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This issue comes up from time to time here on Hacker News, which is why I submitted the current story. The policy proposal of a basic income guarantee is interesting because

a) no country has ever tried it, really, so there isn't a real-world experience case to look at yet,

and

b) a remarkable variety of people from otherwise differing points of view have proposed it over the years.

Charles Murray's book In Our Hands: A Plan to Replace the Welfare State,

http://www.amazon.com/books/dp/0844742236

goes into detail about how much a program of guaranteed income for everyone would cost in the United States, and suggests some probable effects that would have on everyone's everyday behavior. I read the book a year or two after it was published.

Murray's own summary of his argument

http://www.irp.wisc.edu/publications/focus/pdfs/foc242a.pdf

and reviews of his book

http://www.aei.org/article/society-and-culture/poverty/in-ou...

http://www.conallboyle.com/BasicIncomeNewEcon/MurrayReview.p...

http://www.richmondfed.org/publications/research/region_focu...

http://mises.org/misesreview_detail.aspx?control=296

may inform the discussion here. Big public policy proposals are not easy to discuss, but the big public policy proposal of a guaranteed basic income for all is a response to existing policy of supposedly targeted social welfare programs that are just about equally expensive in the benefits they provide, but much more costly to administer.

As a matter of personal opinion, I am still thinking about whether or not a basic income guarantee is a good idea, but I definitely want to figure out if spending no more in total for social welfare by directly transferring cash to all citizens would simplify administration of welfare programs and allow more individual choice about how to use the money.




One thing I like about this policy is it removes all kinds of perverse incentives which currently exist.

Some (true) personal examples: a friend of mine is moderately disabled and lives with his elderly parents. He wants (and they desperately want for him) to be able to live independently in a small apartment so that he can develop coping skills which will serve him when they are no longer around. His parents have the means to help him buy an apartment, but doing so would disqualify him from receiving any disability pension (including free health care).

A colleague of mine once employed a young woman as a secretary/admin assistant. One day her family advised him that they had arranged a marriage for her and as she was no longer living with them she and her new husband would both qualify for unemployment benefits. If my colleague refused to pay her the equivalent of two unemployment benefits (after tax) she would resign. The next week she did.

I used to know a guy who was what I would term chronically unemployable. He had no obvious disability but was seemingly unable to accomplish anything without having his hand held (it was a severe issue, not a joke). As an example, I actually couldn't trust him to fetch a plate from the kitchen. He was unsuited for either technical or menial work because he needed to be instructed down to the barest minutiae. Nice chap otherwise.

He naturally ended up on unemployment benefits and attended fortnightly reporting sessions. He was required to apply for 5 jobs each fortnight which he would be duly rejected from, then report back on his results. I'm convinced that the sheer brutal pointlessness of the process crushed him to the point where he took his own life.

Perhaps a basic income would create other perverse incentives, but it is clear to me that the current system is beyond broken.


A colleague of mine once employed a young woman as a secretary/admin assistant. One day her family advised him that they had arranged a marriage for her and as she was no longer living with them she and her new husband would both qualify for unemployment benefits. If my colleague refused to pay her the equivalent of two unemployment benefits (after tax) she would resign. The next week she did.

Perhaps we should think of unemployment benefits and minimum wage laws as a subsidy for technological progress, in particular automation and artificial intelligence.

Low-wage workers are competition for automation, at least in the early stages when a new technology is just getting off the ground. Remove them, and there is likely to be more demand for technological solutions to do what they used to do. In the long run, everybody wins by giving private enterprise an incentive for more automation.


It does not remove "perverse" incentives. Human nature dictates our desires. If we could have everything we ever wanted then there would be no "perverse" incentives. I could have my own amusement park where there would be no lines and I could ride any ride I wanted at any time - not to mention someone would carry me from ride to ride.

People will always want more, to achieve more. The "perverse" incentives exist simply because of that fact. If you cannot accept that, you should go live in the woods far away from people and be happy.

Life isn't fair, you do what you can to help those less fortunate around you. But, if you think for a second that some sort of "equal" pay will solve our worlds problems you are either ignorant or in denial of our human nature.


Your post contains no arguments, just a straw man with some accompanying unsubstantiated statements. No one is suggesting that any single measure will solve all the world's problems. But might we not solve one, or two?


First of all, nobody's opinions are substantiated. I believe that human nature has not and will not change. By human nature, I'm talking about what drives us to do the things we do.

I understand the logic behind BIG. My problem with the _idea_, as it is, is that the idea ignores human nature. If you want to bring an idea to the table, at least be honest about it.


I think you fundamentally misunderstood my point.

The examples I gave were situations where people did something against their own interests because the current system of welfare provision is broken. Maybe that is inevitable; maybe the system we have is better than any alternative.

But ask yourself if a BIG were implemented:

Would my friend still live with his elderly parents? Would my colleague's secretary have quit? Would my acquaintance have been forced into a degrading simulation of a job search he would never succeed at?


The secretary might still have quit anyway - it probably depends on the level of BIG. Ending the pointless simulation of a job search for your acquaintance doesn't require a BIG, and a BIG alone probably doesn't represent the optimum solution either.

Those points don't mean that a BIG is bad, but since people tend to only see one side of an issue after they've made up their mind on it (whether rationally or emotionally), I thought I should bring it up.


"The secretary might still have quit anyway - it probably depends on the level of BIG."

She'd either get BIG and her salary, or just BIG. Compared to the previous scenario of salary vs welfare. The motivation to stay employed would be greater with BIG, surely. The husband would receive BIG regardless of her salaried situation.


I do understand your point. And you gave perfect examples of situations where BIG would be beneficial. My problem with the idea is that proponents ignore the negatives or severely downplay them. My biggest argument against that type of idea is that it kills human drive and ambition and progress.


Sorry, you are confusing "perverse incentive" (as in the incentive itself is perverted) and "incentives to things that are perverse" (as in having incentives to do things that are socially considered to be perverse).

It is a simple innocent ignorance of the term. Look up what perverse incentive means and you'll understand.


I read an adjective describing a noun, not a combined two word, self-defined phrase?

Perverse: inexplicably irrational: contrary to what is regarded as normal or reasonable, often for reasons that seem unaccountable or self-defeating

Incentive: something that encourages somebody to action: something that encourages or motivates somebody to do something.

Please, all knowledgeable one, tell me where you learned of this definition of "perverse incentive" (one word?).


I can see you're defensive about this subject, but a simple google search of the term comes up with a wikipedia article explaining what is commonly meant by "perverse incentive".

I agree that BIG creates incentives... that is the point of all social policy in the history of ever. But the contrast here is that current policy can make positive actions (working, investing, personal development) a net loss to a family or individual who attempts them. THAT is the definition of a perverse incentive.


And my point is that BIG policy makes it so that negative actions (not working _hard_, not investing, no personal development beyond what is required) are not a net loss to the family or individual. Thus, it promotes doing the bare minimum to get by, especially when the result is a very comfy, stress free lifestyle.


You might want to Google the term yourself. According to Wikipedia, "A perverse incentive is an incentive that has an unintended and undesirable result which is contrary to the interests of the incentive makers". That is exactly westicle's usage here, unless you are implying that the outcomes he described were actually intended.


I don't see what your point is.

Maybe you aren't aware of the meaning of the term "perverse incentive." A "perverse incentive" is when you are incentivized to do something that doesn't make sense. It's not the same thing as "incentive."


Arguments like this assume you can change one thing and society won't change around it. With a basic guarantee many people who are marginally employed would stop working. You'd have two classes of citizens: the workers and those who are effectively parasites off of the workers. I don't like people being poor but society is just not wealthy for poverty to disappear. The said a person living in poverty is probably better off than all the but the richest people at any time in human history. Part of the issue is that we lack an understanding of poverty and what actually causes people to not be in poverty. Considering that in human history poverty has always been the norm it makes sense to look at what causes poverty to not be the norm first before moving onto just "fixing" it.


>With a basic guarantee many people who are marginally employed would stop working.

I believe with basic guarantee many people who are unemployed would start working. Social security in many countries mean that it's rational to either work many hours per week or work zero hours per week. Basic income means that every hour worked or dollar earned increases your standard of living, thus creating a higher incentive to work.

>You'd have two classes of citizens: the workers and those who are effectively parasites off of the workers. I don't like people being poor but society is just not wealthy for poverty to disappear.

There are countries like Finland with a social security guarantee. You can pretty much refuse to work and get $1000/month as a social security (though there are details and sanctions which make this more complex in reality). Anyway, the point is this: in Finland you can already be a "parasite" and some people do that.

Finland doesn't have a basic income guarantee. We also have a system where living on basic social security (toimeentulotuki) working 5 hours per week doesn't really make sense. The effective tax rate for working only a little is 90-100%. If you make 100 euros per week, the social security is decreased by 100 euros. With basic income the effective tax rate would be 20-30%, so working would make sense.

In Finland you pretty much have either full-time/part-time workers (20+ hours) or people who are completely unemployed.

Why should a citizen living on basic income would want to work? To get paid more.

An unemployed person living on $1000/month basic income can increase his or her standard of living substantially by getting paid $200/month more. If someone is working full time and getting paid $3000/month, a $200 increase per month has a lesser increase in standard of living.

The current social security system has an incentive to be completely unemployed. Basic income means that it makes sense to work 1 hours, 2 hours, 5 hours, 10hours, 20 hours or 40 hours per week. All different kinds of working situations are naturally covered under basic income guarantee.


>I believe with basic guarantee many people who are unemployed would start working. Social security in many countries mean that it's rational to either work many hours per week or work zero hours per week. Basic income means that every hour worked or dollar earned increases your standard of living, thus creating a higher incentive to work.

I am what in the US you would consider a "strong libertarian" - and I would say, I would be in favor of instituting a basic income if we got rid of the minimum wage.


A basic income would hardly be libertarian. Although I also tend to libertarian, I do see a role for government in addressing cases of market failure, or where the market fails to meet certain moral standards. An example would be if somebody working in the best job they can find doesn't earn enough to pay for basic accommodation and food. The government would provide the safety net in this case. However there must still be some incentive for people in this situation to try and find better work (or perhaps move to a better location). Otherwise, you have people simply taking whatever job they find the most enjoyable, living off the government subsidy, and leaving other less desirable jobs unfilled(paying slightly better, so according to the market more important, but leaving the employee no better off due to the government subsidy.)

It's particularly silly with the current system that you can legally work for nothing, be a volunteer or an unpaid intern, but you can't work for $1 per hour. If you make low paid work illegal, you make the low paid unemployed.

Perhaps some day all of this "scarcity economics" will be moot, if we could invent the star-trek style replicator, I suspect "work" would move to a volunteer model.


> Otherwise, you have people simply taking whatever job they find the most enjoyable, living off the government subsidy, and leaving other less desirable jobs unfilled

What's wrong with this, honestly? If less desirable jobs go unfilled, I'd expect that people would find ways to mitigate the need for human beings in those jobs. Let's let the market figure out what those jobs are and if we can do such mitigation. That seems preferable to the current situation, where people such as yourself say that we need people to be placed into explicitly undesirable positions.

Let's actually see this problem before we anticipate it.


> Let's actually see this problem before we anticipate it.

The problem has always existed. It's the reason that people need to be paid for most jobs, since they won't do them just for fun. If people know that they'll be paid a decent amount for doing any job at all, then there will be a lot of recreational activities which are thinly disguised to look like jobs.


That's why it's an income guarantee - so you don't have to invent an activity that looks like work in order to receive money.

So in your case under a BIG, they would get some money and pursue leisurly activities. This in contrast to someone doing a task that needs to be done (say dispose of garbage), who would get some money from the BIG and a substantially bigger sum in actual wage. The service (getting your garbage disposed) would have to be priced accordingly.

Some activities (such as musicians) would be a gray area, but it's not a problem - people can make music and if someone buys it the musicians get extra income.

If there are services needed which are very unappealing, they will be priced high. Also, the incentive to automate them (and thus reduce human suffering) will be high as well.


right - it would have to go without saying that EVERYONE gets the BIG, including millionaires and paul allen.


These sort of pensions are already available to some people, in some countries (typically the elderly and the disabled). However governments are struggling to pay for them, and the eligibility criteria tend to get tightened (in my country, the old-age pension age will increase to 67). I don't see how they could be expanded to the entire population without destroying the governments' budget, and if they tried to raise such massive sums through taxation, destroying the economy too (and causing massive flight of the wealthy to lower-taxing countries.)


The availability of BIG to people who don't actually need it is about the principle of BIG: that it doesn't care who you are. I'd find it interesting to consider how we might let people decline their BIG stipend in return for... something.


> I'd find it interesting to consider how we might let people decline their BIG stipend in return for... something.

Why would we do that? We could instead just sell the "something", which has the same effect, without defeating the point of BIG by complicating the BIG administration.


> It's the reason that people need to be paid for most jobs, since they won't do them just for fun.

There's a huge difference between (a) not being interested in doing a job, but doing it because you're getting money for it and (b) not being interested in working and doing it because you're getting money for it.

You're arguing (a), but I'm arguing (b).


A basic income is libertarian in that it allows individuals to actually participate in the free market as rational actors, and puts control over use into the hands of many individuals instead of in the hands of the government.

I think eliminating the minimum wage is reasonable combined with a guaranteed stipend. However, I think you will find that "undesirable" jobs are (rightfully) paid quite well. Possibly even better than now since this system would better balance the power between employers and employees.

http://bit.ly/16o33Bp


Ah, but it's not libertarian in the sense of total sovereignty for owners. The workers would start to backtalk!


I'm a Groucho-Marxist, so I refuse to be a member of any club that will have me, however it is nice to find something I agree with you on :)


Speaking of Groucho-Marxism: http://sniggle.net/Manifesti/groucho.php.


I am what most would call a conservative and if what was being offered was a complete elimination of all social services, entitlements, and government largess, then count me in.

I would much rather a BI than having this menacingly powerful centralized vote buying machine.


Under-the-table arrangements are like the majority of BitTorrent traffic, economies that occur despite rules because there is net utility. People still pay taxes and still license (not own) retail movies.


Seconded. I'm also a believer in basic income as an otherwise staunch libertarian, purely based on how much sense it makes.


In reality I think you'd see people moving from collecting social security/SSDI/etc. and getting paid in cash under the table to collecting BI and working in licit jobs and paying some taxes/having some employment protections.

You might also lose some people who "can't work" for economic reasons of UI/SSDI/etc. and volunteer instead to the paid workforce.


> Why should a citizen living on basic income would want to work? To get paid more.

What in the case that the person doesn't want to get paid more? They can live comfortably enough on what is given to them and value the free time more than the extra money.

What would be the way to deal with this?


Essentially, by keeping the basic income guarantee sufficiently low that most people don't want to do that. Note that having everyone want to work is not necessary or even necessarily desirable, you just need to be able to maintain a low enough dependency ratio that the working people don't have to sacrifice much more than what they gain from such system.

I personally think that the employment market for next few decades will continue to be characterized by endemic structural unemployment. We will continue to destroy jobs faster than they are created, through automation and efficiency improvements. What's going away especially quickly are the "middle-difficulty" kind of jobs -- between highly trained specialists and burger flippers. For a simple example, self-driving cars will soon revolutionize long-distance trucking. They won't eliminate the jobs completely, but they will significantly reduce their number. There are 3.5 million truck drivers in the USA. How do you retrain a 55-year old truck driver to be a software engineer? If you can't, should he go work at Burger King for a much lower wage instead? Maybe as a society we could just allow people like him the possibility of not working at that point?


> Essentially, by keeping the basic income guarantee sufficiently low that most people don't want to do that.

Which, it should be noted, it is pretty much economically impossible not to do except in the very short term, barring vast increases in productivity (or decreases in people's expectations of acceptable living standards.)

> There are 3.5 million truck drivers in the USA. How do you retrain a 55-year old truck driver to be a software engineer? If you can't, should he go work at Burger King for a much lower wage instead?

And, even if you can, how do you do it when he still needs to work full-time to pay his existing bills?


Right now the people who don't want to work cost us a lot of money, a large fraction of which doesn't even go to them.

To a certain degree, I see it like the war on drugs. Yes, ending the war on drugs will increase drug usage, but not as much as many people think, and the costs of dealing with that will be less than the costs we spend on prohibition.


Having some of that happen is a non-problem. It's a post-unskilled-jobs world. There are only a few workable solutions: A shorter work week, mincome, or some combination.

Some people get offended by mincome because it means someone with lower qualifications for work gets to enjoy leisure. They should get over it.


Speaking as one who could live comfortably off a Basic Income of $1,000/month (Which would be 2,000/month for my family- wife and myself and our 1 year old): If this plan were implemented, I would likely do a few things with my new found free time:

1) Develop more open source software 2) Work on my small 4.5 acre farm, growing produce to sell to locals for extra cash. 3) Spend more time helping other people with their needs and wants. 4) Do more substitute teaching, perhaps volunteering to teach a programming class or similar.

While most of the time I would not be earning any significatn income from these activities, I think the societal benefits would far outweigh the cost of providing the Basic Income.


Let the few people who are content with being modestly poor be.


Why is it a problem? Someone wants to live modestly, trading consumer power for free time. Why do we need to stop them?


> What in the case that the person doesn't want to get paid more? They can live comfortably enough on what is given to them and value the free time more than the extra money.

And...so, what's the problem with this?

> What would be the way to deal with this?

Why would you want to deal with this? That's a feature, not a bug.


You're assuming that the goal of a social safety net is to avoid or eliminate parasitic behaviour. I would suggest that reducing parasitism to zero is not possible. In fact the nature of any wealth transfer system is that some people will be drawing more out of it than they contribute.

One political problem with welfare schemes is getting over the psychological hurdle that hard-working people are funding welfare abusers. I, for one, do not care if there are a few egregious abusers if the overall system is cost-effective.

Focusing on eliminating parasitism leads to wasting even more money on administration, e.g. drug testing for welfare recipients.


A similar analogy that occurs to me is the justice system. Yes, there will be guilty criminals who walk free of a innocent-until-proven-guilty, trial-by-jury-of-your-peers justice system. The alternative is convincingly worse enough that we accept the false negatives and outliers of the system that protects us.

In this case, letting millions suffer in poverty with real effects of poor healthcare (instead of investing in preventative care), restricted access to better opportunities for themselves and their children seems thoroughly worse than accepting the outlier "parasites."

I am of the belief that given the foundations of Maslow's hierarchy and a real education, many of those "parasites" with limited opportunities can be changed into people who feel they have a chance and pursue "self actualization." Poverty is a vicious cycle; it's hard to be ambitious in a "i want to change the world" way when you have no choice but to take whatever you can to support your family on minimum wage.

I agree completely that instead of throwing money at administrative peripheral problems like eliminating any parasitism, we should address the root problem.

Overall, people living in poverty do not have the same opportunities as the wealthy. Given the same opportunities there is no reason that they would not pursue the same "worthier" career aspirations. The assumption that poor people are parasites is the most colossal example of Fundamental Attribution Error[1] I can think of.

[1] https://en.wikipedia.org/wiki/Fundamental_attribution_error


> Overall, people living in poverty do not have the same opportunities as the wealthy.

This is the basic issue every argument against any social program needs to address.

The last time basic income came up I saw a poster strawmanning it by claiming that the "producers" would be financing everyone else to have daily parties. Actually nobody is suggesting that we give enough money for people to throw parties every day. The suggestion is to give people enough money to survive in a way that eliminates government waste on the program. Then we will see what sort of jobs or tasks they create for themselves. The majority will not be content to watch TV all day.


I wonder how many of the people who argue against a basic income because of parasitic behavior also argue against paying people for work for the same reason. Paid labor has unbelievable amounts of abuse, yet we go on.

Edit: man, typos galore. How embarrassing.


You are obviously right, but it doesn't contribute to a solution of the political problem.

Today, means-tested aid receives a huge amount of criticism about supposed "leechers", even though abuse is basically a rounding error, and the vast majority of recipients are not at fault for their situation.

Imagine how much worse the criticism could get when there really are leechers because leeching is officially approved.

So no matter how nice a BIG is, I often wish that at least part of the massive amount of political energy spent on promoting it would instead be targeted towards poverty-reducing and power-shifting policies that have a higher chance of being implemented and remaining implemented.


Here's the problem with your analysis: Just because someone doesn't have a job, doesn't make them a parasite. Here's an example, a granddaughter who lives with and helps take care of her poor grandmother who has Alzheimer's. In her spare time she does sonogram analysis to determine the sex of babies for newly pregnant mothers (Yes, this does exist.) But there is no money in any of this, even though she provides a service to society. Give it some thought and you can realize there are many variations on this. The problem with capital-driven society is that it only values a narrow range of activities that have high rates of money exchange. But there are many things in life worth doing, indeed that need to be done, that do not.


The "parasite" in your story is actually the grandmother. Realizing that the system having "parasites" is not avoidable and is not a moral failing is huge.


Ignoring for the moment the argument that the grandmother may well have paid a load of taxes before getting alzheimers, one thing that would seem fundamental is that the grandmother gave birth to a parent of the carer, without which the carer would not have existed at all, so how can the grandmother be considered a parasite?


"Parasite" is kind of a charged word. Trying to reinvent it as something OK is walking blithely into doublespeak territory. If you feel you need to redeem it, then okay, but I'm not seeing your reasons for wanting to.


Isn't the granddaughter getting paid for the sonogram analysis? If not, why not?


Except your granddaughter isn't providing services to society. She's providing one service to her grandmother, as a family member (which could almost be seen as repaying a debt). The other service she's providing is the equivalent of a hobby: if it was valuable enough to other people to be considered a "service to society," then she could be getting paid for it.


> Except your granddaughter isn't providing services to society.

I think it's arguable that she does. By doing what she does she relieves the system from taking care of her grandmother, and thereby making whatever small amount of taxpayer money usable for something else meanwhile taking that economic burden on herself.

(Edit: It can of course be seen that whatever wellfare money she gets is the equivalent of her service to grandmother/society, but in that case it's still at worst a zero sum scenario.)


It's a service to society if the grandmother would otherwise be taken care of by the government (at enormous expense probably)

I can imagine other fulfilling activities like helping less fortunate people get back on their feet, which could provide a giant boost to the economy but aren't really directly profitable (as the poor have no money)


Forget society, she's doing a service to ME. Why? Because if all else failed and her grandmother were dying in the street in front of me, I would feel a moral, ethical, and emotional obligation to assume her care. I would rather pay in to BI, if that worked to remove this scenario from possible things that might happen. That's my personal felling about it, without parsing all the possible socioeconomic ramifications.


But why should your personal moral dilemma define legislation for all citizens across the country? I have an issue with "it makes ME feel bad, therefore make it law." You can use the same basic argument against gay marriage.

Regardless, the grandma won't be doing in the street without BI, just like she isn't now. I'm not arguing against providing care for the elderly. I'm just saying that if a single individual chooses to spend her life caring for another single individual, maybe that person isn't performing a service to society. Maybe she's performing a service to her grandma, and nobody else.


> Forget society, she's doing a service to ME.

And hence "society". Social costs and benefits (also known as "externalities") are simply costs and benefits to anyone outside of the decision to engage in a excahnge.


Look HN, I understand that people disagree. That's the point of this site, right? If you don't like what I said, let's talk about it. Down voting opinions you don't agree with seems childish at best.


> if it was valuable enough to other people to be considered a "service to society," then she could be getting paid for it.

Why do you assume she couldn't be getting paid for it? Maybe she's just not charging.


If she's doing something she could be getting paid for bit she's not charging, then society definitely should not have to pick up the bill. That's just unfair.


Generally it works so that you get paid to do things for rich people, but if you do those things for poor people you don't get paid.


The U.S. doesn't have much real poverty, at least as long as you leave out people with mental illness or veterans with psychological issues.

Bottom decile personal income in U.S. is above $5,000 which puts people in that bracket above the median person in Mexico and not terrible far below the median person in Poland: http://super-economy.blogspot.com/2010/04/median-earnings-hi... (note the chart is in PPP-adjusted dollars).

Poverty in the U.S. means subsidized housing, terrible schools, food stamps, etc. But survival is guaranteed.

So the issue with basic income is not eliminating poverty. It's about changing the mechanism by which we have eliminated poverty.


moving, goalposts,etc.

Just because many people are in extreme poverty doesn't mean that the US doesn't have "real" poverty.

Also poverty is more or less defined in the society in which it happens. And the "standards" for not being poor in the US is not met in a lot of cases.


But if you define poverty as "the bottom decile of the population", how exactly will you get rid of it?


Your question is like saying "if you define green as the colour of grass, how can you make grass yellow?"

If you take a sensible real-world definition of the poverty threshold, such as "earning less than 60% of the median full-time wage", then you can do so by pegging the BIG to 60% of the median full-time wage.


There are many definitions of poverty.

The use of a quick percentage is used for policy as it is easy to put figures to, however it is being used as a measurable indicator for a deeper definition.

If you do not have people living hand to mouth in your society, then you have got rid of poverty, until then it helps to have some quick and dirty economics to work out where to direct your efforts.


This --^

The definition of "poverty" is influenced to buy votes for politicians.

You can have A/C, Cable TV, full meals, and still be considered in poverty.


The USA poverty line is some 20x world median income.

If you're making more than twenty times what the top of half the people on the planet are, you're not poor. That other people in your vicinity make more than you does not make you poor.


> The USA poverty line is some 20x world median income.

Check: median --the middle of the range. Not the average value.

http://en.wikipedia.org/wiki/Median

Quote: "The median of a finite list of numbers can be found by arranging all the observations from lowest value to highest value and picking the middle one"

Therefore the USA poverty line is not 20x the world median income, because the world median income is roughly half of Bill Gates' income. (Technically it's (H-L)/2 + L, where H = highest income, L = lowest income.)

> If you're making more than twenty times what the top of half the people on the planet are ...

Wait, that's not the median, that's the average (or mean). They're not the same. In a symmetrical distribution, the mean and median are the same, but most distributions aren't symmetrical. Personal incomes are most certainly not symmetrical, anywhere in the world.

So when specifying median or average, be sure you know the difference.


The median is not found by (H-L)/2+L. Read that Wikipedia entry again.

Disproof: 1, 1, 2, 10, 101. The median of this list is 2, not 51.


> The median is not found by (H-L)/2+L. Read that Wikipedia entry again.

I really did read it, but I managed to take it to mean the midpoint of the range, all evidence to the contrary. It seems I tripped on the words "middle value", which is ambiguous.


Yeah! Modes of centrality can mean lots of things. It's why it can be so frustrating when media folks casually toss out "average" for long-tailed things that require way more specificity.


I know the difference. That's why I said "median".

Median world income is $2/day. USA poverty line is $46/day. That's a 23x difference, 20x if you round in the direction of common qualifiers.


> Median world income is $2/day.

I think you should be using average or mean, in particular because you're comparing a median to a mean (the U.S. poverty level). What's the point of choosing the middle value in a billion income figures when the average produces a more meaningful result? Just look for the point on the distribution that has a first derivative of zero.

Also:

http://www.bbc.co.uk/news/magazine-17512040

Quote: "so the average income is heading towards $10,000 (£6,273) per person per year."

That's an average of $27.37 per person per day. Which means the US poverty line of $46/day (an average value) is 1.7x the world average income level.

Also:

http://www.wisegeek.com/what-is-the-median-income-worldwide....

Quote: "The median income worldwide — the amount that is dead middle between the least and the highest amounts — is $850 US Dollars (USD)."

Which works out to $2.32/day.

Also:

http://money.cnn.com/2012/01/04/news/economy/world_richest/i...

Quote: "In fact, people at the world's true middle -- as defined by median income -- live on just $1,225 a year."

Which works out to $3.35/day.

I'm not sure the median is what you're after.


I'm not sure you want to get my point. I'm sure I do want the median: if half the people on the planet are doing much worse than you, then the term poor doesn't apply ... yet the term "poor" keeps getting revised upwards into historical levels of luxury.

If you're at the USA "poverty line", you are doing better than 87% of people on the planet. That. Is. Not. Poor.


All valid points, but you were comparing a world median with a U.S. average. Surely comparing two medians (or two averages) would be more appropriate. For example, one could establish a median "poverty level" representing the point below which 25% of Americans fall (or another percentage on which people agree). That might be more enlightening.

It would be interesting to know how many Americans fall above and below the average represented by the poverty threshold, i.e. using a straightforward count -- more in keeping with using a median measure.

> yet the term "poor" keeps getting revised upwards into historical levels of luxury.

I agree with that point, entirely. I also think it's bizarre that so many people end up being defined by absence of an arbitrary property -- homeless person, childless couple, unemployed worker -- which to me seems an underhanded way to enforce social conformity.


"you were comparing a world median with a U.S. average."

No, I was comparing to the official legal definition of "poverty line".

My gripe is that in all this talk about "poverty", either nobody defines it or they define it upwards to rediculous. If someone earns more than 87% of everyone on the planet and is still deemed "poor" then the definition of "poor" is absurd.


Interestingly, your other argument does apply here.

It's inappropriate to use the mean for world average income because it's inflated by very high earners. Very high earners (outliers) have a disproportionate effect on the mean that makes it unrepresentative.

Imagine if salaries were ${1,1,1,1,1,1,1,1,1,1000000} Then the mean average would be $200000 - but you could not claim this represents most people. The median is $1, which is more fairly representative.

As with any skewed distribution, the standard way to measure average income is by using the median. There is broad agreement in official figures to use the median.

The BBC article is wrong to use the mean: the journalist appears to be confused in comparing the mean (which she calculates) to the median (standard published figure) and then claiming the difference results from patchy stats.


You can have A/C, cable TV, meals, and still have a totally unstable housing situation, unable to maintain personal property over the long-term... Sorry but just because TV is cheap doesn't mean poverty is eliminated. Keep an eye on the rent checks.


Relative poverty is still poverty. If you can't improve your lot in life because you don't have the resources, you're impoverished even if you're objectively better-off than someone rotting on the streets of Somalia.


Such poverty isn't necessarily a problem though. I live in relative poverty compared to most people in my city. Basically all I spend money on is rent (of a cheap apartment), food, electricity, and Internet. Yet I find this lifestyle quite acceptable, and a good trade-off as I can avoid the need to work. What do I care if my neighbours are wasting a fortune on cars, boats and overseas travel?


Yes, but can you advance or are you hamstrung by living hand-to-mouth?

If you felt you had to get an advanced degree to get a better job, is that an option or would you be economically devastated by working fewer hours to fit schoolwork in?

If you had to move to a different city, is that an option for you? Would you be homeless when you got there?

If you got seriously ill, is that it for you? Could you recover economically?

In short: Relative poverty the way I used the term involves running as fast as you can just to stay in the same place. Advancement is impossible. Any major disaster sinks you.


You are still talking about absolute poverty, not relative poverty. If somebody got seriously ill and could no longer afford food, for example, then that's not just relative poverty, they actually have a serious problem.

As for "running as fast as you can just to stay in the same place", well that depends. Why would I need to advance? I already have everything I need. I don't work at all, and disasters aren't likely to be much of a problem since I don't have a lot of expensive assets to lose. If I ever need healthcare I can use a government scheme (I don't live in the USA btw). So in this regard, you could say my lifestyle is partly subsidised by the government.


> Relative poverty is still poverty.

Given that the experience disutility of poverty seems to be driven more by relative deprivation than absolute deprivation, its arguably that relative poverty is actually the more important kind to address, from a utilitarian perspective.


The problem is that this is comparing apples to oranges.

Things also cost more in the US than in many places with lower incomes, so it's not fair to say "But people in country x make lots less money, so our poor people aren't /real/ poor people."

Beyond this most social programs people mention are harder the be eligible for than one might think. The only thing that pretty much any US citizen will be consistently eligible for if they have a low enough income is food stamps. Most other programs require having kids or a disability to be eligible for.

And to be poor enough to get much out of food stamps, you're likely to be in a situation where you're struggling to afford a place to live and associated costs, even with food stamps factored in.


You know, you call them 'parasites' but it could be argued, firstly, that spending their 'free' cash is the service rendered (think utility functions: do you trust "average joe" or bureaucrats to be more effecient spenders of tax dollars?). Also, by giving these people basic income, you allow these families to build their own lineage and estate: over generations, families will be less likely to fall through the cracks, and thus can start producing "useful" members of society.

Parasites you might call them, but they can be producing something even in this state.


>do you trust "average joe" or bureaucrats to be more effecient spenders of tax dollars?

This is an excellent point. Even when one points to the dregs of society, those people are likely to spend their 'free' money in a way that is beneficial to me, by spending at local businesses.


It's not unlike how you get to use Facebook "for free", but in reality you're feeding them information.

Guaranteed Minimum Income could be seen as a way to ensuring everyone is able to express their purchasing desires with less distortion from necessity, and that you're paying them for that "social service".

Idk.


I think it'd be an interesting philosophical exercise to posit that we sell Facebook data traces about ourselves in return for easy access to data traces about others. What would that really mean, and what moral or economic consequences can be concluded from that?

I personally have no idea.


Thank you. People live in poverty because they don't know how to not live in poverty. We think we can buy our way out of the problem by providing housing, foodstamps, welfare (or, as proposed, scrapping all those things and providing a "basic income") but all this really does is make poverty a bit more comfortable without actually teaching those in poverty that everything they know about how to live is wrong and counterproductive and contrasting that with what works.

From the article: A Basic Income Guarantee would establish economic security as a universal right. It gives each of us the assurance that, no matter what happens, we won’t go hungry.

I don't see that it provides that guarantee at all. It doesn't mandate that the money be spent on food, housing, or anything sensible. One of the things that people in living in long-term (generational) poverty tend to do is to immediately spend any money they get on "escaping" the drudgery of their survival, e.g. on alcohol or drugs, flashy jewelry or clothing, gambling or other entertainment. It simply doesn't occur to them that money can be managed, invested, or saved. If you don't break this way of looking at life, then the money will be gone in a week or two (or less) and they'll struggle for the rest of the month until the next payday comes, and repeat the cycle again.

[Edit: Cite for my last paragraph: A Framework For Understanding Poverty, Ruby K. Payne]


When you work for 7.75 an hour to support a family, you don't have enough money to "manage," much less gamble or buy jewelry. That's what it means to be working poor. I don't think you could hack that.


Funny how demographically, lower income citizens in the US are the backbone of almost every state lottery...


The main value one receives from buying a lottery ticket is not the statistical expected value of return on investment, but the sense of hope for a better life that you get when you but the ticket. This hope is much more valuable for someone struggling with poverty than for someone who's relatively well off. Therefore, it's perfectly rational for poor people to put a higher dollar value on a lottery ticket.


In other words, it's gambling.

Most gamblers don't weigh the EV on each bet. Most are just riding the high, or hoping to hit 21...

There's a reason Vegas has all those fancy hotels, and it's not because gamblers are mastering EV.


Do you really think it's funny? I don't.


His point wasn't that it was funny, it was that the parent was making a poor argument. And he's right. If you spend any time at all around people working low/minimum wage jobs, you'll see that many of them spend money on non-essential things: alcohol, tobacco, lottery tickets, drugs, expensive cell phones, renting stereos and TVs, etc.

My mom spent many years working with low-income families as a social worker. She told me repeatedly that many of these families just lack the basic skills of managing money. If they had $40 a week left after paying all their bills, they see nothing wrong with spending $30 of that on cigarettes and beer.


Yeah, if they took that $40 / week and invested it in an index fund with a 7% after-expenses return, then after 47 years of working from age 18 through age 65, they'd have an inflation-adjusted $185,000. Combined with Social Security, that would provide them almost $20,000 / year to retire on.


But humans aren't just satisfied with being alive. They all have hopes and dreams; they have needs, sure, but also wants. We need food but we also need some pride. It may not make sense to you, it may not seem logical, but it's human. Lottery tickets are a way to have hope: that it's going to be ok one day, better than ok. A smart phone says, I may be cleaning toilets but that's not who I am.

If you spent a year or more working a minimum wage job and living off of it, you too would start to do some of this. It's just human nature.


This, so much this.

The problem with poverty is often not that you have no excess income, but that you have so little (or should have none, but sacrifice some food to have some) that you're exhausted and can't help but want what little luxury you can afford.

It's easy to say that if someone was better disciplined they could save what little extra they have and make something of it in the long run, but it's very different to actually be in that situation and have the resolve to do that.

You can be smart enough to know you're being irresponsible and keep doing it, which just makes it that much more painful, but many aren't even smart enough to be aware of this.

This does not mean that giving people in this situation additional means would always be a total waste; often, people just want/need a certain baseline, and beyond that will use additional means to lift themselves up.


Sure, these are common values. But damaging values. When people learn to defer things for future gains, they get the chance to improve their lot in life, or the lot of their children. But blowing it all on lotto tickets with a pack of cigs and a forty isn't doing anyone any good.


Funny as in odd or contradictory to the parent argument.


One idea I've casually pondered is if things would be better if you had a card that got a daily, or even hourly top up, instead of the status quo of a monthly top up. Bills would have to be similarly broken up into continuous payment, or some people might not be able to save up enough continuous income to pay them.

I think it at least sounds possible that it could shift people to a more even expenditure rate instead of the rich for a week, starve for three, some people lead.


Here's an article summarizing some experimental evidence to the contrary: http://mondediplo.com/2013/05/04income


You talk about poor people as if they are a different kind of human being from "normal" people.

In fact, 80% of USA citizens are poor at _some_ point in their life. _Most_ people experience poverty. It's not necessarily because they "don't know how" to be anything but poor. (Often it's a result of becoming too old to work.)


Agree with first paragraph a hundred percent. How can we teach those in poverty that the way they live their lives is counter productive? The politics have to get out of the damn way or it will never happen.


You've got the first step down pat: become an authoritarian paternalist. Now you need the second step: understand how the world works.


It's likely that job-sharing would increase. Instead of one unemployed person and one 'full-time' waiter, you'd have two part-time waiters. Waiting being a menial job that's not awesome, but is easy to pick up and easy to manage when it's only a couple of shifts per week. The focus would have shifted from "I must do all this to survive" to "a bit of extra money on top"


> Considering that in human history poverty has always been the norm it makes sense to look at what causes poverty to not be the norm first before moving onto just "fixing" it.

"When I give the poor bread, they call me a saint. When I ask why they are poor, they call me a communist."


> With a basic guarantee many people who are marginally employed would stop working. You'd have two classes of citizens: the workers and those who are effectively parasites off of the workers.

We already have this, it's just horribly mislabeled. http://apps.npr.org/unfit-for-work/


> With a basic guarantee many people who are marginally employed would stop working.

So what?

> You'd have two classes of citizens: the workers and those who are effectively parasites off of the workers.

We already have that; the latter class is called "capitalists". With a BIG, the public commons become an equally-owned, dividend-paying asset, which in effect makes everyone at least a very-small-scale capitalist.

> I don't like people being poor but society is just not wealthy for poverty to disappear.

Reducing the necessity of continuous wage labor for those without large personal fortunes increases labor market mobility, opportunities to explore higher-risk, higher-potential return activities, and opportunities for job retraining for better fit to changing markets.

Yes, a cost of that is that some people will opt-out of work without engaging in even potentially socially-useful activities, but this is to an extent self-limiting (the more people do it, no matter the nominal level of the BIG, the less goods and services the BIG will suffice to purchase, so that the more people that opt out, the less attractive opting-out becomes.)

> Part of the issue is that we lack an understanding of poverty and what actually causes people to not be in poverty.

We actually understand poverty quite well, and understand very well that the combination of limited goods and inequality in the distribution of goods cause people to be in poverty. What we don't have is a mechanism that works with human nature to encourage enough production and equal-enough distribution of goods to eliminate poverty, and BIG isn't, itself, intended to be a solution to that. Its mostly a self-regulating partial solution on the distribution side, since, as productivity increases, the sustainable minimum level under the BIG increases as well.


With a basic guarantee many people who are marginally employed would stop working.

Why do the rich work?

a person living in poverty is probably better off than all the but the richest people at any time in human history

I'd imagine that hunger feels much the same now as it did a thousand years ago.


A proposal in this direction has been pushed in Switzerland that will be subject to a referendum.

The idea : hand out 2500CHF a month (about $2700) to each citizen without anything in return or any condition. Plus around $1100 a month for each child you have to support.

Now this has not been confirmed yed (the referendum is to be held in 2015). The goal is to put an end to the degrading controls forced upon people depending on welfare, and to balance the relationship between employers and employees - if you don't HAVE to work, you don't have to put up with abusive employers, low-paying slavery and the like


I'm intrigued by the costing of this proposal.

2500CHF per adult is an enormous proportion of national income to redistribute: even taking into account Switzerland's unusual prosperity we're talking about an income subsidy that's nearly 40% of per capita GDP. That's a huge sum of money that's going to have to be found via the tax system, and it's far too big to find from merely taxing the top end (especially when you're as full of millionaires and as prosperous from foreign capital flows attracted in part by your low tax regime).

It sounds likely to be a huge boon to certain categories of "idle rich" dabbling in low end residential property speculation (CHF 2500 per month average Zurich apartments aren't going to stay that way when even unemployed couples earn double that) and ironically probably penalise precisely those employees most readily exploited by employers: those without the raw ability to earn above the median wage but with the work ethic and drive to get close.


You could do it, you'd just need the world's steepest tax rates- and not marginal tax like the USA, either, where the top marginal bracket is 40% but the effective tax will be much lower. We're probably talking you take home one dollar for every three you earn.

ironically probably penalise...

This actually brings a really interesting point to mind. When everyone gets 2500CHF, the people who are currently working for 1250CHF have in a sense had their incomes slashed. They go from being infinitely richer than the unemployed, to only 50% richer (on a monthly income basis). So instead of lifting themselves high above the jobless, the same amount of work now lifts them only a little bit. I am unsure at the moment whether this can be described as decreasing the marginal utility of the income they currently earn.


On the other hand, now their wages are entirely disposable income, right?


> Now this has not been confirmed yed (the referendum is to be held in 2015). The goal is to put an end to the degrading controls forced upon people depending on welfare, and to balance the relationship between employers and employees - if you don't HAVE to work, you don't have to put up with abusive employers, low-paying slavery and the like

That's quite radical, but smart at the same time. It has the potential to weed out bad companies from the economy, which in the long run is beneficial. It shifts a lot of power to the employee though, so there's a risk in the long run it can create a bad workforce instead.


There is no such thing as a "bad company."

Either a company is providing a good or service that people want enough to pay for, or it's not and it goes out of business. That's the market.


So... if a restaurant owner gets his rocks off by forcing the waitresses to blow him, that's fine as long as the place is profitable?


Wow, I didn't think 2500CHF/month is anywhere near possible for a country like Switzerland. I think that balancing relationship (or negotiating position) is the argument for basic income. That being said going from 0 to 2500CHF/month looks very bold.


SPECULATION: I'd guess that they already have some kind of social security system that costs them a lot plus they would use progressive taxation to get most of the money back.


Citation? I really like the idea of basic income but $2700/month per person seems absurdly high. I don't know why any political faction would try for so much.


Is there a detailed explanation of the plan available online?


> a) no country has ever tried it, really, so there isn't a real-world experience case to look at yet,

Brazil is trying, it's called "Bolsa Família". It's an attempt to assure a minimum base income, stop child labor and develop the economy on places far away from the big centers. It works by putting money directly into the hands of poor families and letting they decide how to use it, as opposed to more specific welfare programs.

I guess that's as close as you can get to socialism, and there's a lot of controversy surrounding it, since brazilian government is provenly corrupt.

[1] http://en.wikipedia.org/wiki/Bolsa_Fam%C3%ADlia


Thanks for pointing out Brazil. And as for the OP, I would also point out History! I mean what is this bullshit - basic income guarantee has been in practice for 50 years in almost every communist state around Russia, my Poland included. It wasn't called that way, but the policy was that everyone has to have a job and receive a specified wage. And everyone did. You know what happened? Money was useless because there was no supply. Everybody had money, nobody was poor, the problem was - you can't eat paper.

You know what would happen in the US, where there is supply? It would drive spending nuts, demand would grow, prices would grow, therefore inflation would grow and the dollar would lose its value, effectively diminishing the basic income benefits.

Because life ain't fair, it never will be unless we live in utopia where everyone is good and there is no evil. So why not try it? Because there was a guy who wrote it all down. His name was Marks. And you know who used his theories in practice? Lenin. And you know what happened next? The Red Revolution.

Seriously, such ideas for the US… "Fate, it seems, is not without a sense of irony."


"basic income guarantee has been in practice for 50 years in almost every communist state around Russia, my Poland included"

This type of statement betrays a total lack of understanding of what a basic income guarantee even is. Plenty of deeply anti-communist thinkers--including probably the most effective one in history--have supported a basic income.

Why did your native Poland fall far short of its productive potential? As you yourself say, it wasn't for lack of money: it was because the things people wanted to consume were not being produced.

The root cause of that was broken capital markets: special interests (or foreign special interests, in the case of Poland) captured political control of the economic resources of Poland and used non-market decision making to allocate capital. If people who completely deprioritize popular standard of living control capital, then, yes, unsurprisingly other things--military, party functionaries, foreign invaders--will end up getting their demand met.

Also: "Because life ain't fair, it never will be unless we live in utopia where everyone is good and there is no evil. So why not try it? Because there was a guy who wrote it all down. His name was Marks. And you know who used his theories in practice? Lenin. And you know what happened next? The Red Revolution."

It's abundantly clear that, for all his faults, you don't even have a passing acquaintance with Marx. He's wrong on virtually everything, but you're not even wrong.


I can't comment on your reply because it lacks any argument against my post. Tell me where I'm wrong. But what I can tell you is that if you give $1,000 per month to every adult in US without any requirement, then: 1) you might as well not give any money to anybody, because relatively no ones wealth will change 2) at first everybody will be able to buy the essential stuff, food etc. but then 3) you will end up with inflation, because free money will create more demand, which in turn will result in smaller supply (relatively to demand) and higher prices, and cheaper dollar - in the end these $1,000 after a couple of months will buy you only $500 worth of goods (end game is that these $1,000 will be worthless after some period) 4) you will be spending $3bn per month on this, out of thin air, effectively pumping cash into the system, decreasing dollar value even more

To some extent this already has been tried in the US in the form of cheap mortgage credit to the poor. Thousands of dollars were given to people who defaulted and never paid back. Look where it got us…


Your points are inconsistent with each other: first you claim that no one's pattern of consumption will be affected, but then you move to claiming that the prices of basic goods will change. Those two things cannot both be true: which would you like me to address?

Overall, your main flaw is that you're considering the economy an entirely static thing. But as the demand for basic goods increases, it creates new business opportunities for both incumbents and potential entrants into the market. Capital seeks out profits, and relatively more capital would flow into the provision of basic goods. That's what prevents the basic income from dissipating into worthlessness.


Not at all, not static. I'm just saying you cannot give people free money and not take that money from somewhere else. FED has been doing this, the quantitative easing, for some time now, but it's not feasible in the long run. Wealth is created, not given.


"I'm just saying you cannot give people free money and not take that money from somewhere else"

No-one is saying that you should. A theoretical BIG would be funded by the money that is currently spent on inefficient and mismanaged state welfare. It's money that is already being spent, used in a different way.


1) you might as well not give any money to anybody, because relatively no ones wealth will change

Blatantly untrue -- under basic income poor people will see their relative purchasing power increase, and rich people will see theirs decrease.

3) you will end up with inflation, because free money will create more demand, which in turn will result in smaller supply (relatively to demand) and higher prices

Or maybe supply will go up? You know we have an unemployment problem, right? More demand is exactly what America wants right now. It creates business and employment opportunities.

in the end these $1,000 after a couple of months will buy you only $500 worth of goods (end game is that these $1,000 will be worthless after some period)

Obviously basic income would be pegged to GDP, hence pegged to inflation. This is a non-argument.


1) If I have $0 and you have $100 and we both get $1000, you are still $100 richer than me. Also, if you say that purchasing power of the rich decreases, you are admitting to inflation. If I have $10,000 and can buy 20 laptops, but after the $0 guy gets $1000 he of course feels better, he can now buy 1 laptop - however I can only buy 10 laptops now. The value of the dollar dropped by half :/ that's what you are saying?

And about pegging, if you say you increase the payout according to increasing inflation, then wow, you now have a hyperinflation (that's when prices go up 100% in a matter of days, each week).


Think of it like USA Inc. with every citizen a shareholder entitled to dividends from GDP. It is not free money.

Also, your economics is pants. Giving $1000 to everyone is going to make a lot more difference to someone eating out of dumpsters than it is to Bill Gates. And it isn't about rescuing people by giving them a lump sum and expecting that things will be fine, it is just about giving people enough time for reflection that more of them have a chance to sort their shit out. Life is hard and people are disorganised bastards, if we try and make it a bit easier for people we might get more done.


It will make a lot more difference to those who are wealthy as well. But not in a good way.

USA Inc. with every citizen as shareholder would work like this: I earn $100K/y, my neighbour just $0/y. I pay $20K in taxes, he pays none. We both get $12K/y from BIG. For me it's a dividend. For my neighbour it's free money. So what's my incentive to work? Screw this, I quit. Now, USA Inc. get's $0/y from both of us. For 4 months we still get the cash, from the surplus. But that runs out, and now we both get $0 and are jobless.

BIG will only work if there are more people who work than those who don't work. Making things easier for people never actually helped them. Those who succeeded had to go through hard work.


"So what's my incentive to work? Screw this, I quit"

Your incentive to work is that you earn $100k instead of $12k. I certainly wouldn't quit my job if it means that much of an income hit. This is actually a real situation for me - I could quit my job tomorrow and get more than $12k in benefits, but I won't.


Good point. But what if you earned $20k? The problem here is, you would have to go straight from $0 to at least $24k to have incentive to work. Anything less is just not worth the hassle, if you get $12k for nothing. And that creates a problem - how people are going to go up the career ladder, if at the starting point they want so much?


Interns? Work for nothing/benefits/nonmonetary compensation/experience?

(I'm not agreeing or disagreeing with the premise, just brainstorming)


Even a minimum wage job would double your income. That is plenty of incentive to work.


Making things easier for people never actually helped them.

You'd lose a lot of people as a lifeguard.


I'd rather teach them how to swim when they are young.


Then, in addition to my previous comment, especially at a pool for the elderly.


> It wasn't called that way, but the policy was that everyone has to have a job and receive a specified wage.

That is not a basic income guarantee. With a basic income guarantee, you receive the basic income regardless of whether you have a job or not. You do not have to have a job. If you choose to have a job, you earn a wage in addition to your basic income. The system you're describing is a completely, fundamentally different thing from a basic income guarantee.


Let me explain: in a communist country, people had various jobs. Each job had a different salary. But everyone had a job, everybody had income. So, if you asked anyone "Do you earn at least $100?" - all would say "Yes". But some could earn more if they were in better jobs. Obviously that meant you didn't actually have to work to receive salary - that's why productivity sucked. Not so different now, huh?


Yes, still very, very different. Having a job where you don't actually accomplish any work is completely different from not having a job at all. Having a non-productive job wastes your time and saps your energy. I've had them before, and they're soul-crushing. Not having a job at all, on the other hand, frees you to do real work. Creative work, work in line with your passion. That's what we really need people to be spending their time on, not raking all the leaves from one end of Central Park to the other and back.

When J.K. Rowling was on benefits from the UK government, she wrote the first in a series of novels that would go on to become the best-selling novel series of all time and earn her hundreds of millions of pounds, a good portion of which went back to the UK government in tax revenue. If instead she had been forced to do a menial, unproductive job, none of that would have happened. Her words on the subject: “I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy to finishing the only work that mattered to me. … And so rock bottom became a solid foundation on which I rebuilt my life.”

Buckminster Fuller hit the nail on the head with this quote: “We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian-Darwinian theory, he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.”


I understand your point and you are quite right that if an exceptional individual has given space to pursue his passion without the worries of "making a living", it's awesome and they can blossom. But for general population, this doesn't work. Otherwise Poland would be filled with success in all fields instead of 2M jobless receiving unemployment pension.


> I mean what is this bullshit - basic income guarantee has been in practice for 50 years in almost every communist state around Russia, my Poland included. It wasn't called that way, but the policy was that everyone has to have a job and receive a specified wage.

But is it really the same thing?

A basic income guarantee is the same as having a basic (food/healthcare/public services/whatever) guarantee (basically, state welfare already implemented in many countries) - the difference is the government is paying in money instead of trying to provide the services themselves.

The way I see it, it's quite different than everybody getting the same income. It has the potential to improve public service efficiency and foster the economy away from big production centers (decreasing city population density, which causes a lot of problems on it's own, like homelessness or poor housing conditions, traffic, health and environmental issues, all of which are problems the government has to waste money on already).


> Because life ain't fair, it never will be unless we live in utopia where everyone is good and there is no evil. So why not try it? Because there was a guy who wrote it all down. His name was Marks. And you know who used his theories in practice? Lenin. And you know what happened next? The Red Revolution.

https://news.ycombinator.com/item?id=6311812


> Because there was a guy who wrote it all down. His name was Marks [sic]. And you know who used his theories in practice? Lenin.

Marks, really? If you want to pose as a scholar, at least learn to spell the names of important historical figures. And this isn't a trivial correction -- because you think his name is Karl Marks, your post will not show up in Web searches of the topic you think you're writing about.


I don't pose for anything, I'm just saying what is logical. 2+2 != 5. And sorry for this heresy I committed by not writing Karl's surname properly - force of habit, this is how we write his surname in Poland. Now does it change the discussion in any way? I don't think so...


A big difference between the BIG scenario and what you describe is "everyone has to have a job". The inefficiencies of/resistance to state-mandated production quotas make the two systems significantly different.


Bolsa Familia is not a basic income. It fails to fix the fundamental problem with current welfare: that it is a disincentive to reemployment.

A proper basic income is fucking trivial to implement. Give every member of society X amount of money per T time period.

This has nothing to do with socialism. The means of production do NOT change ownership.


> A proper basic income is fucking trivial to implement. Give every member of society X amount of money per T time period.

Just like that, huh? Pray tell, where does the money come from? Magic money pixies just conjure up limitless amounts of money and sprinkle it everywhere, and the only effect that has is that now everyone has money!

> This has nothing to do with socialism. The means of production do NOT change ownership.

Oh, a Marxist.


>> This has nothing to do with socialism. The means of production do NOT change ownership.

> Oh, a Marxist.

Not necessarily a Marxist, just someone who actually knows the meaning of the word socialism. Depressingly uncommon, that.


From what I have read basic income is often suggested to be combined with a single land value tax. This means the only direct taxes are on the unimproved value of land, which is fairly easy to administer in a country like the United Kingdom, for example. That tax is then passed on to people who consume the output of the land, be that actual produce, like vegetables, or more intangible things, like crossing the land in a train.

The land value tax can be scaled to match the requirements of the basic income, plus additional government costs (e.g. defence). I suppose in a libertarian interpretation of that system the additional government costs would be minimal. Personally I would favour more social spending, but I could imagine less being necessary than under systems where basic provision is lower, or has more strings attached.


The money could come from a number if sources, like all existing welfare programs, or public pensions, which are already incredibly high, and could be substantially lowered. Or we could cut our ridiculous military budget by a tiny fraction.


Have you looked at some numbers?

Here's a start: 300 million people * $1500/month = $5.4T per year.

It seems the total US tax revenues are around $2.9T in 2013. So with these numbers, all they'd need is to.. roughly double their revenues. In other words, the US would need to forcefully confiscate almost twice as much money as they do now.

This is why statements like "A proper basic income is fucking trivial to implement. Give every member of society X amount of money per T time period" are somewhat annoying, and we haven't even gone into the consequences of raising taxes by even half.


Try using some real numbers if you're going to actually try dismissing an argument with an appeal to numbers. Are we talking about guaranteeing that every child has $1,500/mo, too? I don't think so.

Based on Census data, there are about 240 million adults ... so $4.3T, using your $1500/mo figure.

Basing this off existing tax revenues is somewhat foolhardy as that system is gamed like crazy. Forcefully confiscate? No. The US would have to alter tax code to increase revenue by closing all the loopholes used by those who exploit them to avoid taxation of their incomes and assets.

Beyond that, this would not be a simple program to implement--which, I think, is actually your point. For starters, BGI would have to adjust based on where a person lives--someone in NYC or LA has a higher basic income need than someone in the smaller, cheaper Southern and Midwestern towns. This makes a bit more difficult equation for determining exactly how much this would cost, but there's enough Census data available that we could roughly estimate it with a bit of effort. The tax system would have to be modified, making appeals to current tax revenues a rather moot point.

So, you're right that it's not a trivial proposal, and it's unfortunate the other commenter suggested such a trivial solution. However, we do just give every member of society X amount of money per T time period in the form of various tax breaks and write-offs, etc. So, the other commenter is not too far off that it can be as trivial as agreeing and deciding to just do it--and then get on with the hard work of figuring out how to implement it.


I didn't mean my numbers to be accurate. That's why I referred to them as a start.

Yes, there would be considerations such as the differences between rental prices in NYC vs Idaho, or whatever.

But more importantly, what happens if there's a hefty increase in taxes? -A lot of businesses will shut down or get the fuck out, and then the tax burden is just that much heavier on everyone who's left, and then they're even more motivated to shut down or get out. It's a feedback loop of higher taxes.


A voice of reason in the wilderness. These people (or is it all one person with multiple accounts?) disinter tired, old socialist notions that have no basis in reality. Indeed, let's just close all the tax "loopholes" and redistribute $2T to the least productive people and see what happens. What a great idea!

Excuse me, but I have to get back to the real world, now. Enjoy eating the goose, but don't complain tomorrow when you run out of golden eggs!


Yep. They have no clue. I've come to the conclusion that trying to get people to see reason is futile, but old habits die hard.


> to the least productive people

BIG goes to everyone. It replaces (among other things) programs which go to the "least productive people". So your criticism seems misplaced.


> But more importantly, what happens if there's a hefty increase in taxes?

Depends. I mean, if you do a big shift from payroll taxes (which business pay for workers independently of whether they are making a profit) to income taxes (which business pay, essentially, on profits), even if the overall level of taxation is higher, you can make it much easier to start a business and make it sustainable, causing businesses to flourish.

Also, you can tie BIG to a revenue base such that increases/decreases in the revenue base over time also lead to increases/decreases in the guarantee.


> I didn't mean my numbers to be accurate. That's why I referred to them as a start.

Typically, when discussing a start, I'd expect people to not be starting with a number that is over $1T higher than what we would actually be discussing right now. $1T is a lot of overage for a start, even considering that you apparently did not care to be accurate when trying to so definitively dismiss the attainability of a better economic platform for everyone.

> But more importantly, what happens if there's a hefty increase in taxes? -A lot of businesses will shut down or get the fuck out, and then the tax burden is just that much heavier on everyone who's left, and then they're even more motivated to shut down or get out. It's a feedback loop of higher taxes.

You're purely speculating here.

Running a business ought not make anyone some kind of special entity more valued than all the workers they depend on. There is a seriously systemic social problem in America where too many people look at businesses as something that ought not be obligated to the same expectations of social responsibility as normal citizens and the state itself.

Don't want to pay taxes? Fuck off Business Person, we don't need you. If what you're doing is really that valuable and the market wants it, someone else will find a way. And if nobody else does, we still don't fucking need you.

Establishing a fair, just, and reasonably equitable society is far more important than counting the number of businesses we have. When the system is stacked in favor of those who want to evade taxes, or threaten they will shut down or get the fuck out, and constantly caters to this bullshit, we can't improve our institutions meaningfully. Moreover, the cult of endless economic growth that so dominates our cultural narrative is working against us and reality itself. It's unsustainable. We keeping moving toward more bullshit jobs and less meaning for people, as if job titles and salaries are the only measure of human worth and the only means to happiness.

Everybody treats the economy and the complex systems that transact within it as if it's some kind of set of laws built into the universe itself, instead of something we fashion ourselves and have the ability to direct.


> Don't want to pay taxes? Fuck off Business Person, we don't need you. If what you're doing is really that valuable and the market wants it, someone else will find a way. And if nobody else does, we still don't fucking need you.

We all need goods and services. Who's going to give you food, fix your car, build your house, sell you a computer? You might make a few of these yourself (grow your own food if you live on a farm, for example), but not all of them. Eventually, it all comes back to a system where people make stuff and trade with others.

> Everybody treats the economy and the complex systems that transact within it as if it's some kind of set of laws built into the universe itself, instead of something we fashion ourselves and have the ability to direct.

A lot of these systems and designs are fashioned by human nature. We can't truly direct human nature; people in all societies are self-interested, looking to survive and improve their place in society. This is balanced with cooperation, since in some situations you're better off collaborating than being selfish.

Whichever way you re-design society, it's going to shape itself after human nature. Not even the communist master planners managed to break its basic laws, quite the opposite. For example, in Communist countries (or Romania at least), there was a black market for all kinds of stuff you couldn't find in the open (like Western magazines, literature, or rare stuff like meat).

TLDR version: I don't think you can engineer society.


Oh stop it, you Silly Marxist Goose.


Isn't $10k/yr the generally the suggested figure, maybe $1k/mo for simplicity? $10k/yr makes it $2.4T. Social security is approximately $770B, safety nets $410B. Medicare/Medicaid is around $730B. That's getting close.


> Bolsa Familia is not a basic income. It fails to fix the fundamental problem with current welfare: that it is a disincentive to reemployment.

I don't think it's disincentive to reemployment in this case, because being unemployed is not a requirement to receive the money, just being below a certain level of income per family member. Those families can both receive the benefit and work, as the program has the potential to stimulate the local economy and create business opportunities or jobs that didn't existed before.

> This has nothing to do with socialism.

Redistribution of wealth is a core concept of socialism, and that's what this program effectively achieves. The resources come from heavier taxation from the federal government on the bigger economic centers of Brazil. So I'm not sure what you're trying to say here.


Redistribution of wealth is a core concept of centralized government of all kinds, through the medium of taxation. And governments of all kinds already redistribute wealth in pursuit of social goals, whether they are socialist or not.


> I don't think it's disincentive to reemployment in this case, because being unemployed is not a requirement to receive the money, just being below a certain level of income per family member.

Well, I personally know people that refuse to work because they get the benefit, and even a minimum salary would make them ineligible.

Bolsa Familia is fixing several people into poverty.


Minimum salary won't get you out of poverty either. It means 2-4h in a packed bus, work for someone else, see your kids only when they're sleeping, have no alternative but public health and education, which usually is hellish.


I'm sorry, but for some reason I can't believe you.

The program currently pays per family, tops, R$ 306. Minimum wage is more than double. I don't see why mentally and physically capable people would refuse the opportunity of doubling their income.


Some can make more by taking informal jobs, which they don't have to report. With that, they are locked into a local maximum. And I've heard anecdotes from social workers of people who do prefer taking the "free" money to working. When you are dealing with hundreds of thousands of families, there will always be a few outliers.


Genuinely curious, at what point does taxation become socialism?


There are many ways to spend tax money that aren't directly related to welfare: military, infra-strucure for the private sector (docks, airports), industry, research...

I believe that a state that taxes and redistributes wealth is enforcing some level of common ownership, so acting under socialist principles. A state that uses tax money and reverts back into public services though is more often said to be only a welfare state.


Sounds like, in short, taxation to help the poor is socialism, while taxation to help the rich is not. Which I suppose is true, but not exactly a reason to avoid socialism.


Okay, that puts this into perspective:

>> This has nothing to do with socialism.

>Redistribution of wealth is a core concept of socialism, and that's what this program effectively achieves. The resources come from heavier taxation from the federal government on the bigger economic centers of Brazil. So I'm not sure what you're trying to say here.

You two are arguing around two definitions of socialism, the OP is using the standard definition and you are using your own heuristic.

>I believe that a state that taxes and redistributes wealth is enforcing some level of common ownership, so acting under socialist principles.

This doesn't follow. If they were abolishing property rights, then yes you might have a point, but this is nothing new. It doesn't erode away any of the problematic power relations in a pre-socialist economy.

It's like equating the following:

>There are many ways to spend tax money that aren't directly related to welfare: military, infra-strucure for the private sector (docks, airports), industry, research...

with fascism.

It bears a resemblance but upon closer inspection is absolutely nothing of the sort.

I'm also curious as to why you don't classify the above corporate welfare as socialism as well.


> You two are arguing around two definitions of socialism, the OP is using the standard definition and you are using your own heuristic.

I'm giving my definition, as someone who knows what goes on inside this country.

The program was put in practice under a left-wing government, whose president was the head of the worker party and went to jail during the right-wing, US-supported, military dictatorship we had in Brazil from 1964 to 1986.

So even though the program looks like "just" welfare, there's a strong socialist doctrine behind it, revolving around redistribution of wealth and the maintenance of the left-wing in power. Mind you, the same party that implemented the program won all four subsequent elections for presidency.

> It bears a resemblance but upon closer inspection is absolutely nothing of the sort.

Nothing of the sort? It's pretty close a description of where the US government invests it's tax money, and there are quite a few people who classify it as a fascist government. The fact it's a military power, ran by a two-party system where both sit on the same axis of the political spectrum, with a strong nationalism sentiment and martialist culture are often given as indicators.


The moment you do something useful to society with the tax revenue.


At the point at which it's mandatory.


I would hardly call "basic minimum income" socialism. Socialism is top-down control of the economy by the state; this is just an (extremely) liberal (in the european sense) welfarism. You could argue that it's less socialistic than the US' welfare system, which imposes lots of behaviour controls on its recipients.


>I guess that's as close as you can get to socialism, and there's a lot of controversy surrounding it, since brazilian government is provenly corrupt.

I would say that is as close as you can get to capitalism (while having welfare). In the current welfare systems, the government funds specific programs to provide for the public. With a BI, the government gives money to individuals, and allows the market to arrange itself to provide for the public.


Actually, that's what I meant.

It's as close as you get to socialism (redistribution of wealth is a form of common ownership of the country's GDP) without rendering money useless (having the government provide everything for everybody).


a) France does just that.

Since 1988.

It was called for years RMI for "Revenu Minimum d'Insertion" which translates to something like minimum revenue for social integration.

Our previous government changed the name to RSA or "Revenu de Solidarité Active", which translates to revenue of active solidarity. They reduced the revenue by a few percent at that occasion.

The RSA provides now enough to live (about 500€ for a single person per month) if not in a major city center. It becomes about 1200€ month for a family with two children. Again, just the minimum to live.

Also take in account that education and health are free* in France.

(*) YMMV, not all MDs, but most schools, etc.


Except RSA is not available to everyone (many people are not eligible), not guaranteed (it's tied to searching for a job, for instance), and not an actual income that provides you the bare minimum (in some places it doesn't even get you housing).


Does this apply to immigrants ? If so why are there such large tensions around the issues of immigrant unemployment ?


Yes, under conditions. Mainly: stable residency, plus legal immigration papers.

Legal immigration is pretty low in France (compared to other European countries for instance), but what you mention IS a source of tensions, and the bread of extreme right parties.


I've been thinking about this proposal for quite a few years, and wrote a blog post explaining how this kind of negative income tax actually reduces distortion of free markets by separating personal risk from income risk.

I think the reason it keeps coming up here is because the ability to do this is particularly relevant to entrepreneurs. Unfortunately, it didn't get much interest when I posted it here, but hopefully some folks will find it interesting enough to more seriously consider this.

It is not welfare, it is not socialism. It frees people to be rational actors in a capitalist society.

http://neltnerb.tumblr.com/post/58818804903/an-entrepreneurs...


Basic income of all the failed attempts at communism, whats the end difference? Everyone can be happy in poverty except for those who run the industries and government?

Seen it, fails every time. Basic Income is nothing more than some people hoping to pay some groups enough so they don't steal their stuff. The issue becomes, how much is that pay off going to be?

NPR has lots of stories about people living off of SSI/SSID and similar, very close the requirements of BI, guess what, they seem to lose the will to improve their lives.

BI will just result in more people not trying to improve themselves


If you think the majority of people would just lay their lives to waste because they don't need to doing the bidding of others just to survive, then you are wrong. 99% of able-bodied and able-minded adults would not succumb to idlery.

Applying for SSI/SSID is an incredibly dehumanizing process. It takes over a year if you are lucky. You will be denied for any reason they can possibly find. It is guaranteed you will be denied for your first application. You have to prove you are disabled to them (disgusting really). You must have documentation. It goes on and on, but they honestly hope most applicators either die in the interim or just give up on 'improving themselves'.

Really, if there is a miniscule amount of people who will abuse the system it does not at all outweigh the good it provides. If your qualm is with said abusers, profile, detect, and prosecute them. Society is not going to collapse.


>If you think the majority of people would just lay their lives to waste because they don't need to doing the bidding of others just to survive, then you are wrong. 99% of able-bodied and able-minded adults would not succumb to idlery.

I would like to be the first to welcome you to planet Earth and introduce you human beings, as it is clear you have just arrived here.


The people who make more than enough money to survive (many tech people), what keeps them pushing for more? The drive to prove oneself, the drive to rise above the rest, the drive to obtain what others do not have, the drive to fame. Those forces will always exist, and will always push people.


I can play that condescension game too! Mason, you seem to have really taken the don't-question-things-fall-in-line schooling to heart all the way to where you think you are actually an independent thinker, but you just parrot completely baseless folk wisdom!

See? Isn't this productive and enjoyable? Hmm, if not, maybe you could try to have respectful and productive things to say in the future. You might learn something.


It's clear that you have a very limited view of humanity. Go out and meet some people, and learn their motivations and what drives them.


> a) no country has ever tried it

Isn't the cash you get from "Social Services" (or whatever it's called) just that, a basic revenue that's guaranteed (as long as you follow some very simple/basic/normal rules)?


No, not really; and the rules aren't that simple.

Example: My father's Medicaid was suspended/discontinued because he failed to submit some paperwork by a deadline, and missed a scheduled appointment.

Well, of course he has to fill out the proper paperwork and make his appointments! you might respond, and yes, for you or I, perhaps it might be reasonable to demand filled out forms, on time, and that we submit to an in-person interview. However, if you have COPD / Emphysema, you must to take oxygen with you; lacking a portable oxygen system means that you are, for all practical purposes home-bound. You most certainly are not able to make a sixty mile round trip. So, homebound, and lacking necessary medicine, portable oxygen, his health deteriorated until he needed hospitalization. At the hospital, a social worker was quickly made available. Medicaid was restored. He received enough care at the hospital to be released. He returned to his apartment. This cycle was repeated several times before his death.


Horrible story. This is exactly why these types of services should be provided without conditions attached to them.


One of the tenants of basic income is that you don' discriminate who gets it. The economic impact of everyone having some fraction (relative to their monthly checks) of demand met regardless of employment is something we have never seen. Additionally, all those unemployment / SSI projects are probably less popular because its discriminatory. With BI everyone from a homeless guy on the street to Bill Gates would get a check.


Those services have very narrow windows of qualification. This create a lot of top heavy bureaucracy which wastes a great deal of money that could be going directly to people. In addition it create a bifurcation of society, "those parasites" vs everyone else, which is turn create social stigma which only further exacerbates poverty.


> "those parasites" vs everyone else, which is turn create social stigma which only further exacerbates poverty.

Yep, our cultural stupidity does exist. That's why everybody should get a good education.


The issue in this branch of the conversation is the stigmatizing of people who legitimately need services but have actual hardships in maintaining them in the face of beauracratic rigidity and "discrimination by fiat".

My mother is legally blind and needs assistance for almost any trip out of her residence, and all paperwork. How many classes/subjects will fix that?


Not so much. It is not very easy to navigate and can take a while depending on how you end up there. Some of the money is also restricted use[1]. It is very much not guaranteed.

1) ok, in the last year or two some rules changed allowing EBT payments at strip clubs and liquor stores, but not buying a burrito at a gas station then cooking it in the gas station's microwave.


> a) no country has ever tried it, really, so there isn't a real-world experience case to look at yet.

Argentina had implemented a minimum income based on the number of children of a family. There are some studies about it like: http://www.degruyter.com/dg/viewarticle/j$002fbis.2012.7.iss...

This is not a basic salary but it's an important income for poor families.


Australia has it: https://en.wikipedia.org/wiki/Social_security_in_Australia#N... It's conditioned to seeking a job, but nonetheless there is no time limit; plus they offer job placement support, helping you become a productive citizen.

Surprises me that in 400+ coments there is no mention to it.


That is nothing like an unconditional payment to every adult regardless of their work situation. That's why no one has mentioned it.

The concept of a basic income seeks to replace the variety of welfare/support payments a country has. In Australia, that would include Newstart, Austudy, Abstudy, veterans payments, carer's allowance, disability, pensions, etc. You would get the basic income even if you chose to work as well.


They idea is interesting, but only if you take healthcare out of the equation. Healthcare expenses are close to nothing when you're in good health, but can get incredibly high - at market rates - when you're not. And no, private insurance is not the answer.


> no country has ever tried it, really, so there isn't a real-world experience case to look at yet

Canada tried it in the city of Dauphin, Manitoba in the 1970s. While it was not conducted across the entire country, there is at least some data to look at.




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