A little over a year ago, I moved returned to Canada (Toronto) after five years in the UK. One of the most striking things I noticed was the difference in homelessness between here and there.
A homeless man who they had to repeatedly pick up off the street because he kept drinking himself into a stupor and falling down. (Hospital bills, etc..)
Apparently he cost the state 1 Million Dollars over 10 years.
So $20,000 per year $100,000/per year? Suddenly that low end guarantee is a serious cost savings.
Now certainly - "Murray" wouldn't get away with costing ONLY $20,000 per year ... but in a safe, (partially) supervised area, he'd have cost a lot less than $100k.
Gladwell also mentions that the data shows "most people" won't leech off these programs forever. Most have an innate drive to want to improve themselves.
Some will but actually - it's probably still cheaper than "Murray".
I am 100% in favor of a program like this - in principle.
Now try and introduce it at a Texas town hall meeting :) With FOXNEWS cameras in attendance.
Coming from belgium I have seen big differences with homelessness in Canada. Not only are there more homeless in Canada but their composition is different too.
There are more women and young people on the street. The ratio of whites(and presumably Canadians) to non-white(and presumably immigrants) is also higher. Something that is also remarkable are the obviously drugged people walking in the street.
Another difference lies in their behaviour. Many are polite and friendly, or at least that's how they come across when they say things such as "have a good day" after you told them no.
I'm not entirely sure what the UK is doing differently. I didn't even notice that it "wasn't there" until I got back. It was only after I returned that I realized the difference.
I know that in Toronto, I sometimes get the feeling that the streets are paved with the homeless.
Maybe it was the Socioeconomic status of the area I was living in, but it just seems so much more prevalent here.
The UK does however seem to have 'council housing' projects that I think act as a buffer for many. The jobless and those on very low income, can obtain housing from the local council (municipal government). Essentially the risk of becoming completely homeless was very low.
But essentially it's a program where the municipality pays the rent directly.
I think the level of social assistance must cover quite a bit of the difference.
I really must add the caveat that I didn't study the problem while I was in the UK and am certain that there must be some homelessness there somewhere - but - it really isn't anything like what's in Toronto (and Ottawa that I've seen).
A council house in the UK is a dwelling that is provided by the local municipal authority. Rents are about 1/2 to 1/3 of the lowest market rent. They are generally set by the local council. In addition to this you can receive housing benefit to pay most of this if you are out of work, the rules for this are quite complicated.
The concept dates back to postwar reconstruction in the 1950s when they were originally built at a large scale to replace bomb damaged and run down private 'slum' housing. I think I remember a lecturer saying that in the 1970's as much as 60% of the British population lived in council houses. In the 1980's Margaret Thatcher introduced 'right to buy' legislation which forced local councils to offer tenants the opportunity to buy their council house for well below the market value. This lead to a large decline in the number of people living in council houses. I think the proportion is more like 20% of the UK population now.
There has been a big cultural shift in Britain in the last 30 years; living in a council house was considered 'normal' but is now stigmatised. The quality of the accommodation can vary widely.
Council houses are not always in housing estates ('projects' in US) they can be normal houses intermingled with private housing that just happen to be owned by the council and rented out to council tenants. However this is rare now because of the 'right to buy'
There is a shortage of council housing, if you want to get one you have to be assessed as being in need of one and you go on a waiting list. Your position on the waiting list is based on points. The points are allocated based on criteria like: how long you've been waiting; how many kids you have; if you are being threatened; if you have disabilities etc.
By the way, I'm not totally sure about the percentage figures, they are based on a memory from a lecture about 10 years ago. I'll try and find some references to back them up.
Incidentally, I live in an ex-council flat, which was 'right to buy'ed by a previous owner. In the whole block of 30 or so flats, very few are still council-owned.
The UK has quite the shortage of council/social housing so someone who is homeless tomorrow would struggle if it were not for "crisis" loans and housing benefit. Housing benefit pays the median market rate for a property in your area for you if your income is low enough. If your rent is cheaper, you can even keep a small amount of the overpayment.
Worth a test on a small scale. I'd be most worried about very long-term multi-generational effects, given that such a program could be impossible to undo or adjust once people get used to it -- like other broad-based entitlements.
For example, the first generation to enjoy such a guaranteed minimum income might still have the traditional ambitions... but over time and with practice, the bohemian ideal of making-do on just the guarantee could grow in attractiveness. And, the discretionaty time offered by the stipend could be directed chiefly at lobbying/politicking/mass-protesting for ever-larger benefits. After a few generations, might we get a combination of the worst stereotypical qualities of both the 'underclass' and 'trust-funders'?
It's the sort of positive-feedback loop that -- like financial leverage tricks and other forms of moral hazard -- can build on itself until disasterous collapse.
What you describe is a fear of what people might do if they are not forced to work. None of us really knows, but my feeling is that it is natural for humans to go out and explore things, make things, strive for recognition by others, etc. Homer Simpson does not expemplify the natural equilibrium of the human psyche.
What you describe is exactly the current situation in Europe, but the reason is not some bohemien ideal. The reason is fear. By tieing entitlements to a lot of conditions people are incentivised to stay put in their current status once it is officially acknowledged. Once you have your piece of paper that makes you unfit for work you avoid doing anything that could threaten that hard won status. I personally know people who live off benefits but would much rather work if they were not threatened with losing _all_ of their benefits the day they start to take up self-employed work.
A milder form of the same would be to have a bicameral legislature, where one house is elected by universal suffrage (including the perpetually dependent), and another house limited to those who are net-positive taxpayers. (Or perhaps similar: subject to a poll tax equal or larger than the guaranteed minimum income.)
An interesting question is whether government employees and large government contractors count as dependents for representation purposes or not. Some of the same tight-feedback-driving-increased-benefits-without-regard-for-true-value loops that are of concern in the generous-welfare case are also at play with regard to civil servants and large companies wholly dependent on government spending.
By that you mean "The right to vote". Here in the US I haven't ever heard of the word used in that context so I thought other's would find it useful to know what you meant.
I anticipate a lot of people would think so (which is why I called it a tradeoff no one would agree to). It would be more interesting to know why you think it's a terrible idea.
Well, for one, it treats poor people like criminals who need to be punished for being poor. Granted, we do that to a large degree in the US now implicitly, but this would be very explicit -- and, I feel, tremendously mean-spirited.
More practically, it removes the poor as a voice in their own governance by using what amounts to a bribe. And in practice, it would probably remove most poor people from the voting rolls, because short-term, taking the 10k or whatever to make ends meet is the rational decision over pulling a lever that may or may not have any affect on your particular situation.
I think my main objection here is that there is no real guarantee that the extra money, generally, will push people out of poverty and back into enfranchisement -- and if it doesn't work, what you've done is institutionalize bribery and legitimize an explicit oligarchy of the rich.
So if you think there's "no real guarantee that the extra money, generally, will push people out of poverty", then why bother giving them extra money at all?
Won't this just attract the slackers of the world to come live in Canada, or the part of Canada that tries this? If this is intended as a sort of experiment, it can only be done in a closed environment.
I imagine that our current immigration policies would be sufficient to prevent this. There are probably a large number of people who would want to become citizens solely for our health care or existing safety net.
Let me be frank: It seems to be like that already for Sweden, which is a welfare state with the most open borders in EU.
That said, most immigrants to Sweden do seem interested in working -- there just seems to be a strange glut of uneducated people, compared to the available jobs.
(Remember, it is a welfare state -- high minimum wages.)
Educated people that can choose country prefer places with lower taxes -- which are high in Sweden to pay for the welfare state.
Edit: The real problem is that Sweden might be on the way to ghettos, US-style in a few decades. :-( A sociologist might mutter something about a perfect storm to generate a criminal underclass, also US-style. :-(
Edit 2: Worst case, I could go to Canada... Would love to relearn my French, anyway. :-)
It's interesting that this has never seriously gone anywhere, given that a number of prominent people on both the left and right have proposed it. Among many other people, supporters of a minimum income in some form include: Thomas Paine, Richard Nixon, Daniel Patrick Moynihan, Milton Friedman, George McGovern, Friedrich Hayek, Paul Samuelson, etc.
Friedman proposed a negative income tax, which is not the same thing. A negative income tax often increases the marginal utility of work (if the rates are not too large), a guaranteed minimal income always reduces it.
Assume a utility function U(P) (P is take home pay) which is downward sloping (i.e., dU(x)/dW < dU(y)/dW whenever x < y). This is just the law of diminishing marginal returns.
Negative income tax: take home pay is P = A x W, where A > 1 and W = wages. Marginal utility = dU(AW)/dW = A dU(AW)/dW. If A dU(AW)/dW > dU(W)/dW, negative income tax creates an incentive for work.
Basic minimal income: take home pay is P = BI + W (BI + basic income). dU(BI+W)/dW < dU(W)/dW. This is always a disincentive for work.
I'd really be curious, do you have more information on Hayek's support for minimum income?
That's a version of the "negative income tax", like the current EITC, but not the one that Friedman proposed. His version refunds a proportion of unused deductions, and bottoms out at a guaranteed minimum income equal to the standard deduction times the refund rate.
In his version, there's an allowance calculated by family size, dependents, etc., and a "subsidy rate", which is the proportion of any excess allowance that's refundable. He proposed a 50% subsidy rate. If the allowance for a given taxpayer is $20,000, and the taxpayer earns $15,000, that leaves $5,000 in unused allowance, of which 50% is refunded, so the taxpayer gets a $2,500 transfer payment. If the taxpayer earns no income at all, the entire $20,000 is unused, of which 50% is refunded, so the taxpayer gets a $10,000 transfer payment.
So, if A is allowance, S is subsidy rate, and W is wages, the taxpayer earns W if W >= A, or W + S * (A-W) otherwise. The guaranteed minimum income is when W=0, and equal to S * A ($10,000 in the above example).
For Hayek, here's one of several places he discusses his rationale: http://books.google.com/books?id=nclLLOfnGqAC&pg=PA55. One reason is that, unlike many libertarians, he's strongly against private-sector safety nets through e.g. church charities, because he feels those inhibit human freedom by making people scared to leave their ethnic/religious/racial/social group for fear of losing its safety net, which he views as a variety of collectivism. So he sees a guaranteed minimum income as a way of promoting individual freedom and undermining the power of tribalist collectives.
I'm not sure what makes that a negative income tax. That's just a flat out subsidy, and it always creates a disincentive for work (it reduces marginal utility of work by (1-S)[dU((1-S)W+SA)/dW ] / [ dU(W)/dW] ). But you are right - this is what Friedman proposed.
But I get Friedman's rationale - he wanted to replace the the "ragbag" of assorted other welfare programs with this. It does have the advantage that dP/dW is always positive (just reduced by (1-S) if you are poor), which is not necessarily the case for the existing system.
So I'm not sure it's fair to say Friedman advocated it - he just proposed replacing a much worse system with it. Do you know if he considered it good policy, as opposed to merely better policy?
I think you're right, that Friedman viewed it as a least-evil approach: that, if we're going to have social welfare programs, the least distorting and least bureaucratic approach is to just pay out cash.
O jeeze, I don't know where to begin with your calculation.
First, if the utility function was "downward sloping" nobody would ever work. It's the marginal utility that is assumed to slope downwards (I assume you know this, because you later argue as if you did). But this is the opposite as in your example: It should read dU(x)/dW < dU(y)/dW whenever x > y (not x < y).
More importantly, your negative income tax definition is faulty. A NIT has never the form proposed by you. It wouldn't make much sense. Also, if A > 1 (in fact, if A > 0) you always have an incentive to work in your model, assuming dU/dW > 0.
And by the way, I don't know where you received your math education, but dU(AW)/dW = A dU(AW)/dW does not follow. For example, let U(P) be a simple concave utility function U(P) = ln(P) = ln(AW). Then dU(P)/dW = d(ln(A)+ln(W))/dW = 1/W != A 1/W.
This is all not so bad. Everybody makes mistakes (maybe I made one above). What bothers me is that some hacker news readers have apparently upvoted you without ever checking the results.
First, if the utility function was "downward sloping" nobody would ever work.
Aggh, I miswrote. I meant concave down, which is actually what I used in my calculation. Thanks for the correction. In defense of my readers, they probably glossed over my incorrect definitions, and didn't notice any problem because my calculations didn't match my definition.
But I will defend my calculus: dU(AW)/dW = A dU(AW)/dW follows from the chain rule. Another way to do your calculation: d(ln(AW))/dW = A x 1/(AW) = 1/W.
Also, the NIT I described has been proposed (that's how it was described in my intro to econ class), and it does not always create an incentive to work. The relevant criteria is A dU(AW)/dW > dU(W)/dW. Since dU(AW)/dW decreases with A, there the marginal utility of work can be negative with respect to NIT.
Maybe I am wrong. But how can dU(AW)/dW = A dU(AW)/dW be true? If you set z = dU(AW)/dW and substitute, then z = Az. This can only be true in trivial cases.
Also if you apply ln(P) as utility function then the partial derivate for W yields the same result to U(P) = U(AW) as to U(P) = U(W), namely 1/W. So in that case your inequality does not hold.
So in that case [U(P)=ln(P)] your inequality does not hold.
The inequality I gave is a criteria, not a theorem. I didn't claim it was always satisfied, I just claimed it was possible.
If it is satisfied (e.g., U(P)=sqrt(P)), a NIT creates an incentive for work. If equality holds (U(P)=ln(P)), a NIT has no marginal effect on work. If the reverse inequality holds (U(P)=1-1/P), a NIT creates a disincentive for work.
Actually I think the Leibniz notation is confusing you a little (or at least you are using it very sloppy): you use dU(AW)/dW to denote the derivative of the chained functions as well as the derivative of the outer function applied to the inner function, all in the same equation. As I said: substitute the aforementioned term with z and your equation reads z = Az.
Not necessarily - simply provide everyone, no matter their income level with the basic payment; that also decreases the paperwork and the power of the bureaucracy to bully the recipients. Then, since everyone has the minimum to live on, have a fairly high, fixed percentage, income tax on all income. There would be no effects on the marginal utility of work, and shouldn't be too much on the average utility, provided the minimum really is only a minimum subsistence level.
That of course depends on the specific model of negative income tax and basic income. There are many, and sometimes they are functionally equivalent. More importantly, you are implying a specific quantification of the desirability of being in the workforce. I doubt very much that the utility or rather desirability of free but forever limited money is the same as that of earned money that comes with an option for much more money and personal recognition. I think the incentive structure of these models is very complex and neither proponents nor opponents can really understand it.
As you hand out more free money you just cheapen the money in everyone's pocket and make them poorer. The 20k you just gave away won't even buy the amount of goods it would have before you created the program. This is just some redistribution of wealth gimmick. Giving away money does not address the source of poverty. Would you patch your code this way?
To end poverty you must fix the education system. Perhaps vouchers would encourage competition and force schools to compete for students by improving the quality of education. Perhaps someone would have to balls to end the process by which bad teachers are transferred from school to school because the union and public admin refuse to do something about it.
To end poverty you must cut the costs of education. There is no reason a 4 year college should cost what it does today. Look at what some administrators and professors make compared to what they do. Look at the quality of what you can learn on the internet for free. These need to come in line. State universities don't need water parks.
To end poverty we must educate on safe-sex.
To end poverty we must encourage healthful eating choices. We must get partially hydrogenated oils and all the other crap out of are food.
To end poverty people in the US must realize that left/right blue/red republican/democrat foxnews/msnbc is a false paradigm. People must not be divided by these things. People must see past all of this noise and see who is working against the best interest of people in favor of the people who hold the most money. People must see that all policies we have are in fact creating more poverty. To end poverty, we must fix the source of the problem - the united states congress and the federal reserve.
I’m not sure whether a program financed by taxes (either existing tax revenue by cutting other spending or additional tax revenue by raising taxes or both) has to lead to inflation. Could you elaborate on that point?
It’s certainly possible for certain tax increases to affect everyone or nearly everyone and consequently lead to a rise in the cost of living and inflation. Increasing the sales tax would certainly seem to increase the cost of living, making the stipend worth less. That is not the only way to finance such a program, though.
no, your original assertion is absolutely correct. This will create price inflation, and this is exactly what happens every year in Alaska. Alaskans receive a dividend check every year for about $1500 to $3500 dollars, and every year around the time people begin to receive checks prices go up. I try to explain this to people up there and they don't seem to understand.
To end poverty we need a gov that does not lie when it says it supports affordable housing for people.
Affordable housing does not mean a 0% down FHA loan on an overpriced home costing the person 2/3 monthly income with some jacked ARM.
Affordable housing is to quit jacking with MBS and let housing fall to its proper market prices at which point it becomes affordable and buyers come in.
People need to understand that renting is just fine and home ownership is NOT for everyone.
It's fairly obvious that gov action in regards to home ownership has impoverished many people this past decade while making a killing for the banking elite. This trend continues to this day.
it saddens me that I had to scroll through comments for awhile before I see someone bring up that money isn't a magic static store of value.
taxes don't mean anything in terms of ability to spend to the guy with the printing press. taxes under the current Bretton Woods II policy maintain aggregate demand for dollars. The oil trade being conducted exclusively in US dollars is for the same effect. Nothing escapes supply and demand.
We owe the existence of Linux to something very much like this. Finnish students not only do not have to pay tuition, they also receive a basic living supplement. Therefore Linus was in no hurry to finish his degrees, and spent his time doing Linux instead / as well.
We'd also end up with more entrepreneurs. Under this scheme, your startup would be "ramen profitable" without any income.
Currently, Canadian welfare pays $3 to bureaucrats for every $1 given to recipients. Most of the money to fund it comes from there.
I'm a huge proponent of this scheme -- I like to combine it with a "flat income tax" -- give everybody $20,000, and tax all income at a flat rate. The resulting curve is nice and progressive, as well as nice and simple, saving even more money on bureaucrats.
Canadian welfare pays $3 to bureaucrats for every $1 given to recipients.
That's exactly the kind of irrationality it would be a pleasure to see swept away.
I'm a huge proponent of this scheme
Who in Canadian politics is actually advocating it? The article mentions Hugh Segal. This is not someone with much power. So I guess my question is, of those advocating it, who has the most power?
If nothing else, it would be a counterexample to the principles that nothing in Canadian politics ever changes or is ever interesting. Hey, we could even call it Worthwhile Canadian Initiative! (http://en.wikipedia.org/wiki/Flora_Lewis)
I'm not convinced. I'd pay extra taxes for a limited time to see if this would work but I suspect it wouldn't.
My conclusion is based on one assumption: The source of financial problems is either bad money management or lack of enough earning capacity. Giving away free money fixes neither in the long term (this is another assumption.)
If their problem is bad money management, giving them more money and hoping that they'll fix their money management habits sounds like a very ineffective approach to fixing the problem.
If their problem is lack of earning capability, that needs to be addressed through education and job creation. Giving a single mother with 2-3 kids an extra $1500 per month might make her life a lot easier but it won't allow her to begin earning an extra $1500 on her own unless she uses the extra money to make very smart choices. Given the real world demands that she would be under, it seems that probability is not likely in her favor and again seems like an ineffectively approach to solving the problem.
The article really boiled down to: give people free money and they'll make wise decisions to help themselves. It didn't provide enough arguments to support that thesis and from just my understanding of human nature, I can't see this being an effective approach to solving the problem of poverty.
But what if those aren't the only two causes of poverty? I don't know if the idea has merit or not, but I think poverty is much more complicated than that.
Then perhaps you're creating (or training for) the wrong jobs. There are many vocations out there that provide benefits and have rather large earning potentials.
The wrong jobs still have to be done by someone though. When you're talking about an entire system, you can't shift everybody out of a class of work as a solution or your dishes won't get washed.
Can you name any? There are a lot of people out there who keep trying to find one and failing. If not for many years of experience in software (without which even new grads are really struggling), I have no idea what I'd be doing.
An equivalent way to describe Friedman's negative income tax proposal is that everyone pays their taxes as normal and then $20k/year (or however much) is given back to literally everyone, regardless of income.
I like that version because it makes more clear that you don't have perverse incentives with respect to working: you never get more money by working less. The $20k/year is guaranteed unconditionally and you can supplement it with a job if you choose.
That's also the same as the FairTax, which is a major policy proposal in the US. And it involves sending everyone a check each month.
So this idea is actually not that far out for the US, at least.
I should also point out that the FairTax is primarily supported by conservatives at this point, though from my point of view, liberals should be even more supportive.
The FairTax as I have heard it advocated included a huge annual transfer payment to redress the highly regressive aspect of all consumption taxes. (If you are poor, you consume 100% or more of income, resulting in paying taxes on all of it. Richer individuals consume a fraction of their income, thus paying a much lower overall rate.) It would instantly be the most extensive wealth transfer program in the world.
you're probably downvoted because you're very clearly wrong about FairTax. it's a very very different thing than from a guaranteed $20k income. FairTax also has the rather creepy distinction than it has an Orwellian propagandist name, because it is not (necessarily) a "fair" tax at all. It's riddled with loopholes and complexity to be exploited, and many folks think it favors the rich and inherited classes, at the expense of the poor/working class.
As a Canadian, I'd be willing to pay an extra $X in taxes just to see if this would work or not. They should probably roll it out provincially in isolated areas first rather than going the full 9 yards (or metres as the case may be.)
I like the experimentalness of it too, plus the fact that it goes against certain moral intuitions that have proven themselves rather fruitless in practice (bootstraps, blah blah). Real leaps tend to be counterintuitive. It does worry me that it seems dangerously write-only.
While this is a perfectly logical statement, there's absolutelty no chance it would reduce the cost of public services in reality. We don't fire government workers, they just get new titles / department names.
If anything the public service costs would increase as new oversight commities and other completely useless entities were created to manage the migration from our current system.
This is ultimately self-defeating. Following the principle breached by this and countless other abrogations of individual rights, what right does anyone have to keep or reinvest the profits from a startup when that money could be taken and spent on exactly this sort of minimum income program?
This is - essentially - a proposal to increase individual freedom by repurposing the existing welfare system.
The taxes that you pay already are higher than they need to be to deliver the aid they're intended to deliver, because they have to pay for a bureaucracy to assess 'need', check for fraud (more restrictions = more room for fraud = more time/money spent fighting fraud), and even to educate people on the often complex array of benefits available. This system would be much simpler to administrate, there'd be no need to educate people on their available options, and without having to deal with enforced conditions and other eligibility restrictions dealing with fraud would be simpler and cheaper.
The only argument I can see for opposing this is a moral one, that you want to force people to behave in certain ways before you'll assist them. I always find those kind of arguments really skeevy.
It's quite possible that this could end up _cheaper_ than the current welfare system, due to cutting through the bureaucracy and red tape needed to manage such a system.
It sounds to me like you're posing a philosophical question about the nature of the problem, and I'm talking about a specific scenario if this was actually implemented.
Don't bother arguing with this guy. Just take everything you say and put it through the "what would Ayn Rand say?" filter and you can pretty much generate most of his ideas by yourself.
I'm saying that if you've read Ayn Rand at all, or for that matter run into Randroids on the internet at any other point in your life, you can pretty much predict what they're going to say within a given context. As a result, Randroids don't really add much to a conversation once they join in; rather than presenting original ideas, they just harp on the same Randian talking points everyone who's argued with a Randroid or read an Ayn Rand book is already well familiar with.
If they are so predictable then you must know how they will respond to being provoked with condescending names such as "Randroids?" Is there a specific response you want to see? Are you trying to exploit some known stack overflow bug in this specific Randroid model?
Why be so dismissive and insulting and then respond to the same poster you advised others to ignore?
I'd much rather read the predictable respectful discussion than a presumptive judgement designed to prevent discourse.
When the topic is government assistance to the needy, it's indeed trivial to predict what one of Rand's disciples would argue about the subject.
My point (which you can view either as a tangent, or as a point of order) is that most of us are contributing original thoughts from our own perspectives, not simply adopting and commenting from the perspective of some novelist with some admittedly seductive ideas. If we were interested in Ayn Rand's ideas, we could read Ayn Rand herself. It's not useful to have her ideas proselytized to us.
Again, "some novelist" and "disciples" are dismissive terms that you're using to shut down the conversation by belittling the source of one poster's ideas.
If you think the discussion is not useful, make an argument to support that claim. Link to criticism. Or demonstrate that the Randputer is not arguing in earnest.
If you don't consider the fact that you might be wrong, that there might be something useful about the discussion in question, then how are you any better than someone who won't consider that Rand might be wrong?
> It's not useful to have her ideas proselytized to us.
But you can't properly speak for other users on this site ("us.") You can (and certainly have) spoken for yourself, but a claim to represent more seems pretentious at the least.
Wrong. There are a whole lot of people who have never heard of Ayn Rand, and don't know anything about her ideas. You are not everyone, and (fortunately) not everyone has or will come to the same conclusions you have.
On top of that, I don't think you have a deep understanding of her ideas (specifically her epistemology and metaphysics.)
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Folks, would you judge Newton by his critics, or by reading the Principia and working through it yourself? Don't trust anyone to tell you what you shouldn't read!
By "his" I was referring to you, under the assumption that "max harris" is a male name. The fact that the ideas aren't yours is something I'm glad to see you admit to, but you are the one signing your name to them all over this thread and behaving like they're original, thoughtful comments on the subject rather than a pseudo-religious recitation of someone else's dogma.
Pop quiz: What would Ayn Rand call someone who just parroted someone else's intellectual work instead of coming up with their own?
P.S.: I'm very supportive of people reading Ayn Rand, if they're so inclined. In fact, if anyone wants to reimburse me for shipping, I'm willing to send them a free copy of Atlas Shrugged or The Fountainhead. That's an inclusive or; I'm trying to get rid of a lot of stuff before I move, so if you want both, let me know. I only have one copy of each, though. My email is in my profile.
> Pop quiz: What would Ayn Rand call someone who just parroted someone else's intellectual work instead of coming up with their own?
Why do you assert that I am a mere parrot? A student that draws free-body diagrams and calculates torques can't be said to be a parrot of Newton. Are we obligated to mention Newton's name every time we talk about a third-law pair, or in front of every use of "momentum"?
Clearly, there is nothing illegitimate about communicating an idea without attribution in this context. When I quote, I usually put in a link to the source, but that's not absolutely essential. In a web forum, just putting quote marks around a paragraph is enough, because people have search engines if they care enough to look.
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Incidentally, have you ever tried to read Rand's Introduction to Objectivist Epistemology?
"Incidentally, have you ever tried to read Rand's Introduction to Objectivist Epistemology?"
Yes. I was pretty fanatically into Ayn Rand and probably a lot like you when I was 17 years old. I've grown out of it; while I appreciate Ayn Rand's influence on my intellectual development and genuinely encourage people to try and understand her ideas, I've found points of disagreement with much of her philosophy.
More to the point, I don't find it particularly useful or honest to contribute to discussions if one have nothing more to say than simply applying someone else's opinions to the topic at hand. It's not like physics at all; the solution to a physics problem can be non-obvious, whereas applying Objectivism to the idea of a guaranteed minimum income is a very straightforward exercise. (And, more to the point, not in the least bit convincing if you don't already believe in the Objectivism!)
You should read the debates Objectivists had over the NYC mosque issue, for example.
Applying Objectivism to the NYC mosque issue is a little more sophisticated. That doesn't address my point, though, which is that it's trivial to apply Objectivism to the idea of a guaranteed minimum income.
I'm interested in hearing what your most fundamental criticisms actually are.
I get this a lot. I'd invite you to email me (and certainly won't complain if you do), but answering this question properly would frankly involve a lot of hard philosophical work that I don't have the time or focus for at the moment.
Philosophy (the one I go by, at least) isn't some floating castle in the sky that has nothing to do with practical problems on earth. Put another way: the true in theory is the successful in practice.
To have a successful startup, you need to make things that your customers want; of course, this presupposes that you have customers. That presupposes that they are free to choose to buy from you, from someone else, or not at all.
By forcibly taking money from some and giving it to others, one of the things that your startup depends on in principle is eroded just a little more. Some of the money that your customers had is now collected as a tax, and spent ostensibly in an effort to make it easier for some group of people that cannot or does not want to make their own living.
It is true that your startup will "benefit" (and only in a very temporary, limited financial sense) by this measue if you make some product or service wanted by at least some of the poor people receiving the subsidy. But what of new things? What of trying to build the best that you can? How would early personal computers have been affected by this? They were expensive! If you're making anything like this, such as fine goods, medical devices, engineering software, etc., these kinds of measures hurt you. Sure, it's a small hit. But it is a hit.
But these are just details - the important thing is to identify correct principles inductively - by observation and reason, and then to be absolutely certain of them, unless and until you have evidence to otherwise. (This is what is meant by "contextually absolute.")
What I mean isn't "everyone will have money to spend, more customers, whoopee!" What I'm talking about is "Now, founders can easily quit their job to start their ventures."
This is the dumbest and most dangerous idea I've heard in a while. Go ahead and vote me down, but I hope some on this site have the common sense to see how bad this idea is. This is essentially welfare, and in the US, we've been down that road and we know exactly where it leads.
Yes, and? The point is that we're already providing welfare, just often in a convoluted, inefficient, and counterproductive manner. The unfortunate fact is that some people can't provide for themselves. We can either ignore them, establish fifty government agencies to "help" them, or give them money. Option 1 isn't on the table, and 3 makes a lot more sense than 2.
I often wonder about the true motivation of some conservatives opposing any programs such as the one described in this article. If your agenda is to cut Government spending, shouldn't you think about ways to do that? It's well understood that preventive programs (such as the one described in the article) cost less than programs that deal with the consequences, e.g. prisons, hospitals to name two. So if your agenda is to cut Government spending, shouldn't you advocate for programs such as this?
So when on the other hand these people speak about cutting spending, and then cutting every preventive program in the books, they're not only failing to achieve what they advocate for (in the long run), but also causing real harm for people affected by these program cuts.
So to answer the comment I'm responding to. The goal of programs like this is not to "be nice", but to actually reduce to overall spending. I don't understand why it's dumb or dangerous at all.
Where does it lead? It seems to me that the only thing we can say for certain is that it leads to a lot of partisan hand wringing and rancor. That's a problem with our dysfunctional American system, not a universal constant.
That's precisely the trouble here. Following today's common sense, this seems like a great idea. To argue against it in a meaningful way, you have to attack the ethical root beneath it: altruism. To this end, I recommend reading The Virtue of Selfishness (google for it, if you haven't heard of it already.)
Amusingly, the UK is trying to backstep out of this sort of system (though a less generous one) that has bred a "workless class" who find it pays better to not work rather than start working and both pay taxes and lose "valuable" recreation time smoking and watching Jeremy Kyle.
But part of the problem in the UK is that the highest tax rates paid are those by the working poor : As more money is earned, benefits are subtracted at an alarming rate. That means there's a huge disincentive for getting off the couch.
The idea of this 'flat payout' is that it provides a baseline - and any money earned thereafter is a pure win (even after you pay taxes on the money earned).
It seems like this would cause a lot of low-end inflation as rental prices of cheap housing and such adjusts to the fact that people can now pay more reliably for such things.
Equally important, it seems like it'd suddenly be hard to hire someone to a position making (say) $27,000 a year when their alternative is to simply collect $20,000 a year - so a lot of lower-paying jobs will vanish... and the ones that adjust $ to compensate will of course have to pass on the costs to their customers. I'd expect an abrupt spike in the prices of restaurants, grocery stores, and the like.
It's an interesting thought experiment but sure to cause some social upheaval.
The is absolutely the most horrible idea ever, and on so many levels morally and ethically wrong. First off, the $20,000 has to come from taxes; so this means higher taxes for people who are productive and produce in society. Probably would require atleast more than 51% taxes; what is the purpose of working if the government is just going to steal from you more than you make? Second, what is the incentive to better yourself, train for better skills, and get an educate when you are guaranteed a basic income -- there are no incentives. Third, politicians love the dependent mentality this creates: voters will never ever vote against the welfare state and so this lets the politicians to do all sorts of draconian legislation, because they can always threaten to reduce welfare if the citizens don't go along with the state -- and the citizens will always vote for more welfare. Fourth, this creates a bureaucratic state that can pick and choose winners and losers: instead of your quality of life being based on if you are a hard worker, your time and money investment and your risks/rewards, your quality of life is based on a central planning state sponsored bureaucracy. This can be politically motivated. Fifth, this keeps the poor poorer and the rich richer by eliminating the incentive to better oneself.
This seems like a great way to drive up rents. Poor people don't tend to hang on to their money, they're awfully tempted to do things like pay rent, make car payments, and buy things to eat. Not that I blame them, I do these things too.
Such a scheme would essentially be an indirect subsidy to all those the poor do business with. A rising tide lifts all boats.
Which is basically another way of saying "printing money," which, as we know, causes inflation. Money can be flooded into the economy by means other than cheapening interbank lending rates.
Most people will spend it on drugs, alcohol and gambling. I say give them some money for basic food and shelter and some more (plus training) to start their own business so they can learn to be self sufficient and not to depend on the government.
Reading the article, it sounds like they already have some version of the basic income guarantee already in place. According to the article, Nicole Gray (the subject of the article) already subsists on government provided income.
Currently, if you want to avoid work and take advantage of income support, you must navigate an unpleasant bureaucracy and perhaps endure suffer feelings of shame. If you get a job instead, you can avoid this unpleasantness. This is an incentive for work. The only thing that the proposal seems to add to the table is removing this incentive for work.
Is the bureaucracy of welfare distribution a significant portion of the cost?
The article also argues that people actually have an intrinsic motivation to work (to get nice things for themselves and their children).
If your sole motivation for work is to get nice things for you/your kids, and someone hands you free money, why bother working?
As for Namibia, it doesn't seem that Namibia replaced a welfare system with work incentives by a welfare system without. All they did was create a welfare system. News flash: giving money to poor african villagers can help.
Skip down to "Capitalism Supersized" for the meat of the idea. It is one of those experiments I would love to see in reality, as I believe I would still be inventing and trying to better myself and the lives of those around me without having to worry about that pesky "job" thing. Though, the main risk I see isn't the people blowing their money, but the inflation and greed this would cause.
Well, proponents from a libertarianish direction hope that it would be a way to structure a social safety net with minimal economic distortion. Instead of a whole bunch of programs (food stamps, welfare, medicare, employment insurance, etc.), just have one transfer of cash money. But if all those people become government employees, that hardly reduces economic distortion, because now you have a giant state workforce. Some libertarian-leaning folks, like Hayek, also think that people would be able to better self-direct their labor than the government could, e.g. by using the minimum payment to bootstrap small businesses.
How do you handle someone who has a low-paid job that earns $10,000 a year? Make them quit their job? Part of the benefit of this approach versus a minimum wage is that it can make low-paid jobs viable. With your suggestion it wouldn't make sense for any job to pay less than $20,000 a year.
How about people that simply can't work, due to long-term illness, disability, or age? Another benefit to this approach is that it simplifies administration of welfare/benefits so that you don't need to prove illness/disability to get the money. This also helps to remove stigma associated with disability, which is a Good Thing for society.
What if there's no need for your government labour where you live, but there is elsewhere? Do you create busy work for people - which will incur capital/material costs and management costs - or do you start forcing people to relocate?
Pretty much the entire point of this way of handling welfare is that you do pay people without receiving anything directly in return or enforcing how the money is spent. That way people can gain the freedom to decide how to spend it themselves and will largely make good choices. (And even when they make bad choices, the state is no worse off than under the current system.)
With a stipend, the money is theirs. With a government job, some of their salary would go to a politically-potent union that constantly lobbies for raises. Might not be worth the 'work' they're doing!
>With a government job, some of their salary would go to a politically-potent union that constantly lobbies for raises.
That sounds like a separate unrelated issue. Hand each worker a check for $1,666 each month they work, and leave it up to them how to spend it. It would (obviously) be untaxed...
The cost would be partly offset by dismantling much of the welfare apparatus (Edit: as semanticist already pointed out here: http://news.ycombinator.com/item?id=1926049). It wouldn't even be too surprising if the measure largely paid for itself in this manner, especially if you consider side-effects like health care and prisons. It would be interesting to see some reasonably objective numbers on this.
Another benefit, wages and living standards would rise, since there would be increased competition for workers.
Increased wages likely would drive better education and training, leading to a German-style skilled workforce. In turn, a skilled workforce is much less likely to be arbitrarily fired, look at German unemployment during the slowdown of the last two years.
In theory it could ultimately turn out to be profitable for tax revenue: 1) increased economic activity means increased taxable income from others; depends on the velocity of the money spent via the new income 2) if people can pull themselves up by their bootstraps via this sort of program that means more taxable income for the recipients later in their lives. Impossible to know how it would turn out in advance but interesting to consider.
I disagree. When governments step out of their proper role of protecting individual rights, economic output will necessarily be lower than what it could have been. This is because governments deal in force (and they must do so - they have a proper monopoly on the retaliatory use of it!) But force applied in a non-retaliatory manner inhibits minds - minds from which all economic activity stems.
Force, as I mean it, is something that other people do to you, in a political context. You can't be politically forced by hunger. To illustrate, imagine that a plane crash leaves you alone, stranded on a remote mountainside. After a couple of weeks, you begin to starve. Clearly, your hunger is not the result of anything but your natural circumstances, and it has nothing to do with politics. So you can't conflate natural phenomena with force in a political context.
I say that living is an individual responsibility. To meeting the physical requirements for continued survival is something that each of us must either do for and by ourselves, or, by extension, with voluntary trade with others.
If someone doesn't want what you make, it's not political force, even if you're starving. If the interaction is totally voluntary, you'll find people that want what you make, or you'll grow intellectually, and figure out how to make what people want so that you get what you need. Everybody lives!
If someone initiates force against you, they're preventing you from thinking about whatever it is they're forcing you about. A gun held against my head will prevent me from thinking about my life, or my future - I can tell you that I wouldn't be thinking about my upcoming physics exam in such an event! A regulatory body that prevents a patient from getting an experimental cancer drug prevents the physician from that loop of thought, trial and observation that in some instances would save real lives (unfortunately, this is not a made-up example.) You can argue about the degree to which this happens in any individual case, but the principle is the same: to think in a way that's useful for advancing your life, you need to think about, and then act on reality. But if someone or some group of people initiate force against you, they are preventing you from doing that, to some very small, or very great extent. No matter the magnitude, it's bad for your existence, which is conditional (you depend on your faculty of apprehending reality and acting upon it for your continued survival.)
> A gun held against my head will prevent me from thinking about my life, or my future - I can tell you that I wouldn't be thinking about my upcoming physics exam in such an event!
Natural selection is holding a gun to everyone's head, every day of their lives. In order to be able to think of other things, they need to have some time where they're not directly thinking of survival.
No human that has ever lived has had one of their ancestors choose suicide before reproductive age (or without preserving their genetic material, I suppose). This is an enormous weight of genetics. As long as survival is involved there can be no truly freely entered contracts. It's naive to argue that people can just choose to die, instead.
Example: I notice that you are starving. Here's 5 dollars to perform a sex act that you and your society consider degrading. It's your choice. It would be naive to consider that a free choice.
It would also be a mistake to construct a system where this is a common occurrence, because of some inflexible and unrealistic ideology.
> No matter the magnitude, it's bad for your existence
This is a sign that you're engaging in all-or nothing religious thinking, which is shallow at best, and disastrous when implemented in the real world.
> Natural selection is holding a gun to everyone's head, every day of their lives.
Natural selection gave rise to our (and every other species), but it is not a conscious entity capable of threatening us in any political sense. Calling bad genes a form of political force is to commit the same epistemological error as someone that maintains that the gravitational force of the earth of his body is a form of political force. See my other post(s).
> This is a sign that you're engaging in all-or nothing religious thinking
Developing and expressing thoughts clearly (which is what "all-or-nothing" thinking is) is antithetical to religious thought. When an engineer that says "yes, this bridge will stand, absolutely, for this amount of time, assuming the following conditions" is engaged in all-or-nothing thinking (Newton's laws are contextually absolute.) To call this religious thinking is absurd.
> Calling bad genes a form of political force is to commit the same epistemological error ...
This is interesting and telling. I've done no such thing. You seem to be focused entirely on this notion of political force, whereas I'm not. This is what I mean when I point out that you're placing ideology above any practical or empirical concerns.
We did not start out talking about political force. It's only vaguely related to my argument, yet it seems to be very interesting to you. From my side it appears that I've triggered one of your auto-rant keywords. Until your most recent response, it wasn't clear to me that I was responding to a human rather than a chat bot.
Here's is my point, again, so we can stay focused: relieving some of the pressure of immediate survival does not reduce creativity nor innovation. In fact, as demonstrated throughout history, creativity and innovation (as opposed to just cunning) require that people have spare time that they're not devoting purely to survival. Surely you must have heard of Maslow's hierarchy of needs.
> Developing and expressing thoughts clearly (which is what "all-or-nothing" thinking is)
Well, I suppose we're all free to choose our own definitions, but this is quite the abuse of the term. "All or nothing thinking" is generally understood to mean the inability or unwillingness to recognize that nuance matters in discussion.
There are many ideas that can be expressed clearly, but that are wrong. While removal of nuance may result in a clearer message, it rarely results in clearer thinking. This is the peril of the sound bite.
"For every complex question there is an answer that is simple, obvious, and wrong."
Could you please start providing some evidence or anecdotes for your claims (not parables). If you can't at least do that, I'm not really interested in continuing this discussion, as it's essentially a rant.
I'm intrigued but confused. You're saying if the Canadian govt. guaranteed everybody an annual income of 20K it's an example of "the government not protecting individual rights"?
"A “right” is a moral principle defining and sanctioning a man’s freedom of action in a social context. There is only one fundamental right (all the others are its consequences or corollaries): a man’s right to his own life. Life is a process of self-sustaining and self-generated action; the right to life means the right to engage in self-sustaining and self-generated action—which means: the freedom to take all the actions required by the nature of a rational being for the support, the furtherance, the fulfillment and the enjoyment of his own life. (Such is the meaning of the right to life, liberty and the pursuit of happiness.)
The concept of a “right” pertains only to action-specifically, to freedom of action. It means freedom from physical compulsion, coercion or interference by other men.
Thus, for every individual, a right is the moral sanction of a positive—of his freedom to act on his own judgment, for his own goals, by his own voluntary, uncoerced choice. As to his neighbors, his rights impose no obligations on them except of a negative kind: to abstain from violating his rights."
Your entire chain of argument sounds religious in nature, and at no point did it touch at all on why anything having to do with rights would affect economic output in any way. You've neither pointed out a specific flaw in nerfhammer's argument, nor answered waterside81's question for clarification.
All you're doing is reminding us that hard core libertarians hate almost everything that government does, and that they all consider most things that governments try to do to be bad for the economy.
You can't successfully argue that a particular action is bad by falling back on the base libertarian dogma that all actions of that sort are bad, or at least you can't do it without offering at least some independent support for the base dogma. We already know that you believe it; what we're asking is why we should believe it in the context of this individual example.
There are dozens of possible responses you could give, I've come up with several myself, but frankly, I can come up with many arguments for both sides of the issue, so I'm of the mind that it's likely something we'd need to see a bit of empirical data on to be sure.
One of the few things I know for sure about econ is that first-principle-based arguments tend to be complete and utter trash whenever they measure up against real world tests.
> Your entire chain of argument sounds religious in nature,
It's not. You make the mistake of equating or asssociating morality with religion. I'm an atheist, and I think that ethics is a science. Applying the same metaphysical and epistemological foundations that give rise to science to ethics (and politics and art by extension) is what I'm advocating.
> and at no point did it touch at all on why anything having to do with rights would affect economic output in any way.
Yes, and this was intentional. The principle that underlies individual rights is not that it gives rise to increased economic output! (Although it does, this is not essential.) There are plenty of voices out there that will tell you all about the economics of capitalism (AEI, Cato, etc.) But that can't work because economics is not a fundamental field because any economic statement, no matter how trivial, subsumes a great number of concepts.
Altruism (a pernicious legacy of Christianity, and before that, ancient Egypt) dominates ethics in the West. It is an awful, irrational and anti-life doctrine, but it will trump economics every time, because ethics is more fundamental in an individual's life than economics is. The only proper way to deal with altruism is to name it, and fight it on principle. You can't do that by talking primarily about economics.
> Altruism (a pernicious legacy of Christianity, and before that, ancient Egypt) dominates ethics in the West. It is an awful, irrational and anti-life doctrine, but it will trump economics every time, because ethics is more fundamental in an individual's life than economics is.
I'm just curious. You're obviously just mostly parroting this from something you read once. What was it?
I swear Karl Marx is Ayn Rand from the inverse bearded mirror universe.
Let's see: There's 44,000,000 Americans living below the poverty line. Times 20,000 a year (ignoring administrative expenses) is 880,000,000,000 (880 billion) yearly. I'm not sure where we could take this out of the budget.
If you replaced existing welfare, food stamp, and Social Security programs with this guaranteed minimum income, not only would you break even, you'd probably fix the deficit to boot.
If you're of the opinion that poverty causes crime, you might save money there, too. However, most spending on law enforcement is not federal and having a large population of idle people who can't get jobs might actually increase rather than decrease crime.
A little over a year ago, I moved returned to Canada (Toronto) after five years in the UK. One of the most striking things I noticed was the difference in homelessness between here and there.
I later read Gladwell's article about homelessness. The story of Million Dollar Murray http://www.gladwell.com/2006/2006_02_13_a_murray.html
A homeless man who they had to repeatedly pick up off the street because he kept drinking himself into a stupor and falling down. (Hospital bills, etc..)
Apparently he cost the state 1 Million Dollars over 10 years.
So $20,000 per year $100,000/per year? Suddenly that low end guarantee is a serious cost savings.
Now certainly - "Murray" wouldn't get away with costing ONLY $20,000 per year ... but in a safe, (partially) supervised area, he'd have cost a lot less than $100k.
Gladwell also mentions that the data shows "most people" won't leech off these programs forever. Most have an innate drive to want to improve themselves.
Some will but actually - it's probably still cheaper than "Murray".
I am 100% in favor of a program like this - in principle.
Now try and introduce it at a Texas town hall meeting :) With FOXNEWS cameras in attendance.