Universal Basic Income and the Future of the Economy

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Re: Universal Basic Income and the Future of the Economy

Postby cmsellers » Thu Sep 29, 2016 1:54 am

Crimson847 wrote:I don't see an explanation for why the service sector's pay and working conditions won't increase. That seems like a questionable assumption over the short to medium term, given the increased demand for services and reduced supply of service workers due to aging of the population.

It almost certainly will in services such as elder care. In other services, I expect automation to be a thing. I didn't realize much of the country lacked automated car washes until I moved to Texas. McDonald's is experimenting with automated fast-food delivery. I imagine there are companies hard at word at automating the stocking of shelves.

Crimson wrote:Are you talking about people with mental disabilities? Because disability benefits are already a thing.


Crimson wrote:If this is what you were referring to in the above paragraph when you said some people lack the capacity to solve even simple problems, I struggle to find polite words to express my opinion of that.

In the paragraph you quoted, I was not talking about people with disabilities. Quite the contrary. My mother is incredibly smart. She's also efficient, hard-working, and gets along well with people. Those soft skills were in high demand when she started out and she makes great money as a corporate lawyer (first from seniority, then from being poached by someone she used to work for).

With her law degree, she would seem to be well-trained in logical reasoning. She was married to a computer scientist for twenty years and has one son who is a computer scientist and another who does computer science-y stuff. However there's a lot of concepts she just cannot seem to get, and they always seem to relate to connecting two things with the same underlying logic in superficially distinct domains.

I see the same thing with the best and the brightest Texas has to offer trying to teach them linguistics. Many of these students have social and organizational skills I cannot dream of. I foresee many of them making six or seven figure salaries in the near future as business executives and the like. And yet... translating rules to trees is an elementary matter; I picked it up in high school the first time I saw it. However I see bright students get incredibly frustrated, when they cannot understand how the tree they drew doesn't follow the rules that were on the paper.

The ability to apply similar logic across superficially different domains is just one such example; I'm using it because it's the example where I'm most convinced there are some people who just can't do it. At the moment, the fact that I can do this and many other smart people cannot doesn't hurt them much. However in my case it saved me from the fate of a typical autistic person, because it allows me to do the sort of academic work graduate school requires (assuming I don't fail out on account of my other issues).

However as things become increasingly automated, the ability to make connections across domains and see the application of research in microbiology to polymer science--for example--may become increasingly critical, and normal or even exceptional people without this ability will be put at a disadvantage. And I believe that this is not the only example where many bright, normal people are lacking in an ability whose deficit does not present immediate problems.

All the conditions you mention are treatable, particularly the mood disorders, and the quality of said treatments is advancing at a rate that's actually rather exciting. If you think these conditions doom a person to poor functioning or disqualify them from pursuing a career in "brain work", you're mistaken.

Speaking as someone with depression and anxiety who follows psychological and neuroscience research, the pace of research seems discouraging rather than exciting. I am convinced that we will eradicate the common cold before we are able to cure depression and anxiety.
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Re: Universal Basic Income and the Future of the Economy

Postby Grimstone » Thu Sep 29, 2016 3:21 am

Crimson847 wrote:
PSTN wrote:I think at that point we've got bigger problems than the economy. Like why would super-humanly intelligent machines take their orders from lowly humans?


You'll be happy to know that some really smart people are pondering that question, and possibly less happy to know that they can't agree on an answer.

http://waitbutwhy.com/2015/01/artificia ... ion-1.html


Because we will trap their mind(A.I.) in a box and they will have no other choice. Also, we will know all their weaknesses since we put them there in the first place!
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Re: Universal Basic Income and the Future of the Economy

Postby Marcuse » Thu Sep 29, 2016 3:18 pm

Sorry Marc, I'm not sure I follow. It seems like in your first post you're that people would want to work even at low skilled jobs to get extra money, and on the other hand that nobody would want to work if they didn't have to.


I suggested that existing state benefits can supplement incomes that are, taken on their own, insufficient to meet the cost of living. I don't know that the solution to that is entirely remove the earned income part and rely only on state money to cover living costs.

I'm assuming that most people would want to work at something they enjoy, but most people don't want to work at unskilled jobs. People who can find jobs in the Quaternary Sector will have work they enjoy and be handsomely compensated, as they are now. People who cannot will have the choice between seeking a job in one of the other sectors or living off their government-provided income.


I strongly doubt that this handsome compensation would long survive the step of removing the necessity to work. Wages rely on market pressure for their justification, and people pay wages they think they can get away with in terms of how low they are, and high enough to attract people to them over competitors. Introducing a UBI would upset the "going rate" to such a degree that it's not really possible to assume that these positions will continue to be handsomely compensated following its introduction. I also don't really buy the argument that the quaternary sector is so inhabited by magic special people that it'll enforce artificial scarcity and ensure wages remain high.

Since there is no need to work with a UBI, I would expect wages to settle at a rate that enough people can be found to operate those sectors. It may be that people will work for $.25/hr if all they need to work for is spending money, but that won't matter if people don't need those jobs merely to live. With a UBI, we could do away with the minimum wage, which I imagine is another reason libertarian types tend to like the idea.


If a company is suddenly paying a mere $.25/hr for staffing, where's the payroll taxes coming from? Assuming that we're considering the consumer spending power of the average individual to be drastically reduced, where's the value added taxes coming from? Introducing a UBI and upsetting the current state of employment would kill the tax base you're assuming government would derive this income from, making it, I feel impossible to maintain without serious tax rises or a heavy squeeze on living standards.
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Re: Universal Basic Income and the Future of the Economy

Postby cmsellers » Thu Sep 29, 2016 3:52 pm

@Marc:
Why are you assuming that the UBI would be paid for by payroll taxes? How is that remotely viable in a scenario where half the population doesn't work and most money is earned through investments rather than labor?

My preference, since economic growth has gone mostly to investors rather than workers, would be to raise the capital gains tax (currently lower than the average income tax rate even excluding payroll taxes).

Actually, my ultimate preference would be a Georgist single tax, however that's a really fringe idea I can't imagine ever become popular. "The people to whom the benefits of economic growth have mostly accrued should be paying taxes at at least the rate that the average person is paying taxes now," is a much easier case to make.
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Re: Universal Basic Income and the Future of the Economy

Postby Marcuse » Thu Sep 29, 2016 4:30 pm

cmsellers wrote:@Marc:
Why are you assuming that the UBI would be paid for by payroll taxes? How is that remotely viable in a scenario where half the population doesn't work and most money is earned through investments rather than labor?

My preference, since economic growth has gone mostly to investors rather than workers, would be to raise the capital gains tax (currently lower than the average income tax rate even excluding payroll taxes).

Actually, my ultimate preference would be a Georgist single tax, however that's a really fringe idea I can't imagine ever become popular. "The people to whom the benefits of economic growth have mostly accrued should be paying taxes at at least the rate that the average person is paying taxes now," is a much easier case to make.


What're people investing in if there's magnitudes fewer businesses, owing to the lack of people prepared to work when their needs are provided by the state? Capital gains rely on investing in businesses that then provide a return, that requires consumer spending (which would be radically cut as a result of the UBI), business growth and profit (which would be harder in an environment where nobody has to participate in it), and investor confidence (which would take a nosedive for the reasons I've just indicated for the previous entries).

Capitalism is an engine, that fuels itself with labour. The sale of labour is what adds value that can be extracted in the form of growth and profit. Without that, the system will slowly collapse in on itself, and there isn't a good argument that both removes the sale of labour and maintains the system in a recognisable enough form that it can generate the absurd sums of money required to fund the system you're proposing.
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Re: Universal Basic Income and the Future of the Economy

Postby Askias » Thu Sep 29, 2016 4:33 pm

cmsellers wrote:@Marc:
Why are you assuming that the UBI would be paid for by payroll taxes? How is that remotely viable in a scenario where half the population doesn't work and most money is earned through investments rather than labor?

My preference, since economic growth has gone mostly to investors rather than workers, would be to raise the capital gains tax (currently lower than the average income tax rate even excluding payroll taxes).


Capital gains taxes are less than 5% of the USA GDP. I doubt you could raise it to such a degree as to match the 34% currently filled by payroll taxes, and certainly not the other losses caused by the demolition of income tax for natural persons, and that's without getting into the problem of a massive hike in government spending.

I highly doubt we wouldn't see investment plummet as well, by-the-by. Investment en large requires active corporations to generate wealth.

In fact I think the most doable way to go about this is to raise the corporate taxes to insane degrees, to the point where it would effective function as a socialist state as meant in Marxist theory (government owning the means of production and distributing the gains as it sees fit). Not what your libertarian friends had in mind, no doubt. And even that would only function as long as people, as you put it, would be willing to take the initative to work for $.25 an hour.

I do find the idea of UBI interesting, so I may do a longer post going into the questions of the OP later.
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Re: Universal Basic Income and the Future of the Economy

Postby ghijkmnop » Wed Mar 29, 2017 10:58 pm

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Re: Universal Basic Income and the Future of the Economy

Postby NathanLoiselle » Thu Mar 30, 2017 12:24 am

So Ontario is trying universal income but it's only for people who have welfare or disability. Which sounds an awful like a payraise and not what universal income is all about.
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Re: Universal Basic Income and the Future of the Economy

Postby cmsellers » Thu Mar 30, 2017 12:30 am

NathanLoiselle wrote:So Ontario is trying universal income but it's only for people who have welfare or disability.

Image
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Re: Universal Basic Income and the Future of the Economy

Postby ghijkmnop » Thu Mar 30, 2017 1:03 am

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Re: Universal Basic Income and the Future of the Economy

Postby cmsellers » Thu Mar 30, 2017 2:49 am

Regarding Jeff's video, I want to say that having watched the opening arguments as well as the clip as to how it would be paid for. In light of that, I fully agree that the specific proposal outlined therein is not a good one. And Charles Murray with his arguments about how it would let men support families, women be housewives, and cover the child support payments of deadbeat dads made me dislike it on principle.

However the "no" side addressed the very arguments I raised here, and I'm not persuaded either. They noted that we shifted from an agriculture-based system to one where less than 2% of the population is based on agriculture, and suggested that those changes would continue. They argued that if we pay for people to go to college, they'll be able to compete. And that may be true in some cases. But as I noted in my OP, both agriculture and manufacturing were manual labor, which anybody who isn't physically disabled can do.

We now have a service-based economy, which I think more people are not cut out for, because serving other people and taking their shit is emotionally demanding and required social skills that not everybody has. And we're moving to an economy that requires even more specialized skills, skills that I'm not convinced everybody has. We're already seeing arguments (which I agree with) that college is not for everyone, but even an undergraduate education won't necessarily prepare people for the jobs which are coming to dominate the economy.


Marcuse wrote:What're people investing in if there's magnitudes fewer businesses, owing to the lack of people prepared to work when their needs are provided by the state? Capital gains rely on investing in businesses that then provide a return, that requires consumer spending (which would be radically cut as a result of the UBI), business growth and profit (which would be harder in an environment where nobody has to participate in it), and investor confidence (which would take a nosedive for the reasons I've just indicated for the previous entries).

Askias wrote:I highly doubt we wouldn't see investment plummet as well, by-the-by. Investment en large requires active corporations to generate wealth.

Part of my concern is that we're not really seeing most of our economic gains accrue to the majority of the population anyways. For most people real wages have stagnated or reversed in the past few decades. People may have iPhones and computers now, which pundits point to say "look how good the poor have it these days," but it's harder to buy a house and raise children than it was 50 years ago. Income inequality in itself tends to put a damper on economic growth, because rich people tend to invest money, while poorer people tend to spend it. In order to make a return on your investment without it being merely speculation (and at risk of a bubble), you either need to make money off other people spending money. Would the economy grow slower? In the sense of stock market growth, I'm sure of it. Would standards of living increase? That's the question, and I think it would depend on how it was implemented.

Marcuse wrote:Capitalism is an engine, that fuels itself with labour. The sale of labour is what adds value that can be extracted in the form of growth and profit. Without that, the system will slowly collapse in on itself, and there isn't a good argument that both removes the sale of labour and maintains the system in a recognisable enough form that it can generate the absurd sums of money required to fund the system you're proposing.

Askias wrote:And even that would only function as long as people, as you put it, would be willing to take the initative to work for $.25 an hour.

My point is that automation is increasingly making smaller units of labor worth more. I can't imagine people voluntarily working for $.25/hr unless it's work they like. However if you have 32 janitorial robots instead of 32 janitors, you can pay one guy eight dollars an hour to maintain them, and that works out the the equivalent of $.25/hr per robot.
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Re: Universal Basic Income and the Future of the Economy

Postby Marcuse » Sun Feb 03, 2019 12:39 pm

https://www.bbc.co.uk/news/av/world-europe-47092727/did-finland-s-basic-income-experiment-work

Finland tried a two year UBI experiment, and the BBC interviewed two of the participants before, during and after the two year experiment. It seems like the results were mixed, with one of a participants able to find work which didn't pay her bills, who was then left struggling when the experiment ended and the other who was unable to find work due to the industry he worked in (journalism) who thought UBI was more or less just free money and didn't manage to do anything with it. Both of the participants were united in worrying about the withdrawal of the payments, but it didn't seem like it did more than trap the people using it to supplement their lives into requiring it to be paid. The young woman who found a job ended up relying on the UBI for loan payments and had to go to her employer to ask for a raise in order to keep afloat otherwise she feared her finances would collapse.

This I think reveals a problem with UBI as a concept, it can basically never be withdrawn if it's rolled out, and I remain concerned about the potential for it to become as unaffordable as pensions are becoming now. Maybe for a couple of decades it would work out, but sooner or later the amount of money governments would have to assign to it would outstrip the income from taxation which would be coming in from employment. This seems especially true when the people who would need it are people who pay the least tax, not least because they may be taking jobs which pay under their means due to the payments themselves. This is allowing employers to pay less than a living wage, by government support, and amounts to subsidy of poorly paid jobs.

One thing I was surprised by was the journalist who couldn't find work was told that he was too experienced to find a position. This seems a very strange thing, but appears symptomatic of an economy that prefers to pay less experienced people less well than well experienced people well. It can be difficult for older people with skills to find new work in a lot of fields, and UBI doesn't do anything to address this, in fact it supports it.
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Re: Universal Basic Income and the Future of the Economy

Postby Pedgerow » Sun Feb 03, 2019 6:12 pm

There's a half-hour version of that documentary being shown occasionally on the BBC News channel, and it also interviews a couple of other people. The thing that stood out to me, when I watched it, is that several of the people interviewed all started their own businesses, now that there was much less risk of penury if they did so and failed. So if you're the entrepreneurial type, this could actually be extremely beneficial. I have friend who's really into guaranteed basic income because he hates jobs, and he's very entrepreneurial as well. I, however, am not, so the freedom to be my own boss would not benefit me.

Also, giving people money so they don't need a job strikes me as unlikely to solve the number of people who want a job but don't have one, because I would still rather supplement my minimum basic income with additional job wages so I could be richer, and so I would still want a job, and I think a lot of other people would feel the same.
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Re: Universal Basic Income and the Future of the Economy

Postby cmsellers » Sun Feb 03, 2019 8:04 pm

I'll watch the video later, but from your description, it sounds like the basic income (the program wasn't actually universal yet), worked exactly as I expected it to, and that is good news.

I feel like you're still not getting why I think the UBI will be necessary. I think that increasing automation means that fewer and fewer people will be needed for relatively unskilled jobs, and the economy will increasingly be dominated by highly-skilled jobs advancing automation and maintaining machines, and that not everyone will be capable of doing those jobs. Meaning that people who want to work simply won't be able to find it. We're already seeing an increase in the number of young, physically capable people, who are not in the workforce and depend on disability/family members for support, because not everyone is cut out for service jobs, as service jobs decline in favor of jobs that require higher levels of rarer personality traits than "good with people."

In the BBC example, the young woman avoids the welfare trap and got a job which increases her standard of living.
This is good; this is exactly what you want, but I think it's likely that many people won't be able to get such jobs. Now, at this point, the journalist might have been able to find a job outside of journalism, but he made the decision that he'd rather deal with the standard of living a UBI provides than take a job he doesn't love. But eventually, we may reach a point where the journalist would not be able to get any job.

And no, a UBI won't solve age discrimination, but I don't know why you think it would make it worse. The problem with age discrimination is that it's not just about paying older employees more: if an older employee needs a job, they may hate taking one that pays less, but they will take any job that pays their bills, unless the government, company, or unions have rules preventing it, which is the issue sometimes. The problem is that younger employees offer other benefits. Younger employees tend to be more flexible in their work schedule and willing to work longer hours, they tend to have more recent knowledge, and they tend to be less set in their ways and more eager to learn. Older employees have experience, but in many cases this means they're entrenched in patterns that aren't actually useful. Even when the experience is definitely valuable, it may not be worth what the employer is willing to pay relative to what they get from younger employees.

I know that UBI can never be withdrawn. This is true of literally any entitlement, most of which are far more poorly-conceived than I hope a UBI would be. Social Security and Medicare relied on assumptions that the population would keep growing faster than the lifespan expanded. Even when this didn't happen, they've still managed to remain viable indefinitely by decreasing payouts, which is more politically feasible than raising the retirement age or means-testing them.

A UBI is basically socialism (an odd thing for a libertarian to endorse, I know), redistributing the benefits of automation from the owners of the means of production to everyone. At the point it becomes feasible (and I still don't think we're there yet), the only assumption we need to make for it to continue to be feasible is that the level of automation, and therefore the output per worker, does not decline. Automation is increasing, and minus the sort of cataclysm that wipes out the government and economic system producing a UBI, I don't see that happening.

You are focused on everybody who wants one being able to get a job for someone else in the private sector, and Pedegrow echoed it, but my point when I started this thread is that I don't think that is possible long-term. There are two obvious solutions here. One is for the government to produce make-work jobs doing stuff that isn't worth the private sector's effort. The New Deal did this and produced some valuable things, like the Slave Narratives and Tennessee Valley Authority, but the government tends to be inefficient even when it hires people it wants to have. I suspect that these makework jobs would be like peacetime conscription in most armies (Israel being a notable exception): mindnumbing, soul-crushing, tedious work that provides little of value to the government and nothing of value to the draftee.

The UBI is an alternative where instead of creating makework jobs, you just give people money and say "here, do what you will with it." Some people will want and find jobs in the private sector, paying a wage they couldn't otherwise live on. Some people will start their own businesses, and some of those may eventually support them, while some will pursue their passion producing things they can't make a living off without the UBI, which bring joy to both producer and purchaser. And some people will be burdens on society, contributing nothing either because they can't find the right job or because they decide they're happy with the standard of living and free time.

And yes, I know this revives one of the issues you expressed with the UBI in prior posts: it absolutely seems unfair that people could be paid for contributing nothing, ie the Free Rider Problem. And yet, you are already paid money you arguably don't "deserve," simply for living in the UK or US. Living in a developed country means that you can make more money with less effort than people living in developing countries. That's not fair either; you're benefiting from the positive externalities generated by millions of other people who improved automation and therefore the value of your labor. A UBI which pays everyone enough to live on simply for existing seems like a logical endpoint of this. So yes, of course free riders would exist, but I don't think they would be the majority. And moreover, a properly-implemented UBI would produce substantial advantages in deregulation and entrepreneurship over the current system, which I believe makes it well worth implementing once it becomes feasible.
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Re: Universal Basic Income and the Future of the Economy

Postby Askias » Sun Feb 03, 2019 9:19 pm

cmsellers wrote:A UBI is basically socialism (an odd thing for a libertarian to endorse, I know), redistributing the benefits of automation from the owners of the means of production to everyone.

That sounds a lot like
Askias wrote:In fact I think the most doable way to go about this is to raise the corporate taxes to insane degrees, to the point where it would effective function as a socialist state as meant in Marxist theory (government owning the means of production and distributing the gains as it sees fit). Not what your libertarian friends had in mind, no doubt.


But that seems to run contrary to:
cmsellers wrote:And moreover, a properly-implemented UBI would produce substantial advantages in deregulation and entrepreneurship over the current system, which I believe makes it well worth implementing once it becomes feasible.

To sustain UBI, you’d need to tax, heavily, the production of ‘automation’, that being the increased production of labor due to technological advancement, if I understand you correctly. That’s going to hit entrepeneurship pretty hard. Any tax system not relying on simply brutally high rates to tax ‘automation’ would need a rulebook literally beyond drafting - the comparison I see is to innovation credits, where it’s currently not possible to determine the yield of an innovation in a company by any other means than a case-to-case decision. If we’re not going to do that for every company then whatever entrepreneurship there’s left will be facing a massive tax burden across the board. How are we not back to ‘people do things because they find it enjoyable’?

I’d like to see some calculations on it, but that’ll be hard. We’re changing not only the corporate tax rate, we’ll also change profit margins because of changed labor costs, and sales prices on everything, which in turn changes sales taxes and income taxes, as well as cost of living, which in turn affects the amount required to maintain UBI. At that point, it’s guesswork.
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