Hacker News new | past | comments | ask | show | jobs | submit login
Guaranteed Minimum What? (granolashotgun.com)
195 points by danans on May 12, 2017 | hide | past | web | favorite | 429 comments



> Humans are agressively being eliminated from as many business models as possible.

Well that's true, where they don't add value. What's the difference between the case of getting movie tickets and your waiter at a fancy restaurant? One of them is practically a useless annoyance, and the other one is part of the experience.

Someone in a movie box isn't going to tell you about the movie, or have a conversation about it with you. They are there to take the most basic info (movie, time) and money, and give you a ticket. It's also always done thru a thick bit of glass that makes communication sometimes difficult if not painful.

On the other hand, the fancy waiter will make recommendations. Will tell you about other things, and is generally part of the ambiance and experience of eating out.

Honestly, do we really like interacting with the people with minimum wage jobs? Not really. Most people seem to prefer the automated checkout, ordering on their phone, etc. While sometimes the person doing the job can be interesting, or friendly, even if the person is amazing, generally these jobs are pretty repetitive, and could be done easier, faster, and cheaper with automation. Not only for the employer, but the customer. Most of these people also are not thrilled about their jobs and be lazy, or do a bad job (I can't blame them really, you get what you pay for). The only thing keeping employees around was that automation was more expensive (and more unreliable). Now it's the flip - labor is much more expensive and unreliable than automation. Now people in those jobs have to prove where they add value, if it's only to watch over the machines.


When I worked in the movie box, that was not at all true. People would come in and ask about the movie. How long was it, whether it was any good, should they see another one instead? We gave them real answers. Just because you have a minimum wage job doesn't mean you're a bump on a log. If you've lost sight of the value of basic human interaction with anyone not baked into your caste, I pity you, even if you are in the majority. Also, 99% of movies today are crap, so there's not much to talk about.


Like I said in my original comment, even if the people are great, they are usually doing a very boring repetitive job. And even if they aren't a "bump on a log," many employers these days honestly want them to be. (liability, efficiency) They really want a robot that is cheaper, not a person. There are so many rules about what an employee can and should do now, especially for lower level jobs. What they can say, how they can say it, what abilities they have to resolve customer problems, if they should interact with the customers at all, etc.

I honestly think the whole demise of customer service is the result of this. People feel in a double bind because they aren't allowed and aren't supposed to help customers. Or if they can, they aren't rewarded for it and take a greater risk by doing it. People can do much greater things, be more helpful, be more friendly, and generally add value - if their employer would allow and reward it. But most are just looking at profit, and speed from entry to exit, and a lot of customers are too.


I'd argue that those companies that have squeezed the humanity out of their workers are the first ones getting dislocated by the market. E.g. Blockbuster being bankrupt and our local independent video store doing just fine. Or McDonald's vs Waffle House.

If you play was "we can provide a worse service for less" then yes, you're going to get steamrolled by automation. If your business is run around adding value (like informative parent of yore in the ticket booth), then your value is going to increase until strong AI (if that ever happens).

Assuming people like talking to humans. Sometimes I wonder about the HN crowd...


I think you hit it on the head - it depends on the service being provided, and how the people relate to providing it.

Some people like talking to humans, some don't. It often changes as well. But for incredibly basic mundane transactions, I'd lean on the "I don't like talking to humans." But it's also slower to talk to humans, and generally there is a line, making it again slower. If I have to add travel time in there, that's a factor. So if the person at the end doesn't add at least some positive value (other than just doing what I need done), I'd rather go the faster way.

Also, if a company is squeezing the workers and not the market, that probably means that company is having trouble no matter what the workers are doing.


A major point of data missing in your example is all the many, many cafes, diners and other eateries which Mc Donald's itself wiped out.

The point being that lots of independent and service focused restaurants have died, and automation, consistency and efficiency has decimated the alternative.


I look at it in terms of competitive advantage. (And I'm not authoritative on any of the following, so don't take me as gospel)

Imho, McD and the first wave of franchisee stores leveraged price and consistency as their advantage. Their logistic chains were more efficient, and they could standardize their operation (benefit to efficiency and customer).

The market did decide that their prices (which were nationally set afaik) and consistency won over the qualities independent chains brought to the picture.

However, I think in the intervening years there have been a few developments.

Firstly, Sysco and the national food suppliers as intermediaries. So aside from volume discounts, everyone's sitting on the same logistics backing now.

Secondly, consistency as a commodity. Whereas before this was a competitive advantage (because it distinguished them from Local Dairy Freeze 283), now it's the market average.

I see it as, as you noted, McD's and the like put everyone else out of business... but we're now in the future past that where they have become the model that's ripe for disruption.

Maybe that looks like Chipotle and Five Guys (limited menu, better product, slightly higher price), or maybe it looks like a return to local service, now backed by automation and turnkey logistics chains.

I can't see a future with McD's where it isn't a fully-automated, human-less burger factory though. Unless they basically toss out their existing business model.


> 99% of movies today are crap, so there's not much to talk about

So it's true now, then.

> If you've lost sight of the value of basic human interaction with anyone not baked into your caste, I pity you, even if you are in the majority.

This seems a bit extreme. I assume you don't use ATMs, auto-bill pay, or automatic check deposit then either? Because you clearly value human interaction at all possible avenues?

Perhaps people's "need" for interaction as they go about their day is somewhere in the middle.


I would find this super annoying while waiting in line to buy tickets.

If that's a service that makes sense to have theaters can always keep it. One staffed line for people that want to chit chat and automated kiosks for people like me who just want to buy a ticket.


My local big theater has exactly that


Doesn't every theater have automated ticketing kiosks now?


There was probably a nicer way to make that point without attacking the parent's awareness of "the value of basic human interaction."

For what it's worth, I didn't infer any value judgement about caste in the comment.


I did and think the reply's tone was perfectly reasonable given the parent comment's dismissiveness.

Yeah I do like interacting with people. Even "minimum wage workers" who last time I checked were still people.


That's fine. Some of us are already maxed out on our low budget of human interaction and craze cold, mechanical, impersonal efficiency. Dealing with error-prone, chatty human beings is not fun for some of us, when they simply serve as an obstacle to what we need.


Sure, but my point is that he never said they're not people. I believe you're reading something in it that isn't really there. It feels like you're unfairly mischaracterizing what was actually said, which was rather neutral.

Some people (myself included) appreciate minimum wage workers as humans and still want the efficiency that comes with automation. It's a mixed bag. When I'm at CVS I would rather have actual cashiers. At a movie theater I'd rather have a ticket machine.


> 99% of movies today are crap

Survivorship bias. They always have been.


That's not true. The economics of movies and TV has shifted overtime. (What are the distribution avenues? What sort of projects get funded? Etc.)

Movies today are much more likely to be high budget, rehashed/sequels, most common denominator, etc.

TV, on the other hand, has been in a golden era for the past decade. Netflix/HBO/etc. has allowed lots of interesting more niche pieces to get produced.


"Things are always the same" fallacy.

No, there are periods that are artistically more fruitful and interesting that others, and the history of art knows and documents several of them.


> there are periods that are artistically more fruitful and interesting that others,

Sure, but the claim was just that there have always been bad movies.

Here's a test: If there's some year you know of where bad movies were exceptionally rare, let us know. Then we'll see if we can provide counterexamples.


My pick for year is 1878. I'd love to see your examples.

But really, how do you quantify good? Taste is subjective. The original Transformers move is a great example. I didn't like it. but i believe 14 year old me would have absolutely loved it.

It's similar to the statistics about Word users only use 5% of the functionality of Word. But everybody uses a different 5%.

I guess if you want to go by money, i'm going to pick 1939. I'd guess about $18,000,000 in production expenses, and about $240,000,000 in box. [1] (arbitrarily assigning 1,000,000 to the unlisted numbers, but keeping the box at $0 for unlisted numbers) Seems like a pretty good ROI. (although i think of, Gone with the wind, Mr Smith goes to washington, and the Wizard of Oz as subjectively good. 25% is a pretty good percentage)

Kind of a fun exercise poking through the years. 1997 was a standout, but everything i looked at had memorable and fun movies. I don't think any year would hit that 25% mark though.

[1] http://www.the-numbers.com/movies/year/1939


> My pick for year is 1878.

Very funny.

> I guess if you want to go by money, i'm going to pick 1939.

You listed several great films, but I'm not disputing there were years with several great films, that's a completely separate point.

> But really, how do you quantify good? Taste is subjective.

I will concede that if we adopt a radical skepticism towards all aesthetic values then the claim "every year has bad films" collapses.

However, if we agree to make that move... the original claim that "everything in the theater now is terrible" is also false. Or "there's something special (and bad) about the quality of film at this very moment" also collapses.

So I'm good with this move. I accept the gambit.


Oh, for sure. We agree "Everything I the theater is terrible" is false.


>But really, how do you quantify good? Taste is subjective.

That's why I don't use random individual tastes as a measure, but informed (from decades of studying movies and moviemaking) and argued critiques (by movie critics, other directors, and everyone with similar expertise).

The same way most will agree that Citizen Kane is a great movie, even if 16 year old John, from Buffalo, Indiana finds it "boring and gay".

That said, I also don't believe that just because something is fuzzy (like "what's a good work of art") and can't be defined with numerical precision, it's also impossible to reason about at all. So, in that sense, I'm satisfied with a general "expert consensus" on whether a movie's great and don't expect to have some absolute quantification of that.

So, to agree with my opinion, one should probably also be OK with fuzzy, not totally quantified inquiries (incidentally the inverse is something the climate deniers use for their advantage: they say that because the scientific community can explicitly give a specific number on the impact of human activity on the climate, it is bogus: http://blog.dilbert.com/post/157823678756/tucker-carlson-ind... ).


Given that there are now like 7 billion people on the planet AND we can make indie movies cheaply, home movies, etc. probably at least 99.9999% of movies today are crap.

It used to take a lot more resources and know how to make a movie. Today, any hack can do so. Gawd.


Reduced costs of creative production (or distribution of same) means that more low-quality crud will be produced and/or distributed.

Which makes filtering all the more critical.

Herbert Simon. Alvin Toffler. James Gleick. Ted Sturgeon.


> When I worked in the movie box, that was not at all true. People would come in and ask about the movie. How long was it, whether it was any good, should they see another one instead? We gave them real answers.

Your smartphone gives you all of these answers now.


Those smartphones answers are full of paid shills and scores made up of fraudulent votes. Even people who aren't on HN (and likely at least know this, if they haven't literally done it) are starting to catch on to that these days.


The person in the booth is literally employed by the movie theater


The ratings and reviews on my smartphone are often paid for or are artificially inflated by anyone willing to pay review sites or reputation management firms.


I think you just need to learn to interpret the numbers. For a big Hollywood movie, anything sub-8.0 on imdb in the week after release (where the shill votes still aren't outweighed by the general population votes) is bad. Just for this week, this rule of thumb tells me for example that the "Alien: Covenant" is probably not worth watching, and "The Circle" is a disaster.


> I think you just need to learn to interpret the numbers.

I'm not sure how I can learn to interpret something that's been manipulated by people with vested interest to promote their product or put down a competitor's.

The value from these sites stem from actual consumer ratings, not bots or the services themselves changing ratings.


Perhaps it's a matter of trusting the person behind the counter over your smartphone.


Why trust one random person (who may not have even seen the movie you are interested in, share your preferences, or be particular insightful) when you can have the aggregate wisdom of everyone who has seen the movie and cared enough to rate it?


Because, frankly, I don't give a shit about aggregate "wisdom". (It's aggregate opinions, no wisdom to be found there).

Many movies are polarizing. In aggregate, they're OK. Talking to a single person whose opinion I trust is much more helpful than getting an average from 1,000s. Look at Yelp ratings - everything is pretty good by now, and the recommendations are mostly meaningless. They don't fit my needs, if my needs go beyond "I need edible food in a certain price category".

It turns out experts trump the crowd when it comes to opinions, because the opinion of a crowd is almost always indifferent.


I disagree with you on almost every, but so much of it is soft and nebulous so lets you are correct for most of your comment. I just want to pick on tiny part:

> Talking to a single person whose opinion I trust

Why should we trust the person at the ticket counter?

They have no special knowledge or insight. It seems likely to me they will have below average insight otherwise they wouldn't be working an easy to automate job.


They have seen a ton of movies. (One of the few perks of that job). They certainly have opinions on them. And while they might not align with my opinions, I can calibrate for that. But "expertise" or no, they hold information I don't have - how did they experience the movie. They likely have seen it. I haven't. Talking to them increases the amount of information available to me.

I can't calibrate for the averaged-together soup of opinions on online forums. Because everything is average, nothing matters.


The point is expertise.

If a consideration in employing someone at the ticket counter is that they have well-founded opinions or suggestions to offer on films, then, by way of their expert status, you've cause to believe them.

Otherwise, this collapses to a general critique of the upstream assertion: that "low-value" positions, such as box-office worker, see no labour value add, whilst simultaneously a certain set of positions, say, white-linens restaurant waiter and/or somnlier, do.

I don't see both arguments being valid simultaneously.


The person behind the counter in a movie theater is usually a high school aged teen.

Their opinions as to what constitutes a good movie are almost certainly wildly at variance with my own.

That said, Yelp-type reviews aren't much better.

About the best you can do is find a professional movie or restaurant reviewer whose opinions match yours and go with that.


I'd applied a specific conditional to my response. You're disregarding it.

That doesn't address the case where the condition is satisfied.


You mean this?

"If a consideration in employing someone at the ticket counter is that they have well-founded opinions or suggestions to offer on films, then, by way of their expert status, you've cause to believe them."

I'm disregarding it because it's observably not true.

People are employed at theatre ticket offices because they are teens who are willing to work nights and weekends for minimum wage, not because they're film experts.

Expecting a ticket booth employee to be Roger Ebert is about as reasonable as expecting a Radio Shack employee to be a qualified electrical engineer.


Actually it's the opposite of asking a random person a question, which is what aggregated opinion really stems from.

The person behind the counter, for example, has likely seen the movie given the folks I've known who work these jobs. As well, they might tell you something like "the people leaving the movie are always talking animatedly" or some other insight that a random movie-goer likely couldn't assert themselves.

I was just pointing out that people have different preferences and that there are many reasons one might trust a single person behind the ticket counter over whatever information they might derive from their smartphone.

That this is so controversial is amusing to me.


Why trust the waiter over Yelp?


Because yelp is horrible.

You argument is much stronger as "Why trust the waiter over meaningful online reviews?"

That argument is much stronger and I can only attack in niche markets like very high end restaurants.


Oh yes. BaaB - blackmail as a business.


Side question... Is there anything better than Yelp?


Knowing people in real life.


This.

Talk to some locals and you'll quickly learn the atmospheres of various locations, times to go, where to avoid, etc. As long as their preferences are fairly similar to your own the suggestions will always trump what a generic review site will offer. This also sidesteps the problem of paid reviews and the like.

That dive down the road may not be as terrible as it seems. Provided you're looking for a specific type of experience. Avoid the food, stay for the local brew, sweaty 20 somethings and stumbling down alleys with some new friends.

>Worked in the restaurant industry for a few years


Doesn't work very well when the people you know in real life (and whose judgment you trust) can only rarely afford to eat out.


The American Express concierge service.


Friends. I completely avoid yelp.


Because it takes more work to extract useful information from Yelp.


A person will be more reliable than your phone regarding these basic information? Give me a break.


We've banned this account for repeatedly posting uncivilly and ignoring our many requests to stop.


It's like the (independent) bookstore employee. They probably make minimum wage but they are interesting to talk to, are up to date on the latest great books, and really do add to the value of the store.


When and where did that happen? Every time I've been to a movie theater in the last fifteen years, it's had a ten-person line and everybody was in get-in-get-out mode. I can see value in moving the people in the box sideways into a reviewing-and-recommending role, but that's a sideways move as a result of the current role disappearing.


Was this in planet Earth or somewhere else? I've been to over 1000 movies and have never seen it happening with me or anyone else.


You write as though you've never held a minimum wage job. Have some compassion for those people who are working hard for almost nothing. Sometimes, it isn't their first choice, or it's their only choice. I would suggest a better experience is had when you give respect to the (say) service industry worker you engage in a transaction with.


I disagree. It's not that the GP isn't being compassionate or understanding their perspective. They're describing why automation is more appealing to a large company and why this change is taking place. That said, the change will likely be met with the same response that similar changes have come with: people won't be out of jobs, the job market will change. Programming jobs will become more common, for example. Minimum wage jobs will turn into more conventional jobs/push more people into the software industry. It's sad that they're losing their jobs now, but the hope is that this will elevate them in society and give them new opportunities (which in the past has proven to be the case, luckily).


> It's not that the GP isn't being compassionate or understanding their perspective. They're describing why automation is more appealing to a large company

Could be both


Even economists themselves finally admit that retraining is the missing link in the global trade model. So while jobs go, people don't transfer into other well paying jobs. Instead the good jobs are replaced by worse paying service sector jobs.

So that theory that people will get new opportunities which are as good, or they can transition into is not valid.

Now if the service sector jobs go too?


Maybe we should be working on better ways to get the poor educated and integrated with modern society as opposed to making them dependent on jobs which take all of their time, don't pay nearly enough, and block any and all opportunity for a way out because there's no free time or disposable income.


You seem to be assuming that low-wage workers are all poor and uneducated. That is misleading. From [1]:

  50% of minimum wage workers are under the age of 24
  25% of minimum wage workers are under the age of 19
Entry level jobs paying minimum wage teach important skills to teens and young adults:

  * being on time
  * attention to detail
  * how to work with others
  * how to follow instructions ...
There is certainly room for discussion about how to help heads-of-household who are struggling with a minimum wage job because they don't have any other skills, but it is a mistake to assume that is the situation for all minimum wage workers.

High minimum wages price many entry level workers right out of the market making it difficult for them to gain these entry level skills which are important for subsequent jobs.

[1] http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-mi...


I don't know what entry level jobs you worked at. Every single entry level job I worked at just taught you how to sign off paper work saying you did procedure A when you hadn't done it months, how palling around with the managers got you whatever shift you wanted, and how to turn a 2 minute trip into the back room into a 30 minutes break. There were some lessons in petty theft as well if you were interested in that. You had to go at least 3 levels of management up to actually find someone who cared about the results of the work, and who wasn't just pulling a paycheck.


I'm going to add more to this cause the idea of entry level jobs teaching skills you need to work at other jobs isn't sitting right with me.

As a rule, the only skill entry level jobs teach anymore that apply to future jobs is how to eat shit and keep going. Every single habit you would learn would need to be unlearned to be valuable in skilled labor. You need to be independent and able to think of novel solutions to provide value at higher skilled jobs. Entry level jobs will grind you up and fire you under some made up offense so you can't even get unemployment. You succeed by being as close to a robot as possible.


> As a rule, the only skill entry level jobs teach anymore that apply to future jobs is how to eat shit and keep going

Eh, I've had this experience at well-salaried jobs too. It's a job thing, not a minimum wage thing.


There are two distinct problems at play:

1. Workers whose contributions are undervalued.

2. Workers who cannot be trained or educated to provide high-value labour.

These are both issues.

(There are other categories: parents, caregivers, the disabled, sick, or handicapped, etc. But the two classifications above represent a major part of systemic failure of labour markets.)


3. Creating a hellish nightmare society where I am not afforded the opportunity to talk to a single random person in the going about of my average day.

If you think the class gaps and problems of lack of cross-socioeconomic empathy are an issue now, wait until a middle class worker can go 24 hours without ever having to interact with anyone making less than them.

"Raise taxes to fund foodstamps? Crazy! I hear the poor are doing just fine eating their insect protein cubes. I saw a report about it on the TV last night!"


I'm middle class and I can go 24 hours or even many days without interacting with anyone. The future is already here. Can't say I'm all that impressed with it.


I've quit my remote job for in-office for this very reason. The hell of constant noise and having to warm up seat for 8 hours (even when I can realistically concentrate on code for maybe 4-6) is better than the hell of sitting at home alone coding for months. I think... (I'm starting the in-office job in a couple weeks).


The in-office hell is worse.

Hell is other people.


The problem is, in remote job there are still other people, but they are in remote time zones and your bandwidth to them is frustratingly limited (most communications occur via chat, sometimes a hangout). It does not make the communication less important though - for example, some code nazi on your team will post lots of remarks to your patches in code review and now, instead of going to him and explaining your perspective, you need to painstakingly type it into boxes on Github... My experience was that the review process with such people (when done remotely) takes at least as many calendar days as the work itself. Granted, it's not all useless pedantism - they often want me to rewrite the code so that it's more similar to the rest of the codebase (we were doing Scala+Play, where you often have many ways to approach a problem) - but it would be so much less painful to go over it in person.


That's drifting significantly from the matter at consideration here.


We should also work on better ways to equip society to have skills that are more "valuable" in the modern high-tech world, absolutely.

The incompassioante charge made by the gp is still fair, I think: Saying these workers provide "no value" is too business-focused and incompassioante. Yes, these workers provide little value in terms of profit to the business, but looking at societal value at a larger scales, these jobs do have value (to the workers, to their families, to the local businesses and landlords they can now make business with using their wages, to homelessness, crime, hunger, etc.). Simply replacing these workers with technology is a net negative for society if we don't do what you suggested.

The free market thinking that the poor deserve to be fired because their skills are no longer competitive, can be, I think, a privileged and incompassioante position.


> workers provide "no value" is too business-focused and incompassioante

By creating the minimum wage floor the government enforces the notion of value creation. With hypothetical example of minimum wage set at $10 an hour everyone producing $10.01 worth of value within a 60-minute period gets to stay, everyone producing $9.99 and below gets to leave.

Compare that to Asian societies where some companies have an [usually older] tea and coffee lady in the break room. The pay is usually next to non-existent - the lady is usually retired and has a variety of savings and a safety net. She doesn't do it for a paycheck, but she craves human contact, so helping out with tea and coffee while chatting to younger employees is fulfilling her social (but never financial) needs at that age.

Such a position is impossible in US corporate environment within the current framework of labor laws, so we deny older people gigs with simple communication opportunities. Not necessarily because US companies are generally more evil and stingy.


"Compare that to Asian societies where some companies have an [usually older] tea and coffee lady in the break room. The pay is usually next to non-existent - the lady is usually retired and has a variety of savings and a safety net. She doesn't do it for a paycheck, but she craves human contact, so helping out with tea and coffee while chatting to younger employees is fulfilling her social (but never financial) needs at that age."

When I used to live in Singapore I saw a lot of miserable looking hunchbacked old ladies and men cleaning food courts and they were for sure doing it for financial reasons:

https://www.bloomberg.com/news/articles/2015-01-06/what-reti...

The worst part is the excuse - the country is staggeringly wealthy, vastly unequal and yet excuses itself with "we can't afford these pensions any more" because "we have fewer children and higher life expectancy", presuming that GDP growth has obviously been zero for the last 40 years and we just haven't noticed that the money actually is there.


It's not that they don't provide any value, it's that their value isn't competitive anymore.

We could be talking about automation or outsourcing, and it would be the same - labor (especially unskilled) is generally getting cheaper. For outsourcing, there is different labor than us that is benefiting, and that's good. That allows them to prosper and buy food and have a life. We also have robots, which are basically virtual slaves that only benefit their owners.

Overall, you could say that there would be an overabundance of labor then. And we hit this before, with the industrial revolution, and new waves of technology in general. What about all the human telephone operators? Or the candle makers? Maybe it really is different this time. Maybe it's not. Nobody really knows for sure.

It sounds uncompassionate, but these are the same forces that drive down prices so everyone can shop happy at walmart (which I do too). Providing cheaper living is great for everyone as well, and nobody remembers that when talking about fewer people working.


"Maybe we should be working on better ways to get the poor educated and integrated with modern society"

So you want an order of magnitude more competition for your own job?

Maybe we should be doing what we did in the 1930s when there was a similar 'surplus of labor' - creating jobs which create valuable public works like LaGuardia or the Lincoln Tunnel instead of pretending that if aggregate demand is weak, it's because everybody already has everything that they need.


Agreed. And doing that will put a lot of money into demand, which translates into more and better business opportunities.

I visit the great places created by CCC, WPA type efforts and value them, even in their often current state of disrepair.

More please. Worth it.


Many people I know in low-wage jobs have either trade-skill jobs on the side or degrees in things like business (eg finance). The latter say they're under or overqualified for higher-paying position. I got the same overqualified stuff from all kinds of businesses out here, too. The businesses are systematically blocking talent.


Blocking talent? Or not in need of the talent offered at the price expected?


They say they need it. They often do need it to achieve their goals. Then they block everyone that can do it unless they'll do it for a ridiculously low amount. One so low that it seems to result in half-assed results in most IT work that cause them trouble down the line. They just can't afford that $10-20k for real production work.

That said, they can pay someone $1+ mil a year to let the people under him do all the work. Give executives raises. Pay for meetings in expensive hotels that could happen over the phone. Buy lavish furnishings for their buildings. So on and so forth. Don't buy into the idea that most of these companies are ultra-rational actors investing only what they need for the benefit of the company. Lots of politics, gaming the numbers, and people on top trying to move more money their way in most of them.


Fair response. I guess it is probably both. Some businesses block, some just do not need the help at the going rate. And some just don't know they need it...


Yeah, it's a mix. I'm leading more toward block and dont know in your model but I steadily see some overpricing or underselling. Given the social aspects, I occasionally wonder how much underselling factors in where the people with valuable skills arent so good at selling them. That vs the companies' filters being too strong.


A) most arent uneducated nor lazy

B) them would never compete with those that were on an "educated" job at an earlier age and can bring years experience to a company

C) will drive fields to regulation and red taping because noone likes a massive influx of lower waged competition


That was not the point. Bluntly, I don't care whether the employee benefits; I, the customer, don't like talking to them and would prefer a machine. Want humans in the loop? Have them do something that they can actually do better than a machine.


> Honestly, do we really like interacting with the people with minimum wage jobs? Not really.

It's sad how this socially destructive mindset has washed first over the US and then over the rest of the globe. The money religion has won.

I'm lucky to live in the French countryside, where solidarity is still a guiding principle for social interaction. The cinema in the closest town is run by a not-for-profit organisation, and the people who work there are volunteers (and tickets cost 3€ for adults). Likewise, our village feasts, meant to raise money for our small primary school, are organised by volunteers. Everyone contributes according to their abilities for the common good.

I'm not French and have only recently moved here, and I'm really impressed with the way people here take matters in their own hands and create social and economic value by volunteering.


Are the people volunteering to ryn the cinema also desperate immigrants struggling with their paychecks?

If not, you're wondering why the starving don't eat cake.


May I ask where in the countryside (approximately), or more importantly how you got there and also got here? I'm seriously looking into leaving the city life for the first time ever, and I'm curious to hear what others did and what their experience was.


> Someone in a movie box [...] is practically a useless annoyance > Honestly, do we really like interacting with the people with minimum wage jobs? Not really.

This may not be substantive enough for HN guidelines, but you know what? Ewwwww!


> On the other hand, the fancy waiter will make recommendations. Will tell you about other things, and is generally part of the ambiance and experience of eating out.

I don't see the distinction. With all due respect to waitstaff (it's a tough job), the function is just begging for automation. An order-and-payment-taking tablet embedded into the table would be so much more efficient:

1. No need to wait for staff to come by, and then do the whole "drinks then wait, then food then wait" dance. Instead, just present a full page description of the food plus a picture, and an "order" button that you tap. You can even order more later if you'd like, without having to summon a waiter. Done.

2. No need to wait for staff to notice you're done eating and need the check. The total is right on the tablet, and it has a card reader.

That would be great. Would probably cut the entire time suck that is restaurant dining by at least 1/2.


You're basically talking about the "fast casual" dining craze. Like a panera, where you can order and take payment online, or from a tablet there, and they drop the food off when it's ready. Drinks and everything else until you leave are self service.

Pei-wei is another example. These are all the rage because of the efficiency (less wait staff) but still good food and a sit down environment.

The distinction is in expectation. Certain places you expect a waiter, to be seated, brought everything ("fine dining"). The difference between casual dining is mostly the atmosphere (usually better furniture, tablecloth, cutlery, etc) and a waiter (who may or may not be formally dressed).

The fancy waiter is adding value in the second case, because you're looking for that fine dining atmosphere. If it wasn't, they'd probably be going toward iPads too. Instead they have dress codes.

The difference is the waiter doesn't add much to an everyday meal. The waiter could be terrible though. So in terms of a business cost, that's something casual places can skimp on. For a more "fine dining" feel, you need great waitstaff, so that's harder to automate.


Excuse, did you just say Pei-wei has good food?


What you are describing would be great for chain restaurants like Chile's or Olive Garden, but for something sufficiently high end the people involved really matter. If you shift your view up a few notches there are many places where real intelligence and dynamicness is required that we can't yet automated.

Having a wine expert or a unique expert chef as part of the experience is part of high end dining. Consider one of those mid to high end Japanese steak houses where there they throw shrimp across the room into someone's mouth. Or a more midwestern steakhouse where you can talk with a person who butchered the steak. Or one of the new microbreweries where can can talk with the brewer about some new experiment has has and look at the brewing equipment right there. None of these make sense to automate, until we get strong AI.


Figuring out suggestions based on preferences and given choices with so constrained options is an easy problem.

The "expert" is there to sell you a story. Not that there's anything wrong with that - the story is a part of the experience that many people like - but let's not pretend it's a technical problem that's difficult to solve.

I know a bunch of people who work in that buisines (my brother is a chef, gradeschool friend as well, ex. is a restaurant waiter, met a bunch of their co-workers, all worked in Michelin star restaurants etc.) what actually goes on vs what the customer hears ...


> Figuring out suggestions based on preferences and given choices with so constrained options is an easy problem.

Then why do Spotify and Netflix et al persist in identifying artists and songs I've heard of (because of obvious similarities to stuff I like) but have actively ignored (because of any of a number of reasons that don't boil down well into an algorithm), over and over and over again?

I still don't want to watch The Office, Netflix. I won't in another six months, either.

But I could tell a person why not, and they could factor that into their recommendations. It's like the difference between trusting Waze and trusting a local that says "even though the app says go another half mile then turn right, turning right here is way easier, since if you wait you'll have to then quickly make your way across three lanes of traffic in a hundred yards to make your left, and making the right here gives you more time to get over."


Different scale/complexity. You could hand-code waiters decision tree for recommendations and the possible choices end in ~hundreds. Personalized music suggestion has to pick from millions of choices and there's no straightforward algorithm behind it.


Chili's is already starting down this path. At the location near me you can order drinks and pay through a device at the table. They haven't jumped in all the way as food orders are still through a server.

Though, as someone who has had a credit card stolen via gas pump several times, I'm really hesitant to use a card at one of these devices. They're probably not very secure to begin with and then you couple that with the fact that anyone can sit with one of them for an hour or so with no scrutiny, it's just ripe for exploit.


What you described seemed pretty common when I visited Japan. For those in the Bay Area a Japanese chain Yayoi opened in Cupertino and Palo Alto.

You order entirely on the iPad. You do have to pay at the desk on your way out, but they just type in your table number you pay with Square. No tipping allowed so it feels so smooth and simple.


And then with out any human interaction, the tablet asks politely for a 20% tip... I wonder if the tablet makes less than minimum wage too.


In my experience with these tablet ordering restaurants I suspect that they will also make the restaurant more money.

Often it is too hard to get a waiters attention to make multiple small additions after they have been around to take orders. With the tablet there is no barrier to you adding an extra drink or side.


More accessible to the hard of hearing, too. I hope this model takes off.


You kinda missed the whole point of the OP, which was, if people don't add value to a business, how will said valueless people put food on the table and participate in society?


The same way we have every time an industry has disappeared in the past: by participating in the newly opened industries.

Is it rough when (for example) shipping crates put a bunch of longshoremen out of a job, when they are in their 50s and too old to easily retrain? Sure. But how many people now not only enjoy (as customers) the benefits that Amazon provides, but also enjoy the employment benefits of a massively expanded global market?

On the other hand, the alternatives are harsher: as the population grows and people resist the very innovation that could create new markets, unemployment will grow. For all the problems we have in the US, providing low unemployment is not one.


You're looking at it with past-tinted glasses. This time is different, and the market won't solve it.

Those newly opened industries have less people in them than the industries they replace. Mostly because our consumption doesn't increase as much as our efficiency does.

Funny you mention Amazon. We enjoy their services, and they enjoy that expanded global market. And they do this by killing local businesses with their ruthless efficiency. (Remember we're supposed to be competitive. There will be winners and there will be losers.) They don't create nearly enough jobs to compensate for the unemployment they cause.

There's also the problem of skill. For instance, in 20 years, truck drivers will be gone. Instead, we'll have an operator managing a fleet of 50 trucks from some control centre. The rest will have to find something else. But what exactly? The low skill jobs will be even scarcer than they are now, and the high skill jobs will be taken up by people who enjoyed a higher education in the first place, as they are now. You could still raise the level of education, but that will be too late for those drivers.

Keep this up to its logical (and absurd) conclusion, and half the population will starve to death in the streets. They're useless, why the market would support them? Of course, we'll have cleaner robots wipe it all away, cleansing the stench of death —those who still have value will be able to enjoy their walk in the park undisturbed.

More realistically though, we'll have a revolution before we get to this point. Or, the rich and powerful will see it coming, and start giving bread and games to the people. Come to think of it, they already do it to some extent.


50 years ago, who would have thought of search engine optimization as a job? Social media manager? Video game storyline writer?

I'm not saying that people who are displaced will easily be able to retrain to a new job. They will have a rough time, and that's something we need to address as a society.

But assuming that number of "jobs" for humans will decrease to zero is a big stretch. I think that even if we had robots that could take care of all our needs for us, humans would come up with jobs to occupy their time.


> But assuming that number of "jobs" for humans will decrease to zero is a big stretch.

It seems to me the amount of available work is steadily decreasing right now. Perhaps not towards zero, but we don't have to lose that much to need substantial reform. Once you reach over 30% unemployment, you have a big problem already.

There's an easy way to increase the number of jobs though: share the existing ones by reducing the work-week. We could start by shaving off a few hours, perhaps as much as a full day (for a 4 day work-week). Then decrease it further to match progress in automation. Of course, we should keep the salaries at the same levels, lest machine owners will just get a bigger and bigger share of the pie, just because they had starting capital the other workers didn't.


All the jobs you've listed are white collar and require a probably at least above average intelligence. The high school dropout you remember from your childhood (the one who sniffed glue and never completely comprehended basic fractions) is not going to be a video game story writer. Once he got his issues in order, he made for a good truck driver though, and was a valuable member of society. I'm afraid it won't be so in the future.


50% of the population have an IQ below 100. 16ish percent have an IQ below 85. What are they going to do?

We've already essentially phased out the useful work that people under IQ 70 can do. It's likely that it's creeped up to 75 or 80, even. As these are automated, let's creep it up to 90.

It also takes out those who are poor and have no branch on which to gain experience for their first job. If we have eliminated the first jobs for all but the most talented and those with connections, what does a somewhat bright poor student do?

Well, it used to be they got a job, proved themselves, and worked their way up. Now, what do they do when they don't have the social capital to get to the point where they can work up?

What are these newly opened industries that will work with these people?


> What are these newly opened industries that will work with these people?

As far as I can tell, it's "magic future ones" and the evidence for these statements is "because I hope that's what happens".


Food delivery service for one. Startups like uber eats and foodora give jobs to people who like to ride fast on bikes, bike deliveries existed before in major cities but not like this.


So a short term sharecropping job that barely pays you enough to survive with no path for advancement and you soon get replaced by driverless cars?

If that really is the best answer then it's time to invest in guillotine manufacturers.


That's the real issue. But you're not supposed to say that.


If many of those people don't have money to "put food on the table and participate in society" who will be able to pay any business for anything?


People who can participate (those with the skills necessary to manage more complex systems as he states in his blog post).

The scary part is it looks like wealth will be increasingly concentrated, and more and more people will fall to a level where what we consider basic needs in modern society (food, shelter, education and health care) will no longer be attainable. As the author points out, "it will be messy": Those societies usually don't end well.


>People who can participate

A diminishing pool of people to pay for stuff, not only hurts businesses profits, but also diminishes the pool of rich people (who make their money off of selling products, houses, services, etc to the masses).


Bingo! If humans are continually replaced by robots without being given an income subsidized by the benefits of automation, in the long run, the robots will have to be shut down because the humans can longer pay for the products!


You are missing a great deal of suffering in the middle. Decent hard working people can start dying long before the robots must shut down.


"On the other hand, the fancy waiter will make recommendations. "

The fancy waiter will recommend whatever the owner of the restaurant wants him to recommend, because that is his actual job. He is employed to maximize the dollar value of food and liquor sold.

Now, there are limits to this. A good restauranteur isn't going to sell you inedible crap, and a good waiter isn't going to recommend it, because that will hurt the restaurant's long-term profitability (and in the short term, probably result in a bad tip for the waiter).

Nonetheless, it's wise to keep in mind that the waiter is working for the restaurant, not you.

If you have any friends who've worked in fancy restaurants, ask them about some of the strategies waiters use to encourage a large bill (and thus, a large tip).


> The fancy waiter will recommend whatever the owner of the restaurant wants him to recommend, because that is his actual job. He is employed to maximize the dollar value of food and liquor sold.

This is a limited way of looking at the value of a waiter — I think this is a common misconception. A good waiter knows to listen to what you want and make recommendations based on that. Anytime a waiter recommends mostly or only the most expensive things, I trust them less and they lose the potential to be a great waiter even if the service is otherwise good.

The waiter is not really working for the restaurant because the amount of their pay that comes from the restaurant directly is very low. In a restaurant with tips that comprises most of the waiter's income, and since the amount you tip is voluntary, really the server is working for the customer to earn a good tip.


> On the other hand, the fancy waiter will make recommendations. Will tell you about other things, and is generally part of the ambiance and experience of eating out.

I only need the waiter to tell me this because I have no idea what the food with end up looking like. Just put pictures of items on the menu. Problem solved. Now it get to order what looks best.


Good grief. Ordering food by appearance is like deciding music is good because the artist has purple hair or a painting is beautiful because the canvas smells like cotton.


Please enlighten us with your wisdom as to what reasons for liking a piece of art are acceptable, and what reasons are unacceptable.

To put it another way, when you walked into the restaurant you committed to paying a premium for one sensory experience or another. Why not the visual?


I think his point is that there's more to food than the way it appears in a picture, and a human being can add a lot of insight into the selection process.


For some restaurants, unveiling the food is a big part of the experience and photos would ruin a lot of the fun. E.g. Atelier Crenn in SF


> Someone in a movie box isn't going to tell you about the movie, or have a conversation about it with you. They are there to take the most basic info (movie, time) and money, and give you a ticket. It's also always done thru a thick bit of glass that makes communication sometimes difficult if not painful.

This has not been my experience at all. People who work at theaters get discounted, if not free, tickets to movies and have often watched the featured movies themselves. They get to see how often people walk out, ask for a refund or praise a film. They can relate to your tastes and make recommendations based off of them. They can tell you if a movie isn't a great date flick and suggest another.

> Honestly, do we really like interacting with the people with minimum wage jobs? Not really. Most people seem to prefer the automated checkout, ordering on their phone, etc.

Speak for yourself. There is nothing more aggravating to me than self-checkout, it is slow, it is often buggy and I don't like having to scan, punch in codes and bag things myself. I hate having to wait for a manager's approval to apply a coupon or finish checkout because the machine decided I did something wrong and won't let me fix it.

Hell is having $20 a machine won't accept.

I prefer being able to speak with the people who are going to submit or prepare my order, because I can ask questions or customize what I want. I cannot do that with an app or touch screen menu.

> Most of these people also are not thrilled about their jobs and be lazy, or do a bad job

Again, speak for your own experiences.


"Speak for yourself. There is nothing more aggravating to me than self-checkout, it is slow, ... "

Oh, man. I never use the self-checkout. It's part of the invisible work movement--stuff someone used to be paid to do for you, now you do yourself. Same thing with pumping your own gas. I miss Oregon, for how there was always someone to pump your gas for you. Is gas cheaper here in Washington, where you have to do it yourself? Nope. Invisible work. Screw that.


Same, there's a group of Co-ops in Canada here. They do everything from gas to groceries, financial to hardware and other services. The profits are put back into the community and members of its programs receive payouts when they turn a profit.

The only reason I'm a Co-op member? Customer service. They pump my gas, are helpful in store, the workers are paid fairly and members of my community, managers understanding even do grocery delivery at a loss. Hell my buddy can manage a store and provide for his family as opposed to scraping by.

Kind of tangential to OPs post, but I'm getting disillusioned and sick of watching community funds get transferred away to accounts somewhere else. Fuck that, I'll pay the slight premium.


Huh? The pumping is automated, all you need to do is place the nooze and push a button? It seems crazy (like 5-star hotel level of service crazy) to have people in full time employment to do just that.


If you live in an area where it gets cold, hot, or it rains or snows, the service is invaluable. If you haven't grown accustom to the convenience of not having to leave your car and saving time, you might not understand.


Having become used to having gas pumped for me and cheap gas, it's a pain travelling where I have to pay a premium and pump it myself.


> This has not been my experience at all.

FWIW it matches my experience. I can't think of a time I've gone to the cinema not already knowing which film I'm there to see, so it wouldn't cross my mind to ask for recommendations.


Dealing with unhappy minimum wage workers seems to be the default to me as well. My theater experience sounds like yours. As for minimum wage cashiers, I would rather use the self checkout.

Most cashiers can't be bothered to puts things like eggs anywhere except directly under gallons of juice. I am not trying to beat them up, most are clearly hard working and decent people. But they are people who are being replaced by more efficient, cheaper an more reliable machines. Except for the part where I have to bag my own eggs, but I won't crush them, because I paid for them.


On the other hand, I live in Japan -- land of vending machines. I often have a choice between going to a convenience store or getting the exact same thing from a vending machine. I go to the convenience store and I do enjoy talking to the person there if they aren't too busy.

Obviously not everybody will be like that (I suspect I'm turning into one of those "old people" for whom they manage to keep the bank teller windows open for a few hours a day...) But I just want to point out that this isn't as straight forward as it seems. And, if my suspicion is true, with an ageing population society may actually swing in the direction where they prefer more human contact than less in their every day lives.


I know what you are saying, but I can't help wondering where teenagers will get their initial job experience if most minimum wage jobs go away.


>Honestly, do we really like interacting with the people with minimum wage jobs?

You're naive if you think this will only impact minimum wage jobs. Paying humans is usually about 30-50% of a companies operating expenses. With less humans you can shave even more percentages off by reducing office space or insurance premiums of applicable.

This might be starting with robot barista arms manipulating coffee machines, but it's really quickly going to make it to lab workers manipulating samples. Where it goes from there depends more on the software than the hardware, but it's really not a stretch to assume that shortly after we replace truckers, we're going to replace pilots and sea captains as well.

We're racing towards a decision. We can allow the automated cargo ships that will soon manage all global trade to be owned by a small cabal, or we can nationalize these systems and use the value they create to support our most disadvantaged populations.


Flight crews and ship crews will be enhanced by automation, thus reducing those jobs, but they won't be replaced completely. The liability, safety, and economics situations are completely different from drivers. The cost of a crew to ferry an oil tanker around the world is a rounding error. The cost of two pilots on your flight is similar, and in both cases, you want someone there when things go wrong anyway.


> One of them is practically a useless annoyance, and the other one is part of the experience.

You make an interesting point, and I want to remark to it - this is why I don't think the problem is just automation, but in fact social inequality. You can always employ people to take care of a small, privileged class of people.

The extent to which society does this is completely cultural choice. I heard of comparison, in Brazil, several procents of households have a maid (or multiple), where in Sweden, less than half percent of households have one.


While I agree with your statement on the movie theatre ticket counter, I would say that I enjoy talking to the cashier at walmart. I usually ask how they are doing, I might ask about their name if it is an interesting name, or complement them on something. Some cashiers end up being short and don't seem to want to talk, but I often have great interactions. Granted, Walmart pays more than minimum wage, but I don't think it matters.


I think it does, actually. In-N-Out burger pays more than minimum wage, and I'd say it's some of the best customer service at a fast food place. Paying that bit more means they can be choosy and pick the best people.


I realize that UBI is a very popular position on HN, so I am hoping someone here has given this more thought and can comment.

My problem with UBI is that all tests to date look great, but have only been done on a micro level. The fundamental issue I would like addressed is the macro scale inflation you would expect when redistributing trillions of dollars without commensurate economic value being created directly.

Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, etc).

If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.

Anyway, it would be nice if it worked, but I've seen no evidence that it will in a large system. Comments appreciated.


Why would you expect inflation? All sane UBI proposals don't create money, they just move money from rich people to poor people. If you're a Friedman disciple, then "inflation is a monetary phenomenon" and we can stop there.

If we're moving money from rich people to poor people, perhaps we'll see the prices of stuff rich people buy go down and the prices of stuff poor people buy go up.

The vast majority of stuff poor people buy is demand limited, not supply limited, so if poor people start buying more PS4's, Sony will just make more.

I'll also assert that food is demand limited, we have lots more capacity to increase production than people think. It doesn't matter though; the problem with poor people in the United States is that they eat too much, not that they eat too little.

The only thing that might see price movement is housing. That's definitely supply limited in many places. But maybe UBI will encourage people to move from high cost areas where UBI isn't sufficient to live on to low cost areas where it is. And movement will only happen in the margins -- most of the poor in the States already have a place to live, so demand shouldn't increase that much.


MV = PQ. Money * Velocity = Price level * Quantity of goods and services.

Friedman assumes the velocity of money is constant (good assumption), so really the only why you can cause inflation is to increase the supply of money, M. UBI increases the velocity of money by moving money from low-consumption, high-investment rich people to high-consumption, low-investment poor-to-middle-class people. Increase money velocity, and you'll see price inflation to compensate.


But if we are demand constrained as opposed to supply constrained for most consumer goods, than you will see an increase in 'Q', not 'P'.


Energy, time and space.

Distance is effort, both in energy and time.

Space is already constrained by historical distributional of 'valuable' lands, and restrictions on new ones. There's nowhere left to go out and just settle that someone else doesn't already claim somehow. (Yes, if you go out of the solar system you might claim that... but that's literally how bad the issue is.)

The real solution is increasing supply. Yes, UBI will help individuals, but society must actively balance to ensure that there is enough supply in the markets to maintain liquidity. Otherwise (as we see with housing) flow seizes and prices dramatically rise.


Energy: It's getting cheaper and cheaper thanks to competing technologies. California's wholesale rate went negative (due to solar) for the first time ever in April. If you are unemployed and on UBI, you have more freedom to to take advantage of time-of-use rates. Or better yet, hook up some cheap solar panels and some lead-acid batteries and make your own energy.

Time: If you are unemployed and on UBI, you have more free time. If prices spike for food, then you can always grow your own. If prices spike for gasoline, then ride a bike.

Space: With UBI, you no longer need to cram into a handful of high-growth economic areas. You can move to cheaper areas, grow your own food, and ride a bike everywhere. People with a lot of free time, and not a lot of money, will be a lot more price sensitive than in our current environment (where time = money). If prices rise due to inflation, they will either do without, or find/create a substitute.


What is meant by "velocity" in this context? I'm unfamiliar with the term.



Would adopting UBI correspond to a one-time step increase in velocity that sits constant again afterwards?


Probably, yes. But the question is how much of a bump in prices that translates to - how much of the UBI will it wipe out?


> All sane UBI proposals don't create money, they just move money from rich people to poor people

I'm not very educated in this, so correct me if I'm wrong, but my understanding was that while UBI doesn't create money, but it can move money from people with a lower ratio of money-spent to money-made, to people with a higher ratio. If that's the case, the money that's actively being used should increase.


The main barrier to UBI is that the same groups in the population that are so in favour of it are also fiercely determined immigration must be open. And guess what happens to the first country to say at the same time "anyone can come here" and "we'll give anyone living here (not just a limited closed trial scheme) $40,000 per yer no-questions-asked". It may just be a transient effect (things might even out steady-state) but that would be a very big transient effect with some pernicious consequences (eg it'd be in other countries' accounts-balance interests to keep their welfare low, and to be harsher to the poor, to encourage more net recipients to move to the UBI country, while offering low-tax environments to encourage the UBI's wealthy to squirrel away their money there)

Globalisation is ending at the right time for a UBI to emerge, but so long as the first priority is ensuring globalisation is never dented, UBI can't get to the starting line. There are two hundred mice; they can all see the bit of cheese that looks like the solution to many of their problems in the trap; but nobody's going first.


You'd want to increase the level of income slowly over time so you can deal with problems like this as they arise. I don't think anyone's proposing an immediate $40k-per-year no-questions-asked grant to all residents.


It's a state change. As with the introduction of the NHS in the UK, you'd need to bring it in pretty much all at once, with a significant value so people see the benefits.

Otherwise, the costs add up fast, but the impact does not. eg, even picking a smaller country than the US -- the UK has 70 million people; giving them £14 per year would be a £1bn item in the budget but £14 would not have visible impact to society-as-a-whole, and would be cancelled quickly as an unaffordable indulgence.

It's happened before recently -- eg, the UK's Child Trust Fund policy gave every child born a one-off £250 investment gift (a relatively small sum but with a multiplier effect as it would grow over time and prompt relatives to add to the account). The £250 from the government was cancelled within six years as unaffordable. As the benefits only get seen later (when the children grow up), there's a valley of death for the policy where the cost of it kills it.

https://en.wikipedia.org/wiki/Child_Trust_Fund

Curiously, Iain Duncan Smith's "universal credit" seems about the closest governments have come to a national scheme headed towards being a basic income (or at least a negative income tax), with the idea of at least first eliminating the benefits eligibility cliffs that existed in the system. But it's not been plain sailing, and again started being taken apart before it could be rolled out or "got right". (Any government can be expected to get it wrong first, you just hope they'll get it right later.) So has comparatively little likelihood of growing to be a universal basic income or negative income tax.


Saving ever more money is deflationary by removing it from the economy, but spending money is not inflationary because spending money does not create more money.

In the simplest possible term demand for money is created through taxes and loans because people need it at a future date to meet these obligations. Spending money does not remove these obligations so it does not devalue money.


What do you mean by, "actively being used" though? The rich tend to want a return on their money, "invested" seems like a type of use, even if it is passive. Crazy hypothetically, if it reduced the money available for investment, it might raise the interest rate on loans, reducing the rate of lending, so reducing the total money supply.


I'm not sure that the rich usually invest in terms of making loans available, so I don't think your concern will happen. What might happen is a decrease in investment, which might lead to a decrease in economic growth. (Or, alternately, to a decrease in the rate of installation of automation, which might preserves jobs...)


> I'm not sure that the rich usually invest in terms of making loans available,

Outside of the $100+ trillion bond market the examples are indeed hard to come by.


Yes, that's one of the problems we're already facing, as I understand it. Too much of the money is in too few hands, and it's not being circulated back into the economy the way that it would be if that money was spread out among more individuals.


Housing, Education, Healthcare are supply limited and pretty important to the poor and UBI doesn't fix that.


Housing is one of things that can be solved by UBI - currently in many regions housing is scarce in places "where all the jobs are" and plentiful, cheap, and even empty and abandoned in places with few jobs. This imbalance happens in 'competition' between different centers, and also in the process of urbanization. We have people leaving their granparent's houses, and leaving them empty, just to go to the big city where they can actually earn a living.

UBI can change that by making it feasible for underemployed people to live in those cheaper areas. If there's no economic reason (good for society) to have them work at all, then there's no economic reason for them to live in the scarce housing in the economically most active areas - and they will revitalize the cheaper areas by bringing their spending there.


Housing costs can be solved without massive social transfer payments simply by eliminating all income and consumption taxes and switching to a land value tax in order to pay for public services.

If UBI transfer payments are paid out of a consumption or income tax, then landholders and mortgage companies will simply be able to charge all residents higher rent. If residents experience an increase in housing costs associated with savings which must be put away for purchases, rent, and mortgage payments that is in proportion to the increase income they receive via UBI, then UBI will not have made them better off. UBI will only have redistributed money from workers and entrepreneurs to landholders and banks invested in mortgages.

Under a land value tax, landholders cannot charge higher rent due to an increase in land values brought on by public spending on public services. If they want to increase their profits, they have to invest in real property improvements, such as by expanding the stock of available housing. If UBI is paid out of taxes on labor rather than taxes on land, they will be able to charge higher rent.


Can anyone explain to me why this is being downvoted? A mob of angry property holders? OR is there some glaring flaw in this reasoning that I'm not seeing?

It seems like a viable contribution to the discussion.


I agree this could help a little, but the "nice" places are still where people will /want/ to live. Where you see a city now is either a nice place, or someplace that has strategic value of some kind. (real cities, not suburb towns)

Markets work best when lightly regulated, when there's corrective action to smooth out the ups and downs of overshoot and collapse tendencies. Something I see lacking is the will to ensure sufficient supply so that demand can have choice, instead of captivity and vulnerability.


I think a lot more people would live closer to greenery if they wouldn't have to commute to a job.


> UBI can change that by making it feasible for underemployed people to live in those cheaper areas.

Detroit or Baltimore are pretty affordable already, and some counties will give away free land if one agrees to settle there.

That did not seem to spur much economic development.


That's the big difference I'm talking about. Cheap or even free housing is not sufficient, currently hard-to-employ people can't afford to live in Detroit - they also need to eat, so they need jobs that simply aren't there. So the practical result is that such people are forced to move to locations with much more expensive rent so that they'd have any income whatsoever.

UBI would mean that the underemployed people could move to Detroit if they wanted to. That would effect a transfer of money towards Detroit - as money would be taxed elsewhere, flow through these people and get spent in Detroit, spurring economic development.

Widespread remote work could achieve a similar result, having people live and spend in Detroit but earn money elsewhere; but currently it is not widespread and so doesn't make a meaningful impact.


Housing, supply limited? Except in the land-limited big cities, I don't see this as the case at all. Education would certainly be important, but most don't pay for that directly (just through Taxes); no reason for that to change.

Healthcare, yeah, that also needs addressing, regardless of the UBI decisions.


Well, it's believed to be cheaper to house the homeless than to leave them on the streets. [http://www.huffingtonpost.com/2014/03/25/housing-first-homel... ]

And there's plenty of housing, just not really in places that are convenient to jobs. If you didn't need a job, that becomes less of a problem. So giving people enough money for a secure housing and food situation--somewhere, anywhere--strictly decreases suffering.


If you consider UBI as simply replacing jobs, that works.

However, the reason UBI works is because it allows people to spend their life doing things that are valuable but wouldn't make a living wage.


UBI does several things. There's no single "the reason".


> Housing, ... supply limited

The US is incredibly sparsely populated, there would be billions of residents if we were as dense as Western Europe.

We do have limited supply of housing in artificially low dense cities that have good jobs, but that's politics and not economics.


There is no law of economics that says the latter two have to be supply limited, to the grotesque extent that they are.

I'll give you housing though. One of the reasons housing is expensive, though, is because it is closely tied to job opportunities.


Housing is expensive because public spending is currently paid for using taxes on labor and its products rather than taxes on land.

Public spending on infrastructure and services raises land values, as parks, police, and fire departments make locations more attractive to live in. This subsidizes landholders and allows them to charge higher rent whenever these services are paid for by a tax on labor rather than a tax on land.

With a land value tax, landholders have to privately invest in improving the private property on their land, such as expanding the supply of housing units, in order to increase their profits. Without a land value tax, landholders can earn greater rent and profit without actually privately investing in improving their property. They simply have to lobby for higher public spending paid for via taxes on income or consumption and then they can raise rents without competing to improve their supply.


> Public spending on infrastructure and services raises land values, as parks, police, and fire departments make locations more attractive to live in.

This sounds like how the property tax works today.

At municipal level, where a property tax bill is comprised of (a) land value, (b) improvements and (c) special assessments, which are voter-approved voluntary taxes to pay for things such as new tram line or a pump for the water district.

The land value periodically gets reassessed to account for improvements, public services, and general real estate prices in the area.

How does your system differ from the property tax status quo?


The base assessment rate is only determined by the unimproved land value. The value of real property improvements is subtracted\untaxed. If an abandoned lot is adjacent to a well maintained house, the tax rate is the same for both owners, despite the real estate value of the house being much higher due to the labor invested by the homeowner. Values would be reassessed quarterly rather than only upon change of ownership. There would be no negotiated exemptions on taxes for commercial developers and they would have to pay the land value tax even if they leave the lot abandoned. If commercial developers want to decrease their land taxes, then they can build vertically and leave more land left over for housing and wildnerness.

There would be no sales, earnings, payroll, income, excise, personal property, tariffs,state, or federal taxes for residents. Residents in land tax counties would only pay the single land value tax to the county assessor. The county would then pay negotatiated state taxes on behalf of its residents, and ideally the state would also pay negotiated federal taxes on behalf of its counties.


Exactly, there are many laws that result in those being very supply limited.


I strongly doubt that. Which laws do this for education? Could you point me to a couple?

There isn't some sinister cabal of teachers, that restricts supply, for the purposes of keeping their wages high. There isn't a grotesque system of receipts payable, and the user not paying the real price of service, and hidden, unitemizable fees at my local high school (Two of those do, however, start appearing when you go to university.)

There is more then enough education to go around. The problem is that it's not evenly distributed. I'm not talking about sending every kid to Harvard, here.

Healthcare certainly has people restricting its supply, but also has the exact same problem. We have the budgets for it, we have the doctors, and nurses to provide it - but we don't provide it very evenly.


Ubi does fix that. If ubi isn't enough to cover those then it's not high enough.


UBI is not guaranteed to make the majority of people better off. Its effects and consequences are highly dependent upon the source of revenue from which it is financed. You have to know the source of revenue for UBI and how other prices in the economy react to it in order to determine if it will make the majority of people wealthier or poorer.

If UBI is funded via taxes on labor and capital rather than taxes on land, it will subsidize landowners and banks and allow them to charge higher rent and make more from mortgages. If the price which a family pays for shelter, rent, and mortagages increases in proportion to the rate which their income increases from UBI, then will not actually be any wealthier.

Society will actually be much poorer, as we would be redistributing money from productive workers and entrepreneurs to unproductive landholders and lenders who were able to capture the increased public spending through higher land prices and rent.


It's basically not possible to do that without making those things cheaper somehow. Convert the entire US federal budget to UBI and it is around 10k per person. Healthcare alone per person is already 9k. Housing is maybe another 5k. And this is before those things get more expensive as people consume more of them.


Other countries spend way less than that on healthcare (spending more like $3k per person) because they use more efficient systems.

Private healthcare is extremely expensive.

So that "somehow" already has a known solution.


Most UBI schemes have an increasing tax rate so that you gradually get less money and once you're past a certain threshold, say $60k per year, you are paying the same in additional taxes as you're getting in UBI payments.

The net result is that you don't need to fund UBI payments for nearly the entire population.


Ubi goes hand in hand with taxing the rich


The US federal budget is 3.8 Trillion. Using parent's numbers, you would need $5.3 Trillion to just cover healthcare + housing, assuming zero inflation.

What tax rate are you proposing will genenerate $5.3 Trillion off of taxing the rich?


Trivial. Tax the top 1 percent at least 75 percent for about 2 trillian or more once you close off loopholes, ban insurance companies altogether and make hospitals publish their prices, and require estimates for any work to be done, and you suddenly have a balanced budget.


> make hospitals publish their prices

They already do http://www.oshpd.ca.gov/Chargemaster/

> ban insurance companies

So lose the negotiating advantage and be forced to haggle on prices on a case-by-case basis?


Who haggles for anything besides cars in the us? Publish pricing and give estimates, shop around.


So to recap, the key to lowering prices in healthcare is (a) strip consumers of negotiating power (b) not try to haggle the prices down when providers consistently try to raise them?


Nobody is haggling the prices down. Prices are skyrocketing.


Insurance companies do. But your proposal seems to do away with them in order to lower the prices. I am trying to understand the mechanism.


The mechanism is open competition. Right now hospitals and clinics don't have to give you a price for their services, and you have to pay them whatever they ask for. It should work just like a mechanic or a lawyer, you are told the fee, you pay it, you get service. Don't like the price up front? Shop around.


Traditional education is supply limited. But the internet is rapidly changing things. As an example, Udacity and Coursera are both offering various forms of certificates.

I could see a future where people use UBI to bootstrap an education. Move to a low cost of living area, take some online courses and work on some projects. Once they have built up a small portfolio, attempt to re-enter the workforce etc...


Education & Healthcare are already universally covered in Nordic countries, yet cheaper than in America.


There's inflation that the CPI tracks. And then there's inflation in a given sector, or product group. Basically inflation happens any time you shift the money supply around, be it with government regulation, or with economic booms or "gold rushes" (just look at what happened in the shale boom town economies).

I can guarantee that there will be inflation in areas of the market that cater to poorer people. There is a pretty basic economics law that says when demand for goods go up (aka more money chasing a good) it's price will tend to go up relative to to the "price elasticity" for the good.

Things like basic food stuffs will get more expensive, because there will be more money chasing it. Rents will go up, since disproportionately more poor people rent. Hopefully much of this will be offset by people being free to move to cheaper cities, since they no longer need to worry about work income as much. Alcohol and tobacco will likely get more expensive as well.

You're right, in that eventually production will ramp up to meet increased demand, but it's usually not 1 to 1 increase, which means you'll still have higher prices in the long term (though it does happen occasionally where increased demand leads to lower prices because the volume allows for economies of scale in production).

UBI isn't likely to be the silver bullet that many think it will be. All the experiments have been short term, and inflationary pressures can be small and can take time to take effect. Also the UBI experiments have been in smaller countries, where social aspects may be coming into play.

I'd really like UBI to work, since I dream of having enough basic money to sustain me so I can work on some of the science and engineering that interest me but might not have short term value, but my economics background give me an intuition that it can't be as successful as people think it will be. It'll likely be a beast that will require constantly increasing benefits as price levels rise to adjust to the new equilibriums, with ever fewer reasons to do the work necessary to fuel the costs. Maybe we're approaching a post scarcity world, but economics says no such thing is possible, that there is always something that is scarce that people will compete for.


> Things like basic food stuffs will get more expensive, because there will be more money chasing it. Rents will go up, since disproportionately more poor people rent.

Why would demand go up? Do you think these people are currently not eating and living in the streets?


Do you think the fact people are renting property now is going to stop landlords putting the rent up when they know that their target market that's used to spending nearly all their income on rent now has a lot more to spend (and few more housing options than before)?


If poor people have income not tied to a specific location, I'm expecting that they're going to move to lower-cost locations, rather than stay in expensive urban areas. So I further would expect that this will overall depress rents in urban areas.


> If poor people have income not tied to a specific location, I'm expecting that they're going to move to lower-cost locations, rather than stay in expensive urban areas.

So why haven't we seen a massive exodus to Detroit or Mississippi? Outside of coastal areas US already tends to be affordable and accessible.


Because that is not where the jobs are. Unemployment is at 9.8 % in Detroit, 5.6% in Mississippi, compared to 4.7% nationwide (all numbers Dec 2016).


How would introduction of UBI result in job creation?


Without speaking to the net effect, a possible mechanism of job creation is increased demand for goods.


In economic model of the last century - sure. People would spend at their local milkman and butcher, who would in turn hire a local glassblower, who would spend some with local seamstress, who could finally afford the services of local blacksmith.

In the modern economy an increased demand for goods benefits very select entities - mainly a Chinese manufacturer, a Danish shipper, and Seattle-based Amazon.com. There's some job creation to the effect that a UPS guy needs to be hired to deliver those goods, but middlemen are likely to be squeezed on margins, while the value creation is taking place abroad.


Most poor people's work (or habits, or family and friends) tends to be very location sensitive...


No. Market forces (and in some places rent controls) will stop them. If anything, I would expect rents to come down. Landlords do not have a monopoly, they compete with each other. So they can't simply raise prices. That's the supply side. On the demand side, people will be more mobile, since to survive, they are no longer bound as strongly to places with jobs. Demand in places with high rents will go down, and in places with low rents will go up. On top of that, more people will be able to afford to buy a house (getting a mortgage is much easier if you have a guaranteed stable income) instead of renting, causing demand for rental units to go down.


> basic food stuffs

Very few people are actively starving. A lot of people have food stamps already, and UBI eliminates them. With a UBI, and the hopeful cultural normalization of utilizing resources over being "poor", you can better optimize the use of excess foodstuffs that end up in food trucks and banks that not enough people can use all the time.

Food prices are always in a balancing act. Premium goods like beef and lobster fluctuate based both on the amount of money in the market for them, that can spur investment in increasing supply, or in the amount available, that can vary significantly depending on seasonal yield (moreso in lobster than cows). If a UBI increases the food spending budgets of the poor, they start buying more lobster and sirloin, and the prices go up. Then the market is up on those goods and more will be produced because the cost of manufacture probably didn't go up - the poor weren't suddenly demanding tractors or rural farmland or grain feed - meaning you still have the same net cost to manufacture, so the supply side pressure is there to increase the supply to meet the demand. Prices normalize again as a result of that, and they would not be dramatically higher. It depends on the total sum of social desire for these products relative to their competitors. If people start eating more beef, the price of chicken might drop in response and pressure people into maintaining the natural balances and optimizations around what the market can best provide at the cheapest prices.

> Rents will go up... about work income as much.

Housing is in balance now between rural and urban, and it would be after UBI. If rents get too high in cities (or just more generally, wherever the poor want to be) there is a cost ceiling where they will start inhabiting the dirt cheap rural towns that have been abandoned for decades because it is infeasible to live there without an income. Overnight, millions of unoccupied and unlivable houses become usable again.

> Alcohol and tobacco will likely get more expensive as well.

Luxury goods go up in price. The world isn't hurt at all for this.

> you'll still have higher prices in the long term

UBI has an economic effect you can see in food stamps now. The market treats food stamps as a price floor - they know that the worst their customers can be is on food stamps, so they price accordingly because the amount of money in the food stamps system is huge. As long as they can make any profit at the prices food stamp recipients can afford, they will compete in the market for their money.

The exact same would happen with UBI. Suddenly even the poorest person has a market voice, and there are still enough poor people - the median US income right now is only about 4k a year over the poverty line - to influence markets with their size, if not their density of money per person.

Inflation is not magic. The inflation in the US right now is from expanding the monetary base. If the federal reserve stopped printing money entirely, inflation would slow or stop. You would certainly see inflation immediately after instituting UBI - because suddenly billions of dollars effectively frozen in the stock market and trading in economic circles outside of the general consumer market are moved back into it - but it would not cause sustained inflation if you are just moving around funds in the economy that already had velocity. And even then, it would not be a severe jolt - billionaires don't just hoard benjamins under their mattresses. They invest them in companies that spend the money. Unless you are Apple or hoard billions overseas, but those are generally the exception to the standard rule of money in your pocket is money lost. The velocity would go up, but not tremendously, in ways that can destabilize an economy.

And that price floor that UBI sets puts tremendous pressure on businesses to meet demand at the price level. Properties would be built and refurbished to accommodate that income bracket. Food production would insure that food is available at that bracket. And of course vice and luxury will try to price themselves into that bracket. Because it would be billions of dollars of demand - you can't just ignore it - but because the UBI income puts an effective ceiling on costs that people can pay if they have no other income, that pressure fixes prices to that income threshold. It wouldn't respond instantaneously - you could and would see examples of people not being able to afford living off UBI in isolated years - but those are from market variability. The prices will either drop to get their money, or they will move where they can. And the US is big enough that we won't have a shortage of places to go, like we do right now where the limiter is a drying up pool of job offers.


> Why would you expect inflation? All sane UBI proposals don't create money, they just move money from rich people to poor people.

If UBI is funded via taxes on labor and its products (income and consumption taxes) then one should expect further inflation in housing prices, and ultimately the transfer of money from productive workers and entrepeneurs to unproductive landholders and mortgage lenders.

If you don't want this transfer to occur, then you need to fund it via a land value tax, which does not allow landholders to charge higher rent in proportion to increased public spending.

If you are funding UBI via increased taxes on income and consumption rather than land, then you run the risk of making the majority of people poorer if housing, rent, and mortgage costs increase faster than their UBI transfer payments increase.


> they just move money from rich people to poor people

That seems pretty cool if you're US, but what about Chad or Tajikistan where there are no rich people of the Forbes 1,000 variety and primary employment happens to be in government services?

The closest examples we have are resource-rich USSR and Venezuela, both of which did not do well inflation-wise. The jury is still out on Norway or Saudi Arabia.


The problem with taking money from the rich and giving it to the poor is that you undermine riches' motivation. If you limit the prize, then you also limit amount of effort that one is willing to make to get it.

Therefore, after UBI is introduced on mass scale we might see a slow but steady decline in economic activity: fewer new companies started, fewer investments made, riches focusing on tax evasion and moving their business abroad instead of just running and developing it, resulting in recession.

Of course you can go with nuclear option and forfeit all their properties at once, in the name of social justice (does that ring a bell?) but you can only do it once, and eventually will run out of the money seized this way.


This assumes that the primary reason to start a company is to become fantastically wealthy, which I would contest.

Sure, most founders want to get rich, but I'd assert most would be just as happy to end up in the 8 figure range ($10's of millions) as they would in the 9-10 figure range. (And such a reduction would require taxes on a scale far beyond what UBI would require)

Few people are going to consider starting a company and then sit down, calculate their tax burden as a billionaire and decide that it isn't worth starting Apple, Facebook or Google.


Lol. I'm sure most everyone on the planet would be happy to settle for the 8 figure range. It's humorous that anyone would suggest 8 figures isn't "fantastically wealthy" when only a fraction of a fraction of a fraction of a percent of people ever reach that level.


Founders might looking for a good living and glory, but VC's for example are looking to really capitalize on 100X growth.


To play devil's advocate: you may not need VC's as much in a UBI world. You don't have to worry about income if your startup fails, so you're less likely to play the VC lottery in hopes that you can ride the funding into a successful exit.


Exactly. In a UBI world, the government becomes the investor for innovation. If an idea you tried doesn't work out, you try something else. It becomes much easier to start a business, and you no longer get kicked out on the street for failing.


Look, no matter how much you tax the wealthy, you always have a positive derivative -- the more money you make, the more you take home. I really can't see anyone making a rational decision to work less hard because the tax rate is too high, within reason.

The other thing that becomes blindingly clear when you live somewhere like Silicon Valley is that wealth is logarithmic. If you take home a million dollars a year here, you're still living in a 2000 sq foot home in a town with a half-decent school district. If you want a house walkable to downtown Palo Alto, you'd better be making $5 - $10 million (those homes go for $4 - 5 million). And if you want a real mansion, you'll need $20-30 mil. You want your own jet? $100 mil. There's always someone making MUCH more money than you, unless your name is Gates or Bezos. In that environment, a 3x increase in pay is still a meaningful difference in take-home.


>I really can't see anyone making a rational decision to work less hard because the tax rate is too high, within reason.

I really think people do. Two years ago I had to work 250 hours in December to get a 25k bonus. At ~40% taxation, I felt it was worth it. I probably wouldn't at 65%. That is a pretty extreme case, but well off people turn down work if it isn't lucrative enough.

Plus, if you are taxing investments, then it all matters because of risk. Tax factors into the expected value of an investment. It's not worth investing money if 70% of the proceeds get taken away. This is why world wide, capital is taxed fairly lightly.


> It's not worth investing money if 70% of the proceeds get taken away.

Yes it is. As long as the 30% of the proceeds are higher than the proceeds of the best alternative use of your money.

> This is why world wide, capital is taxed fairly lightly.

This is wrong. It is taxed fairly lightly because it is mobile. Tax it too much and it just moves abroad.


>Yes it is. As long as the 30% of the proceeds are higher than the proceeds of the best alternative use of your money.

You aren't guaranteed proceeds. You can model investment as a probability function of profit. You should only invest when the expected value of the investing is greater than 0. But tax rates factor into the expected value.

Would you bet on a 50/50 coin flip with 3:1 odds? Of course. How about if you were taxed 90% on proceeds?


I was just in a meeting yesterday with a fund that chose not to pursue lucrative investment opportunities because the tax situation was much worse than the other opportunities available.

Tax is absolutely a huge part of the decision making for any substantial wealth management. Whether you buy property, bonds, or do something more creative is heavily influenced by the taxes you'll have to pay.


I'm generally a fan of redistribution strategies, but, it's worth noting that motivation is not just a binary function of "is the marginal value > 0".

Say I could spend 30 hrs/week running a small business at moderate efficiency, and make $100k/year in profits, or 60 hrs/week running a much larger, more efficient business for $10m/year in profits.

My motivation to put in the extra 30 hrs/week is going to depend greatly on the absolute value of the difference, after taxes. If taxes are such that I take home $90k vs $7million, I'm probably going to work the 60-hour strategy. If taxes are such that I take home $89k vs $500k, I may or may not consider that worth the extra hours.


>The problem with taking money from the rich and giving it to the poor is that you undermine riches' motivation. If you limit the prize, then you also limit amount of effort that one is willing to make to get it.

Commonly stated, but any real data to support it?

I think what kills the economy more is when the barrier to entry is high. This impacts mostly non-wealthy folks. In the US, it is ridiculously trivial to set up a "company". I've heard in some countries, you need to apply for a license, which could be expensive (say $2000). And along with that a lot of regulation that is quite affordable to big companies, but not to the average Jane.

The rich easily absorb all these costs, and it barely hurts their motivation. Poorer people trying to make a living and grow their wealth somewhat are most impacted.


Just like any resource, your 'motivation per dollar' return decreases as people get richer. For $20, a very poor person will do a lot of difficult things; a rich person probably wouldn't even get off the couch for $20.

Once you get past a certain wealth level, money actually STOPS being a motivator, at least in the ways that it is for poorer people. Instead, it becomes more like a scorecard, to demonstrate to others your success. That desire to demonstrate your success will always be there, whether you tax the money or not.


Riches' motivation to do what? Continually hoard resources? The problem of hoarding, tax evasion, and generally just theft from society disguised as "innovation tax" is the problem that already exists. You're not reducing economic activity, you're just taking economic output and putting it where it deserves to go.


Instead of deserves to go, I would say where it will be the most mobile. Sitting in a bank account doesn't do anything for the economy. Giving it to the poor means it will get spent. The people that the poor buy from will see an increase of revenue and make more money. Those people being one step above the poor will spend the profits (as well as buy more inventory), and the cycle continues. Trickle up will generate the economy spur more than trickle down.


Rich people don't have most of their money sitting in bank accounts.

And even if they did, you think the banks just sit on it? No, they loan it out.


Why is it that giving money to rich people increases their motivation, but giving money to poor people decreases their motivation? This "motivation" thing sure is hard to understand!


A possible explanation would be this:

People are on a continuum between "extremely lazy" and "extremely hard-working". I know that I would stop working if I had ten million dollars, even though I love programming, because I would prefer to read books all day long. Elon Musk, on the other hand, would probably not stop working even with ten billion dollars, because he is obsessed with creating stuff.

This suggests that most people will generally settle where they are content with what they're making. I know this is true for me (it would be easy for me to make twice what I'm making now, and ten times is achievable but would take a lot more effort than I'm willing to put in); from what I can tell, it's true for all the people I know.

Also, you're equivocating on the "giving money" expression. Giving $10 to a homeless person and to Elon Musk would probably not motivate either of them.


> The problem with taking money from the rich and giving it to the poor is that you undermine riches' motivation.

Two problems:

1) Assuming the "riches' motivation" is something that would be bad to undermine

2) This probably isn't true


> you undermine riches' motivation

To tax the rich is not the same as disincentivizing investment! Investment matters to the economy, not capital.

Yes you need capital in order to invest. You need the right amount of capital in the right places! Rich hoarders are not the best investors.


Taxing capital and labor creates deadweight loss and disincentivizes investment in the production of more goods and services. Capital goods are durable goods which go to wherever they are best treated, including overseas.

If you want to tax the rich without taxing capital or labor, then you want to tax land. Unlike capital, there is only a finite supply of land and it cannot be moved overseas. Wealthy individuals like owning land in areas with high land values in stable countries with high public spending, and with a land value tax they directly pay for it.


The rich don't broker in dollars, they broker in power. Our current president filed for [corporate] bankruptcy ~~something like five~~ four times? He wasn't worried. He knew he'd be back on top again. All his relationships and social capital would be intact, except maybe with the people he owed money to.


Most western social democracies already have an overlapping network of benefit systems that are essentially a patchwork UBI in disguise. The system is designed not to go without food and shelter, but the exact mechanism varies depending on what population group you belong to. There's assistance for the temporary unemployed, for students, for people with disabilities, people with long-term illnesses, etc. There's pensions for those that have aged out of the workforce, there's assistance for children. And this is only scratching the surface. Even working people get a fixed basic tax deduction under most taxation systems.

I'm not convinced that the sum total of all these benefits plus the current infrastructure that is needed to maintain, dispense and detect/punish abuse on them is significantly larger than the total expenditure on UBI.

Of course, all the people that you let go from the benefits departments initially will end up on UBI, so that's not really a big win. But eventually they will find employment elsewhere, hopefully.


> I'm not convinced that the sum total of all these benefits plus the current infrastructure that is needed to maintain, dispense and detect/punish abuse on them is significantly larger than the total expenditure on UBI.

Most western social democracies publish the data on costs of running departments and numbers of working age people in employment or receiving each type of subsidy, so we know that the admin costs are negligible compared with the cost of paying a living subsidy to an enormous number of working age people who aren't claiming disability or unemployment benefits, generally because they don't need the money enough to take the steps necessary to claim it.


I completely agree. I think moving to a single-payer health care system would also be required.


I believe single payer eliminates market competition to the detriment of all but those who can pay out of pocket.

A better way is to use UBI which a portion earmarked only to purchase health insurance. Instant universal coverage with consumer choice and market forces stay intact.


The best explanations I've heard effectively make the assertion that a country's land is collectively owned by its citizens. Its citizens can then charge rent (via taxation) to individuals or corporations using the land. UBI is the distribution of that rent.


Politicians are loath to acknowledge this, but the fundamental purpose of taxation isn't just to fund the public good, it is to discourage rent-seeking. Economic rents (not to be confused with the rent you might pay for an apartment) are dead weight, so any tax that can target them without disrupting actual productive work is effectively free money. One of the best ways of doing this is, as you proposed, to tax the unimproved value of the land.

https://en.wikipedia.org/wiki/Land_value_tax


In what way is the land collectively owned? The business would show a deed and prove they already own the land.

Also, if I already own a house privately, I would pay the commons rent on what I already own? This seems to pervert the notion of ownership.


As the land is not something that you created your 'ownership' of it is simply a grant from the commons. Unless I am misinformed this is explicitly the case in the US as far as many tracts of land in the mid-west are concerned, the federal government granted parcels of land to those who would settle there.

The point is that because it is a grant from the commons there is no natural law that says that that grant cannot be handled in a different way than it is now.

If society as a whole decides that this grant is no longer to be regarded as absolute then there is no barrier to taxing the occupier of the land.


In the US (and most countries), land "ownership" is already a perverted notion. You often must pay personal property tax on the land you "own", the government, through eminent domain, can take the land you "own", etc.


I think one of the biggest problems in the world right now is how much money is simply captured and not moving through the economy. A huge amount of money is sitting around adding very little economic value. Redistribute that money to people who will use it to consume products and services and you get a much more active economy.


Where is this money that is captured and not moving? Most invested dollars are still moving in one form or another. Invest in a company's bond, and they're using that money to build a factory.


Apple has 250 billion dollars in cash -- they aren't building any factories with it. There might be greater need for factories if people had more disposable income to spend on things.


If you buy stocks, you could argue that this money is not doing anything (except maybe the person who sold you the stock now has cash and is presumably doing something with it).


That's exactly what I'd argue. You can't show money tied up even in skyscraper investments since they generate rents. So where is all of this money that's just sitting there doing nothing?

So long as interest rates are > 0%, I think that's going to be a pretty rare situation.


You know, trillions are raided from communities and stashed offshore untouched instead of being reinvested locally, this makes entire continents poorer; on the other hand, it is common sense today to give people the basic to survive instead of having them fleeing, migrating and becoming criminals. You may even avoid paper money, just give all a credit card to buy the minimum daily dietary without withdrawal allowance. Otherwise history says that there will be wars.


But sometimes that scarce resource is time. You pay a person for their time doing a service. For instance, waiting tables. Cleaning. Staffing a counter. Driving a truck. Nothing (or very little) is constructed there, it is just a service rendered.

And you can therefore consider financing UBI by virtue of the time saved by automating these tasks. You take that time saved and hand it back as dollars instead of translating it into additional profit.


You're absolutely right, but theres no other solution that's feasible. If we don't have some form of UBI, I'm willing to bet in 20-30 years we're looking at another French revolution.

I think the best solution is instead of handing out liquid cash that can be used/abused in any way (and contribute to inflation as you say), the better option is to provide basic accommodations for every citizen in a given country. This means, basic housing / basic education / basic means of transportation (either car or ride sharing credits) / basic forms of entertainment / basic access to some vacation spots. That way no one needs to work anymore but you could keep the general citizen's happiness to a stable level.

The only problem with this solution is that the government has to pay for this by either borrowing money from private creditors or to tax the rich heavily. The rich are only rich because they're good at keeping their money, so it's a good solution, but incredibly hard to pull off.


UBI generally has the implication attached to it that creating a proper safety net allows for savings in other areas, simplifies other social services, and reduces costs through net social benefit - not just the upfront costs.

So health care savings, the ability to quit your job and go back to school (or other kinds of re-training, generally a diversified workforce is a beneficial one), reducing the need for shelters, etc.

This is aside from the fact that a reduced engagement in the workforce doesn't have to be a negative thing - plenty of money is being made, it's just not being distributed very well :) UBI just intends to right that inequality in a productive way.


UBI isnt the solution, there just isnt a better response that has even slight chance of being implemented.

There needs to be a radical shift in how we look at our economic systems and culture in the medium term. However, if the currently proposed health care replacement is evidence of current thinking, U I is a pipe dream.

I don't usually make predictions, but it is going to get very ugly in the next 10 years if nothing changes.


IIRC the margin for single payer healthcare being not considered under Obama was Joe Lieberman demanding it be removed from the ACA/Obamacare in the Senate. And this was only because the Democrats were honoring the filibuster so they wanted 60 votes, when they could have removed the filibuster like the GOP did for the Supreme Court nomination.


Inflation or deflation is basically driven by the balance of goods and services available against money being spent. If your hairdresser say is full all the time you raise prices, if it's empty you give discounts.

At the moment if you handed everyone more cash without an increase in output you would get inflation.

If you took the money from the rich and gave it to the poor you might get some inflation in basic goods as the poor tend to spend their money while the rich invest it. Also possibly deflation in luxury condos. This probably isn't going to happen in a hurry due to politics.

If robots start producing a lot of goods and services then giving more money to people would not necessarily be inflationary and there would be more money spent but more goods and services also. Your hairdresser would have twice the customers but employ robo-haircutters rather than raise prices as it were. I could see something along these lines being gradually rolled out with the amount of basic income increasing as human labour became less necessary.


As others said, UBI doesn't necessitate increasing the stock of money, it's a system of redistribution. The types of goods being consumed by the economy as a whole would change, you correctly predict (if they didn't, UBI could hardly be called a success in redistributing money to the poor, could it?). Luckily, one thing capitalism does have going for it if nothing else is that it encourages a rapid response to changing demand. There may be a period of time where the grocery store aisles are leaner than usual, so to speak, but I don't see why we wouldn't see our usual swift return to equilibrium.


we're so sophisticated now that we abstract the idea of work away from the idea of making a living (as in being able to be alive, as opposed to dead) and come up with concepts like UBI where we can simply not work, without realizing that not working correlates with not living.

work is not some thing apart from ourselves. work is not something apart from play or recreation or relaxation or any such things. we move and create and change and destroy all the same. we value these things as part of our social fabric of keeping a community of us humans alive. money lets us abstract away the need to trade immediate goods for that purpose, but it also lets us abstract out the fairness of it all. those who seem to contribute more to the general welfare might deserve a little more in return, whether it be in goods or esteem or respect. but we're all expected to put in along with taking out.

UBI would tear up that implicit social contract and unmoor us from our democratic underpinnings. while well-intended, UBI suffers from the same idealism as libertarianism by failing to grasp even a basic modicum of the human condition.

despite automation, people will create ways to make a living. lives are literally depending on it. that's not to advocate long-term suffering, but our social responsibility should be focused on using our natural craftiness to help others help themselves (and leveling the playing field), not providing handouts.


I agree that work is very important for mental health. I disagree that the work has to be in form of a paying job. With UBI I could choose to work on open source, or create art or clean up my neighborhood. Without UBI I have to sell my lifetime and work on things that don't really interested me.


I can see GDP dropping massively.


Normal people don't care about GDP. They care about working infrastructure, food, housing... those things can be had with a shrinking GDP.


Look at Alaska which has a long-term state-run form of UBI. It's about $100 per person per month. Even at such a low amount, to your point, it creates some measurable inflation and other distortions in the market. UBI may only work as a low, supplemental amount to start, so it could be a fair analog. The idea that we'll start with UBI that's enough for each individual to rent a studio, cover transportation costs, and put food on the table seems improbable.


Distortions in the Alaskan market happen because everything in the far north costs a lot more labour/energy. This is due to economies of scale, the inhospitable environment, and the need to ship in pretty much everything necessary for human life.

Government handaouts are not why a head of lettuce in a small town in Nunavut can cost ~$15.


Yes, that's true. There are other Government subsidies (e.g. increased payments to medicare providers) meant to offset the costs of operating in that environment. What I meant was that within these "permanent distortions" of the market, there are short-term observable trends around the time of the APF dividend (an annual payment) is distributed, e.g. I believe something like 30% of all sales in certain (rural) areas occur in the 30 days following distributions. My larger point was simply that 1) the APF is an important source of income for many cash-poor Alaskan families, 2) Alaskans generally seem to have faith in it's sustainability, 3) there's 30+ years of good data around distributions and economic activity, and 4) as such, it seems like both the best proxy we have for UBI and its potential effects.


I would like to see UBI tests performed in pathological areas, or areas close-to-pathology - in real world environment without hype enforced on them.


In the "real world", payday loans type operations will be the only beneficiaries of UBI. Simply handing out money will not change the structure of society.


> My problem with UBI is that all tests to date look great, but have only been done on a micro level. The fundamental issue I would like addressed is the macro scale inflation you would expect when redistributing trillions of dollars without commensurate economic value being created directly.

The thing is though, most people who would benefit from UBI are not currently generating enough economic value to live, or barely so, and many are probably not capable of doing so for any number of reasons. We can do this because:

> Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, etc).

...the costs of all of these things are plummeting due previously to outsourcing, and now to automation. As manufacturing becomes more and more automated and the costs of these items continues to drop, you start seeing volume sales/renewing subscriptions being the only possible way to make money on some products.

> If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.

This is my one beef with UBI and the one thing that does make me worry about it, but the way I see it is that whatever effect this does have the overall value of the currency cannot possibly approach the effects that the results of borrowing and printing currency to fund things like the outrageous defense budget (of the US) do, the economic benefits of which are muddy at best.

For me this is both an issue of economics -and- of people. To me, in a country as rich as mine it's embarrassing that we still have such vast areas of the country that look more like the slums of Brazil than the cities they're usually parked next to. It's also the simple fact that if you continue to displace more and more people, as we've done, who are too old/not smart enough to change careers, eventually something is going to give. Frankly I pitch UBI as how we avoid the second Civil War, where instead of North vs South, we have Urban vs Rural when the much larger (and better armed) population gets tired of the cities and their nonchalant attitude towards their plight.

These are legit questions and I hope we get better answers than mine (I'm no economist), but speaking as someone on the higher end of the income brackets who would never see a dime from UBI, I really don't think continuing to pretend that the rich can keep on getting richer and the poor poorer is a good plan. When it comes right down to it, there are more of the poor than the rich, and the cash won't save you when they break down your door with pitchforks.


If you don't see a dime I wouldn't call it an UBI. "Unconditional" is supposed to mean that everyone gets the same amount of dime.

If you are concerned with progressive income tax as a means of financing it. Consider the possibility to implement UBI based on land rent instead, like the Alaska oil fund but the rent from all kinds of natural resources that really should be shared fairly anyway.

Regarding the issue that people would work less:

- Perhaps that's not a big problem. Just think of all the people in telemarketing that could just stop contributing to that particular problem. Or perhaps some other truly evil industry, like tobacco, would people with an UBI be more inclined to not work in unethical industries?

- Perhaps more people would dare to start their own business. Trying truly weird stuff that no one would invest in otherwise.

- Perhaps it contributes enough stress reduction in people to have significant effect on healthcare costs

- Given the safety net of an UBI, a lot of laws and institutions surrounding employment could perhaps be relaxed and more dynamic.

In my mind the potential benefits to the economy and could be quite interesting


> If you don't see a dime I wouldn't call it an UBI. "Unconditional" is supposed to mean that everyone gets the same amount of dime.

I wouldn't see a dime because I make far, far more than the people who need it. I don't need help.


Part of the benefit of UBI is removing a large amount of overhead that comes with current welfare systems. This is done by writing a check to every citizen in the system with overhead only to confirm that one citizen gets one check. When you add in other checks you increase how much money needs to be spent on just running the system


If I literally see a dime from the UBI check and pay $2 in taxes to support the UBI program for every dime in UBI I receive, it's reasonable to say that I'm not really receiving UBI on a net basis.

(I still support it, and your arguments for why it must be universal are congruent with my own thinking.)


That's completely true, it's just cheaper to send the same check out to everyone than pay for the administrative costs to figure out who gets the check that week.


Then you're not talking about a UBI, you're talking about a negative income tax[0], which IMO is a lot saner than a UBI.

[0] https://en.wikipedia.org/wiki/Negative_income_tax


A UBI alongside a progressive income tax is identical to a negative income tax, assuming that the negative income tax is truly progressive (that is, the marginal tax rate is monotonically increasing over the entire income range; I only add this caveat because I've seen NIT proposals where the marginal rate was higher in the range where the total rate was negative, then dropped down, and was progressive beyond that point.)

That is, with any such NIT, you can add a fixed amount to the tax laibility so that the amount is never negative, and add a UBI of equal amount, and get exactly the same net results, and with a UBI you can subtract the UBI amount from everyone's tax liability, delete the separate UBI, and have an NIT with the exact same net financial effect. They are basically interchangeable.

Administratively, they are different, in that the UBI payments are effectively an advance against the potentially negative income tax that those above the point with 0% marginal tax have to pay some or all of back at tax time. But that's the only difference.


> in a country as rich as mine it's embarrassing that we still have such vast areas of the country that look more like the slums of Brazil than the cities they're usually parked next to.

Well, the slums of Brazil also do not look anything like the cities they're parked next to.

With the increasing economical disparity, less and less reliable government services (and laws), anti-intellectual culture and many other trends visible on the media, it looks the US is getting more and more of the "features" Brazil is working hard to exterminate. That's concerning.


The argument I hear for UBI is that it eliminates all the administrative overhead of most existing welfare programs.

In most western countries unemployment does equal lack of food or housing... due to a large number of welfare programs.


I wonder if a MMORPG with an economy could be used to simulate what happens.


Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: