taking. And like in my previous example, a UBI will allow more parents to stay home and spend time with their children, potentially allowing the children to earn more money in the future.
Countries with generous (compared to USA) per circumstance income transfers don't generally have a big problem with this. People have a pretty basic need to feel useful to society, and for status. It does raise the bargaining position of the employee on the job market somewhat for the low end of the job market. But it's just much better for everybody if cleaners and janitors get respected a little more by their employers and aren't just a pink slip away from the gutter.
And UBI will do better in this respect than per circumstance income transfers since you get to keep all the money you earn on top of it.
I think the cost of a lot of basic goods and services would fall. Employers would only need to offer relatively modest wages because the marginal value of those wages would be so much higher. This could drive down labour costs without driving down net pay for low wage workers. Basically a worker on $1,000/Mo now might be on $600/mo basic income and $600 wage after (fantasy numbers). This could make low wage workers much more affordable for employers leading to more employment and cheaper goods and services, leading to lower cost of living. A win for employees, won for employers and win for customers. Of course this is an idealised scenario, it would all need to be funded from higher overall taxation.
This is exactly wrong. The cost basic goods would increase. Basic Income would immediately have an inflationary effect as the money supply for these good would be expanded drastically.
The Employer would not see as much benefit as you'd think as presumably he would be amongst the class of people/entities (including the middle class, upper class, and corporation) which would be paying for this indirectly in the form of taxes.
Alternatively, if Basic income is debt finance (and not financed directly through taxes), incurring more debt also has inflationary effects.
3D printing and market forces will take care of raised prices. Cost of production are going down. If company X decides to sell for 100% increase company Y will see an opportunity to undercut and we will continue with our race to the bottom. If no one offers value a new company Z will enter the market and provide it or people will just start manufacturing/growing it at home.
Inflation only occurs with increased supply of new money into the system so whether or not there is inflation depends entirely where the money to pay for BI comes from.
I don't suppose it's guaranteed that the overall incomes of the lowest earners would actualy increase though. Maybe they would, but it's possible wages will fall and rents will rise to cancel that out.
You may well be right about employers. Basic income isn't going to wish away all the problems of the poor. The main benefits are likely to be a simpler, fairer and more efficient benefits system and more opportunities for employment.
It may or may not be wrong. There will definitely be some inflation, but there will also be an equilibrium. It is also a possibility that if the UBI is adjusted accordingly, that the relative costs of things will remain roughly the same.
As for whether employers will benefit, recognize that demand will also increase when those who were formerly impoverished begin consuming things. It is direct and distributed economic stimulus.
Of course it does, it's the same thing with minimum wage increases. When businesses have to pay all of their employees more, that just doesn't come out of their pockets. Price increases across the board are passed down to customers.
Did anyone else read this post, and think, "Wow, what a dream job. What an opportunity to actually study something in real-life with real people that could make a fundamental difference in the evolution of humankind."
It is harder to conceive of a notion more beneficial to the fate of humans than the notion that all humans deserve the basic essentials of life, and that the first task of a civilized society must be to provide those essentials, without regard for any judgements of the worthiness of individuals.
It should be assumed that everyone gets to eat and have shelter.
I guess I did data consulting for one too many programs and read it as, "damn, that's going to be a hard outcome to work out and the data collection is going to be problematic. I hope they find someone who knows what their doing."
>It should be assumed that everyone gets to eat and have shelter.
Would this include intimacy?
Consider that babies who aren't physically touched suffer extremely high mortality rates even though all other needs are provided (to the extent that even studying the effect is banned as unethical). This alone shows that physical touch should be considered a need.
And then there is the topic of needing human emotional intimacy, where loneliness is shown to be very unhealthy.
In my opinion, "we tried this before" and it didn't work. We didn't call it Basic Income, but we have some historcal examples of large scale attempts to guarantee everyone gets a share. Famous failures include communism.
I do not care how you arrange this research, it will not tell you what will happen under real world conditions. There is plenty of instructive data from the real world that you can look at. For example, about 2/3 of lottery winners are bankrupt within 5 years.
When people get unearned money, most of them piss it away. "Easy come, easy go." I have thought long and hard about this. I don't have time to write an opus on it today, and I imagine it wouldn't be welcome anyway. Here are a couple of things I wrote previously:
It seems like you're assuming that in our future there will be plenty of jobs for average people to earn a 'living wage' (i.e. enough to pay for basic shelter, food, clothing, education, medical treatment, etc.). What makes you confident in that given that forecasts of economic growth show significant stagnation and trends show increased automation of jobs?
There will be jobs, they just will require more education and/or skill than jobs currently require. This is always true any time civilization advances. The entry level jobs we have currently take more education and skill than jobs took 100 or 200 years ago.
My father, who died a couple of years or so ago in his late 80s, was a high school drop out. This was not a big deal in his day. It was not a mark of shame or a barrier to getting a job. When Lincoln was president, the average education level of your typical American woman was 2nd to 4th grade (IIRC).
Google stats for "big data jobs". It is expected to produce, directly or indirectly, millions of new jobs in the next few years. Trying to fill big data jobs is currently a challenge because of a skill short fall. It is expected to get worse.
You don't want to get that much education? Then pan for gold. Stuff I have read recently indicates we have only found about 5% of the gold in the earth's crust. We are increasingly using precious metals, such as gold and silver, in the electronics to which we have all become so very attached. Gold currently is selling for around $1100/ounce. From what I gather, about 1/2 cup of gold would weigh as much as a two liter bottle of soda and could be readily sold online for about 80% of the spot price, totaling around $60k in income. It is unlikely we will be able to substitute automation for human labor any time soon for finding gold.
Every single human that exists creates a need for labor. In human history, every time we successfully automate or otherwise dramatically enhance productivity, we raise the standard of living for everyone. When we do it stupidly and badly, we breed a situation that leads to a cycle of booms and busts. See historical civilizations dependent upon distribution of river water via some system in order to grow enough food. They develop a canal system and a complex bureaucracy to run it and every few generations the complex bureaucracy that runs it breaks down, causing the civilization to hit its bust cycle.
Edit: Let me emphasize that: The HUMAN piece of the puzzle breaks down, and the whole system falls apart. You are talking about intentionally trying to create that very situation with Basic Income. Automation cannot keep working without human maintenance.
I have no desire to live in a world where machines run everything and the last man who knows how to write the code that runs them or debug that code or do the repairs dies and the rest of the sheeple sit around waiting for it to fall apart so we can rebuild civilization from the ground up like a bunch of stone age cave dwellers.
We had better find a way to educate people and distribute the work or we are incredibly, amazingly fucked.
Experiments in dense, but attractive housing are probably the gatekeeper to affordable housing. I don't see this talked about much. Affordable housing is a good goal, but until it can be done in a very dense way, it cannot compete with other schemes. One idea I have is to run genetic algorithms to create housing schemes that would seek to maximize sunlight, and privacy. The plan needs strong focus on sound proofing and technology to reintroduce ambient sound when desired. The plan would also balance the exposure of inhabitance to each other in their comings and goings and in their use of common areas. Finally, the scheme would seek to keep public as much of the area as possible to make it competitive for commerce and livelihood compared to other parts of the surrounding environment.
I'm very skeptical of basic income as commonly understood.
The typical basic income program I've seen goes something like this: give every person in the country $10k to live on, no strings attached. [a]
1) As defined above, this is horribly inefficient and expensive. I, a software engineer in Silicon Valley, would receive this $10k. How does this benefit society? I already make over $100k; I don't need additional income support.
2) As noted elsewhere in this thread, the US has 300M residents; naively the cost of this program would be $3T!
3) If you do start to add guidelines for poverty, etc., you just reproduce the current welfare system that exists in the US, which balances available government revenue against our desire to help poor people.
[a] https://en.wikipedia.org/wiki/Basic_income, "all citizens or residents of a country regularly receive an unconditional sum of money ... in addition to any income received from elsewhere"
The catch is very simple; you receive $10k, but as your income is $100k+, your income tax will go up by $10k + $X.
1) You getting the $10k benefits society in that we don't add any administration on the front end - deposits go to everyone, and then the taxing back step is already being done (as you're already filing taxes). So cheaper administration cost overall than doing a means test or whatever.
2) A basic income has to be introduced with corresponding tax increases. For some people the basic income is a net positive (if you're currently poor, broadly). For others it's a wash (middle class, by whatever definition). For others (like you and me, most likely) taxes will go up to pay for the poor. But then there are all the savings basic income leads to - fewer administration costs, fewer costs of poverty (like homelessness and crime), etc.
3) Right, don't do that. Handle it through taxation at the back end.
1) How is this more inefficient than our existing welfare system? Seems a lot more efficient to give everyone money rather than spend $100M on bureaucratic infrastructure for verification and employment tracking.
2) It benefits society because you no longer have to work to live. This affects how you make decisions about your employment. You would be more likely to change jobs when you're unhappy, for example. This is good.
3) Whether you make $40k, $100k, or $500k, the $10k isn't there to prove "additional income support". The system could be set up so that after basic income is implemented, your disposable income is the same as it was before--people making $40k wouldn't have $10k in free money to spend, because their taxes would go up $10k a year, for example. The key here is that if they choose not to work for some period of time, they can. That's not how I think it ought to be implemented, but the principle is true.
4) If government handed out $10k to everyone, they could tax everyone $10k and it would be like nothing happened. The difference in implementation would be that the additional taxes would be progressive, while the benefits are flat. So if you make over $100k a year, you might be taxed $15k more than you were before, but you would also receive $10k. Without a doubt, an effective basic income would require a more progressive tax structure than what we have.
5) "If you do start to add guidelines for poverty, etc.," not familiar with this reference, but presumably a basic income would eliminate extreme poverty. Do you mean like, for example, what would someone who was physically incapable of working receive? Is the basic income enough?
> Whether you make $40k, $100k, or $500k, the $10k isn't there to prove "additional income support". The system could be set up so that after basic income is implemented, your disposable income is the same as it was before--people making $40k wouldn't have $10k in free money to spend, because their taxes would go up $10k a year, for example.
> So if you make over $100k a year, you might be taxed $15k more than you were before, but you would also receive $10k.
So basically as a middle class person, I don't benefit at all, I may even lose money, but some kid who has no income and wants to live in his parents basement gets $10k/yr for contributing nothing to society? Am I understanding this correctly?
The upper class won't care - this is pennies to them, but this is going to bite the middle class badly and completely change their incentives to avoiding getting housing and living as cheaply as possible to minimize or eliminate work.
You always have to think very carefully about the incentives you create with something like this. This seems to create very bad incentives to me, incentives which would have caused me to make very, very different decisions in life drawing me away from any sort of productivity in society.
I'm not strictly against this idea, but as you've presented it, I can't see a way this would ever be implemented, how would you sell it to the middle class?
> So basically as a middle class person, I don't benefit at all, I may even lose money, but some kid who has no income and wants to live in his parents basement gets $10k/yr for contributing nothing to society? Am I understanding this correctly?
The benefit for you is that you'd be living in a better society. Hopefully, you'd see reductions in crime, improvements in various service jobs, etc.
That kid gets $10k/year, sure, but then again lots of people already have the means to live in their parents' basements. Most of them prefer not to do so.
However, there'll be other people getting that $10k/year. Single mothers could spend more time with their children. More people would become educated. The job market would become more liquid for employees, hopefully improving working conditions.
The idea is that the taxes scale, so for the middle class the tax is negligible. You get $10k, and your taxes are increased by $12k if you're making less than $100k.
As for teenagers sitting in their parents basement - The thought is that $10k lets them live and do anything they please instead of being tied to a shitty job or their parents basement. In theory they will choose to contribute to society in some way and not just play video games all day.
But that is what we need to test - Will people choose to play video games and watch TV all day, or choose something fulfilling and 'productive.' Then we have to redefine productive, some other comments in this thread speak about that.
It might seem more efficient to give everyone money rather than spend on bureaucratic infrastructure until you've realised just how many adults don't work or pay income tax or claim welfare. The choice between raising taxes or cutting incomes for the people that do really need the welfare payments isn't a pretty one...
I'm also a bit skeptical, which is why there is a need for experimentation on the topic.
Aside from that:
1. You'd have the freedom to quit your job without fearing homelessness or hunger. Suddenly, you're a lot less stressed.
2. We are wasting trillions on making new fighter jets or new wars we don't need, surely we can cut those programs and then spare a few trillion for something more useful.
3. An open question, I think. The guidelines for poverty would likely have to be open to change in order for a UBI to work.
1.) We'd have to implement it so that starting somewhere on the pay scale, taxes increase so that by some point you pay back to full $10k you received. Naively: $25k income you pay back $1000 of the $10k in taxes at $50k, pay back $2500, etc. That way you, making over $100k, essentially get $0 basic income by the end of the year.
2.) You probably have to say "everyone over 18 gets $10k, each child up to 3 per family gets $2k"...or something similar. Getting $10k per child creates some crazy incentives. (2010 there was roughly 70m people under 18, so it's only $2.38 trillion! ;)
3.) You can probably remove a ton of welfare programs if you do this, but not all. You can't completely remove the safety net, but a lot few people should have to be serviced by said net.
> Naively: $25k income you pay back $1000 of the $10k in taxes at $50k, pay back $2500, etc. That way you, making over $100k, essentially get $0 basic income by the end of the year.
If I recall correctly about 50k is median income for the working population, so you're still paying most of your population at least $5000. And that's just the currently working population, there are so many non-working adults who will also want the free money, I can envision the divorces being had for an extra $10k right now... the incentives this creates are very bad.
"As noted elsewhere in this thread, the US has 300M residents; naively the cost of this program would be $3T!"
So you raise taxes. For the people who don't need the extra $10k... well, that's OK, because their taxes will go up by some amount. Possibly more than $10k, possibly less. It depends on how much they earn.
You do still have the problem of determining what the progressive tax looks like, but this is a simpler problem than administering a large number of social welfare programs, all with their own eligibility criteria.
Naively, a $3T program would increase the US budget by around 50% even if you eliminated all existing social security and unemployment benefits.
I can't see determining a politically acceptable and GDP-neutral progressive tax that finds an average of 50% extra per person as a simple problem, and that's even before you start dealing with the backlash from equally unhappy people whose existing welfare or social security program entitlements add up to more than $10k per annum...
> 1) As defined above, this is horribly inefficient and expensive. I, a software engineer in Silicon Valley, would receive this $10k. How does this benefit society? I already make over $100k; I don't need additional income support.
So give basic income only to people doing less than the basic income, and take it away once you are doing more. That's how it's been implemented in some countries, and I don't see any reason not to follow this scheme.
The point is that determining who is worthy or not is difficult and just giving it to everyone reduces administrative costs. Tax rates for high earners can be increased so above a certain point the benefit would be outweighed by additional taxes.
No non-strawman BI scheme that I have seen proposes just giving everybody the same net basic income, somehow pulling the money out of thin air. Everyone's gross income would rise but middle to high income households would have their income taxation increase to compensate.
Presumably progressive tax increases would accompany a guaranteed income such that some percentage of the population would get no net benefit, at the least. The point is that it's much cheaper to administer than traditional safety net programs and less nannyish.
I've always heard it pitched as some sort of sliding scale. Basically you'd get a certain amount based on your level of current employment but it doesn't require many of the checks Welfare has. I've also seen people say doing a basic income then eliminate food stamps and welfare and it ends up being a cost savings.
It sounds good in theory that this very odd system of income could end up _saving_ us money, but I don't actually know if that's true and is probably highly dependent on whatever scale is used when deciding how much basic income a person receives.
Personally, I think one way to handle funding is that current tax deductions might count in some form as coming 'from' basic income so if you were already making significant income, then maybe there would be no additional government expenditure.
Negative income taxes (linked in other comments) is similar to this idea.
it's more or less negative tax; part of your income is already tax-free, BI is just stretching the idea the other way than it usually happens. also don't forget to cut the cost of most welfare - BI should handle most of it. it might actually cost less if welfare administration is expensive enough!
"Ask HN: What can startups do to increase prosperity for everyone?"
I think we need a way to have a faster iteration cycle for trying sociopolitcal ideas. The problem is, its almost impossible to change the laws necessary at a governmental level in any reasonable time scale. This is exacerbated by the fact that you are inside a "monolithic legacy codebase" in which you can only afford to make minor changes over many years to take you from point A to some goal which is point B, and you still can't verify that point B works in any practical way.
Ideally, you could have at least an entire city (population ca. 50k minimum) where you could just try out all this stuff, and continually carry out sociopolitical experiments. I suppose that's not feasible, but any idea that goes in the direction of increasing iteration times and improving the testability of ideas like this would be a good direction I think.
Hong Kong has become a Special Administrative Region of China and has it's own justice, education, and political system (mostly). I think it would be a great idea to have several of these regions across the us to "beta test" different policies to see whether they would be good or bad. Changing a policy or law of an entire nation is hard and risky; trying these things out in special regions, where you have a known trial period, would allow much faster innovation in the political space.
"I think we need a way to have a faster iteration cycle for trying sociopolitcal ideas."
One of my personal hopes with Basic Income is that it addresses this issue by providing a safety net so that people who's livelihood relies the existence of the status quo can be liberated from the incentive to keep the status quo. For example, our government creates a Department for Homeland Security to address threats. It employs thousands of people. What happens if the threats go away and the department is no longer needed? Suddenly thousands of people are out of a job. That's thousands of people with an incentive to keep the department in business, which requires threats to our homeland security. Multiply this example across not just government institutions but private as well. People have an incentive to keep their gravy train running, even if it does irreparable harm. We need to remove this incentive so we can have faster iteration cycles, not just for socio-political ideas, but all ideas. Hopefully, a basic income can remove these perverse incentives by giving people a safety net. They're not afraid to lose their job, or move on from a shitty job, because they know they and their family won't go hungry, homeless, or without access to medical care.
Honestly, I don't think that people sitting around is the problem with basic income - it's funding it.
Say you are going to give each of the 320M inhabitants of the US $10k per year (that's about the poverty threshold). That would be a cost of $3.2 Trillion per year, or about 50% the total government revenue (federal, state, & local combined). I just cannot see a future where the US raises taxes by a number that anywhere close to 50%.
Keep in mind that some of the additional tax would be funded by the basic income received by the rich (i.e. some people would get the $10k and then pay back $10k more in tax than they would have before, thus not gaining or losing - and of course some people will fall on either side of that middle line). Also, some social benefits costs would be cut, and in theory possibly also save money on currently-needed beaurocracy.
Whether it all balances out would depend on how it was implemented and then your subjective opinion of how it would work, my point is just that it's not as simple as "find another $3.2trillion".
It seems that in 2009, 13.2% of americans have been living under the poverty threshold. Lets say that they make 50% of the poverty threshold on average (don't know the number). That would be an increase of 3.3% of government revenue. Plus the savings on bureaucracy you point to. Does not sound like the most libertarian plan ever, but it's certainly not unrealistic.
Fantastic. Basic income should start entering the political vernacular in a massive way. Even in the short term, it seems like a more elegant solution to the progressive lefts "lets build giant infrastructure" plan.
I'm looking forward to this research answering the basic revenue calculus. How much of the required spending can be supported by dismantling the current welfare infrastructure? How much would general productivity need to increase (and be maintained) to make sure the tax revenue can support this?
Is there any effect of this on capital investment (the lifeblood of SV)?
Things got fiddled a bit here with the comments, but this is my response to "how can we increase prosperity for everyone?", although it's probably more a political problem than a startup one.
Maybe it's just me that has noticed it in the past few years, but "fixing housing in the US" is looming large on my list of things to improve.
It's not just San Francisco - the same debates are playing out in places like Boulder, or even here in Bend.
> Ask HN: What can startups do to increase prosperity for everyone?
good financial services for very poor people in developed countries.
the basic financial services that middle class and wealthy people have access to such as checking accounts, savings accounts, retail brokerages for purchasing investing vehicles (stocks, bonds, etfs, etc.), access to consumer credit that does not have usurious rates and predatory practices, tax filing assistance, direct deposit of paychecks, automated scheduled bill payments, access to in-network or no-fee ATMs, ability to build up good credit history and have a high FICA score, etc.
all of these things that the middle and upper classes totally take for grant as basic infrastructure necessary for modern life are things that very poor people are almost completely shut out of. this is a HUGE driver of persistent poverty in already poor communities. this is one of the things that makes climbing up out of poverty almost impossible for so many people.
a startup attempting to solve these problems would have to be willing to experiment with totally new business models that do not directly rely on exploitation of the customers to generate profits. it might be a lower margin business than, for example, commercial banking. it would be a great social good though, and it might even be possible to make a profitable business out of it too.
edit: expanding on my point
an important component of sama's query is "increase prosperity for everyone". how does providing financial services for the very poor help everyone? simple: it increases demand at the base of the economy. very poor people have almost no discretionary spending money and often end up as net drains on local economies, taking in money from government assistance programs while not contributing back to the economic growth of their communities.
if the poorest people become less poor they begin to buy things with their newly available discretionary spending money.
Re: what startups can do to increase prosperity for everyone:
Find ways of destroying harmful institutions by replacing them with better ones-- a perfect example to pursue is the institution of health insurance in the USA, which is explicitly harmful to people, inefficient, inhumane, and completely entrenched in multiple other institutions. Find a way to get people cheaper and better care, and they'll flock to you.
There's other ways, of course, but the gist is that rather than focusing on relatively irrelevant problems (getting takeout easier, booking flights easier, etc), startups could choose to tackle actually difficult problems such as political corruption, exploitation of the poor, existential angst, etc. These issues aren't traditionally simple to monetize.
Removing minimum wage is a very important aspect because it allows teens to get experience early. Nothing kills teenage employment rates better than a 20$/hr mandate.
If "everyone" means "all US citizens" then startups can help increase transparency in government. It's much easier to figure out who to vote for when there's a clear picture of somebody's track record and who their political allies and funders are. Everybody should want this, regardless of political persuasion. If massive data gathering can't be stopped (and it looks that way) then the least we demand is real transparency. Without that there can be no accountability. Most political information people come into contact with is disinformation or shameless propaganda by some special interest. It is getting completely out of hand, but there's no obvious solution.
If "everyone" means "every person in the world", then we need startups to fight for sustainable energy and universal education. All scientific papers must be freely available to everybody in the world (few exceptions, e.g. how to manufacture anthrax can stay secret). Music and literature should be available to everybody, preferably at no cost. A single college textbook costs a month's salary in many parts of the world. That's just cruel.
There isn't much overlap between things that are super important for society and things that are profitable. The civil rights movement wouldn't work as a for-profit venture and future civil rights movements will be no exception. Often enough people who have contributed the greatest value to society never benefited from it personally. Duchesne or Flemming didn't get rich from their discovery of penicillin but the contribution to mankind is immense. In contrast the Bill and Melinda Gates foundation -- with their many billions -- struggle to make a huge impact. To really improve the quality of life across the globe a social revolution of some sort is needed.
The problem with basic income is that people need purpose, not charity. Look at the success of programs in Africa that give people the ability to make a living, not a bag of rice. One particularly moving story was about a group that got foot-powered water pumps into the hands of subsistence farmers, who subsequently were able to send their kids to school.
At one point, the core purpose of monetary policy and central banking was full employment. Now, it seems to be stability and productivity. The political system is too corrupt to pivot -- but the private sector can, because untapped potential represents lost customers.
I think we need to figure out how to empower people. We have all of these underserved communities that suffer mostly from hopelessness. How do we empower a handyman in the inner city to build a sustainable business that enjoys his neighbors? How do we bring vitality to a rural community marginalized by the death of farming and mills?
> The problem with basic income is that people need purpose, not charity.
This is based entirely on the assumption that work=purpose, which I think is bogus.
> Look at the success of programs in Africa that give people the ability to make a living...
For many, perhaps most of the poor, simply BEING poor inhibits them from being able to make a decent living. Jobs may not be available, the means to get to a job reliably may not be available, the physical/mental health to sustain a job may not be present and the resources to be treated and rehabilitated are obviously not there.
In effect, the hypothesis is that in a highly developed economy, handing out cash might be the equivalent of "teach to fish" for, say, rural Africa. And even then, at least one study showed that basic income guarantee did amazing things for an african village, increasing education and entrepreneurship (sorry - don't have the link handy, maybe someone else can point to it).
> suffer mostly from hopelessness
On a final note, be careful here... if I have cancer, and I can't do anything, do I suffer mostly from hopelessness or do I suffer from cancer? Hopelessness is a symptom of people suffering from poverty.
> The problem with basic income is that people need purpose, not charity.
> I think we need to figure out how to empower people.
I don't think anything you've said is incompatible with something like basic income.
What could be more empowering than knowing your basic needs will be taken care of? From that position of strength you can negotiate with others based on mutual benefit rather than avoiding the consequences of not meeting your basic needs for survival. You must be enticed into a transaction rather than coerced no matter how circumspect that coercion.
If people needed to be forced to add value to the world through the threat of starvation or homelessness HN wouldn't exist. Why would people with means continue transacting? I don't believe the poor are much different, they will nurture their potential and provide what they can to the world because the trade leaves them better off.
Savings, financial support structures through their family, direct funding, and skills they can easily turn into funds. These are not basic income but they have the same effect: they allow the freedom to bargain from a position of strength without worrying about starving or going homeless or other basic needs unpleasantness. They have breathing room to create. And they do.
Imagine a world where, in order to create a new business, someone had to enter a walled city, give up all savings, were forbidden to take money from outside sources and must work full time (at least) at the same time in order to earn their daily rations of food and a bed while they are at it. That is the world the poor live in, more or less. The walled city is the planet Earth.
You mention dependency but you forgot the qualifier: on government. The poor live in dependency right now -- they are dependent on their employer to live week to week. They work, not to better their situation, but to keep from losing what little they have. It is the illusion of freedom.
You mention charity, but my position has nothing to do with charity and making people comfortable just because. It is about putting people in a position where their every transaction, if we assume they are rational, are guaranteed to create value. That helps all of us.
It is about giving people a hard floor to stand on. They will find things to do, just like most people with money and resources find a way to add value to the world -- because it improves their situation.
We don't need to worry about keeping people busy...they can figure out for themselves what is best for them and the world doesn't improve your situation unless you improve the world. I trust they'll figure that out.
Easy? What quality and variety of food? what size shelter and in what location? What brand of clothing and how many outfits? What level of health care? Who decides these things?
> Grocery store quality, with the ability to follow the food pyramid.
Organic or not? Brand name or not?
> Somewhere. Probably shouldn't force them to move to a different city.
What if they live in a city with extremely high cost of living? It's likely UBI will not allow them to continue living there, so then do they get extra because they want to live in a trendy place?
> Generic brand, 5-10.
What is "Generic brand"? Don't the poor deserve to have the dignity of owning a few brand name outfits?
> Medicaid.
Expanding Medicaid to every single American is going to cost a lot of money, so now you've got two problems; how to pay for UBI and how to pay for expanded Medicaid.
> The exact number is not the important part, so don't fixate on how it's calculated.
But it is. Because as soon as a number is arrived at, there will be people who say it's discriminatory. They will rail against it because people on UBI will be "barely at the poverty line". There's no one-size fits all dollar amount we could ever possibly come up with.
Many brands are cheap, including most food brands, so buying some should not be a problem. I'm not sure what 'dignity' is involved in brand name clothes unless you're in high school.
They should be able to afford a room in 95% of cities or some similar number, but perhaps not in the trendiest trend city that's refusing to allow denser construction.
Isn't medicaid mostly already expanded?
Being barely at the poverty line is fine, because you can get a job on top of it.
People can and do complain about the details of every government policy ever. That they would complain about the details of this one is nothing special.
Now we've gotten past the definition of categories and into levels -- that's progress.
That's where Basic Income or something like it shines. You don't have to micromanage -- you look at averages for the area and give a lump sum and let the individual figure it out.
I don't see how that's progress. To me it further complicates the issue. You're suggesting that there would be different basic incomes based on where you live? Doesn't that seem the least bit discriminatory?
We went from a general question to discussing specifics...that is progress. It is a complicated issue so I am not surprised or dismayed that when getting to specifics things get a bit complicated.
And yes, there should be some flex based on where a person lives. It is not discriminatory (in the pejorative sense) it is pragmatic. And perhaps a useful policy tool.
Evidence increasingly is showing that direct cash transfers to the poorest are among the most effective interventions, among randomized control trials in the developing world.
"great society" is not being used a rhetorical device to refer to a particular society; it is (I am reasonably sure) referring to the "Great Society" program in the United States [0] in the mid-60s. I don't know enough to address the claims in the GP, but they did frame their argument, at least.
> "The problem with basic income is that people need purpose, not charity."
When most of your energy is spent on survival, the energy left to follow a greater purpose is drastically reduced. Providing the basics as a human right frees people to pursue goals beyond the basics. The cultural element is important too (the goals you set will be influenced by the society you live in), but let's tackle the survival issue first.
One of the best ways to increase prosperity for everyone is to make living more efficient/affordable. Look at the average American budget from 2013[0]. The top of the list is housing. Figure out how to make housing cheaper and more resource efficient and you could lower both housing cost and utility cost, potentially saving people hundreds of billions of dollars per year.
Other top items would be transportation and taxes. A $10k safe and energy efficient vehicle would be a great first step.
Though it may be unpopular in some circles, the fact is taxation is one of the least efficient ways of allocating capital. You have administration costs, fraud, waste, and abuse. If we lower the cost of living for everyone, we can lower taxes as well and allow that capital to be invested more efficiently.
There is non-profit startup in Berlin trying to do this, they mainly fund themselves by raising the money from the crowd. It's a lottery system where one can win 1000€ per month for one year, which in most parts of Germany gets you somewhere. They already funded 29 people analyze and blog about who won. Most people actually didn't do dramatic life changes, which also could be because it's just one year.
Is five years long enough to get a real reaction? Unless somebody is on the verge of retirement, and they want to keep working after the experiment, they must consider staying in the job pool or have difficulty getting hired in five years. To see how people would react to a government-provided basic income, which would presumably be fore life, the study may have to emulate that more perfectly.
Nevertheless, I'm very excited by this project and seeing what comes of it.
Does the basic income prevent people from doing work? Or from doing work they hate?
A correctly designed study will attempt to teach the participants to (1) have basic spending/expenses that match their income (2) procure the basic income from already-available sources (e.g. food stamps, subsidised health care, social security...) and (3) form income-pooling groups that provide/insure a basic income for their members. All three have already been done at a small scale. 100s of people in the United States currently practice #3, e.g. Federation of Egalitarian Communities. 1000s of people practice #2, e.g. Puna Hawaii or your local trailer park.
I think basic income would have the effect of insurance, to allow individuals to take bigger risks and follow their dreams more.
If there were a basic income, I might quit my job and look for a new one full time, rather than looking in my spare time, increasing the chances that I would find a better fit between me and the new company. There must be some utility or public good in that.
That might also provide some needed competition for lower wage/skill jobs, since they'll have to compete with scraping by on basic income. As it is now low wage employees are disposable and disrespected; "flexible" schedule means something different at Best Buy than at my current engineering job.
"Our idea is to give a basic income to a group of people in the US for a 5 year period"
In order to get realistic information for how people will behave / feel with a basic income we should seriously consider dropping the '5 year period' and extending it for the remainder of their lives.
Personally, knowing that I will have to start working again in 5 years to support myself would drastically change how I choose to spend my time over the next 5 years.
I am surprised that it's for only 1 researcher though. The data on startup founders seems to encourage 2 or more people to share the burden and have someone to more explicitly bounce ideas off of. It would seem to be the case that fundamental research like this would also benefit from the cofounder type setup.
The researcher we choose will be fully a part of YCR / YC. He or she will be able to bounce ideas off us at any point, and we will help out however is requested.
I hope It's not coming back to bite me in the ass to say that, but I have been slacking and collecting unemployment benefits in the last few years.
During this time I have re-kindled my interest in mechanics and electronics, bought and changed the electronics of a CNC router, learned to use it, learned a bit of woodworking, created the control software and tool path planning system ( https://github.com/nraynaud/webgcode ). I have helped a guy on the internet with a laser cutting software, I have created an easy captcha breaker, played with Cypress PSOC MCUs (it's the gateway drugs to FPGAs), started a project that uses Polymer Dispersed Liquid Crystals (hint: you can control the 70V stuff with the parts destined for vacuum fluorescent display).
And I learned a few techniques:
- CNC cutting vinyl and using it as a stencil for painting or sandblasting
- isolation milling of PCBs
- PCB etching
- CNC made wood inlays
- using a lot of glues
- learned a bit of Ember.js, lots of Chrome APIs
- a bit of mold making
- parametric mechanical CAD design
Now, I have accepted a job offer and should start next Monday, so I guess all those projects and learnings are over, but that was a good ride.
Question - how did you collect benefits for so long? The two times I was able to collect, the max was 6 months.
I agree with you 100%. The time I spent on unemployment was very spiritually fulfilling and really helped with my career. I got into running, learned how to produce music, and taught myself to code.
I had one year without benefits, and the rest is because there is such a high unemployment country and such a high ratio unemployed/agency employees, that they can't really control anything.
But that number is misleading. I have a spouse and three children. Does that mean we all will get 10K/yr?
I have had a different thought on this in the past; Every child born should have $10K put into an account in their name on the day they are born. It will gain interest and grow until they are 18, then they get the money. And as an adult after 21, they are taxed at some rate to pay back the initial 10K that will then be deposited into the account of some other new baby.
I don't like the interest part of the formula. There is too much financial "imprisonment" because of interest.
But what you are really saying is put aside $10k and grow it through investments. Then withdraw the gains only, and make the $10k a withdraw-but-pay-back option.
An increase in income is generally tied to having less children, not more. I read a study (which I can't find right now) that studied the effect of policies that gave income based on the amount of children, and there is no increase on the amount of children people have. Argentina, for instance, has a program called Asignación Universal Por Hijo that (roughly) pays you for each child you have, provided he goes to school.
Only the social security number holder at 18 has access to the funds. I don't think it would be too hard to include methods to prevent abuse. I may too idealistic.
How much would that $10k grow in 18 years? Bank of America's "Platinum Honors" interest rate is 0.06%[1], and over 18 years of compounding interest that's only $10,108.55 unless I've messed up my math.
At 2.25% that's $14,925.87, right? Don't get me wrong, I'd love to have had a ~$15k windfall right after high school, but I don't think that would be comparable to an ongoing basic income payment.
"Down on your luck? No problem. We understand that terrible things happen to people just like you all the time. But did you know there is a way out? Just sign right here and we'll provide an annuity based on your child's 'right to help' income. After all, what's good for you is good for them too!"
I think the idea has merit, but any good idea also has to stand up to criticism.
Your 401k comment gave me an idea for one potential tweak that would make a big difference. If there were a plan to collect a small yet reasonable tax over the course of, say, 10 years or so, to build up an initial pool to draw from, then it might be able to generate enough interest to sustain a continuous payout. Once payouts have started the initial tax might be relaxed or eliminated, though it would depend largely on population growth and how quickly the pool compounds.
Note that the about 23% of the population is under 18 (possibly zero or reduced BI), and 14.5% is 65 or older (possibly offset by SS).
Also, since the census is tasked with counting all people in the united states, it also includes non-citizen long-term visitors and illegal (or undocumented) immigrants.
So it's not quite as simple as latest census count * 10k. It's still quite a lot though.
Federal poverty level is 15930 for a two people family unit, that gives 8000 USD/person/year (slightly below 10k), * 300 mln is 2.4trln. Total income from social security tax (assuming you're replacing all social security with flat just-out-of-poverty basic income) comes to 1.1trln. So definitely short, but assuming 4% annual growth (figure reverse engineered from budget predictions in the futute), that gives us 20 years when in real terms we would be able to fund it entirely from social security tax.
Of course. But you were also talking in nominal (not inflation adjusted) returns when you said that 20 years of growth in Social Security income could fund a basic income.
You can inflation adjust neither or both sides of the equation but not just one which is what you were doing.
4% GDP growth year-on-year while a bit on the wishy side is not THAT optimistic of an assumption. On the other hand, 59% in 20 years of moving poverty line is essentially just accounting for the inflation. It's true that the budget is not inflation adjusted, but I think 3-4% GDP growth on average is achievable (3 would push the limit quite a few years in the future of course)
Yes, but again you're talking about 3-4% nominal GDP growth not real growth (which will be less due to inflation).
If you want to pay for something using nominal growth you have to also accept the nominal growth in the cost. So in 20 years you will be able to fund 15,930 per year but that won't be enough anymore because that number will have risen.
Basic income is generally designed to be revenue neutral on the middle class. In other words, you send them a cheque for $10,000 and increase their taxes by ~$10,000. So your cost is off by about an order of magnitude. That you get from increasing taxes on the rich and from cost savings for social security and other welfare benefits.
Except almost all of that money will be immediately spent by the recipients, greatly accelerating economic activity. It should provide quite a boon to local entities and the federal government through taxes. Not to mention the various businesses who will suddenly have more customers with money to spend.
Economics is not a zero-sum game and trying to treat it as one will always lead you astray.
P.S. If total US household income was 13 trillion and we assume that the top 1% took home half of that we can just tax the uber-super-mega rich at 50% and pay for a basic income for every man, woman, and child in the US.
I'm also willing to bet that those rich people will end up better off as the resulting economic spending boom circulates through the economy and ends up back in their pockets.
If current trends of automation continue there simply won't be many jobs (Foxconn is deploying a million robots right now to replace "cheap" Chinese workers). How long do you think society will last under those circumstances? Makes a 50% tax look like a bargain.
It's still quite a lot of money, but I think the basic assumption with a guaranteed income is that it would be accompanied by a tax increase such that net income is neutral for some percentage of the population.
Taking the extreme example where no one's net income is decreased and people below median get the full $10k net, you've already halved that number. I think most formulations of actually paying for such a guaranteed income would include some degree of reduction as you approach median and increased taxes at the high end of the income spectrum, further reducing the cost. As mentioned exhaustively, you also can subtract the cost of many of the pre-existing social programs because they get replaced by the guaranteed income.
Does your "US population" number include people <18yrs old, people receiving social security, and people who volunteer to not receive their basic income payment? They should be exempt from your calculation...
Yes. Since you brought it up I can provide those numbers too:
Total US population ~= 319M
Under 18 population ~= 73M
Over 65 population ~= 46M
---------------------------
Remainder ~= 200M
No data on volunteering not to receive, though I don't know many people who pay more taxes than they're required to so I'm guessing that number would be pretty small.
I think that social security is the wrong thing to compare it to. Try social security + unemployment + food stamps + aid to families with dependent children + ...
I'm intrigued by the idea of a basic income, but usually when people begin to talk about it, I see a certain argument presented.
A simplified version of the argument is as follows: "In a free market, if a certain subset of people start making significantly more money than they used to, the demand for things that this subset of people couldn't afford before is going to increase substantially. This increase in demand will inevitably lead to higher prices for the things that they can suddenly afford, which will essentially put them back where they started."
Can anyone briefly explain to me why this argument is wrong? On the surface, it seems fairly reasonable. For example, the ridiculous cost of education is often attributed to the creation of federal student loans. Unless that attribution is also mistaken, it seems to represent a valid example of this phenomenon.
Please note that I'm not condoning or even agreeing with this argument. Its just something I've been wondering about for a while. I figure there are plenty of smart people here that can probably explain it to me.
Supply is limited. Always. Increase demand enough, and there MUST be an increase in "friction" somehow to limit demand to match supply; otherwise, supply runs out fast favoring "first come first served" and suffering waste while "real need" goes unfulfilled. Raising prices is the most natural and appropriate (if arguably imperfect) way to apply such friction, generally equalizing the cost value to the buyer with the reward value to the seller.
I understand the argument. What I'm asking about, is whether or not it would negate the positive effects of a basic income. The people who argue against the idea of a basic income often use this argument as evidence that it can't possibly work.
The whole point of basic income is to reduce the friction for obtaining necessities ... which is increasing demand for a limited supply. Demand increases, supply either exhausts rapidly or finds some other way of increasing friction - usually by increasing prices, stabilizing right about back where we started but with higher prices.
In addition, money itself is of limited supply. Reducing the friction for obtaining money results in increased demand for that limited supply of money. Demand increases, supply either exhausts rapidly[1] or finds some other way of increasing friction - usually by increasing prices (inflation), stabilizing right about back where we started but with higher prices.
[1] - "The problem with socialism is eventually you run out of other people's money."
Look at the most basic need: food. Demand is relatively constant - you need enough to eat, and shouldn't eat too much (obviously in practice there is a certain amount of elasticity and differences in demand for different types of food). Supply of food already exceeds demand (look at food waste, supermarkets tossing out ugly produce or burning unsold items to maintain their profit margin). So - demand for food barely goes up, supply continues to exceed demand.
I would say shelter is as much of a basic need, and places like the bay area show that prices are rapidly increasing due to demand. Would a basic income exacerbate the problem in places that already have an issue with high housing costs?
As far as food goes, wouldn't the prices of luxury foods, like porterhouse steaks and the cost of going out to eat likely increase rapidly? I mean, no one needs to eat expensive food, but isn't the purpose of the basic income to prevent people from having to eat ramen 3 times/day?
The bay area is an interesting example. Prices are skyrocketing from demand, but part of the reason why supply has been so slow is that demand has been so sudden. San Francisco has always had a high quality of life, but it did just fine until the tech booms. The majority of people now moving to SF are coming for economic reasons. Would UBI reduce these motivations, easing pressure on the local rental market? I don't know.
SF definitely demonstrates that the price of food will go up if there's enough money floating around. But you can still get a burrito for $6 if you know where to look.
But the more interesting possibility is actually that we don't increase demand. You have the unemployed, who will go from having no income to having income, and demand from them will certainly rise for the necessities. But for the large middle swath, perhaps this will not add to their spending, but instead provide a means for people to take longer vacations, stay home with children, or create artwork more adventurously. Perhaps this will, rather than increasing demand generally, provide flexibility sufficient for the middle class to feel safer in spending more time in ways that build social ties, benefit the community, and create cultural value that is insufficiently valued in the current economic regime.
* In my opinion, the US healthcare system is a horrifying impediment to life, liberty, and pursuit of happiness. To answer your question: I wish startups would disrupt the healthcare industry in the same way Lyft/Uber disrupted transportation, AirBnb did for short term rentals, and Amazon did for online purchasing. These are controversial examples but all I ask of you is to go back a month before these respective services were announced and examine the convenience factor of your life vs. what it became after the existence of these services.
While I liked how refreshing Health Sherpa was to use compared to healthcare.gov of the early years, I think a more fundamental disruption of the healthcare industry is needed. All the various middlemen with their high overheads, the plethora of paper pushers, coders (what a travesty of a fine word), etc. Some examples of healthcare niches that are ripe for disruption include supplies for disabled individuals, building provider networks not beholden to the Hades of the regular insurance industry, enabling medical tourism, etc.
- talented people will not need to do consulting or daytime jobs to support their startups or side-project, which can lead to them living in a bubble
- there will always be people who spend all their income on gambling, drugs, sex, whatever - with basic income they just have more cash to waste (although this could be controlled somehow)
- low-skilled jobs aren't going anywhere soon - how do we want to motivate people to do jobs like garbage collection or road maintenance - this is already a problem in countries with exuberant social systems like France
Garbage collection doesn't need to be a low paid job. 1 garbage truck can service thousands of homes with just 1 driver (and bins that are designed to be grabbed by a mechanism on the truck). So you could pay a fantastic wage with a very modest contribution per home.
Ask HN: What can startups do to increase prosperity for everyone?...but decreasing the cost of living as well.
I note decreasing the cost of living is by definition deflation. Preventing deflation is an explicit objective of central banks around the world.
I think there are gaps in our economic knowledge. There are different types of deflation, such as deflation through technology, deflation through a economy restructuring itself, deflation through cyclical unemployment. Central banks don't differentiate between them, and do all they can to prevent all of them from happening. It's like taking immune system suppressants because the white blood cell count is high, no matter the situation, even when it's high because you've got a cold.
Therefore, I think startups that can be involved in increasing our knowledge of the economics can increase prosperity for everyone, so central banks don't perform actions that prevent people from becoming prosperous.
The central problem for a long time has been that central banks have done this with the effect being rising prices (or at least prevention of deflation) almost everywhere except wages.
A lot of people see problems in getting basic income funded. But is there is a simple solution :)
Generate the money, just print it!
Everyone on earth will get an equal quantity of money, every month.
Now this money can be used in two different ways.
1) Buy natural resources
2) Buy services
This distinction is important:
When somebody provides a service, like fixing your bike he gets money and can keep it.
When you buy a 'natural resource', like wood, corn or oil the money must be destroyed.
What I hope to accomplish this way is several things:
- Equal chances for everyone, everybody can buy the same amount of natural resources on earth.
- Destroying the money keeps the total money amount balanced. Natural resources are limited so a limited amount of money seems fair.
- The system makes adding value to the world profitable. You are stimulated to be creative and do something for someone else!
- Perhaps the total amount of money will increase. This is not bad perse, rich people will get less rich. But everyone always has enough money to live a good life.
This is the basic idea. How this should work in practice needs lots of work, but I'm really curious how you guys think about this!
tnx for the article, very interesting! Hyperinflation is definitly not what I would opt for. Still I'd like to have a system where every earth citizen has equal rights to earths resources and one where people who actually make the world a better place to live in should be rewarded somehow.
If you think about it, our monetairy system, salaries, social wellfare, taxes. Although not perfect, we kind of have such a system allready :)
well, he has to destroy a certain amount by using the earth resource, but he can raise the price of the resource with his 'service' part.
How much a resource is actually worth is the most difficult question. Perhaps environmental factors like CO2 and ecological damage should be incorporated?
well, what I want is that everybody has the same 'right' to get some of the worlds resources. But once you have used them, you got your share and the money must disappear.
However, if you work for something and add value to the world you should be rewarded.
It doesn't feel right to me to let people who work hard pay money to people who do nothing. By having to pay for natural resources generated money will not devaluate (quickly?)
How to keep such a system balanced is not trivial, but impossible? I can't tell
I want to add the following idea, which I have mentioned here on HN several times:
I humbly submit this as my solo-founder, idea-only HN application;
The Standard Pantry.
The standard pantry is literally just that - a pantry of a set of basic ingredients that go along with a range of standard recipes and a weekly menu schedule.
Provide this standard pantry as a partially subsidized offering and teach people how to make a set menu from the basics. Certain components used are refilled at a regular interval as a part of the standard pantry - other ingredients will still need to be purchased, perhaps in conjunction with basic income.
The goal is to help people cook, themselves, more healthy and affordable meals. and overall increase their quality of life.
---
When I was first learning the basics of cooking from my grandmother, she used to be able to tell me to the penny the cost of each meal we cooked. How some dishes were "$1.43 per person" etc...
It drove home to me the value of cooking and not wasting food.
Cooking is therapy as well. eating well / better is good for every aspect of life.
I am working on an app in this area which I envision as a free app available for anyone, and especially those on food assistance programs. Because these programs are administered on a state-by-state basis, the "onboarding process" for people joining these programs is non-uniform, but I envision the case-workers or government employees who are enrolling people in these programs can also let them know about the app and assist people in downloading and installing it. I am currently developing it on weekend free-time.
The app will offer recipes geared towards cheap, healthy and delicious food. I am interested in encouraging better nutrition, budget economy, and assistive technology to people who may not have much in the way of experience or skill in selecting groceries, meal planning, or nutrition.
Starting February 1st, I will be living off the amount offered by US food assistance, which comes out to $6.25 a day at max. I am interested to see if I can do this, and I intend to "bootstrap" from "nothing: I am planning to use a portion of my food budget for the purchase of cooking implements and utensils. I have spent January buying various provisions so I can get a better gauge on what I will realistically be able to accomplish and when. For instance, the first week I will purchase staples like rice and fruits and vegetables, along with olive oil and butter and salt and pepper. Some provisions will span multiple weekly budgets while others will require weekly replenishment, like fresh fruits and vegetables or meat.
My father had to go on food assistance for half a year, a few years back, so this is an issue that is near and dear to me. He is fairly educated and already owned a fully provisioned kitchen but there are many people who may not and could use some help.
Basic income exists already in several European countries. For example in Germany you get for half a year after loosing a job about 75% of your last salary. After six months it degrades but you will always be supplied with a home, food, cloths and some little money to spend.
In France you get paid for two years after loosing your job. In Denmark I think it is three or four year even. Enough time to start three or four startups.
Would be interesting to look into the data of these countries.
In France, 2 years at 80% of your original salary (unemployment benefits). AND after that, you get the basic income ("RSA" +APL) of 650€/month (which is 60% of minimum salary, or 40% of median income). The amount varies depending on your housing situation and city. Source: I was on RSA for a year when I created my startup.
The basic premise of all these is that land and natural resources can not be owned. If you want to use them you have to rent / buy rights to them. That rent goes into a basic fund that is then used for basic income. The basic argument is that land belongs to everyone, so everyone should get an equal share of the rent from the land.
I believe that is the solution to the problem and I'm not sure why others don't see it.
Stop taxing labor. It's counterproductive. Tax what really does belong to everyone... the land and raw materials.
This approach (in addition to more morally just in my estimation) would have the added benefit of built in environmentalism. There would be a financial incentive to do more with less, to conserve and to recycle.
I certainly see why the idea of putting the whole tax burden on land and raw materials could be appealing to people who are making software. It's difficult to make a compelling argument for change when one is so clearly on the winning side of it (which I dare to assume, given the HN demographic).
If you want to see basic income in action, look no further than the various Native American tribes who operate casinos throughout the country. The results are not pretty [1].
Perhaps - I wish the article went into more detail on annual disbursement size across the different tribes. It could be the case that certain basic incomes exacerbate poverty (e.g. the $1200 that Mike Justice receives from the Siletz tribe), while other basic incomes (say, hypothetically, 1.5x the poverty line) drastically improve quality of life.
This research is an awesome thing that YC could give to the world.
I do have a few very specific, big concern though:
>We're open to doing this in either one geographic area, or nationally distributed.
In order for this research to having meaning, we would need to see how the costs of things, especially real estate prices are impacted. One argument against basic income is that it would inflate the prices of basic goods and provide no real benefit. It would be worth spending a lot to figure that out.
Also...
> 50 years from now, I think it will seem ridiculous that we used fear of not being able to eat as a way to motivate people.
I love this statement, but the need to eat has been driving human beings for a very long time. It would be a truly profound statement if we could prove this.
>I love this statement, but the need to eat has been driving human beings for a very long time. It would be a truly profound statement if we could prove this.
You could look to many European countries for an answer. The unemployed receive welfare, now tell me how many of those are still motivated enough to do anything when there's no fear of hunger. Are these people happy receiving enough welfare to live a modest life, or do they strive to do more?
I have no idea. That is exactly why someone needs to research it. Fortunately for all of us, YC has stepped in to provide some funding for the research.
My gut tells me that if societies could work with basic income, someone would have figured it out a long time ago. There have been a lot of societies after all and people have tried a lot of different things. On the other hand, my gut is wrong sometimes. I think it is super interesting that we may get some well thought out research about this that we can hopefully use to do more research and maybe someday come up with a better system.
@sama - since so many people here are in The Bay Area, i'll give the obvious answer for the region -- high density housing. I'm from NYC and we support a lot more housing in a much smaller area. This is accomplished by stacking upwards towards the sky. I appreciate there are earthquake concerns, but I also understand that many of the barriers for high density housing are political and social.
I'll bet many problems in the Bay Area would be resolved with high density housing. A selfish list: shorter commutes (--> more time with family), lower rents (--> more people willing to move here --> fewer developer "shortages"), less cars on the road, less pollution.
Yep--I'd love it if we could fund some high-density housing work. I also think it's a (for me, other people prioritize different things) good way to live.
I'm not sure providing basic income for a group of people for 5 years is a valid experiment. That group would still need to improve themselves because their money will be gone in 5 years, and they would then need to have built enough of their lives to get a job or be self-financed. The other flaw is that they will be a unique group, not part of a population who all gets the same basic income, so their lifestyle choices will be dictated personally, whereas if everyone had basic income, culture itself would have more impact on choices.
It sounds like a great idea to spend time and energy researching this... I just don't think the description as posted is going to hit the mark.
The top reasons I support the Basic Income concept: 1. It provides a safety net for the most vulnerable in a society. 2. As automation and wealth inequality increase we will need a system in place to deal with mass unemployment. 3. Not being accepted at a job offer can affect the mental health of a person. Basic income gives people time to re-educate. 4. If it works for the royal family it can work for all of us. http://www.theguardian.com/commentisfree/2016/jan/07/basic-i....
I think a critical piece of Basic Income being successful is being able to count on it UNTIL DEATH. Unless folks can trust 100% that when they grow old (and unable to be as productive) they can still live "without the fear of not being able to eat", they're not going to buy into the system in the way that everyone hopes they will.
- a portable computer / tablet / VR headset (on demand)
- access to public spaces (indoor and outdoor)
Basically, this would cost a person about $200/month (all included). You would own nothing, but also have nothing to maintain or worry about (other than your mind).
The ONLY thing that stops this from happening, is the government and its regulations.
The idea is interesting, but to call 2m x 1m x 1m anything but a coffin or a bed-in-a-box or a closet would be disingenuous. It's certainly not a "room".
Another point: Is anything actually stopping this? If a municipal government wanted to provide all of this to its residents, or even a magnate, I don't think anything stops it.
I don't care what size the room is when I sleep. A bed is for sleeping, or passive entertainment. This doesn't require more than 2x1x1.
The government and cities have restriction concerning living spaces. I am not allowed to live in a tiny house, I can't rent an appartment that's smaller than a certain size. I wish I could pay $100/month for just a bed, a sink, a power outlet, wifi and controlled climate (21 degree celcius).
Once again, the discussion about the basic income is framed as "would people work or sit on their ass". This is a red herring. People receive free stuff all the time, from nature, from technology. In general, free things do not make people worse off, it's just more widely discussed, as are instances of men biting dogs.
What people end up doing on a basic income is far less relevant than what people end up not doing due to the taxation burden of funding a basic income. It's telling that the post contains no mention whatsoever of studying the impact of the taxation.
This is very interesting. I recall the first time I heard of a basic income proposal... Milton Friedman proposes it, calling it a "negative tax" in his book Capitalism and Freedom.
Some kind of welfare state is always going to be necessary, so the ideal proposal creates an incentive landscape that is both humane and also nudges citizens toward improving skills and working hard.
This is how we'd design a video game if we wanted to encourage socially responsible behavior. It's a silly accident of history that we haven't managed to do that in the real world.
+1 for Milton Friedman who almost 50 years ago described a negative income tax as the Revolutionary Subsidy.
Basic formula for negative income tax is to apply tax rates on the basis of median income. Friedman offers maximum of 50% of median income as the largest possible subsidy.
Assume median income of $50,000. Joe Smith earns $30,000 and therefore has negative income of $20k (median income - actual income). Joe would then receive a negative income tax of 50% his total negative income, or $10,000. The sum of his earned income + negative income tax = $40,000 / year.
Today I was thinking about the Malcolm Gladwell 10,000 hours thing. That's his theory from the book Outliers (which I haven't read) which argues that to become a true expert in something requires 10,000 hours of practice.
Now, say I wanted to become an expert in programming. To the point where I was an elite 10x developer. If I quit my job and lived off my savings, I could conceivably work on programming 100 hours per week. So after ten weeks I'd have 1000 hours, and after 100 weeks I'd have my 10,000. So that's two years or so at a minumum.
But living off savings for two years would be incredibly costly. Working full time would let me squeeze in say 20 hours a week, so I'd now take 10 years to reach the golden 10,000 hours or experience. If I cut down to a part time job, it would take 20 years.
I think the latter two are unrealistic because they take so long. The 100 hour per week option is more of a possibility. With universal basic income, everyone would have the opportunity. If lots of people pulled it off, the productivity gains for society would be enormous.
Obviously there's lots of people in society who have this sort of spare time and simply do not use it. However I think there's an argument that the people most likely to achieve this 10,000 hours goal are people who are gainfully employed and wouldn't pursue it without some sort of income support.
A lot of people think Gladwell created the 10,000 hours theory, but he merely popularized it. The original research comes from K. Anders Ericsson. Here's a link to the original paper, which is actually quite accessible, if you're interested: http://graphics8.nytimes.com/images/blogs/freakonomics/pdf/D...
All of Silicon Valley should chip in and fund Basic Income for all SF. It would quickly become blatantly obvious that all bonus money would get sucked in by landlords.
Basic income yes, but not without progressive tax on owned real estate that could curb rent seeking behavior of large property owners.
What if some companies experimented with basic income? I mean, sure, people working there are probably already getting paid pretty well, and 'basic income' at that point might just seem like a small bonus to their salary, but what if it was implemented like we implemented life insurance? Hear me out:
So, you work at Company X. You and one person of your choice are now entitled to basic income. It will come as a separate check, paid for by the company. You can put your spouse, your family member, or a friend--etc. as a beneficiary of the basic income, or choose nobody at all and miss out on this "free money".
That person would have to agree to accept the money of course, and the check will be written directly to them, not you (you are not a proxy).
One main difference between this and an actual implementation of basic income is that these individuals will only receive the basic income as long as you work at Company X (unless, for some reason, the Company agrees to continue the program beyond your employment).
Another difference is that it's linked to the success and failures of this company, instead of the successes and failures of society as a whole (the latter seems less risky).
Anyway, I'm posting this more as a prompt.. What if? Do you think it's a reasonable experiment for a company to run? I know big names like Google and Facebook have some interesting perks, so why not basic income for all your employees plus 1 person of their choice, paid for by a flat % of everyone's income at the company?
As you already noted, this doesn't seem much like basic income (as payment regardless of employment is the sine qua non of basic income). This just seems like an augmented salary, slightly unusually paid out.
Semantics. Isn't that all basic income is? That money is coming out of the pockets of people making income. That income is coming from the pockets of employers.
Canada has demonstrated that (single payer) public health insurance works better than America's current public/private model while our taxes are comparable to living in California. Yet the US political system has yet to even be close to adopting it. Data doesn't always translate to political persuasion unfortunately.
I'd expect Canada to adopt basic income before the US does as well and possibly provide the data this study is looking for on a much larger and contextually relevant scale.
Not exactly research, but reading The Culture Series by Iain Banks [1] has caused me to give a lot of personal thought on the subject. When AI is advanced enough to dominate everything and humans are left to just do whatever, what will they do, and will they be happy? That's not the focus of the series, just a side effect.
Yes, The Culture Series has informed my political thought quite intensely as well-- I only heard of it via HN about a year ago.
"Money is a sign of poverty" is the thought that sticks with me the most. Why bother having a currency for resource distribution if resources are vast and there is no benefit to conspicuous consumption?
People in the Culture rightly view money as an abstract type of coercion, and are abhorred by the ability to force people to do things that they don't want to do via monetary incentives.
> What can startups do to increase prosperity for everyone?
Gamify budgeting. I'm on a low income (UK sort-of disability benefits) and I've got a budget set up, but I don't set aside anything. I should, and I should be able to.
I'm more than happy to describe my experiences of claiming "employment and support allowance (work related activity group)" (and the transition from Incapacity benefit to ESA-WRAG; and the difficulties of working while on this benefit.) AMAA.
A few good ones here - another really interesting, current initiative is Bolsa Família, a Brazilian assistance program that functions similarly to a basic income subsidy - the main difference is that it requires families to demonstrate up-to-date immunizations and good school attendance rates for children.
It's inevitable that the threat of withholding 'basic income' will be used to modify behavior. Didn't pay your fine? Didn't do your taxes? Didn't take the shot? Post "radical" comments on the internet? On the no-fly list? On the no-drive list? Don't have a gov-issued InternetID™? Don't like robots enforcing law? No soup for you. Just wait until China couples it with it's human scoring system.
I would very much like to help with this. Is there a way to contact someone beyond the application? There is no way to provide what I can show in that fashion, but speaking could glean a tale most would find impossible. It's a safe bet I can provide a perspective from more angles into the concept than most if not nearly all.
Be it as the researcher, or an advisor in the truth of the real American demographics, that have next to no chance at success. Few topics ignite a passion in me as much as those surrounding this.
Other than the lifestyle truly rich, I have lived the life of the rest. From barrios then ghettos, homelessness to youth prison, day laborer to small business then tech startup success... In literally every corner of the nation as most every caste... With only an 8th grade education to begin with, a dash of 90s electronics tech school, and self taught for all the rest.
I want to help, just let me know how to explain why, away from public eyes. I make this request, to tell the not for public knowledge story of the rest. Then leave it for you, to allow us, to figure out where to go next.
> It’s true that we have systems in place to give people
> resources, but the bureaucracy and qualification
> requirements make it a very imperfect approximation of what
> most people mean when talking about a basic income.
I'd suggest to ask why there is this bureaucracy in the first place. I'd suggest it does its job perfectly well.
2. It paints an idealistic picture of the capitalist economy:
> I think it’s good to start studying this early. I’m fairly
> confident that at some point in the future, as technology
> continues to eliminate traditional jobs and massive new
> wealth gets created, we’re going to see some version of
> this at a national scale.
Machines do not destroy jobs. The social purpose for which they are used - profit - makes and destroys job. Put differently, I'd suggest to ask why this economy produces mass poverty when it gets easier to produce stuff.
My short-term worry about basic income is that it'll end up bidding up the prices for goods that poor people buy, especially the rent. I won't be surprised if most of the basic income eventually goes to the landlords. IMO the right solution is to get the government involved in distributing certain goods, not just handing out money to buy them. The state could guarantee free housing, food, healthcare, education and pensions for everyone, on top of basic income for spending money. The USSR managed that with a fraction of the resources.
My long-term worry about basic income is that people have a need to be needed by society and it won't go away easily. I don't know a good way to solve that completely, short of reengineering humanity. In the short term we could get away with making the government pay companies for employing people (the payment should be lower than the salary, but maybe not by much). That could be a nice supplement to basic income.
>IMO the right solution is to get the government involved in distributing certain goods, not just handing out money to buy them. The state could guarantee free housing,
I think the key is to start from a welfare state that is the same size as the Basic Income system. That is, you have a tax funded system that pays for paternal leave, pensions, unemployment benefits, daycare subsidies, food stamps, and all other types of transfers.
After that you make a transition to a basic income system, with a very small change in total transfers (e.g. 0-20%). This is exactly what would happen in for example Finland, where proposals have pretty wide political support now.
"We’re looking for one researcher who wants to work full-time on this project for 5 years as part of YC Research. We’d like someone with some experience doing this kind of research, but as always we’re more interested in someone’s potential than his or her past. Our idea is to give a basic income to a group of people in the US for a 5 year period, though we’re flexible on that and all aspects of the project—we are far from experts on this kind of research. We’d be especially interested in a combination of selecting people at random, and selecting people who are driven and talented but come from poor backgrounds. We're open to doing this in either one geographic area, or nationally distributed."
This is beyond awesome: an effort truly to explore this with an open mind, measuring whether and how it might work in the real world, and doing it in a no-nonsense, zero-pretense way.
I'm so happy to see this kind of forward-looking work. The writing is on the wall with the constellation of automation, inequality, free agent nation/gig economy, the Precariat, the end of lifetime employment, and the desire for greater labor fluidity (on both sides of the table.) Taken together, these things make the GBI an incredibly important think to start thinking about right now. The fact that a prestigious organization like YC is interested in it is a hopeful sign / leading indicator.
Short: figure out how to make essentials (food, housing, education, health care) cheap. Obvious, but thinking about how to get there is critical if for a GBI to ever happen.
> What can startups do to increase prosperity for everyone?
Startups as a whole can do nothing -- it's like asking "what can car companies do to increase prosperity?" except that would be a little more reasonable given the amount of resources and relative free-time those companies have.
In startup land, you typically don't even have a sustainable business let alone vast amount of resources lying around to fix the world's problems. They cannot be concerned with something this vague.
What they can do is work on the correct problems that will put them in a position to make a legitimate societal impact down the road. Even better if they work on problems that is directly correlated to society's well-being.
You mentioned food. If a startup could compete with the likes of Monsanto, but wasn't run by a bunch of scumbags, they might be able to create such a rich company that it starts shipping food crates free of charge to places in need. This depends entirely upon the kind of person running the company.
Since I respect that you have to view startups in the aggregate, I would probably turn around and ask you, what can you do to fund better startups by better people with long-term Do No Harm terms? The terms might even be bullshit like "You will do everything in your power to help the world rather than just helping yourself." It wouldn't be something you hold up in court, but it would be a major internet foul to find out "Super Rich CEO" signed those terms and "Super Rich CEO" was found being immoral. With the leader's reputation at stake, you might have a chance at nurturing Good Guy CEOs.
At any rate, startups have enough to worry about. If you want to help the world, you'll find a way. If you want to make a bunch of money and fuck the world, you'll find a way to do that too. The problem is cultural and resides at the individual level.
I have a more fundamental question that I intend to work on at some time down the road, and it is this:
How does the money flow, and at what point does it brake down?
You see, if we give every person basic income of $BASIC, that money must come from taxes (else we just have runaway inflation). So ultimately every dollar spent needs to be collected in taxes. That's not to say it gets taken away by the government at the first transaction. The velocity of money will play a large part in determining the tax rate required to collect all the money back to the government. But that velocity will be low if a large number of people choose to not work. It also depends on propensity to save and some other factors. I'd like to see even the most simple analysis of this to get a feel for the math and what some obvious constraints it places on the system.
I am thrilled to see that there is some private interest in exploring the possibility of BI/UBI experimentally within the conditions of the USA. A properly executed study of this type could be definitive in the shaping of our society.
I expect that some form of radical redistribution of resources is going to be the next modality of human civilization, and getting started on the colossally difficult questions (how to ease existential angst of purposelessness and how to kill the work ethic) is just as important as the very-difficult particulars of implementation (how the heck do we find what the right amount of money is, and how do we pay for it) and measurements of efficacy.
I'm extremely interested in the opportunity to lead or be a part of this research group, and will be applying in the coming days.
I am all for research into basic income -- and in fact a big believer. However I take a HUGE issue with reading too much into the viability of the system based upon research done on small sample sizes:
"Our idea is to give a basic income to a group of people in the US for a 5 year period"
There is emergent behavior that arises in the economy as a function of the number of people given a stipend or living wage. For profit colleges are the perfect example. If grants are given to a small set of people the scale of demand necessary for such businesses to exist is insufficient. Crank up the number of people and a new market is created that allows for the existence of predatory "for profit" college businesses that take advantage of funds that would have otherwise been allocated properly.
How can it be possible to run an experiment on basic income when participants know it will end in five years? The knowledge of it ending will change their behavior and encourage them to remain working.
Take a few people that would qualify for various public assistance programs (reduced housing costs, food stamps, disability, welfare) and instead just give them that money in one big annual lump sum.
My hunch is that this would be more cost effective, particularly given the much lower cost of administrating cash payouts vs restricted use programs. But it's also possible all of the money would just go to drugs and alcohol. It'd be a fascinating study.
(I realize this isn't basic income, as basic income is not means-tested -- but it'd be a great first step in that direction.)
Teaching people to control their costs, ala "mr money mustache" makes sense.
I personally believe that you can control your costs and raise a family on $30k/yr if you are educated on the bad choices not to make...several cars on loans, larger houses than needed, etc...
I genuinely don't know how a couple could raise one child on $30k/yr - is rent cheap where you live ?
If you had have asked me what a couple needs to raise a kid in the US, I would have guessed 80k.. maybe 60k if they are very careful with money management, as you suggest.
I'm actually being sincere.. but where I live rent is very high, so perhaps that explains the vast difference ?
I think this is one of those dreams that will always be pushed into the future. People will always want to own new things that come out even if we see them as useless. The cost of living always rises and people will want to work to afford it - and other people will want to work to create it. Automation will get rid of a lot of jobs but as a person writing code to automate engineering work currently this is not as inevitable and straight-forward as people think it is. These automated jobs will be replaced quickly with new jobs that can not be automated - just look at the current US economy as proof- you would think we would have automated a lot of jobs by now but we are at full employment.
Opinions on Basic Income aside, if this were ever to become a reality in the US I'd like to see it be added to the US Constitution as an amendment because it seems like such a fundamental change to the structure and thinking of how government works.
I think it is one of really only four possible futures for human society [mincome, totalitarian, oblivion, expansion into the solar system and beyond (which will me effective status quo)].
This will probably never be seen, but one of the best things I think we can do to lower the cost of living as well as help get people into paying jobs is localize the economy more.
Make it more efficient to buy food from the local farmer / farmers market than having it shipped around the world to the nearest walmart.
Make it easier to do local and smaller scale manufacturing (think 3d printing).
When your economy is local, it's efficient, green (remove the high cost of transportation out of the equation) and it feeds on itself with jobs and money.
I'm building something right now that I hope will be a step towards reaching some of those goals.
The 5 year period of this study will be a significant limitation. An important part of a guaranteed basic income is the guarantee. If I was in a programme that I knew would end after 5 years, I would be very concerned with things like maintaining my employability when the 5 years are up. In other words, while I would love to dedicate 5 years to non-commercial art and science, my option to do this is severely curtailed if I'm expected to re-enter the same old job market with 5 years less experience than my peers.
But overall I am thoroughly supportive of doing the experiment anyway, as we do desperately need more data on this important concept.
* Solve problems in hiring by hiring all applicants on a first-come, first-serve basis and then evaluating them for X days before recommending the best applicants to a client company. Scale this up by partnering with the government to eliminate traditional unemployment insurance.
* Various industries (TV, Print, Social Media) have effectively offered a product with complex infrastructure to the public for low or no cost by using advertisers to subsidize it. Could this be done with food or housing? Would a farm running on self-driving tractors and drones be able to feed people w/ ad-subsidized food for free?
* Lots of food gets thrown away because it's cheaper to ship it to the dump than to ship it safely to starving people. A startup could develop automation and logistics to make the costs competitive.
* Divorce rates would seem to indicate that the traditional family is not the most economically or emotionally optimum method of living/raising children. This may simply be a side-effect of increasing lifespans (i.e. 100 years ago, the average marriage lasted 15 years before a spouse died). A legal startup that offers tools for building new types of non-conventional families to optimize things like economic standing, academic performance of children, or changing employment environments.
* Micro-businesses in a box. Many businesses couple some talent or skill (e.g. software engineering, music, plumbing, creative writing) with administration (i.e. legal, marketing, accounting, invoicing, etc). Lots of startups offer to automate portions of administration, but a truly turn-key solution would allow a customer to simply input their skill, and the administration would happen automatically.
* Crowd-funding life.
----An apartment building with 20 units costs $1mm to build. An affluent person goes to the bank and puts $300k down to build it, and leverages the other $800k. Why can't 20 families each invest $15k and pay a group mortgage instead of rent?
----A single banana costs $.40. At scale, a banana is $.10. Why can't a thousand families buy all their bananas for the year through an intermediary handling the cash flow? Could they buy all their food this way and drive prices down?
Farming is quite a bit more expensive that what you realize. Besides, this model doesn't even make logical sense. Follow with me... 1) Advertising is only worth it if the people who see your ads can and will buy your goods at a large enough rate to give you the needed ROI on those ads. 2) If people are so poor that they need free food then they won't have the means to make point #1 viable.
Your second point on food. Yes, lots of it gets wasted. There are quite a few areas where we can talk about waste and food cost. The best way to cut transportation costs is to just improve farming in places where food is scarce. This is not an easy task, but a much better long term solution in every way measurable. Ethiopia is the shining example of progress in this area. One of the largest wastes of food in the United States is what slides off of our dinner plates and into the trash. This increases demand, which increases prices, transportation cost of both supply and disposal, increased cost in cooking and prep, etc. We could save billions a year as a society if we cut our waste.
Divorce rates are the fault of the people that are married. Marriage, if the vows are followed, is amazing. Married people live longer and have children with lower crime rates. The answer is for people to actually stick to their covenant and make a marriage work. People need to learn to forgive, extend grace, and act selflessly toward their partners. Marriage is no place for rugged individualism, it is truly a team sport. A family where children grow up with both of their loving parents is the ideal situation. Situations are not always ideal, but at least we have something to strive for.
Under the crowd-funding life section... aren't both of these sections essentially just co-ops? Not that they aren't good ideas but I think they do exist already and without the buzzwords.
>> -A single banana costs $.40. At scale, a banana is $.10.
There's a model for "direct from farmer meat": you pay a monthly $3-5 rent for a meat locker in your city , and than you can cheaply buy meat online from a variety of farmers . It does cut costs. And of course , this allows a group of people to buy in volume.
Everyone pretty much has basic income by the standards of a poorer place or time. The issue is people adjust their expectations based on what other people have. So things like air conditioning would have once been considered a luxury are now considered a necessity by many. People will likely feel poor if the average income is much higher than what they have. To get rid of the feeling of poverty one would need to make income more equal, but we know that's not so great: http://paulgraham.com/ineq.html
This has actually already been studied/tried in the 70's in Dauphin, Manitoba [1][2]. The experiment saw a decrease in accidents, injuries, and mental health issues.
I strongly believe that money is not the variable that has to change in the equation. I'd change the minimum amount of hours required to qualify for a full-time job (e.g. 40h / week).
Most of us aren't %100 productive from 8am to 5pm. Meaning, employers wouldn't really see much difference. If you reduce a 40hour week to a 20hour week, maintaining the same salary for each employee, people would have more free time. More time to do something awesome, etc. While maintaining the same level of income. That's what we should be aiming for and it wouldn't require a dramatic change in our society.
As a teenager, I saw this news blurb from the George Bush presidential campaign. A woman (single mother) was working three jobs to make ends meet and the audience engaged in a massive circlejerk. Couldn't help think about the incredible waste of a life - soul-sucking jobs that ensure this person doesn't move up economic classes, has no time to focus on self-improvement and gets to provide no attention to family. And then the next generation continues this cycle.
In the 21st century - we must change our approach to governance - dignity for everyone.
"The Precariat" has some great ideas on how the relationship between the state and individual are changing. He also covers the current dynamics in welfare assistance for citizens of a state and demonstrates how basic income would be easier to administer and lessen the burden if proof needed to gain assistance. I also like how he examine s the current status of citizen vs non citizen and proposes the notion of a "denizen."
If you are an a contract programmer I recommend reading "The Precariat." All the extra work you do for work should count for something but it is sometimes not given any recognition.
Standing, Guy; Jhabvala, Renana; Unni, Jeemol; Rani, Uma (2010). Social income and insecurity: a study in Gujarat. London New York: Routledge. ISBN 9780415585743.
Standing, Guy (2011). The Precariat. London: Bloomsbury Academic. ISBN 9781849664554.
Standing, Guy (2014). A Precariat Charter: from denizens to citizens. London New York: Bloomsbury Academic. ISBN 9781472510396.
If I weren't busy doing Docker, I would be doing this. In fact given enough time and resources, I'm confident I will eventually find a way to leverage Docker to advance the goal of universal income somehow :)
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.
I'm curious to see how Finland's basic income system turns out. I think doing so would drop the omnipresent fear of being destitute and homeless, which would do a lot to improve mental health.
US is a huge territory, and differences in suicide rates vary quite much across both Europe and the US by region. Finland has only marginally higher suicide rate than US (14.8 vs 12.1) if you consider that Alaska and many states in the Western US have rates around and above 20.0 (per 100,000): http://afsp.org/about-suicide/suicide-statistics/
I don't about those numbers. My only guess is that Finland's is vastly over-stated and America's vastly understated. The wealthiest countries of Europe, which includes Finland, really don't have any homeless to speak of. Whereas in America, it's a huge epidemic, including even small towns.
I think having a basic income would do more than ensure people have a place to live, as the social welfare system you mentioned gives them; it'd guarantee a minimum of dignity. People in homeless housing/shelters are certainly better off than in the streets, but, imagining myself in their position, I think I'd still feel like an outcast, out of step with the rest of society. If there was a way to give people a base level of dignity directly, that'd be the way to go, but I think basic income is an interesting avenue to try to do this.
any screening you do on basic income recipients totally invalidates the point of studying basic income (and basic income itself), beyond some really basic stuff. my suggestion : pick a town / neighborhood / whatever at random (preferably relatively poor with a population between 500-1000) and give everyone living in it at the time $1k/month over the next 5 years (even if they move). i think it's safe / wise to exclude anyone who's retired or on disability since that defeats the purpose of the experiment as they already receive entitlement funds. how you handle children i have no idea. maybe parents should get a reduced amount per child?
in other words, if you have qualifications like "poor and motivated", or even just "poor", then the basic income experiment is really a grant program. it's really important philosophically that you DON'T NEED TO DO ANYTHING to get basic income. most work is NOT VALUABLE. society is better off with more people being "lazy" and doing whatever they feel like, especially as automation increases in prevalence and importance. if 50% of people on basic income decide not to work, that's fine because the other 50% will be perfectly capable of doing everything that actually needs to get done, particularly with the safety net of not having to worry about failure quite so much.
One of the biggest fallacies of the BI movement is they suggest that when AI automates many menial jobs it will lead to mass unemployment. This assumes that the average person is incapable of more skilled labor, when history has shown time and again that people adapt to the changing workforce. Yes there can be lag but it's not insurmountable.
Another problem I have with BI is it equally distributes assistance with no prejudice to those more needy, i.e. the elderly, the disabled, the mentally ill, etc. So you take many funds away from people such as 70+ year olds who are on medication, SS, assisted living (which cost >> BI provides) and distribute available funds to able-bodied people who are "discovering themselves".
Further, having considerable able-bodied people leave the workforce by choice delays global human progress and achievement.
Instead, I am for additional public-sector money being spent on country- and global-level goals which the private sector cannot achieve nor make profitable. These include environmental, energy, medical, transportation, and infrastructure research. By putting public money into these research fields (which is hard/impossible to make profitable) you incentivize progress in areas which further human progress that cannot be met through private means. If you instead incentivize able-bodies to not work, not only do you take money away from needy (not much savings in admin costs) but you delay human progress.
My worry about automation is less about people being left without jobs and more about that production ends up concentrated behind those with the capital to purchase automation tools.
It's too early to say -- we're obviously not experts ourselves on this kind of research, so we're going to look to the researcher who joins us to first design the study.
Someone pointed me to a good book on this topic called "Scarcity" written jointly by an economist and a psychologist. It looks at what happens to our minds when we're in a "scarcity mindset" -- basically, we have tunnel vision, lose attention span, self-control, and the ability to plan long-term. Your mind is compromised, and that's a cause of perpetual poverty (i.e., if any of us suddenly became poor, we'd start behaving predictably like those who are low income do).
Along those lines, they suggest a few types of things startups (or anyone) could do to reduce mental stress for people. For example, adult continuing education classes where it's ok to slip up or learn on your own schedule (thanks to technology). Or savings products for young people that start before they are desperate and living in a world of scarcity (and prevent them from going to a payday lender one day). Or a service that gets patients to take their meds without having to think (I think at least one startup is already attacking this).
For things that require behavioral change (like making on-time mortgage payments, or saving money), maybe social pressure can be used in productive ways....like it is in microfinance groups in the developing world (small groups borrow collectively and group members encourage one another to repay). Anyway, just a few ideas...this is a great topic.
I was under the impression that the problem was a corrupt and impenetrable legal system built to erect barriers to entry and protect insiders, the virtue in whose hearts is boiled away in the fires of greed and lust for power.
This is a sort of French Revolution type system: the elites can keep shitting and pissing until suddenly a conspiracy forms and KABOOM a whole bunch of dead rich people in the street and NOBODY CARES because they're perverted scum ! ! !
TL;DR: It's less about "apps" and more about people supported by technology. But I do believe startups can increase prosperity as long as growth (without profits) is the goal.
From someone that spent 5+ years at the intersection of technology-based international development, there's a lot to learn about what works and what doesn't. Kentaro Toyama headed up Microsoft Research India's "Technology for Emerging Markets" research team and oversaw 50+ research projects spanning health, education, governance, and more. He then spent 5 years at UC Berkeley writing a book about what he learnt ("Geek Heresy", http://geekheresy.org).
I did a PhD in this general area (voice interfaces for non-literate users), and Kentaro's main thesis (technology only amplifies human capacity and intent) resonates deeply with my experience. It's all about the people, and technology is mainly an amplifier / supporter of human institutions. An "app for K-12 education" doesn't work in the traditional sense, but an app that connects awesome teachers with students, with an ecosystem that takes care of management, training, incentives, and encourages true mentorship, has a much higher chance of success.
Just a quick note on sama's question on reducing the cost of living. One aspect that comes to mind and I think that this is key in significantly reducing the cost of living for urban populations:
Reducing or at best completely doing away with the necessity for people to travel to a place of work (both commuting and one-off business trips), i.e. solving the problem of cultural aversion to remote work that still is prevalent in most work environments, particularly - of all things - in Silicon Valley startups. Why is it that the world's brightest minds apparently still haven't solved the problem of physical location? Why do I have to be in a tremendously expensive location like San Francisco if I want to start a Silicon Valley kind of startup?
Solving the problem of commuting / requirement of being at a physical location at a particular time potentially could free up so many resources for both people and companies (which wouldn't have to pay office rent in an expensive area of town anymore) that funding a basic income would be cinch.
Start a micro-investment company that allows people to invest in others to live and better themselves for some kind of cut of their future income. Do this at a huge scale.
The problem with basic income is where does the money come from? It's either loaned, taxed or invested. Loans are bad because you are enslaving the borrower. Taxes are bad because you are stealing work/labor from the taxed. Investments are best: you probably won't make your money back, but the possibility could provide incentive to give.
On the recipients side: perhaps there is value for them to promote themselves (in a Kickstarter kind of way) for more investments. Just the exercise might give them ideas of how to increase their own value.
Have the fed become the basic investor. This means inflating the money supply, but somewhat curtailed because successful investments have some payback. This is perhaps the fairest tax-like money source- it really hurts those with large amount of parked cash the most, which may not be such a bad thing. It encourages them to do something better with their money.
Probably the best way to decrease the cost of living is to balance information asymmetry so that buyers know everything that sellers know when transacting. Price comparison and fighting predatory businesses is a start, but too much commerce revolves are arbitrage and exploiting the vulnerability of being uninformed.
Balance out the knowledge gap and consumers will be able to transact directly with producers, bringing down costs across the board.
* Standards of living are variable, and especially so between different social classes.
* Debt requires someone to earn more money than they would otherwise need to in order to meet the same standard of living as someone without debt.
* The variety of higher margin products and lower margin counterparts create inefficiency in making consistent spending choices, particularly when it comes to visibility (e.g. marketing).
* Healthcare costs can be extremely variable from person to person.
* A big question is what it takes for a person to feel contentment. E.g. I have multiple family members living hundreds to thousands of miles away from me, from each other even, that I never get to see, and I would be a much happier person today if I was able to spend more time with them. Other factors can include obtaining a sense of achievement in what you do with your time, or a sense of approval from your peers.
* People have a much smaller pool of peers to identify with if they don't go to a regular workplace or gathering of some kind.
* There are regional differences in supply and demand, especially for property, housing, water, and egress. I'd include food, too, if I didn't think you were targeting the US.
I can probably come up with more, but I'll just leave it at that for now.
I think a related question to ask is "What will people do with themselves when technology has displaced a large majority of jobs, and how will that be financed?" When technology has displaced all the jobs, the only thing that will be left will be research and the Arts. It seems both of those have an infinite amount of work to still be achieved, and technology will never be able to automate away those fields completely.
Start with reducing the costs of basic needs.
Shelter - micro apts, container based
Lots of regulations make this problematic in short term.
Food - Basic nutritious food should be cheaper. Currently, cheap food is not nutritious or that cheap. Even Soylent costs $2.83 and many do not consider that food. A meal should cost less than $1.
- 2 ways that I have been mulling
* Automation for on demand food
* Mass production of simple meals.
giving people enough money to live on with no strings attached
There's always strings attached, either directly or indirectly.
50 years from now, I think it will seem ridiculous that we used fear of not being able to eat as a way to motivate people.
Considering current political trends, I find it significantly likely that in 50 years government would use fear of many different things as a tactic to "motivate" people (food among them).
Improving transit is a large opportunity space. Reducing the need for civilian-ownership of vehicles
- reduces cost of living (cheaper than car ownership)
- reduces number one cause of human mortality
- frees up tons of parking-lot space for additional housing
- reduces strain on roads offsetting transit maintenance costs
- reduces pollution
Focusing on optimizing and improving quality of transit rather than just having it for the sake of it makes a huge difference in the quality of life of the area. This can be done in non-traditional ways by having a fleet of transit vehicles that operate like UberPool instead of along fixed routes, etc.
The other space I'm thinking of is a lot harder for startups to attack, but is worth thinking about anyway -- international labor mobility. This requires world-wide cooperation to work, but there are countries like Japan and Sweden with declining population but still fairly difficult immigration procedures. The world's resources would be used so much more efficiently if it were easier to redistribute people based on their skills, needs and desires with places that had the space and resources to support them and benefit from them. Technology can certainly help here, but it needs a lot more logistical ingenuity than technology.
Another one is reclaiming human resources -- prisoners and the destitute. Majority of these people are able-bodied and/or able-minded, yet it is nearly impossible to gain any value from them because of how society is structured around their status. If we had dedicated, streamlined processes to appropriately assess and reinstate these people back in society, they'd turn from a economic burden into an asset.
<This can be done in non-traditional ways by having a fleet of transit vehicles that operate like UberPool instead of along fixed routes>
I don't know of a case in the USA where a public transit agency has done this without making transit worse.
For example, this was tried years ago in Santa Clara County. Called "Dial-a-Ride", the implementation was that an individual could call for a bus to pick him/her up and take to a given destination. The theory was that an assortment of people would all have origins and destinations along a common route, so you'd have a de facto ad hoc "bus route" for that collection of journeys.
But when you crunch the numbers even this ideal scenario, the time lag in chasing down and picking up the subsequent riders makes the trip time and length for the original rider uselessly long.
Nevertheless, this went on for years, with the result being that a handful of individuals got chauffered around at extremely high costs. It was computed that it would be much cheaper to have taxpayers pay for individual cab rides for everybody. Eventually, it was dropped, but it continued in south county for additional years.
And to this day, VTA is the financially worst-performing major transit system in the nation (as measured by percentage of farebox return on variable costs -- don't even ask about how much worse it is when fixed costs are added).
Compare the U.S. Constitution (7,200 words) to the E.U. Constitution (76,000 words). Many comments are focusing on the mechanics and details. That approach leads down the road to 76,000 words. The goal is a macro issue, not a micro issue. Committing to a basic income is something that should be done for the same reasons we go to war or go to the moon. Not because it is easy or profitable but because it is what we want to do and believe we have a moral imperative to do. A basic income does not require that everyone become industrious. Nor does it guarantee national economic superiority. It is simply, and profoundly, a commitment to ensuring that every individual shares in the economic wealth generated by our society.
Thank you for doing this. This is truly the kind of thing the tech industry needs to be doing in order to make a net positive impact on society and promote a more agile, results-based social super-structure.
EDIT: So many of the comments here are obviously ideology driven. I am ideologically in favor of full automation and UBI but doing this kind of research will help us move forward in an informed and scientific way.
Some thoughts that are not related to the topic of research but rather the program:
- I love the idea of YC sponsoring research.
- Some more information about the program itself would be helpful. 5 years is long for a research program. What does this cover? Income for the researcher, other costs, are they required to live in SV or maybe somewhere else?
- Where are the sponsored basic income people supposed to live/how will they be selected? Any plans for this already?
- (!) Important: Please make it a requirement for the research to be as open as possible. Require datasets to be made available and all publications to be made available online (if journals/conferences make sure they have Open Access). Also make the research process as open as possible.
- Consider making the application process as open as possible, too. Publish the materials/proposal that was submitted by the "winner". Possibly publish unsuccessful applications with some comments as well. I know that this isn't going to be a high priority but there's a distinct lack of feedback for unsuccessful grant proposals in science.
One area that can be improved by startups without the need for enormous entitlement spending is food. I don't mean the radical notion of liquid food or pill popping (though that day might arrive sooner than later) or even manufactured food. I'm talking about employing simple robotics to reduce the cost of farm labor. Tasks such as cutting the paddy crop. All these years, plants have been engineered to suit the machines and that has reduced farming costs. However, these machines are expensive and work only on very large farms. If we engineer machines to suit the plants growth, we can achieve a dramatic cut in costs as these machines or robots won't need scale. By scale, I mean you won't need a 100 acre farm to use one. Even a small farmer can rent a robot to maintain his 2 acre farm and produce food at a very low cost. Couple this with the dramatic reduction in transport which will be brought about by electric and self driving trucks - we are looking at food that will cost next to nothing in the next 20-30 years.
Will the basic income be paid in addition to standard gov't subsidies?
If yes, how do you make up for the shortfall of money? "Taxing the rich" is nice in theory but IMHO it doesn't work right now, what are you going to do to change that?
If no, it might be worth it, if you also fire the bureaucrats currently working on gov't subsidies (freeing up the money thereby) But I don't see how your study will account for this, nor do I think this is feasible because gov't tends to increase in size and has no incentive to decrease. Other beneificial aspects would be decreasing the size of the code of law and forcing "social security lawyers" to specialize in something else, reducing costs of all other lawyers. Again, it will be hard to put it in practice and difficult to account for in your study.
I suppose you also have already read some literature on the topic. From my personal viewpoint I'd recommend "Economics in one Lesson" by Hazlitt [0], it's decidedly non-mainstream and I wonder if it's taught at all in universities today but the only economic theory based on game theory (although not explicitly) and fully consistent IMHO.
I also believe that funding a multi-agent simulation is probably cheaper for a few economic models (I'd volunteer here)
Finally, I see some business value here, namely studying whether it would make sense to fund persons instead of start-ups, as e.g. Entrepreneur First does [1] (I have no affiliation)
Definitely think it would be interesting to see YC Research's take on economics research, but I'm left wondering, why would someone want to take this position? As opposed to, say, entering an economics PhD program and studying the problem there. To be clear, I don't mean to spark an academia-vs-industry (or whatever YC research would be categorized as) battle. I don't know the field of econ research well and my prior would be that more perspectives and approaches to the issue would be helpful in studying the problem. What I'm interested in what would someone personally want out of doing this research but without the support of collaborators in a more formally collegial academic setting or the reputation and pull of an established think tank.
To be clear, I'm not trying to argue that taking this position is a bad idea, I'm just trying to better understand the opportunity and why YC research might be a better decision than a more run-of-the-mill PhD. I'm ever so slightly skeptical, but mostly just curious.
Throwaway for this--I'll get back to lurking (I'm not sure what password I used). I read it. I agree. The way there will be difficult. I've been on unemployment and noticed how pointless the weekly reports were. This will get rid of a lot of systems that need to be removed. I make good money and stand to inherit great money, but I do hope for all sentient life on Earth.
Let's play the devil's advocate here; the problem isn't that the current system needs to be replaced, the problem is that the current system has become overcomplicated and open to a lot of abuse. Basic income will not be the solution on this system, it will just replace it with a "clean slate" dragging a lot of questions. How will the Basic income be regulated? If Basic Income will be implemented, how will the current market evolve around it? Will the amount of Basic Income be the same over all participating members (countries, states, ...)? How will Basic Income react to strong market fluctuations? Etc.
A lot of jobs will be lost in the future due to technological advances (as new jobs will be created as well) and Basic Income is a noble approach to replace an imperfect system and prepare the population for these changes. But for the far future I'm not convinced it won't be prone for the same difficulties and (corrupt) influences the current system has endured.
As technology improves it is going to raise the talent bar required to be employable. Eventually it won't make sense to hire 50% of the population. A solution will be needed.
If housing, education, food, and energy were made super cheap through technology we could provide those services instead of a basic income.
Given plentiful resources what stops us from multiplying until we consume all available resources. Perhaps, if we had basic income it should only be provided once people turn 18. That way parents wouldn't keep having kids in order to get more money.
Housing: Looking to Buckminster Fuller. He wanted to have houses assembled from modular components that could be shipped. Standardization of parts would make things cheap.
Food: Robotics and biotechnology can increase yields and bring down costs. Also, aquaponics is an extremely productive system. It uses 5% of the way that traditional agriculture uses and fish consume only 1/10th the feed that cattle do. Also, duckweed (it grows like a weed) is easy to grow and feed the fish.
Education: Stop with the college model already. Technology is the answer. Look at Coursera, Udacity, Khan Academy, etc. For education that needs more hands on training bring back the apprenticeship model. Let them get their education / training for free in exchange for working for free in the field for a limited time.
Infrastructure: Public transportation needs to be a priority. Cars sit idle 95% of the time. Once we have self-driving cars they should be pooled. Just schedule a time to be picked up.
For basic income, we might want to only provide it for people age 18+. Otherwise parents will just have tons of kids in order to collect checks. That will lead to overpopulation and eventually consuming all available resources.
- Basic income is usually proposed as a replacement to some or all services and income support people currently receive. I wonder if it is feasible to simulate that -- e.g. adjust it downwards for people receiving more public assistance (other than things like medicaid of course), or paying lower taxes, etc. -- this of course would depend on the funding model(s) to which results need to be applicable. Otherwise, following the study, people will surely say that what was tested is very different from what was proposed.
- Systemic effects would be relatively hard to evaluate with such a study, an example would be the change in both absolute and relative prices: e.g. I would expect that after a wide adoption, housing prices in cheap and mid-level areas might rise more than in currently expensive areas, because the added income would change the purchasing power of lower-income households by a much larger percentage -- or perhaps not. I guess it might be possible to try to account for things like this at the data analysis stage.
> I think basic income is important to do but decreasing the cost of living is a critical component as well.
I think startups should focus on the second, not the first. The reason is that the second is a technical problem, or rather a lot of different technical problems, all of which are exactly the sorts of things that startups can tackle and succeed in solving.
The first problem, however, is a political problem. Startups are not the right tool to use to address political problems. That's not to say that startups can't play a role: they certainly can. But the role they play is to solve the second problem, and thereby make the first problem a non-problem. If all of the necessities of life were essentially free, because they were no longer scarce (for example, if food were as easy to obtain as air), then there would be no need for basic income because there would be no need for income. So startups can't solve the political problem in the usual sense; but they can "solve" it by making it no longer exist.
An element of the future economy that I don't see addressed in this comment thread is the ability of technology to improve our ability to DIY. While AI may replace the need to hire labour, sufficiently shareable DIY technology may replace some of the need for people to consume the resources of others.
Granted advanced manufacturing is likely to stay in specialised facilities, but with open source and self replicating tools we may be able to put power back in the hands of the masses.
An obvious step along this path is 3D printing, but I'd argue that wikihow and other sites are greatly increasing the ability of people to meet their own needs. My own interest is in 3D imaging so that computers can reason about the world more readily, and not just replace jobs but replace skilled labour by augmenting our abilities.
Personally I'm more interested in a future where we use our own machines to live how we choose, rather than be given a stipend to buy the labour of machines controlled by increasingly narrow monopolies.
There are many good suggestions around how to increase prosperity so far.
Could I make point related to the proposal?
In order for it to be accepted, I think it would be very useful if people could understand the modelling. Obviously this is difficult because economic modelling is pretty hard.
However, a good first step would be to make the model open - and preferably hosted on some kind of notebook-style platform so anyone can change the assumptions are try it.
I'd note that the Fed Reserve's economic models are open[1][2] and frequently updated, so there is some precedent for this.
In the same way that PG described wealth inequality at the top, there are also a number of reasons people aren't prosperous. Certainly poverty can be a roadblock to someone who would otherwise be prosperous, but we are fooling ourselves if we believe that is the case for all. There are starving artists, but there are also people who will just do the minimum required at any point. In my opinion there are two problems here.
1. How to maximize the number of prosperous people.
2. Ensure that those who will never be prosperous still aren't going to starve.
Incentives clearly matter in human behavior. Which is why I believe a negative income tax would be a better system than BI. Choose a livable stipend with free time or the alternative is digging ditches for very little difference in pay? I know what my choice would be. Conversely taking a low paying or part time job to supplement a negative income tax could eventually turn into a few years of experience on a resume to take the next step up.
There is no such thing as Basic Income. There is no universal set of basic human needs. People will never be satisfied, no matter what you give them. We can't even agree on the purpose of Basic Income:
- Is it an investment/bet that's expected to result in increased productivity?
- Is it a way to preserve humanity?
- Is a way to entertain the elite?
- Is it just "the right thing to do"?
To me, all of this feels like a primitive defense mechanism. People anticipate that they will become obsolete, rightfully so, and they come up with crazy strategies to preserve their relevance. Some even go as far as believing they can avoid this fate through fantasies such as "friendly AI". By letting their animal instinct take over, they miss the big picture.
Rather than slowing down progress, we should all aim to make the universe more efficient. Namely, we should aim to preserve consciousness, with as little resources as possible. Think "The Matrix". The physical world is just too rigid for the mind.
Question: Why is work a good thing? Much of the work that gets done is all heat and no light.
It's really interesting to read this discussion and get a sense of how deeply the work-ethic is ingrained. Many commenters can't seem to imagine that people would do anything productive if they're not paid to do it. Is this really what you believe?
I would investigate implementing a basic income through the creation of an alternative currency system.
That is, everyone who subscribes to the system, gets a certain number of free credits equivalent to 10k a year, in exchange for certain responsibilities.
I don't see how it can be done using the existing fiat currencies at the moment due to lack of political support, but if you could pilot and trial it on say Bitcoin, then you might be able to scale it at a later date when the political climate has changed and everyone understands that software is eating (or has already eaten) the world.
> What can startups do to increase prosperity for everyone?
Make starting a business as easy as possible:
1) Have all the legal stuff taken care of through a web form that fills out all the paperwork in a standard way. When a business becomes sophisticated enough, they get a lawyer to customize their solution if necessary.
2) Provide simple business banking at the same time.
I don't know whether basic income will be effective, but I hypothesize that its changes in incentives will reduce productivity and happiness for the majority of people.
Personally, I’m more interested in a system where costs of living are drastically lowered. Subsidies could work, but I think technology could play a large role. Imagine a clothing factory where everything is automated. Raw fabric comes in and finished clothing comes out. With minimal human interaction, variable costs should be much lower. Customers might even be able to design custom clothes with software.
Nonprofit organizations could be established to maintain the factories and equipment. Their primary goals would be to minimize cost, ensure quality, and maximize customer satisfaction.
Obviously, such a system would require a lot of capital and technological advances, but I believe it is feasible. This idea could also be applied to other areas like farming, electricity, ISPs, etc.
It seems a lot more efficient to do a tabletop or synthetic study, rather than outright paying people BI as a sample.
Probably what I'd do is look at people receiving benefits equivalent to basic income. Disability is a good proxy for some -- you would need to correct for the disability itself. 20 year military pensions are another.
With regards to college tuition, the relatively easy access to capital via student loans has increased the cost of tuition over time. The demand for post-secondary is relatively inelastic since it is a strong factor in higher incomes down the road. If we apply this same logic to basic income, how can we ensure that basic income won't just further drive the increase in cost for all basic necessities that a basic income would contribute to (e.g. housing, food, utilities)?
For better or worse, the only way to "control" the costs would be if each of these basic necessities were led by government institutions or regulations as well as healthy competition for the production. That is a large step politically and socially but may be inevitable if we want to see a basic income succeed.
If anyone has any research or studies on related phenomena I would be very interested.
The first thing to realize when it comes to Basic Income is that it's purpose is not to optimize how the workforce will work out, but to deal with the fact that there will be no workforce in the future.
In other words. If you expect ex. income taxation to be part of the way to deal with Basic Income it's doomed to fail.
> What can startups do to increase prosperity for everyone?
One thing I've been kicking around, though I am not sure yet how it would work, is measuring potential demand for a traditional good or service -- a type of sentiment analysis to find gaps in the market.
When I'm thinking about this problem I tend to imagine market gaps in physical space -- where could people use a sandwich shop or game cafe or a heavy equipment rental, for example.
The traditional route, which seems needlessly wasteful in a world driven by data, is for someone who happens to have capital to come along and start a business either because they /feel/ there is a need, or because a similar business has been started in similar situations, or a similar business is raking in profits -- basically they guess (educated or not) at demand and spend a lot of time and money vetting that guess. Or, even more error prone, because they have a passion and decide to roll the dice. Then it either succeeds or fails to make a profit for a variety of reasons and their test is validated or not.
With kickstarter proving demand for potential goods that can be ordered and delivered, there should be a way to measure spacial demand for a good or service and move the capital required to willing and able people in that area to get it started. Perhaps even collecting information on what particular business practices might have a high likelihood of working...distributed and generalized franchising based on latent demand.
The idea seems particularly relevant in a discussion of basic income. If someone hates their job and are working only to stave off homelessness and starvation or to maintain some basic level of comfort and they are given the means to not worry about that anymore -- well, then they will likely try to figure out how best to improve their situation. What better way than starting a business with a high likelyhood of creating value for your neighbors? It answers the question: what can I do to to have the most impact in my community?
Do people sit around and play video games, or do they create new things?
The "idleness" seen in playing video games seems very close to most jobs. Many factory jobs have more mental idleness and less fulfillment than a video game.
Yes, working at a factory production line is utterly mind-numbing (I speak from experience) even if one is bored enough to use the spare brainpower to perform all sorts of microoptimizations, but at the end of the day, one provides people with goods and the other uses up electricity to provide entertainment, so the value to everyone else isn't the same.
And we do need to provide each other with value, or there won't be enough things to buy no matter how many dollars we have.
I'd also like to see things like the tax system be used to make changes to income inequality - both in terms of like for like pay as well as to some extent evening up the pay professions each sex choose to go into. i.e. if you are a woman you get tax off up to a certain amount because society screws over your pay for getting pregnant.
I'd also love to see meat taxed on a trading system where by everyone would get a meat quota that was quite small - if you want to eat shitloads of meat great - go for it - but you have to pay someone else for their meat points.
You could set the level of everyone's meat tokens for the year at a level to raise people out of poverty/or alternatively just to reflect the costs to the environment.
I'll releasing more totally unworkable economic policies soon... :-)
Your "meat points" idea is horrible, because it destroys market knowledge.
That is: In a free market, there are two things, supply and demand, and they communicate via price. In your idea, you fix the amount of supply, for absolutely no reason. All that's left is for the price to move the demand to where it meets (no pun intended) the supply. But you're throwing away half of the ability of the market to respond - the supply side, and you're doing it for absolutely no reason.
Um, unless you're doing it as research. That... might be interesting research, but I suspect that it will show that "supply and demand" makes a more efficient market than "demand alone".
I thought manufacturing meat was destroying the planet?
The whole point of the idea is to stop the supply side isn't it and the price of meat remains at whatever level the market thinks - the meat tokens are traded separately. It's simply that there would be a centrally planned amount of meat produced and it would go to those willing to pay the most for it. The tokens that everyone gets are designed to sweeten the deal for those who decide not to eat meat.
Sure you can eat meat, but your quota is worth £4000 per year to someone.
I'm not saying cap and trade has worked well for fossil fuels, but this is effectively carbon offsetting done in a better way.
Unfortunately I'm not certain that capitalism has solved the problems we are going to face over the next century if we want to survive. If we leave things to the market completely all this cheap oil will ruin the environment. Needs to be taxed.
I think you're going after just meat when you should be going after all manufactured foods. Meat prices are kept low in part by the same sort of subsidies that keep poptarts, fruit rollups, and white bread cheap. Force meat to be an expensive product, let the animals live on large tracts of land, eating naturally with minimal assistance, and deal with the occasional predation or with the additional effort to protect your animals from predation.
Taxing meat as we have now hurts the consumers and lets the manufacturers continue with wasteful, unethical, and harmful practices.
This is a challenging research problem -- perhaps harder than nutrition and diet research to answer anything definitively.
In the present, everything is connected. Giving someone basic income may mean that they demand higher wages for, say, working as a waiter in a restaurant. But if you only give basic income to some people, then those people still benefit from low-paid waiters (which wouldn't happen if it were on a national scale).
On top of that, it's a dynamic system. Traits like work ethic are partly cultural or passed down in families. Maybe the first generation of BI benefits more from work ethic, but it may decline in a few generations, perhaps undermining BI. That may not be apparent in a small study even of taken over a long time, because the participants will not be isolated from the surrounding culture.
From an economic point of view. How would you provide Basic income for everyone while at the same time eliminating the "wage price spiral" effect of normal goods such as milk and bread. I am not an economist but I would be curious.
Another point would be who gets to decide what a basic income is. Why stop at basic income. One thing that always troubles me able minimal wage discussions is why start minimum wage as say $15 dollars an hour. Why not $100. I actually believe that if we eliminated the minimum wage altogether the wages for various jobs would be able to find a better equilibrium then setting a artificial minimum. The argument the employers would reduce wages to $0.50 and the like would not happen because everyone would quit.
50 years from now, I think it will seem ridiculous that we used fear of not being able to eat as a way to motivate people.
Could not disagree more. This has been the ultimate motivator for all human accomplishment, as well as the evolutionary enhancement of all living things on the planet.
Uh, are you sure? No one will starve to death in Sweden and thei businesses are internationally quite competetive.
I would claim Maslows hierarchy is a pretty good model of human motivation - people strive for great things just to be admired and for the love of the art. Not everyone - but those that wont will not turn into Leonardo da Vincis through starvation.
Would it be possible for a company to issue profit earning shares to every US citizen? Right now, that would be on the order of $100 a person per year for the most profitable US companies but it is an interesting possible vehicle for a company to push for basic income.
I think disrupting the core components of our society that decrease and inhibit growth of wealth for specific groups of people would be the most effective way to increase prosperity for everyone. These components include, but are definitely not limited to:
- credit (specifically housing and pay-day loans)
- the necessity (real or imagined) of a college degree
- quality and subject matter of pre-university education
- utilities (specifically electricity and internet)
- housing and rent
To be clear, I'm not advocating the direct removal or destructuring of any of these things. I do, however, see these as disruptable (but largely ignored) aspects of our society and economic system that have direct, adverse effects on many groups of people.
I am working on cognitive behavioral therapy-based software that aims to fix unhelpful thinking and behavior. It is like Joyable, but for more general thought patterns.
I believe this can at least help people with their inner lives -- which can translate into benefits throughout.
I'm really interested in what happens if the basic income isn't used wisely and doesn't change outcomes. What do you do when half the population is obsoleted by technology in that case? PR campaigns and cash rewards for getting a vasectomy?
I think about this a lot. I think privatization of wealth reallocation could be the best model. If you could directly inject capital into underprivileged communities to do social projects, you could have twice the benefit to these communities. I imagine a platform where you could see social project proposals or propose your own and have people apply to run them. You can pair them with experts, give them the funding and let them hire peers to help accomplish the goals. You then have given them a livable income as well as improved their community.
I don't think it is as pure as a basic income, but rather than just redistributing wealth, it also creates wealth specifically for underprivileged communities.
> Do people sit around and play video games, or do they create new things? Are people happy and fulfilled?
The answer to this question is influenced by so many environmental factors that it would be difficult to do one study and arrive at a repeatable answer. Communities, countries, cultures, weather, and so many other things are at play.
We already know that education and training produce self sufficient people. If startups want to to give back, they should start with something they know and incorporate more training programs into the workplace. Develop growth cycles, from beginner to professional, and build a culture of renewal and community that makes people want to stick around.
Ask HN: What can startups do to increase prosperity for everyone?
We need a better system for measuring and distributing the value of our work. We lose so much collective value because of the system of inefficiencies built up around how we quantify that value. When 70% of working Americans don't give a shit about their job, we're talking about trillions of dollars worth of "productivity" wasted...
Prosperity comes from people doing meaningful work and exchanging that for an abundant lifestyle. I love the idea of basic income, and am 100% in support, but it is only a tool that will (hopefully) enable people to find their meaningful role in society by alleviating the struggles of poverty consciousness.
It's my dream that some day we can know enough about how energy and goods move throughout society that everybody is more-or-less able to do what they want with their lives, and we use information technology to simply arrange them in groups such that civilization results.
It's important to realize what exactly basic income is, because it's a somewhat vague concept. People typically mix two different concepts, the amount of income redistribution (how much money goes to welfare) and the structure of it (who's eligable, etc.).
What people usually call basic income is different from current systems in these points:
- It's automatic, no paperwork or going to authorities.
- It's simple, everyone gets the same amount - disabled people, people with children, etc.
- The income jump from unemployment to employment is higher.
But I don't think the difference is that big. Just modify a few parameters of the current system, perhaps change the level of income redistriubution to your liking and you have basic income.
It occurs to me that we could also turn the question around: What could increased prosperity for everyone do for startups? Some thoughts:
1. Financial risk is an element of prosperity. Lowering risk by improving public services and the safety net embolden more people to pursue a startup. I would spend more money if I didn't have to hoard every penny against the risk of a health crisis or period of unemployment.
2. Prosperity is the source of demand for products and services.
3. Broad based consumer demand can support infrastructure which, in turn, supports startups. An example that I can think of is the cell phone system, which really took off when "everybody" could afford a cell phone.
My first thought about this is that, if I had a guaranteed "floor", I wouldn't have to live in a big city but could move my family to a cabin in the woods. Perhaps what YC should experiment with is something like a new Homestead Act: you'll get an economic foundation to stand on, but only if you're willing to work the land, so to speak: you have to do something with it, whether that be starting a company, writing, farming, or something else creative.
I don't have any research published in a related field, but I'm tempted to send in a proposal. Would the researcher have to live in San Francisco for this?
Robert Gordon, Econ at Northwestern, has a book out saying national productivity and growth rates will be very low for the foreseeable future. If you believe that, then you can only increase prosperity by redistributing current wealth.
> I think basic income is important to do but decreasing the cost of living is a critical component as well. I'd be very interested to hear thoughts from the HN community about what we could be doing here.
Increasing rents in particular metros (the ones where the good jobs are at) is the most obvious and solvable cost of living problem we have right now. Pretty much all we need is to just permit more housing to be built, in the form of radically loosening zoning regulations that block dense housing. There, done.
Housing in the bay area would still be somewhat expensive with more liberal guidelines on housing, but nowhere close to where it is right now.
@sama: i think you've chosen the wrong format to do this. To lower cost of living, i.e. transform the economy is a huge task , that would require much more research effort than a thread.
On the other hand , you've got access to an extremely talented and large group of people, and if you steered them towards a group of sub communities all highly focused on working together to find solutions to each of the individual sub problems - than i'm sure we'll see lots of great ideas and insights.
That's all assuming it's possible to build such collaboration. But the goal is so appealing to many , so i think it's possible.
1. basic income implies that there is a fixed minimum cost for comfortable survival. Does it require organic food? Does it require clean air? Does it require etiquette training? Does it adjust for localized prices? Does it include a vehicle, video games, and gadgets?
2. a simple analogy to zoo kept animals comes to mind. The more detached from the holistic view of nature and the cosmos humans get, the worse off we become. Why? because everything IS connected.
3. Money is a flawed system because you are equating material goods to non-material concepts. It will never balance out. Not even with gold.
* Provide help/advice for people making big financial decisions. For example, help them when buying/renting a house, buying a car or dealing with an expensive repair. Help students with career counseling and college decisions with an eye towards their future finances. Point out less expensive options and hacks (e.g. community college for 2 years, then transfer...consider not going to college until they are more certain what they want to do...). The startup could charge a fixed fee for advice (or maybe have a subscription model for advice at any time, a bit like Angie's list).
How about instead of using a "basic income" to enable people to pay for living expenses (food, housing), how about cut out the middleman and just pay for food & housing? This could be a system of college dormitories that people can live in free of rent, and includes cafeterias that serve meals free of cost.
Anyone can live there, with some sort of local government oversight. You want to live somewhere nicer? Make money and pay more. You fall on hard times or want to cut costs while working on the next big idea? You don't have to worry about not having food on the table or roof over your head.
Are you prepared for your researcher(s) to conclude that a "basic income" is a bad idea? Or is this idea part of your ideology, and no amount of looking at the world will convince you otherwise?
Stop thinking of startups as "startups" and instead as businesses. The whole startup mentality of prizing growth and valuation, at least from the outside, seems greedy, rapacious and unsustainable.
There is nothing much to research, because the concept contradicts to the most basic principles of ecology, economics and sociology.
The first principle is that a population always outgrows its resources. As long as one create conditions to sustain a life it will start to reproduce exponentially. Rabits in Australia is a classic example.
The second principle is the scarcity principle of economics. Everything which is easily available loses its value by definition. Any amount of free money would be factored out by increasing of the prices, as if you move the zero on a scale.
The third principle is of social hierarchy. Each society forms a hierarchy to be sustainable. It is so fundamental, that we never think of it, but there is no flat societies even in animal kingdom.
Again, basic income is just moving a zero on a scale. Prostitutes will not switch to living on that income, they will merely rise the prices, because prostitution is social phenomena much more than economical. The food market will adapt accordingly, so the only food one would be able to buy will be a synthetic crap made out of cheapest substitutes - this is how markets work. Same would happen with housing. Land is a scarse asset and the most ancient status item and a source of income. Free money will change nothing there.
And, of course, there were lots of experiments since the beginning of time - all these socialist or communist utopias which failed the reality checks - they crashed and sunk down after a collision with economical and social laws, which are as unalterable as the laws of physics.
Simple models doesn't work. There is no other way of sustainable ecosystem exept self-regulation due to competition over scarcity of resources. It is very naive and dangerous assumption that human intelligence could beat laws of the Universe or evolutionary forces. The mess we are in is the best evidence.
The parent comment claims simple modles wont work based on simple models.
The "moving 0 on a scale" argument is brought into play with minimum wage (for example 2:[1]) but it most likely wont happen.
There are other points completely ignored by the parent post like welfare already in place (shouldnt this cause the same effect?), dimishing effects, etc etc.
The parent comment cites nothing and mixes basic income with "thats basically communism and communism has obviously failed".
I think there are reasons to downvote the parent comment, even though my comment does not provide much better quality.
I don't think we can have the conversation about basic income without having the conversation about currency.
Right now the government has basic(or really much more than basic) income . . . it can create the money it needs to do what it wants. And this trickles down from the President and the Speaker of the House to the foot soldier and the mailman.
This is a feature of the monetary system and it is only challenged in rare, extreme, or politically charged cases.
Perhaps we should think about innovating the currency to provide basic income to citizens rather than to the state.
History repeats iteld, so it might be good to start by hiring a historian. The claims of impending mass unemployment that serve as the premise for Basic Income were common during the Industrial Revolution. For example, see the "Luddites" https://en.m.wikipedia.org/wiki/Luddite Ultimately what happened then is that greater efficiencies actually increased the demand for labor. Supply begets demand.
It is always ironic when the leisure class who have enough money to do as they wish from birth become very concerned that the poor simply aren't EARNING the right to eat, sleep, and rest.
Bernie Sanders at the recent town hall meeting asked for someone to tell a story of their struggles. A woman in tears told of how hard it was to get by on $10k to $12k a year.
It makes me wonder. How happy will people who only get basic income be? How easy or difficult will it be for them to get simple work for a little extra income?
Now there is a big difference in getting $10k for free vs scraping it together from 4 different crappy jobs. But still I wonder. I came away from that story less confident in basic income that I previously was.
The idea of basic income is to provide something. Enough money to ride public transport. Enough money to rent a room (location dependent, but even in my neighborhood rooms can be $300-$600/mo). Enough to buy food.
It is a lot easier to look for a job when you aren't spending your entire day trying to stay out of the sun and scrounge up enough money to eat. It's a lot easier to look for a job when you don't have to choose between food and public transport.
It is very difficult to scrounge up enough money to take care of the basics while job searching. It isn't impossible but it is very, very hard.
Basic income helps to prevent people from falling that low. If you were moved by a woman struggling on $10k~, try listening to the struggles of the homeless in your area. If you are fortunate not to have any in your area - go to somewhere you know they are. Just talk to them for an hour, it'll change your perspective a bit.
My biggest issue with BI is the logistics behind it. To get it to work is complicated, seemingly prone to corruption, and possibly not sustainable. But it is going to be necessary to figure it out in the coming decades, IMO.
With basic income, that woman could quit her current stressful job, get a better job that only pays $9k, and be wealthier and happier with the resulting $19k income.
Most napkin math proposal for basic income are between $10,000 and $15,000. That's quite hard to make work but it's maaaayyybbeee posssibly achievable. It's at the outer limit of doable but meaningful.
In the US 36k per person would account for 66% of GDP. It'd be 85% of GDP in France. These are not viable figures.
It shouldn't be $100k because that exceeds mean income, and we don't have strong evidence about how much BI improves productivity.
I think the reason most proposals are well below the mean is that we prefer a modest effective intervention, and the desired effect is to remove the hardship of poverty, not to achieve perfect income equality.
The number is arbitrary. The net effect would be the same just differing in degrees... inflation, decrease productivity of the economy as a whole, and downward pressure on the middle class. It would have negligible effect on the problem of inequality with the 1% and above.
Beyond just the amount, I hope your project delves into the issue of effective administration and levels of personal choice. For the first you can look at the recent bio identity cards and direct receipt of a basic income in rice in India. Radical decrease in societal cost and increase in personal benefit. For the second it is a question of where do I receive a basic income for - eg Tiburon or Temecula - and how is this decided and administered. For this consider the troubled hukou system in China.
What a cop-out calling it "basic income". As if it's somehow "free money". Really it's just a further institutionalization of theft, of course making people more dependent on mother government. Imagine the debate, should we raise basic income by x or 2x?
The solution is not more laws, it's less. For example ending the war on drugs would have a immediate effect on the lower income brackets. If I didnt pay >1/3 of my income to support our $T war complex I could hire more people.
Nice job defining all taxation as theft without actually stating it.
I can kind of see a basis for that - people with guns enforce that you pay your taxes. On the other hand, in the US, Congress decides on the budget, and we vote for those folks. And we don't seem to care enough about government spending to vote out the ones that spend a lot.
And, if taxation is theft, what is your alternative? Government supported by charity? Government supported by printing money? No government? What?
Individual income and property tax specifically. There are other ways gov can raise money. Gov has the printing press (although I want to let people decide what money is and what to trade in). Gov supported by charity is usually presented as an absurdity, like nobody would earmark donations for the DOD, I don't think that's the case.
Agreed that people just dont care enough, I think a part of that is the constantly re-enforced state of fear which promotes the protection racket.
Here are 7 pages which you may have already read, but may even still wish to read again while considering ideas such as UBI; especially if you are a critic of such things.
By Keynes' estimation, those who are discussing such things right now are right on schedule.
"We’re looking for one researcher who wants to work full-time... who are driven and talented but come from poor backgrounds." (please read the entire paragraph to understand the context of this)
The combination of hiring researchers that come from poor background with the author's stated belief that a basic income would likely be a good thing makes the entire set up seem very biased.
I like the idea of promoting research into the subject but I don't think this is the right way to do economic research.
>Do people, without the fear of not being able to eat, accomplish far more and benefit society far more?
Why not basic commodities ? I mean distributing significant quantities of corn, corn-meal, flour, rice, a wide variety of beans, dried fruit, beets, onion, millet, granulated garlic, etc. The stuff that you can make a vast array of healthy foods out of.
This eliminates much of the possability of waste in the system, and at the same time it doesn't expose the individual to legal and privacy complications that come with 'income'. It translates into money in people's pockets indirectly because now their family's food budget is dramatically reduced.
I think this is a more elegant solution but the reason why it's difficult politically is because it incentivizes individuals and families to put more time and planning into home food preparation. There are billion dollar advertising campaigns aimed at conditioning the exact opposite behavior which is one reason why it's probably politically untenable at this time.
Also I'd like to raise another point which is that I find it somewhat disturbing that a major startup community leadership organization is so interested in possibly attempting to influence the national policy around financial issues in a way that is so far removed from the technology domain.
Are you guys a startup incubator or a think tank ? In other words are you busy conducting research to churn out position papers designed to influence the national debate on non-tech issues ? If so then how transparent do you plan on being with founders, past, present, and future about this entire process as it evolves going forward ?
The reason why I believe it's a bit of a stretch to consider this a tech issue is because in my view the idea that "technology is eliminating jobs" seems to be a false premise statistically speaking. To me it's a debate centered around how "free trade policy" is influencing the global job market and how that has impacted the United States economy. I believe that in the US at least the tech ecosystem has created more jobs, a whole new economy in fact which didn't exist before. It's the non-tech jobs that are gone, but they weren't eliminated by technological innovation as much as they were dispursed globally in the wake of certain regulations.
Would that work? Part of a basic income is the knowledge that it's guaranteed to be there. I'm not entirely certain that you can do a short term test for it.
I've proposed a number of things at http://catallax.info. It boils down to changing incentives. We are currently incentivised to get the most for our dollars in the present. When you change the incentive to allow for more reward in the future if you spend your today dollars 'better' you can make sentences like 'decreasing the cost of living' much less relevant to the conversation.
Ennui, once the province of past aristocracy and present trust-fund babies, will be accessible to all! Survival is the natural meaning-giver.
You need bread AND circuses.
TV, movies, reddit and video games are the modern circuses, but we need to make MEANING accessible.
Startups, with lowering barriers, are part answer. But not winner-take-all unicorns; more like long-tail lifestyle businesses. So that everyone can be uniquely useful, regardless of direction or ability (Ricardo's
comparative advantage).
Speaking from personal experience, not having to work 9-5 at a dead end job has astronomically increased my personal well being, productivity, and contribution to society (ed-tech startup). If I had been born in the lower class and never had any capital/runway, I would never have been able to do my startup -- or at least not yet, and not with this much impact.
9-5 service jobs so that people can pay rent needs to become a thing of the past, so many lives and talent gone to waste.
Online voting needs to happen first before we have a chance of implementing a basic income in the US. The right wing just does not believe in science or the results of research that doesn't fit their worldview, so anything that comes of this will be moot, until they lose enough power through dying off, or through much higher participation rates among younger voters (online voting).
Additionally, I wonder if basic income can be effective while there are still shitty jobs. Right now, somebody has to clean the toilets, because there aren't yet robots that can do it cheaply enough.
If you introduce basic income so that nobody has to do the shitty job, nobody will do it.
But one day there will be robots that can clean the toilets, and then there will be no shitty jobs left to do - and perhaps only then can basic income take hold.
Damn, there goes another one of my "what I'm going to do after I make a lot money" ideas. I really wanted to run a study like this, especially after hearing about GiveDirectly and seeing their research. In fact, that's what GiveDirectly is already doing, at least in Kenya and Uganda. But yeah, it would be really interesting to see what would happen in the US, or another developed country.
Just a brainstorm, not even sure if this is a great idea:
Perhaps a good thing to do with a universal basic income is tell people they can collect it from anywhere. This is what people do with social security and such. They go live in cheap countries where they can get dental and medical work done for 1/10th the price. Cheap food, cheap rent, etc. The lowered demand for these things in the US would lower prices here. Everybody wins!
Has anybody studied the outcomes on American Indian reservations from having basic income guaranteed for generations? I'm not an expert or well-read in this field, but I think anybody advocating basic income would be interested to visit a reservation and observe the lifestyles, dreams, goals, and successes found there.
>Ask HN: What can startups do to increase prosperity for everyone?
A general theme here is to identify every element of our current economy and society that we use debt to access, and find ways of disrupting that, of providing same or equivalent access without debt. Shelter, transportation, health, and education are all ripe for that kind of disruption.
Great concept! Regardless of who you select to conduct the study, I'd like to volunteer the use of my software (FocusGroupIt - focusgroupit.com) as a way to capture qualitative feedback from study participants on an ongoing basis.
That kind of ongoing feedback would be invaluable to capture the day-to-day experiences of study participants, and I'd be happy to volunteer my time to support the study...
You tell that to all the trust fund kids who go on to build global businesses? You're way off. Fear is a disabler. Many peer reviewed studies prove this.
Stolen from another comment on this page:
>Financial desperation squeezes the cognitive juice right out of you.
In 2013, Harvard researchers did a study of how financial stress affects decision making. Denise Cummins, Ph.D. explains their findings in Psychology Today:
"When the cost of [a car] repair was increased to $3,000, a very different picture emerged: The cognitive performance of those at the upper end of the income distribution was unaffected by the increase. But those at the lower end suffered a 40% decline! The authors interpreted this to mean that scarcity impaired people’s ability to think clearly. The threat—even an imagined threat—of a large bill made it difficult for poor people to focus on the cognitive tasks at hand."
Financial stress impedes human thinking / problem solving. People get consumed by the short term challenges in front of them, and can’t see the big picture.
Sources: http://www.sciencemag.org/content/341/6149/976http://www.psychologytoday.com/blog/good-thinking/201309/why...
I totally agree. Children born into wealth and privilege are completely hobbled by the lack of this fear drive. We should institute 100% inheritance tax, and all children, rich or poor, should be taken away from their parents and raised in orphanages with only enough funds to keep them from outright starving or freezing to death.
Family wealth is typically lost within 3 generations.
As the saying goes:
“When a person with money meets a person with experience, the person with the experience winds up with the money and the person with the money winds up with the experience”.
The brain is a muscle. And much like physical muscles, there are consequences for inducing artificial growth.
Time and again these experiments only prove that for 6-12 months the subjects are euphoric, creative, motivated... until they require the next level of enrichment, which they don't know how to achieve, because they've skipped "level 1" in the game of life.
What we need is to study is what changes we need to make to the education system to support societal structures post-employment. Mass unemployment is coming yet we are doing nothing to prepare the population.
We need new "career paths" where people are prepared for a life without work so that things do not devolve into what we have seen in remote communities here in Australia.
There are lots of interesting questions in an effective basic income system.
Sybil and fraud resistance come to mind immediately.
If I were in the top 0.01% of wealth, I'd really like to see research into basic income. It would help with deflationary spirals, social order in an automated future and increase the supply of good ideas because it would free more people to explore high risk areas.
My non-profit's focus is on early childhood education in developing countries.
It's sort of a long time to see a payoff but economically-speaking these are some of the most efficient education dollars people can spend (it's a time in the child's life that has high leverage).
You can read more about how we're trying to increase affordability here: www.sharedforkids.com
What can startups do to help increase prosperity for everyone? Help get money out of politics. This is fundamental. In the current state, all policies are tilted towards the most prosperous among us. We all know this. We need our public servants to be incentivized to work towards the public good. This is the foundation without which all else is futile.
Ultimately the fact we neex to talk about this issue is a sign of just how much progress we've made. We're on the cusp either of ww3 and or technofacism or a new age where most people spend their time in the arts or pure sciences all those "dont quit your day job" dreams have a chance oglf coming true.
> What can startups do to increase prosperity for everyone?
Increase the range of opportunities that are within an ordinary person's budget. Nowadays it's fairly simple for the average Joe to buy or sell things online, create a blog, or rent small amounts of server time.
Give people something they can do, and a way they can get paid for it.
The most important thing that can be done for long-term prosperity is to eliminate almost all forms of debt. Debt ends up making everything cost (at least) 2x as much and is the reason why everyone feels the requirement to be perpetually employed. In the US, we've built an entire lifestyle on debt.
I'm not talking about consumer debt here (though that's a problem too), I'm talking about the debts that are intrinsic to the system used to obtain a high standard of living in the US. Those debts are what keep most people shackled down.
If you want to take a sabbatical because of a series of hard knocks in a short timespan, you can't, because if you stop working, you'll lose everything you own. If someone can take everything from you when you stop giving them money, you don't own it. That's the core problem, the core reason employment is so stressful and the core reason that losing a job is a major life negative.
Want somewhere to live? You gotta pay that house payment and/or rent. Very few "home owners" in the U.S. are actually home owners, they're effectively just renting the house from the bank. Even 30 years after getting their first mortgage, most are not home owners because they've sold and rebought their homes several times over the years.
Want (need) to drive to get somewhere? For a decent car, it'll be $300/mo for 6 years (+ insurance). You might be able to go a few years without a payment, but by year 10, most cars are going to be worn down to the point where they have to be replaced, and you'll have to start making payments on a fresh one.
Want a decent job? OK, we're down with that, as long as you pay your non-dischargeable entrance fee of $50k+ student debt for the privilege. Actual skillset or competence is of little relevance for most professions.
Make all of these things so cheap that they don't require debt, or make these things available in some attainable way that doesn't require debt and allows people to actually own something, and we'll have a huge portion of the problem solved.
Of course, the powers that be really hate it when someone isn't in debt, because debt is literally free money; usury is the most effortless way to earn money in existence. There are a lot of people that make a lot of money by keeping the citizen dependent on them for big, necessary purchases.
Perhaps the government could offer 0% financing on all of these items -- homes, cars, and education. That might be a start to breaking the debt cycle. Another thing that would help is moving back to multi-generational housing and maintaining a strong culture of inheritance.
I think that there ought to be a maximum wage that is linked to the minimum wage (we can switch over the baseline to the basic income if we ever get basic income implemented).
The idea is anyone earning over the maximum income[calculation] will pay almost all of the amount over the maximum wage as income tax.
Calculation: I propose that the maximum income be a hundred times the current federal minimum wage times two thousand. The assumption is that a full-time employee works two thousand hours a year. Under my proposal, we will raise the federal minimum wage to $15 per hour which will set the so-called maximum income at $3M a year.
Of course, we do not want to penalize people from making more money. Nobody shall go to prison for making more money. I just think that any income over the maximum income should be taxed at a higher rate which I propose should be 90% of the income over maximum income.
If/when we get a basic income system working, we can switch the so-called maximum income to a hundred times the basic income. I hope the mega rich will support this plan as unlike the estate tax, this is not a tax aimed at the eroding their assets. As long as they do not take distributions from their corporations/ trust funds/ "charitable" funds, their assets should remain safe.
I know the federalists will turn in their graves as I say this but we cannot afford to have state and local governments do as they wish. When Texas steals business from California or Kansas steals business from Missouri, the consequences are just the same as when China steals business from the US. We need to federally enforce standards that prevent some states and communities from being "business friendly" at the expense of the people.
Edit: will the downvoter please care to say a few words?
(not the downvoter FWIW)
I think you lost most people when you suggested the status quo "mega rich" should get to keep all their assets whilst the tax system is redesigned to stop anyone catching up with them through entrepreneurial zeal and hard work...
We already have an estate tax that maxes out at 40%. As long as we don't allow any more exemptions or windows, it shouldn't be a problem. We may quarrel over whether or not free lunch at work qualifies as income (I'd say it is not worth it to make a fuss) but use of corporate funds for personal expenses would count as income for the person if we are worried about these things. As long as the mega rich do not receive and spend over (for example) three million dollars a year per person, why should we worry about them? If they take over three million dollars and pay 90% off the top, they are more than welcome to do so in my eyes. The main thing is that there should be no exemptions for any reason. Exemptions, exclusions, deductions, tax discounts, and such are inherently examples of central planning. I can't believe that we would allow such communist ideas in our country.
My goal is not to facilitate people to become ultra rich through "entrepreneurial zeal and hard work". It is just the same ignorance as shown by pg in his recent essay where he says that a startup entrepreneur who becomes a billionaire is somehow better or more desirable than a billionaire who inherited his money. What I want is to get a solid foundation so people are not worried about their next meal or a clean dry place to spend the night.
If someone creates a new business process or a new gizmo that does the work that formerly took one thousand workers, well I am thankful to the person. However, we will still cap his payday at a hundred times the minimum living wage. I think it is a fair deal. People who do things should do things because they want to do things not because they want a big payday and become "mega rich".
Edit: There was an article that I read the other day that said something along the lines of forget the mega rich the upper middle class is the cause of the decline of America.
So the only tax break you're permitting is for inheritance?
One doesn't need to believe that a startup entrepreneur who becomes a billionaire is somehow better than a billionaire who inherited his money to find line of argument that implies the only exemption in the tax system should be for inherited fortunes unfathomable.
What's funny is the best study would involve picking some people at random and giving them a basic income -- something YC could easily do. Theory can only get you so far on this one (although would be necessary to interpret the results of an empirical study).
Basic income is an idea which has been made practical due to electric automation.
Why is it then that everyone assumes the surplus created by electric automation should be distributed using such a primitive legacy paper based information system as the dollar? That's 19th century thinking
All I can add to the discussion is that I'm excited to see this, I take this as a sign of progress and us moving closer to a better future, rather than continuing on as things are (which isn't bad, but can be better). I hope it goes as well as I think it will.
Startups already increase global prosperity enormously by targeting massive markets with scalable solutions. Ultimately, the way you make money as a startup is by offering value to your customers, i.e. increasing their wealth.
Some examples of this include: Uber/Lyft, decreasing transportation costs and improving quality for millions, while creating tens of thousands of jobs; Airbnb, same thing for hotels; social apps like Twitter, Instagram, etc, increasing entertainment/information flow to users, creating new media careers; etc. So startups don't need to operate any differently than they do now ... Think big and make big moniez!
One thing that definitely does not work are "social enterprise" startups. Distraction from the brutal realities of market forces ultimately leads these to fail while patting themselves on the back for doing "good."
In the spirit of the question though I'll list a few areas I think have enormous potential.
Money services and lending - very difficult to innovate here due to the iron fist of Uncle Sam and banking cartels. I think what's needed is either, 1) US-caliber teams operating outside the US or 2) products that skirt the law a la Uber/Airbnb but like those products are so positive with users that going against them becomes a risk for politicians.
Health - outsourcing/telepresence, reducing the cost of basic testing. Again may need to operate outside the US.
Legal - enormous value to be unlocked by standardizing and automating this field a la Clerky but better. Difficult to get lawyers on board, they are very good at extracting rents.
Real estate - breaking regulatory capture of Realtors.
End of life services - we're all in this market. It's not sexy so not much innovation.
Education - it's so backwards that you can innovate in any dimension.
Investment - despite nominal progress on things like crowdfunding, there really hasn't been a big impact yet by startups in increasing access to capital / opportunities to invest. It's still far too difficult to raise money for new businesses. Again, may have to operate outside of the US for this and consider innovative legal structures.
Science - breaking the University stranglehold on credible scientific research through crowdsourced/funded efforts. Enormous potential to cheaply fund studies especially those that go against orthodoxy or corporate interests. Again may need to be outside US.
I would focus on oligopolies that have formed or are forming... cable TV, internet access, banking, Credit Cards, etc. There need to be nimble competitors in these industries that eat away at the bottom lines of these industries.
Not sure any startup can fix the fundamental problem that technology moves too fast for evolution. Came from a long line of big, strong, not-too-bright people? You're kind of screwed. Not much call for that anymore.
Instead of giving everyone free money, we should work on stopping currency devaluation. It's a bigger problem that affects us all, but the poor much more than the rich.
My personal viewpoint is that you should be guaranteed survival and some opportunity by society, but not guaranteed income.
That is, you should get food, shelter, medical care, and education for free (this also implies free child care). But you don't get to buy a cell phone or an XBox or whatever -- you have to work for that.
In other words, I think basic income is jumping the gun a bit. Who is going to PAY for this, if we're not even willing to pay for the necessities of life?
People still die from untreated diseases, and I believe there is significant research to show that poor health CAUSES poverty (rather than poverty causing poor health). If people are healthy they will likely be more productive members of society.
My assumption about basic income was always that at it's core, it provides the money for food and shelter. This reduces bureaucratic overhead in terms of trying to provide people those goods, and gives them the freedom to make their own choices and not have to work to survive, and the government is no longer forced to create the infrastructure to try to find ways to provide food and shelter. This may, however, require work in terms of providing affordable housing options to everyone, but I don't think you have to solve one problem first to solve the other.
Health Care and Education are a separate (but still related and important) set of problems. Both of those require greater infrastructure on the part of the government to provide effective solutions, so again this is a problem that also requires a lot of thought and effort, but providing basic income doesn't seem like it would preclude health care/education reform. Nor does it seem like solving health care and education reform would change the structure or overall effects of a basic income program; they're simply additional solutions that would certainly improve our quality of life and possibly the efficacy of the program.
OK, well this is a good thing for YC to fund an experiment to test.
If given basic income, do people spend money on food and shelter, and plan out a good life, or do they live day-to-day and remain a burden on society?
This is why I think education, for example, comes before basic income. Without education, you can easily imagine people remaining homeless despite the income.
Of course some people will succeed and some won't -- the question is the ratio.
Some rich people are scrupulous; some rich people waste their money. I don't see any reason to believe that poor people are any different. I think we can still help those people with education, etc. without wasting taxpayer dollars. But how much would be "wasted" is of course an open question.
If you try to micromanage peoples' spending, you will spend more and you will hurt them. Believing that poor people will waste their money on cell phones and XBoxes is a common justification for trying to attack them, but this sentiment is evil disguising itself as morality. For example, poor people need cell phones because it's impossible to get a job without a stable phone number.
The problem is the cost... If we can't pay for people's health care, I wonder why we think we can pay for everyone's living expenses.
Suppose one person needs $100K to survive. Is it moral to let that person die, and instead give $10K to 10 people as basic income? That's a real resource allocation decision that has to be made.
I will consider the argument that the government would be less efficient at providing food and shelter than giving people the money to do so... that could possibly be true on a large scale.
Basic Income is probably the most efficient way of giving everybody food & shelter. Giving everybody food and shelter through standard government processes would probably cost way more than $10K/year.
One thing that I haven't seen considered is the cost and complexity savings of a Basic Income safety net over our current patchwork safety net, in addition to being more effective.
YCR is a non-profit; we just think this is important and interesting. Though if it does turn out, years down the road, that basic income happens, I suspect we'd get more people starting companies and that would obviously be good for YC.
I object to the notion of unconditional basic income. I think the possibility of large portions of the population underachieving in their return to society while we are still not rich enough as society to afford it is very real. I'd propose a twist to this unconditionality. I'd much rather see a different brand of basic income in return for work that everyone can do in a relatively small number of hours per month (20h?-40h?).
In order to implement such a system we need a reliable way for society to judge the voluntary work of its members that would justify the basic income. And a set of works with social value offered to those whose chosen work is not deemed worthy of basic income.
I'll just try to make this more clear with a possible implementation of such a system.
You are allowed to receive your basic income and do whatever you want as long as a number of randomly selected people consider your work worthy of basic income.
A way to organise this would be to present what you have done in some kind of predefined format at the end of each year. These people decide if what you have done is worthy of you getting your basic income another year. Otherwise the next year you have to work in one of the state accepted ways to get your basic income (by teaching, playing with kids, cleaning the roads or whatever thing we as a society agree it's always worthy). To maximise the accountability I'd choose these random group of people in the community of the person who receives the basic income. They will have better ways to know wether what is presented is actually being done and worthy. These 'judges' would need to be anonymous to minimise the potential for social engineering to game the system.
This is just an example, I think we can devise different versions of the control structures following the same spirit for works that do not adjust well to this kind of evaluation.
Sorry for my grammar and english. Perhaps someone can restate this in a more readable way. English is not my first language and I'm not a great writer, but I hope at least the essence of the ideas behind this proposal pass through and can contribute to the general discussion.
This is a great indicator that Paul Graham's oft displayed obliviousness to issues of morality and fairness in capitalism is being challenged within YC. Good news.
This already happens in lots of setups: social security, pensions, allowances, annuities. So there's lots to look at without setting up some stilted experiments?
Now you're just being stubborn. Regular incomes that happen whether you work or now, are almost identical to the BI. How are those example different? Constructive arguments are more interesting than "No they aren't, neener neener".
Hi Joe, sorry to come across that way to you. They're not the same because:
-Social security (means tested, dehumanising and bad for self-worth/esteem)
-Pensions (only handed out to older people who are probably in a less creative phase of their lives)
-Allowances (whilst close it is unlikely to be completely unconditional and usually tied to an emotional/familial bond which comes with it's own set of baggage)
-Annuities (this is the closest of the lot but generally only rich people experience this so it would be interesting to see what happens when given to less well off sections of society).
Unconditional basic income deserves to be studied from a scientific perspective. Too many of our major political decisions are based on anecdotal evidence and they therefore don't achieve what they presumably set out to achieve. Unconditional basic income is a unique concept with it's own unique set of inputs and outcomes just as the concepts your mentioned are. We cannot just assume outcomes as that is bad science. We have to implement, test and analyse our results.
The 'unconditional' part is only important in the beginning. Once the subject qualifies (begins receiving the annuity) then the criterion is irrelevant to studying their behavior while receiving the benefit.
For the person receiving them, those things listed offer the same benefits as BI - money regularly received no matter how you behave. To determine what effect that has on people, then we need simply record those results to get a large data set.
To fund even a tiny study (a dozen people?) for a tiny amount of time (5 years?) would cost an exorbitant amount. Its kind of silly to even talk about. Especially when we have data sets of millions of people in almost the same circumstances.
I read this proposal as absurd. Its typical of Silicon Valley to imagine getting results from a tiny study (focus groups etc) that are worth anything.
> 50 years from now, I think it will seem ridiculous that we used fear of not being able to eat as a way to motivate people.
Is this really a problem in Western societies? I haven't heard of famines or people starving to death here.
I believe that most people work for social status, so they can keep up with the people surrounding them.
> I also think that it’s impossible to truly have equality of opportunity without some version of guaranteed income.
Is this a good way to recruit researchers? After all you wouldn't want the researchers just to produce a paper that reinforces what you believe already.
All the people you know are not starving. There are however many folks - even in rich countries - who would not eat without the help of charity programs. Many of them are living on the streets.
Interesting project, but personally I would be more interested to see the funding of a study on "basic financial freedom".
The test is quite similar, but instead of giving them a basic income participants are still required create their own income - however, they no longer have to pay taxes on their income. They are encouraged to create businesses and those businesses are also free from tax, and those employed by said businesses are also free from tax.
50 years from now, I think it will seem ridiculous that we used to allow government to take our money ;)
So are they no longer allowed to use public roads? How about public utilities? Does the fire department show up at their "un taxed" businesses, how about the police? Can they hire students that received their education from public schools? The fact that there existed a group of people that posted that modern society would be even remotely possible without government is far more likely to be seen as ridiculous in 50 years.
> What can startups do to increase prosperity for everyone?
I agree with the fundamental dogma that startups are the best way we know to create good technology, which in turn benefits everyone. ie. the big wealth creators are discovering new resources and creating better technology. ( The big new resources are in space, or perhaps deep sea, so your back to startups to get there.)
Extrapolating, it seems reasonable that within 15 years the cost of many manufactured items will fall dramatically and quality will go up - when 3D printing can print electronics and plastics intermingled together at good resolution, that will mean all our vacuum cleaners / iphones / laptops / TVs / cars / bikes / shoes are printed whole instead of assembling them from parts.
Aside from consumer goods, we still all need high quality and cheap solutions for : education, energy, transport and housing.
Cheap, high quality [customisable!] housing might actually be solved by 3D printing also [ but maybe you'll just end up paying more for rights to the land plot or sky space to host your dream pad ? ]
Its worth mentioning the obvious, that Startups don't exist in a vacuum, they need the backdrop of founders and staff who are highly educated [ not to mention a functioning economy with capital, infrastructure, internet ]
Personally, if someone gave me a basic income and a project budget, I would spend it on establishing Math Circles for students aged 10 to 15. ( My ideal version of math circles involves some hands-on programming in javascript, coupled with the typical tricky math problems to solve - https://quantblog.wordpress.com/2015/12/14/mathcircle-with-c... ). Id also like to see how we could scale out Math Circles by delivering them online.
Education via this Math Circle format is a very long term technology investment, but has a high bang for buck in terms of upside for the planet and our species. As a parent it seems clear to me, we cant wait around for the government or established institutions to innovate in education - it has to be done in parallel and outside of the constraints of a formal bureaucracy.
Think of each student as a startup you're funding - in that long tail there might be one or two Adas, Edisons, Einsteins or Mirzakhanis wherein almost all future 'value' lies.. but we're also making a wider pyramid of culture, diffusing out into the general milieu of artists, nurses, marketers, designers a slightly higher level of facility and intuition in math and science.
Based on my own experiences of transitioning voluntarily into homelessness, I am very excited by the focus on lowering the cost of living. Living more simply, and getting there by a slow and intentional process (NOT coercive or painful), leads to more enjoyment of life, and less fear of failure. Funny how living in the presumed failure state of western society recalibrates your instincts.
I find myself wishing that something like the process I went through could be institutionalized to a degree. For example, I had to be previously indoctrinated on the value of minimalist living. I had to be convinced that that was something that I wanted. And I had to consider all my habits and responsibilities, and what I might be willing to give up to get me to different outcomes. I had to understand how cheap it could be to exist in the city in which I live, and then cut in order to get there. I had to let friends know of my goals, and hope that we could create new traditions that sacrificed little and perhaps even strengthened our relationship. The whole time, you are altering your habits, testing them out before removing the harness. For example, when I wanted to stop requiring my bathroom space, I started going to the gym every morning to shower. Once I was used to that in my daily routine, I then started doing fitness and running while I was there. And when I didn't want to come back for food, I started putting together a minimalist meal plan that I could prepare in advance and take with me for the day. Reworking my habits and needs was almost a full-time job for a few months. Anyhow, I would never assume most people would want to take it as far as I did. Everyone's path would be different, as their responsibilities and routines differ. But that slow process of change if life-altering.
I am now living in San Francisco for perhaps $300/month, and living very happily (perhaps moreso than ever), although El Nino is a recent complicating factor :) I will likely upgrade from hammock tent to camper in the near future, as I don't want to strain relationships with my partner. But up till now, it's worked very well.
And I want to clarify that I would never see minimalism the goal, but just a means to happiness and resilience. In any process that might resemble my own journey, taking something away should always be a choice made for future benefit.
Perhaps making that benefit more concrete could be part of any institutionalized program. Pay generously at first, but then expect costs to come down, and the more they come down, the more "reward". Perhaps that could be a retirement bonus. Or access to some sort of YC investment portfolio that would essentially be retirement reward. So the cheaper you learn to live, under the guidance of the program, the more of a nest-egg you earn.
Anyhow, apologies if this is less than coherent -- lots of thoughts in my head on this topic. I am very not in the "tech solutionism camp", and am pretty self-aware that my experience would be less a prescribed path, but rather a general template :)
This seems a little myopic. What distinguishes basic income from the welfare systems implemented in, say, northern Europe? Seems like there are many countries that have had basic income for decades. Couldn't you look to them and have most questions answered?
+1. I am a willing test subject. where do I sign-up? That said - given the cost of living here in CA, I would assume that in the eventuality of becoming unemployed for an extended period of time, I couldn't support myself with the basic income only and would need to look into moving to some less expensive areas. In fact, this is what was suggested in some discussion ( couldn't find a link ) I remember reading relative to Finnish basic income experiment cited in some posts here. E.g. unless basic income would vary based on cost of living in your region, it would effectively result as people relying solely on it having to abandon living in more expensive cities and areas. Which seemingly is a notion few politicians would want to put forward when introducing basic income. But when you introduce regional differences in level of income, you open a can of worms that seemingly leads to all kinds of potential abuse, managing which then prevents dismantling of bureaucracy that was the whole idea to begin with.
That would be an interesting quirk. I think basing it on the average cost of living for the country would make sense. It might have a helpful side effect of revitalizing some dying towns if a bunch of people move to lower CoL areas to stretch their basic income further.
> What can startups do to increase prosperity for everyone?
The greatest thing a startup can do to increase the prosperity of everyone is simply continue trying to be successful, within legal bounds. Every startup is inherently working to lower the cost of living, whether that's their stated goal or not. Even a seemingly useless app startup - if it becomes successful - will (1) add jobs to the economy, (2) give employees and their families more purpose and well-being (working brings people fulfillment and joy), and (3) contribute to lowering the cost of living[1].
Obviously, some startup industries (education, medicine, etc.) have a more direct influence on this process than others, but they all contribute in indirect ways to increased prosperity overall - even if motivated by purely "greedy", capitalistic ideals.
If basic income were somehow to be implemented by providing basic needs (food, shelter, clothing, etc. rather than currency) without the involvement of other people/companies providing those needs, then I believe it could work. The trouble is, even in a world full of automation (and less need for typical jobs), the resources will still be controlled by organizations, governments, and people - and not always the people who have the most need for them. In that environment (and lets face it, certain people, countries, organizations, etc. will always be better suited at doing things than others), the economy is actually zero-sum in the meta sense. No one can consume without another party producing - even if the producers at some point are just owners of machines. And in a competitive economy, things like basic income just become factored into the cost of living, so it's kind of a moot point.
From another angle, if basic income is ever implemented in terms of currency ($x per month), it will not solve poverty. I have plenty of first-hand experience to tell you that a large number of people will choose to live in poverty (or forgo what most of us consider to be basic necessities) by spending that money in foolish ways (gambling, addictions, frivolous purchases, etc). Those people will not accept responsibility for having wasted the money, and we'll be right back to where we are now: people demanding more welfare services from the government.
[1] A successful but useless (practically-speaking) app/game means that people are willing to pay for it. Paying for a good or service that otherwise would not exist contributes in indirect ways to technological progress (e.g., by gaining more adoption, the technologies powering that app will be in a better position to improve and contribute to aspects of our lives that have more practical value), including more investment into things that do improve our quality of life per dollar spent.
I am shocked there's no mention of Star Trek in this discussion. And I shall remedy it!
"
Captain Jean-Luc Picard: The economics of the future are somewhat different. You see, money doesn't exist in the 24th century.
Lily Sloane: No money? You mean, you don't get paid?
Captain Jean-Luc Picard: The acquisition of wealth is no longer the driving force of our lives. We work to better ourselves and the rest of humanity. Actually, we're all like yourself and Dr. Cochrane.
"
sama asks, "What can startups do to increase prosperity for everyone?" It's a good question. I think one answer that is not limited to startups, but applies to everyone, is to spread the idea and ideals that embody an egalitarian, post-scarcity, society. Star Trek happens to be an entertaining depiction. It doesn't have much in the way of details when it comes down to it, but it embodies the ideas and values of an egalitarian, post-scarctiy, existence where people don't just sit around all day playing video games, but work to better themselves and the rest of humanity.
Giving people money isn't enough. We need to also promote and live a set of values that will compliment Basic Income. We need to free ourselves from the fear of survival, but we must have the proper mindset and environment to ensure a successful freedom.
So, startups, invent replicators[1] so we can move to a post-scarcity economy and everyone, spread the word that it's time for our society to evolve so we can garner the support required for instituting Basic Income.
I completely agree with sama when he says, "I’m fairly confident that at some point in the future, as technology continues to eliminate traditional jobs and massive new wealth gets created, we’re going to see some version of this at a national scale." Thus this experiment is less about whether Basic Income is a good idea, and more about how to ensure that it is a good idea and implemented successfully. I think you really need to pay attention to perceptions and societal values which requires education (plenty of startup activity here).
1. Spread the word
2. Invent replicators [2]
3. Get the messaging, education, values, mental models, etc right
I have read a few economic thoughts about Star Trek and something called Paracon or "Participatory Economics" was economic theories that happened in a "post scarcity economic" world. That would imply your replicators and such. With 3d printing and robotic displacing a lot of jobs that would be something to consider.
I'm half-way tempted to apply for this despite the fact that a) I'm not moving from NYC to San Francisco, and b) I'm probably not qualified.
In spite of that, I have some real questions and comments about the constraints on a project like this.
1. What's the budget for this?
In order to get any generalizable data, you'd have to set up your sample plan to be geographically and demographically diverse. In an ideal world, you'd need to provide for 1,800 subjects to get genuinely usable data. Research is rarely ideal, and you can infer from smaller samples, but how many subjects are we talking about? 5? 10? 100? 500? 1,000?
Also, what constitutes a sample? Individual or household? (see 2, paragraph 2 below)
2. What constitutes Basic Income?
I'd argue that Basic Income represents enough for all human needs to be fulfilled to some arbitrarily minimal extent. Unlike some other comments, I include the need for entertainment and sex among basic human needs. As well as catastrophic health care. Does that mean everyone gets a free PS 4? No. And I also don't mean paying for prostitutes. But some budget for entertainment of some kind makes sense to me, as does a budget for dating.
Anything short of that fails, in my opinion, to be a basic income. It's more like welfare for everyone, which is conceptually different, in my opinion. I also think Basic Income should be adjusted for location and household size. Although it might not be the right metric, the most convenient one we have is centuries of data about total household income vs. household size. That's how the Census Bureau defines the poverty threshold, for example.
There are a lot of different ways to think about this, and my opinions above are just that: opinions. The point I'm trying to make is that if this experiment is going to happen, what's the best possible scenario for measuring something useful?
3. How do we research what is happening without affecting the outcome?
I actually have an answer to this one. I think it's inevitable that any time a government agency is processing payments, there are at least some hoops to jump through. Welfare has its process, as does unemployment. It's reasonable to think we can design a brief questionnaire that tracks certain key variables like productivity, happiness, artistic endeavors, anxiety (bonus points for using a wearable device to track stress levels?? Maybe?) . . . whatever. I'm not sure what those should be.
But it could be structured in a way that is realistic enough that you wouldn't do any obvious damage to the study by observation. Once your location and status have been established, the benefits do not change depending on your answers. But you have to check in and request a payment on the 25th and 10 of every month (to guarantee payments on the 1st and 15th).
4. It's important to note that there will be some people who adjust to whatever income they are making and do nothing beyond that. I don't know what percentage that is, but the funders have to understand that at least some people will do nothing but sit around and drink or play video games, and that can't be a reason to cut them off, otherwise, it really biases things in a bad way.
5. If this is able to be truly representative, then you would have to expect at least some percent of the participants in the experiment to get into legal trouble.
What do we do with them?
If you set a condition that people stay out of legal trouble to get the benefits (a genuinely real scenario if we are trying to model how this might be implemented in the future), then you are tampering with your sample.
If you don't attach such a condition, you're going to draw a huge amount of criticism for paying people to be in jail, potentially funding criminal operations of various kinds, and there will be a small portion of people who choose to go to jail who have been there before and are comfortable with it and live extremely cheaply while racking up the savings. That's a tough one.
6. Going back to budget: is there enough to do control vs. group testing?
By that, I mean we have a control group that answers the same survey every two weeks, but only gets a small incentive to do so. Nothing even close to a basic income. Enough to get them to hit a website and answer a 5-minute questionnaire about their life for the last two weeks, identical to the one the BI people are required to answer for their payments.
And how many strategies can we afford to test? If we have rep sample control, then we can rep sample a variety of strategies: pro-rated based on location and household size, flat BI same for everyone, or other nuanced approaches.
I guess I've really seriously gone and buried the lede here, but Sam, what is the scope of this project? My experience in research is that there's not really an analogue to the MVP in the startup world.
Research needs to be rigorous and correct from the outset. You can't hack something together that mostly works and then see if it gets traction and find bigger funders if it does. I'm not suggesting that's your line of thinking, but this is a big project.
Getting meaningful, generalizable data about this is going to cost a lot.
I don't think adjusting Federal BI for location is the right tact. You'd have to much bureaucracy at the federal levels dealing with fraud, household moves, and city planning. I'd rather state, county, and cities enact their own BI supplementation.
I guess maybe if we had tighter integration between Federal and States there would be less problems with location variations, but then we bump into the States Right's issue.
Both in regards to decreasing the cost of living and also increasing prosperity for everyone, the clearest answer to me is to purposefully and meaningfully increase investment in areas outside of San Francisco.
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.
> decreasing the cost of living is a critical component as well.
Hi Sam,
I'm going to not read through 747+ comments, I'm sorry.
Right now, in the best cities in the nation, the cost of living is rising significantly. These cities have a deep job pool, they are making serious efforts on sustainability, have wide and varied culture and are generally more efficient (and often better) ways to live[0].
However, because of the cost of living is rising so steeply, it is forcing people of median income and below to spread out into the suburbs, increasing commute cost (and pollution), as well as the variety of issues suburbia causes for the environment and sustaininable living[1]. Among the contributing factors here is childrearing, which takes extra space - space which is extremely expensive to rent or purchase in a city. This is an incredibly significant issue as we iterate this game several times.
I'd like to bring to your attention several interlinked aspects that play out here:
- dense housing suitable for long-term family residences is very hard to find.
I'm not persuaded that a start-up (a rapidly growing, high growth company) will be able to achieve success in these areas, because of the time horizon needed for these problems to be dealt with is on the 20+ year timespan. However, I'll argue that a company could make a dent in several of these areas:
- mixed use high-rises that are designed for families: offices, schools, playgrounds, etc included[2]. This would be a shift from the typical luxury condo build and, I'd argue, would find a very solid niche in the modern urbanist movement. I would argue that an affordability policy could go hand in hand with this, with certain entities eating some of the rental/purchase cost of these properties.
- Increase transit effectiveness. YC is already making a play in this area with Remix[3], but I think that doubling down on making transit costs and benefits more effective could really be a game changer. Demonstrating the very real cost of commuting would assist in the people inclined towards Green thought; figuring out how to make transit a pleasant experience would assist in getting the people not inclined to deal with the occasional horror story to support and vote for transit.
- In the same vein, platforms and tools that directly support pleasant densification will help. An example of this for someone in a dense neighborhood is Walc[4]. But, looking at policy and assisting policy becomes a major political play here.
Ultimately, what I fear the actual solution will look like here a broad-based housing price/rent control system, where everyone who isn't a multimillionaire who wants to live in a city has to be in a rent-controlled system, paid out by the local government. What we're seeing in Seattle is a bit of a tulip situation: people buying are buying at high prices because the sellers are aware they can sell at high prices, this ratchets the next unit price up; the demand is so high that it's forcing prices up very fast.
I think the most interesting thing YC could do to promote prosperity in the US is some kind of 'fellowship' for technologists with an interest in helping the impoverished to 'embed' with social service organizations and try to learn how to help them.
I don't think most people who frequent HN, no matter how well intentioned, understand the factors that cause people to be stuck in poverty, myself included. I think you would have to get close to the problem to have really useful ideas. I have ideas, but they are more like questions to be honest.
Some ideas I have thought about in the past:
* An app that helps people learn that they are in a failing school district, and helps them systematically develop a plan to get out of it. I live in St. Louis, and around the time of the This American Life episodes on the Ferguson schools, I spent a lot of time wondering how you end up sending your kids to the worst of the 550 public school districts in the state. The question in this case is: what are the characteristics of people who send their kids to bad schools, and to what extent can they help themselves if given the right tools?
* An app that helps people find others to share resources with (shared living, etc). The idea here is that poverty may be driven by the breakdown of the family, which provides first-line social insurance when working well. Kind of like match.com for poor people with kids looking to team up. The question here is: Is there some subset of improverished people who are very high-functioning, but so limited by childcare and low-wealth that they cannot lift themselves out of poverty. If so, could these people be matched and help each other by sharing resources?
* Trying to create a program that directly funnels kids from underperforming schools into computer programming and IT jobs without going to college. Perhaps to be hired by large corporations who will ultimately spring for night-school to round out their education. Here, I am thinking about a section from the book The Prize, where a bunch of Newark teachers go to insane lengths to try to get one kid with some athletic talent enough tutoring that he can achieve an ACT score of like 14 and qualify for a college scholarship. That strikes me as significantly less scalable than a program that tries to give poor kids a marketable set of skills coming out of high school. It would still be a small set of kids, but maybe larger than the number who have athletic talent (and its not clear athletic scholarships yield good outcomes anyway). The questions here: Could some non-trivial group of impoverished high school kids be funneled directly into employment with the right vocational technical skills and support from major corporations?
With all these kinds of ideas, however, I think you would have to get really close to the people you are trying to serve to have any chance of building something that would help them. And that means 'embedding' with them for a non-trivial period and really trying to figure out what will work.
None of these ideas are like startups, in the sense that I think in the best case scenario they aren't likely to scale very well. I think they are more likely to cherry pick a small number of resourceful/talented people who might otherwise have remained mired in poverty.
That's better than nothing, but my intuition is that when you get into the details of poverty that there are no highly scalable solutions. Everything is going to be messy. These stories have informed my opinions on messiness:
Netflix
Rich Hill
Undefeated
Waiting for Superman
Audio
This American Life on Ferguson Schools
Books
Our Kids (Putnam)
The Prize
Work Hard be Nice
> What can startups do to increase prosperity for everyone?
I think it might be best to create a different thread since this is a separate and important question than the "Basic Income" debate that is also interesting and happening in the same comments. Either way, here are my thoughts:
You can take that question a few of different ways. What can all startups do within their current processes/products? What is a startup idea that will increase prosperity for everyone? What can startups do in addition to their current product to help prosperity for everyone?
I'm also taking the view that raising the prosperity for the lowest individuals will in turn increase the prosperity for everyone else. I think having productive people in our society who do not need to worry about the basic needs will increase the success of our society. If you don't agree with me on that, then everything below is probably not what you are looking for.
I think that setting aside funding regularly to donate to non-affiliated non-profits would be a great start. Most startups don't have the capacity (or desire) to reinvent themselves as charitable organizations. Creating a curated list of non-profits across different factors that contribute to prosperity (education, housing, jobs) and encouraging companies to commit to donating would help. I taught a relationship skills class with my wife for people on public assistance for the past 5 years until our federal grant ended last fall. I honestly believe helping those couples be in a better relationship helps them be better parents which gives the kids a greater chance to succeed. However, when the grant ended we had to close up shop and shut down the whole organization. Funding for these types of programs is so hard to come by that adding anything to the pool would be a great first step.
As far as what sort of startups can be developed to help increase prosperity I think you can segment it again into two views: The long view or the short view. The long view is done by helping ensure the future generation's increased prosperity. Things like increased quality of education and training, family life, and access to technology.
The short view ones are things that would improve access to a basic level of housing, food, healthcare and education. Worrying about those things (and probably more) are going to make it harder for people to be successful. It isn't impossible, just more difficult. I think that gathering and analyzing data would be a great start for a startup. There is a ton of information out there. The grant I mentioned above collected surveys from thousands of couples nationwide over a period of years. I'm sure there are grants funding programs that are delivering information on all types of topics. Utilizing that information to help prioritize what is effective or whatever you can glean from it would be an interesting startup. Using that information to develop a wishlist of product ideas to fund would be interesting for a VC.
(This isn't my best writing/thinking. It is just sort of a brain dump to hopefully fuel some comments by someone.)
>I'm also taking the view that raising the prosperity for the lowest individuals will in turn increase the prosperity for everyone else.
This is an aside, and I don't particularly want to evaluate it as good or bad, but this statement is striking compared to the neoliberal idea of 'a rising tide lifts all boats' - i.e. increasing general prosperty raises prosperity for the lowest individuals.
Thanks for responding. I never really thought about how that might be a controversial opinion but it does ring true the more I think about it. My self-described "libertarian" friends don't believe in the same social policies I do and don't believe in the same correlations between social policies and economic success.
I'm sure you already knew this but I figured I'd share it anyways: After thinking about it last night I decided I believed in a "trickle up effect" and then went to google it, thinking it a nice take on the "trickle down effect," only to find that "trickle up effect" was the original and "trickle down" was apparently the clever take down... Sigh. Guess I should have paid more attention in Economics.
Anyways, like most economic theories I'm sure there are a myriad of reasons why it might not work or be the most effective (which you graciously decided to not go into.)
>(Questions about how a program like this would affect overall cost of living are beyond our scope, but obviously important.)
No, that's not just "obviously important". It's practically the ONLY thing that's important. If basic income raises the cost of living to the point where it negates the effect of having it, then basic income is meaningless.
Here's your study.
1) Bring one piece of candy into an elementary school class.
2) Ask all the kids what they'll do to get that piece of candy.
3) They'll pretty much do anything.
4) Next, bring bags of candy into another elementary school class, give one bag to each student.
5) Now brandish a piece of candy and ask what they'll do to get it.
6) They're pretty much ignoring you at this point.
Money has no value without scarcity and work has no value without ownership of it's rewards.
Basic income makes money less scarce and (to pay for basic income) steals from people who work.
But the point of a Basic Income is that it substitutes for other forms of income support/welfare.
That's supposed to increase the incentive to work, because many forms of welfare are income dependent. For example, we often hear reports of parents who refuse to work because they'll lose some or all welfare payments and their wages will be net worse off.
If everyone gets the basic income, then maybe this effect can be overcome. There's some reason to think this could be true - the marginal benefit of $1 extra at low income levels is much more than at higher levels.
It's worth noting that many conservatives support a basic income because of this, and because the system will be much less complicated and reduce the number of government programs.
>The times that BI has been tried have not had the outcome you describe
You'll need to make a citation for that claim.
>After that, if they want a nice car, a nicer house, they would have to work
In your second paragraph they only need to work in order to have nice things, in the next paragraph there is no work to be had, so basic income is needed to eat...
"The times that BI has been tried, people still work."
vs.
"You need a job to eat -- it's just a shame that there are no jobs anymore."
You're in open contradiction of yourself.
EDIT - To add, I think you misunderstood my analogy. It's not that the kids are suddenly lazy and don't want to work, it's that one more piece of candy isn't that inciting. You're going to have to break out another bag of candy before they're even paying attention to you.
The first problem is that you're comparing children to adults. Adults are slightly more nuanced in their thinking.
The second problem is your use of the word "steals". Does the hedge fund manager who earns $3.5 billion income in a single year deserve all that money? I disagree very strongly with that. In fact I'd use the word "parasite" to describe someone who earns that much.
"work has no value without ownership of it's rewards"
So you work only for the money? I bet you're lots of fun at parties.
Replace "cheque" with "direct deposit" and what time is wasted? You have to do taxes every year anyways.
And what little time is wasted is offset by the sense of security that $200/week is going into your bank account every week like clockwork no matter happens to you or your job.
I take issue with the idea that government should use violence to take from some people and give to others, the "You have to" (or we throw you on a cage or worse) is the problem.
The money and time wasted is the huge infrastructure to enforce the ever growing list of restrictions.
And I take issue with the idea that taxes are theft. Without society, you'd be a subsistence farmer. Any income you earn above that of a subsistence farmer is enabled by society.
Society exists independent of taxes, for example we didnt always have a federal income tax, and there are states without state income tax now. There are other ways gov can raise money.
People can decide to give voluntarily, they may decide it's a good investment. They may even vote to partly decide what it goes to. The "nobody would pay" standard response is just wrong.
mkempe has written a very false description of Marx's work. It is a poor basis for a discussion of basic income programs in relation to Marxian thought.
Furthermore, mkempe has pointed to six historic nations as example of "basic income" gone wrong. None of the six examples he chose offered a basic income guarantee.
I won't dwell on this much but take for example this falsehood:
"This "research" proposal is merely a technocratic rehash of Marxism: the inexorable forces of materialism and technological improvements entail endless progress driven by a Hegelian spirit."
Marx made fun of the idea that history was driven by something like a "Hegelian spirit" (see Critique of the German Ideology).
Although Marx did use the word "materialism" in the phrase "historic materialism", it has no real relation to what mkempe describes here. (See Socialism: Utopian and Scientific)
Marx argued that competition among capitalists, not "spirit" was driving technological improvement in the productivity of labor. (Many places but Capital for example.)
One might say that "Marxism" is not "Marx" and that's fair enough. But Marxist thought, though it often wanders away from Marx, does not involve "Hegelian spirit" or "inexorable forces of materialism". The opposite, actually.
Realizing that the "forces of materialism" DID NOT entail "endless progress", both the Soviet Union and China set out to raise their level of development from agrarian to industrial. Both did so, and quickly.
> "basic income" divorced from free markets, see the Soviet Union, East Germany, Red China, Cuba, Cambodia, and more recently Venezuela.
1. There was no universal basic income in any of these places.
2. The proposal discussed here does not say anything about abolishing free markets.
3. Proof by analogy is fraud.
The 6th five-year plan of the Soviet Union had as one of its central aims a wage reform to guarantee a minimum income and simultaneously reduce hours required to be worked. Khrushchev held reduced working hours as a basic goal of the communist movement, which is entirely aligned with the vision of Karl Marx: to each according to his needs, regardless of ability or work.
The notion that one's income ought to be guaranteed regardless of the value of one's work, or even of its existence, has its origins in the Marxist claim that people should get whatever they need regardless of personal, intellectual, or capital differences (couched under a general denunciation of private property and of non-labor theories of value).
European socialists have been advocating for Basic Income --aka "social dividends"-- since the 60s at least.
Anecdote. My uncle (in Sweden) lived his whole adult life on the "basic income" he got from the State. He played the guitar, beautifully, wrote poetry, and never held a job in his life (why would he? the State was providing). He died in his early 40s, worn out by alcohol abuse and probably drugs. His "basic income" happened to be higher than what I had left after paying taxes as an engineer working for Ericsson.
> "Marxism has been tried, and has failed, in so many places with such bloody results."
This isn't Marxism, that's a lazy comparison. At its core, Marxism is about shared access to the means of production. Basic income has nothing to do with changing who owns the means of production (or at least, it could mean that, but it doesn't have to mean that).
Furthermore, whilst Marx had some interesting ideas, he also had at least one dangerously bad one. I'm referring to the dictatorship of the proletariat...
... I'd argue that no attempt to achieve communism at a state level has ever got past that stage, because the path from a society controlled by power to a true communist society is beyond the imagination of many.
That said, forms of socialism that don't rely on a dictatorial intermediary stage do exist, and just because one form of socialism is misguided doesn't mean they are all misguided.
Actually, at its core Marxism is about this motto: (take) from each according to his ability, (give) to each according to his needs. The abolition of private property and other horrors of Communist implementations are simply means to that redistributive goal. The notion of Basic Income is rooted in Socialist theories intended to implement the vision of Marx and Engels.
The Soviet Union did pretty well in its early years, with GDP growth faster than that of the US for a time. Cuba is still doing pretty well compared to similar Latin American countries at the time of the Cuban revolution. Don't know too much about the others.
Soviet Union: 7-20 million deliberately starved to death. [1] 1.5 million people executed during The Great Purge. [2] "Did pretty well".
Cuba: thousands executed for the ideas they held; forced labor camps; and more than 1.2m fled 1959-1993 (about 10% of the current population). "Doing pretty well". Cuba was one of the wealthiest countries in the Americas, before Marxists took over.
USA: Extermination of natives, slavery, company towns and child labor, Jim crow etc.
England: English colonialism from Drogheda to Amristar, plus the domestic Peterloo, child labor etc. Also, how many millions did England deliberately starve to death in the 1840s?
Germany: I can list off what the Krupp/Voegler/Thyssen financed Nazi party did for a while, then go back to before that
Thank you. I think it is important to understand that the technocratic egalitarianism advocated nowadays in Silicon Valley circles is a poor rehash of Marxist notions. While communism is a political, revolutionary movement, Marxism and Hegelianism were the philosophical underpinnings of that movement.
> I think it is important to understand that the technocratic egalitarianism advocated nowadays in Silicon Valley circles is a poor rehash of Marxist notions.
I don't think that's what they're proposing at all. And if you want me to believe it, you're going to have to do more than claim it's true.
What, specifically, do you see in either the idea of basic income or in "technocratic egalitarianism" that is inherently Marxist (as opposed to being merely superficially similar in some respects)?
Not only is it a poor rehash, it is incredibly insulting to the current Have Nots. It is very much a "I got mine, FUCK YOU." position. Perhaps, at best, a means to assuage their guilt for their imagined crime of being wealthy.
The system can change. It needs to change. I have no desire to be assigned the role of sheeple, where my only value to society is as a consumer. I cannot imagine a worse quality of life or a more effective means to disenfranchise me while telling yourself you are being "nice" to me.
> "It is very much a "I got mine, FUCK YOU." position."
Can you explain what you mean by this?
I think it's worth pointing out that implementing a basic income does not diminish the available work in an economy. If you want to earn more than your basic income, you're still free to do so.
It operates on the assumption that because I am not wealthy yet, I am an incompetent dolt who has no hope of becoming wealthy. Giving me a basic income is highly likely to close doors, not open them.
Getting rich from your own efforts is extremely challenging, but the process changes who you are. You learn something important and you forge important ties along the way. Wealth grows out of power. Power does not grow out of wealth. Giving people money instead of a means to earn it is a means to erode their ability to access actual power. It is a means to disenfranchise people.
It may be done with good intentions, but the road to hell is paved with good intentions.
I find it insulting. I was STAR student and a National Merit Scholarship winner in high school. I have mostly not been taken very seriously on Hacker News. I have mostly been treated dismissively. Giving me a basic income is much, much more likely to entrench the barriers I experience to trying to resolve my problems and figure out how to earn my own.
When I was homemaker, I never figured out how to make money online. I also couldn't figure it out while working for a Fortune 500 company. I didn't figure it out until I became homeless.
When people are still able to eat in spite of the fact that what they are doing doesn't work, they tend to not bother to do the very hard work involved in changing. They tend to not want to make the uncomfortable choices.
You are talking about the principle of "boiling a frog slowly" and applying it to all of society. To me, it looks like a doomsday scenario.
> "Giving me a basic income is highly likely to close doors, not open them."
How so? This would be a universal basic income (UBI for short), if everyone gets UBI there's no social stigma attached to it. Furthermore, a basic income frees up your time to develop your skills, whether that be through academic study, an internship/apprenticeship, or pursuing interests in the arts. In other words, UBI gives the majority of us more options if we choose to change career or make progess in a field without sufficient short term stability.
> "I find it insulting. I was STAR student and a National Merit Scholarship winner in high school. I have mostly not been taken very seriously on Hacker News. I have mostly been treated dismissively."
If I'm honest, if you're expecting a high level of praise on HN, you're in the wrong place. It doesn't matter who you are, or what your background is. However, if you enjoy a good debate and learning new things, then it's worth it. Got to learn to take the rough with the smooth, I've made empty comments with high upvotes, and thoughtful comments with high downvotes, just be clear whether you've been honest with yourself and keep an open mind to new information and you'll be fine.
I really do not need help with my relationship to Hacker News. As best I can tell, I have the highest karma of any openly female member. But it hasn't resulted in the kinds of professional contacts I had hoped for. Getting to the position I have achieved has involved a great deal of work, most of it "behind the scenes."
The point I am trying to make is not about my relationship to HN. The point I am trying to make is that the biggest barrier to success is a million-and-one unquestioned assumptions about how someone is supposed to behave and about how people interact with them.
I spent some time reading articles about lottery winners. About 2/3s of people who win the lottery are bankrupt within 5 years. In most cases, it does not solve their financial problems. If anything, it seems to multiply their problems.
People at the top who worked for it or grew up with it know a great many things about who to trust, how to invest, how to downplay your success and so many other things that poor people do not know. Giving them money doesn't convey any of that. Furthermore, when people believe that money per se is the problem and you give them money, you demotivate them from trying to solve the actual hard problems that do exist.
Often, financial problems are clues to something going wrong and also serve as a motivator to overcome your problems. I am not in the least concerned about stigma. I am concerned about removing valuable information from the system and making it radically more difficult to figure out what is going wrong, thereby making it harder to fix the problems because we are blind to them.
People often do not bother to change bad habits if they can continue to pay the bills. Alcoholics often continue to drink if it isn't ruining them financially, even though it is ruining their health and their lives in so many other ways.
One of the hardest things in the world is to get people to change entrenched habits. You are talking about making it easier to not bother. This does not sound like a good thing to me.
Interesting, and plausible. Plausible is too weak a word - almost certainly this will be true for at least some of the recipients. But the other side also seems plausible to me - that there will be some recipients who already know (much of) what they need to know about personal responsibility, effort, and so on, but whose road is much harder because of lack of resources at the starting point.
So one of the points of the research project would be to find out what fraction of people are in each group (with "all" being one possible answer). And then it gets harder: If, say, 60% of people are prevented from growing in ways they need to, and 40% of people are enabled to soar, then is this a good thing to do?
I have had websites for about 14 or 15 years. I have been trying to monetize them the entire time. While I was homemaker, I could not figure it out. While I worked for a Fortune 500 company, I could not figure it out. I only began making in-roads after I became homeless.
My father was career military. He never figured out how to make good money as a civilian. He tried commissioned sales work. He tried wage labor. He had his own business. He often spent months at a time unemployed. I think my mother bitched less when he was unemployed than when he was doing door to sales, spending money for gas, and making nothing.
I have 6 years of college. I am far from dumb or incompetent. But being in a position where my income depended on certain kinds of behaviors was a tremendous mental block and practical barrier to me learning how to make money online.
I am out of time for today. I am not sure I explained that very well. If it needs clarification, it will have to happen tomorrow.
> "But it hasn't resulted in the kinds of professional contacts I had hoped for."
I know this is off topic but... perhaps you'll have better success at exchanging information with fellow entrepreneurs at a local Meetup group (assuming you live to a nearby group)? http://www.meetup.com/
> "Often, financial problems are clues to something going wrong and also serve as a motivator to overcome your problems. I am not in the least concerned about stigma. I am concerned about removing valuable information from the system and making it radically more difficult to figure out what is going wrong, thereby making it harder to fix the problems because we are blind to them."
I see what you're getting at now. Three points:
1. The 'basic' part of basic income is important, as it's only meant to be enough money to cover a basic standard of living (i.e. food, shelter, etc...). If someone wants to have higher material wealth, they either have to earn it, or they have to learn how to stretch their basic income further. This process of stretching the basic income further relies on frugality and creativity, the same frugality and creativity you're suggesting only those at the top have. I'd suggest being poor can teach you those same lessons.
2. Money as a source of information isn't being lost. Again, the basic income covers the basics. Even if the market for bread and rice is stable, the market for luxury goods would be just as variable as before.
3. In your opinion, what is the purpose of money? In my opinion, the purpose of money is to facilitate trade. Trade can be seen as a form of collaboration. This collaboration relies on trust that what someone can produce has value. However, sometimes even when someone can produce something of value, they're blocked from doing so due to a shortage in tokens of exchange (money). For example, when the Great Depression started, you still had the same skills in the economy as before, but fewer means to coordinate the productive use of those skills. What I'm saying is that money has value as a means of exchange, but not as a means of production. If work is an engine, then money is the lubricant. You don't produce a more efficient engine by restricting the volume of lubricant to the smaller cogs.
> "Alcoholics often continue to drink if it isn't ruining them financially"
Alcoholics often continue to drink even if it is ruining them financially. Addiction isn't curbed by logic alone.
In response to your first point, I am going to quote one of my other replies in this discussion:
One of the points you are missing is that there are two kinds of poverty: absolute and relative. Even if you could eliminate absolute poverty, there is no means to eliminate relative poverty. The minute you have a UBI, anyone who only has that is de fact poor relative to others.
Many years ago, I saw a study that asked people in different countries to define poverty in terms of things like how many meals per day a person ate, what kind of shelter they had, etc. The study concluded that less than 0.5 percent of Americans were poor by the standards of people in India at the time the study was conducted. Meanwhile, Americans routinely conclude that 12% to 14% of us are living below the poverty level.
As a homeless American, I have regular access to electricity via a public library. I have access to public toilets. I have access to cheap goods. My quality of life is likely higher than that of many people in the world who live in countries without consistent supply of electricity and other basic infrastructure that I take for granted. There are countries where women are fairly routinely raped and sometimes murdered while attempting to relieve their bowel or bladder in an open field because there is insufficient infrastructure.
My quality of life is likely higher than that of kings of old, who had no electricity or Internet or antibiotics etc.
As for your second point, the information being lost has to do with what choices and behaviors are problematic and which ones are of real value.
I agree with you that the main purpose of money is to facilitate trade. So, I find myself baffled as to why you are pro basic income. What are people trading for basic income? It makes no sense to me to create a world of consumers.
I worry that we are destroying the health of the system.
At the moment, I do not have time to discuss this further. So, I am not going to try to elaborate on that last point. Given the reception I am getting here, this is probably a waste of time anyway.
> For examples of the atrocious consequences of "basic income" divorced from free markets, see the Soviet Union, East Germany, Red China
What are those atrocious consequences? For Russia? First satellite in space? First man in space? Or do you mean for the PRC, run by the standing committee of the Politburo of the Communist Party of China? Which is currently the second largest economy on earth (in some measures the first)?
What are those atrocious consequences? If you want to mention eggs broken along the way, remember to mention those of the US (extermination of the Indians, slavery, company towns etc.) or England (from the siege of Drogheda to Amritsar), Germany (Sieg Heil!?) and so forth...
tptacek, please don't apply racist comments on this article.
When you don't pay your bills, you simply don't riot on the streets as reaction.
Likely not the fault of what you describe as "middle class white" group for enforcing municipal regulation. Likely no innocent parties on either parties involved.
It's fascinating that you seem to find the "largely middle class white" part racist but not the "largely African American" part racist.
Also, saying the Ferguson protests were about "not paying bills" is like saying Occupy Wall Street was about "skipping work". It smacks of either absolute ignorance or some sort of deliberate agenda.
So my comment gets downvoted for pointing out racism in a y-combinator thread. The original post from the person to whom I've replied seems to have been rewritten and now my own previous answer is out of context. Great.
Maybe some people around here assume racism as characteristic of a single group, not as a human characteristic that we all share alike. Perhaps helps to quote what "racist" is described on a dictionary:
"a belief that race is the primary determinant of human traits and capacities and that racial differences produce an inherent superiority of a particular race"
For the record, the original poster mentioned that people of a given race were not paying bills, and that another given race was enforcing punitive legislation, for that reason riots spun at some point. I just disagreed with such point of view.
Reducing a complex problem such as Ferguson (and others) to colors is not correct. But heck, just downvote the one that tries to point that out. Even the original poster corrected his comment, so I'm happy to see some reflection happening.
It's downvoted because the Fergusun protests were not "because people didn't pay their bills", and it's clear the poster simply has no understanding of what life is like when you're forced to chose between paying a bill and feeding your kids.
You feel bad writing what you wrote, because you likely have a bit more awareness of how badly everything is stacked against the poor from the moment they're born, but you prefer to focus on pointless semantic debates along the lines of "color blind" and decrying "political correctness" that are old and tiresome.
At no point did tptacek suggest that people in Ferguson were rioting because they had arrest warrants out for them. GP wildly misrepresented tptacek's points.
Sometimes, something that people are calling "political correctness" is merely "correctness", and is not political in nature at all. The statement tptacek made about Ferguson was accurate, and five minutes (or less) of Googling could have confirmed that for you.
To demand color-blind language in this circumstance is to deny the existence of systemic racism, and to make it impossible to discuss solutions. A discussion about Ferguson without acknowledgement of the racial divide in Ferguson is actively harmful to finding solutions.
I think this is an oversimplifying view of reality.
Taking the most extreme case (free everything) and pointing out it's impossible (without referencing a single data point of evidence no less) is pointless.
Basic income is not about people not having to work for a living, it's a proposed restructuring of the social security that many nation states already have in place. That is, a simple basic income formula replacing complex and hard/expensive to police support formulas for the sick, elderly and/or unemployed. One of the leading arguments for these experiments is how they allow governments to downsize their workforce, thus lowering the cost for the taxpaying segment society.
As far as I know, early real world experiments are just now being spun up (in the Netherlands and Finland, for example), and so far all we have is simulation and theories from economists. That's not enough data to rule out the entire model.
You are of course welcome to have your own opinion and gut feeling about the matter, but until someone proves your point, I remain unconvinced.
I think basic income is important to do but decreasing the cost of living is a critical component as well. I'd be very interested to hear thoughts from the HN community about what we could be doing here.
Edit: please respond in the main thread so we don't get an unbalanced comment tree. I'll be in the discussion here for a couple hours, but if it feels like there's momentum in the ideas we might do a proper Ask HN about it next week.