The benefits of a basic income // much higher min wage

[Stahlmann]

@Solvent:

I'd say an additional issue in the debate is the tendency for there to be no upper bound on social justice-iness. "[insert whatever] is a basic human right" is, for some people, an unimpeachable invocation.

How about flipping your viewpoint: why isn't there any discussion on how massive capital accumulation is destroying society and hindering its development?

Why are you bringing the expectation to lowest common denominator and playing a dog in the manger? Especially, if you (probably) on the sucker side of the conflict.

Are you on forum where we speak about saving 0,50$ on 1kg of lentils and meantime believing you are on the left side of below comic?
https://imgur.com/a/gU69mE1

Somebody is crazy here. It's not me.

[slsdly]

@BRUTE, it is at least the form I support, although not rabidly so if something better were proposed.

@Stahlmann, favourable taxation of wealth (capital gains, dividends) and inheritance always struck me as unfair. In principle I support (and plan for) higher taxation than today's rates. The original intention in Canada was to make capital gains taxed at the marginal rate, instead of some fraction thereof (currently 50%). It is difficult to extract ourselves from this situation; even if investments were taxed higher, the wealthy can relocate and realize those gains in another jurisdiction.

My intent with basic income is to give the most impoverished/vulnerable more agency. Hopefully it will change the balance of power with corporations, and allow the masses to realize more of the gains from society if they choose to work. Some not working is not a worry of mine -- in some ways, that is a necessary component for any leverage to be created. Economic collapse would be worrisome however, insofar as the very fabric of society dissolves .

In many ways, I view ERE as providing myself a basic income. I am not sure if the government will ever implement it, how much one would get, and what the restrictions on receiving it might be. But at least I'll get mine. So at some level, yes I'm very selfish and (sigh) privileged to be able to accomplish this.

[IlliniDave]

How about flipping your viewpoint: why isn't there any discussion on how massive capital accumulation is destroying society and hindering its development?

You're kidding, right? That discussion was/is the foundation of many political movements and is quite visible today in the form of "income/wealth inequality". The subject discussion is just a continuation of it, being a look at an attempt to "fix" it.

[Stahlmann]

How about flipping your viewpoint: why isn't there any discussion on how massive capital accumulation is destroying society and hindering its development?

You're kidding, right? That discussion was/is the foundation of many political movements and is quite visible today in the form of "income/wealth inequality". The subject discussion is just a continuation of it, being a look at an attempt to "fix" it.

Let me clarify: I wanted to say that usually people (in this case ZAFCorrection) with different viewpoints than mine (*) (in this case pro market, pro lower taxes) (**) argue that (re)distribution is "killing" society. I tried to bring totally opposite viewpoints in flippant way that "the owners" are more restitutionary than rest of the society, which is shown in funny way in the linked comics.


(*) Mine viewpoints aren't the best one, but I try to plant a seed of different thinking in this community. Maybe this is not the best allocation of my resources.
(**) Yep, I assumed his viewpoints after 2 sentences. Pretty douchey.

PS. I see economics in the sense when I don't receive cookie and gender realtionships are mine kryptonites

@Stahlmann, favourable taxation of wealth (capital gains, dividends) and inheritance always struck me as unfair.

I thought that libertarians, classical liberals, Republicans, people who prefer freedom to believe that individual human action should bring them prosperity, wealth and happiness... so I think that taxing inheritance makes that easier... because everybody would have their time for creating businesses, being entrepreneurial... How about that?

Of course Democrats, people who prefer freedom from, socialists, liberals (in American sense) are greedy too so I think most of them (including me) would be angry if they don't receive presents from their family.

Interesting thing to ponder on it.

[IlliniDave]

@Stahlmann, favourable taxation of wealth (capital gains, dividends) and inheritance always struck me as unfair. In principle I support (and plan for) higher taxation than today's rates. The original intention in Canada was to make capital gains taxed at the marginal rate, instead of some fraction thereof (currently 50%). It is difficult to extract ourselves from this situation; even if investments were taxed higher, the wealthy can relocate and realize those gains in another jurisdiction.

I used to think this way until I viewed as an investor (a relatively small potatoes one). Obviously there's a selfish component, but from a broader perspective, individual people are putting their money at risk, so it only seems right that the gov't get a smaller bite of the reward (they are not risking anything). At some point as the government claims more and more of the reward while the individual investor continues to bear all the risk (i.e., the tax rate goes up on investment returns) the reward ceases to justify the risk and risky investment will simply dwindle and wealth will get parked in bank accounts or government debt.

A system of lower taxes on investments that involve real capital risk is clearly advantageous to uber wealthy, but is also more fair to the little guy.

[slsdly]

But the government already helps protect me against risk? I can use capital losses to offset gains to avoid taxation, and to carry those forward to future years if I haven't incurred a loss.

[IlliniDave]

But the government already helps protect me against risk? I can use capital losses to offset gains to avoid taxation, and to carry those forward to future years if I haven't incurred a loss.

The government protects you by not taxing you for net non-income?

[slsdly]

You said you bear all of the risk of failure, and lose out too much on the reward. I believe capital losses shift the balance. It is not the same as simply not taxing you for non-income, because it can be used later to offset against actual gains. It isn't like losses in general are protected by the government, most people need to buy insurance for that sort of thing.

[IlliniDave]

I still stand by what I said in the context of investment income.

If you make a million dollars and lose a million dollars on subsequent days you have made 0 dollars and (rightfully) are not taxed. Government loses nothing.

If you lose a million dollars and say screw it, I'm burying all my money in mason jars and retiring. You are out a million bucks and the government is out nothing.

If you loose a million dollars net one year the gov't loses nothing. If you then make a million the next year you can deduct $3,000 of your prior years loss, pay taxes on $997K (~$200K) Over the two years your investments net $0, you are down ~$200K in taxes while the gov't is up $200K.

If you carry over a million dollar loss it will take 333 years to get it credited against future income (in the US).

Now, if it were the case that if you lost a million bucks investing the gov't were to say, "Here, we'll reimburse you $200,000 towards that loss this year because we stood to make $200,000 if you gained that much this year," then the government would be sharing the risk.

I used big numbers because it makes illustrating the way it works easier.

[ZAFCorrection]

@Stahl,

I think you might have extrapolated too much from what I said. My point was that discussing UBI, or any social program, is often made more difficult by the tendency for some of its proponents to wrap it in moralism from the outset. That is an unfalsifiable position and pretty darn sneaky given that the invented moral high ground is often used to attack non-believers as being misanthropic.

I am somewhat skeptical of UBI because I don't think it will work out very well given my understanding of human nature. But I am perfectly happy with tests to determine if it actually works well and can be made financially viable. If so, I'm all for it. I don't really care about ideological purity.

[BRUTE]

https://medium.com/@simon.sarris/after- ... 7db9889c07

[Mister Imperceptible]

(From the article BRUTE linked)

“Put another way: If you could take from the rich and give to everyone, or take from the rich and (say) create or double a city metro or make a clean water or power supply, which is probably a better use of the money, decades on?
(Of course it already seems that the US is doing neither of these things: It is not creating UBI nor creating many more durable public goods. Very much a pity. We do big government all wrong, there are not nearly enough Bonapartist madmen in it anymore.”

This was the spirit of my Warren Buffett critique, only much better worded. My post was largely misconstrued as a blanket attack on the wealthy. My issue is that our “highest men” should have their efforts towards furthering humanity (and that is distinctly different from giving money away indiscriminately to exacerbate existing inefficiencies):

viewtopic.php?f=3&t=9691

And yet, when one reads someone like Jared Diamond, one is told that history is preterminded by geography, and that “history as the biography of great men” is a false notion, and the West has no justification for its being dominant, etc. Because we should all aspire to be more like....Papua New Guinea?

Give me UBI and I’ll remove the condoms I’ve been wearing. Because all 16 of the children I’m going to have are going to get UBI anyway.

If we had UBI, you would have one Leonardo da Vinci for every 1000 Marquis de Sade’s.

All that, and it isn’t even economically feasible.

[Campitor]

How about flipping your viewpoint: why isn't there any discussion on how massive capital accumulation is destroying society and hindering its development?

There will always be massive capital accumulation and society cannot function without it. Skyscrapers, mobile devices, bridges, schools, businesses, etc. are all possible because someone somewhere amassed an imbalance of capital to fund it regardless if they are a government entity or a private business. The difference is that a business has skin in the game and therefore has better incentives to make sure their money, time, and resources are allocated optimally or they will find themselves out of money and out of work; the government has no such incentives.

McDonalds requires a potential franchise owner to supply 40% of the cost of opening a new franchise site or 25% of the cost of purchasing an existing franchise site; the money must come from non-borrowed resources (McDonald’s Franchise Costs/Requirements). McDonald's learned that the success or ruin of a franchise was mostly determined by the amount of personal financial risk undertaken by the franchisee regardless of education or business experience although they do a good job making sure you have both - they want you to succeed.

UBI will never work because the majority of the people will make suboptimal financial decisions like they currently do with actual paid labor. Free money will somehow motivate better decisions? Those who maximize their finances will still be envied and accused of amassing wealth even in a UBI scenario.

[BRUTE]

brute's favorite quote from the article:

Many an article explain proposed positives, but none explain quite how we’ve made the leap from “we can’t pay for people’s retirement anymore” to “let’s give everyone money and see what happens.”

[Mister Imperceptible]

@BRUTE

“California Optimism” as the article describes seems pretty prevalent these days....only it gets passed off by its adherents as the only type of optimism there is.

[prognastat]

I would say once automation and 3d printing are capable of those things though the odds of McDonald's or similar businesses still needing us weak inefficient flesh bags is pretty low though.

Automation drives down the cost of labour since we humans are competing with the robots/algorithms for labour and the cost for the automation keeps getting lower and the cost for humans only keeps going up as our cost of living goes up.

The government has a few options:
A) Have a minimum wage that matches the minimal cost of living for an area and government helps those unemployed through some form of financial assistance. If this is implemented unemployment will be higher as the moment that robots/algorithms are cheaper than the minimum wage those jobs are no longer viable for humans long term.
B) Have a minimum wage that matches the minimal cost of living for an area and government doesn't help those unemployed. This will only grow the percentage of the population that has no stake in the current system and will likely lead to violent revolution.
C) Remove minimum wage, but supplement the insufficient income from taxes gathered. This is inefficient as we now have government subsidising an inefficient business model. Humans are obviously not efficient enough as they are unable to earn a living wage for the particular job, however due to the government making up the difference the business chooses to go with humans over automation. This is a waste of both financial and human capital.
D) Remove minimum wage, don't supplement the insufficient income at all. With this the people smart enough to not take a job that doesn't pay enough will be out of a job and those that aren't will be struggling to survive on insufficient income. This will also grow the percentage of the population that has no stake in the current system and will likely lead to violent revolution.

Options B and D are efficient, but I think most would agree that it is either a morally unacceptable outcome or at least would like to avoid heads rolling during a violent uprising.

Option A would be in second for efficiency as increased productivity through automation would lead to higher GDP which would increase tax revenue even without increasing the tax rate, however it will definitely lead to higher unemployment and some businesses would go out of business if automation hasn't become cheap enough yet to be profitable and a minimum wage high enough to cover minimal cost of living isn't sustainable either.

Option C would be most inefficient as we have humans performing jobs that robots/algorithms could be doing for less and having the government take on this burden instead.

Option A comes very close to UBI though in that a constantly growing percentage of the population would in effect be unemployable and would need something to live off.

This all depends on whether you believe automation will outpace job creation or if you believe job creation will outpace automation.

Based on what I've seen I believe the former to be the case more and more as the industrial revolution severely reduced physical labour's value, but cognitively humans were still superior. However the current automation research is of cognitive tasks. When humans are no longer valuable for physical labour nor cognitive labour I don't see what else most have to offer to the marketplace.

Finally the automation doesn't necessarily have to be as good as human in it's capabilities either physically or cognitively as long as it is sufficiently cheaper than humans are.

A good example is the software that handles most of the call routing for many companies. When you used to call a company you would speak to an operator of sorts and tell them what your concern was or who you wanted to speak with and they got you to the right person/department. However these days most of those jobs have been replaced by software that though inferior still to humans in understanding other humans is so much cheaper that most companies and people accept it.

[BRUTE]

Automation drives down the cost of labour since we humans are competing with the robots/algorithms for labour and the cost for the automation keeps getting lower and the cost for humans only keeps going up as our cost of living goes up.

wouldn't automation cause the cost of living to go down, all else being equal, because products and services would be cheaper to manufacture?

[prognastat]

wouldn't automation cause the cost of living to go down, all else being equal, because products and services would be cheaper to manufacture?

In the long run I believe it will, but I don't think all industries will be automating at the same rate leading some products and services to become cheaper relative to other goods and services. Also this would also rely on consumption remaining the same, but historically speaking as we have increased productivity consumption has rarely remained the same.

For example if some industries achieve high automation while others have not some people could lose 100% of their income earning potential while cost of living relative to their income has remained higher.

If we can make it to a post scarcity world most of these things wouldn't be much of a concern anymore as almost all goods and services would have minimal cost associated with them to the point where we might even be able to spend less on covering the people that are unemployable than we do now and at a higher standard of living, but I expect many bumps on the road there.

[BRUTE]

yes, that seems realistic. so for some humans, CoL-to-income would go way bad, whereas for the average it might slowly trend in a good direction. but this seems unavoidable with any passage of time.

brute would also like to mention that "post-scarcity" is a euphemism (for capitalism-haters) for "high-productivity". the world is not going to start growing more fruits on every tree. capitalism and the economy have been moving humanity from high-scarcity to mid-scarcity, and any movement towards post-scarcity will have to come from increased productivity, until one day the entire GDP is only a side-effect of an extremely productive, if small, workforce.

[prognastat]

brute would also like to mention that "post-scarcity" is a euphemism (for capitalism-haters) for "high-productivity". the world is not going to start growing more fruits on every tree. capitalism and the economy have been moving humanity from high-scarcity to mid-scarcity, and any movement towards post-scarcity will have to come from increased productivity, until one day the entire GDP is only a side-effect of an extremely productive, if small, workforce.

We will probably never be in a truly post-scarcity society, maybe if we manage to master space travel and colonising space we could get to a true post-scarcity society as the odds of us running out of all the resources in the whole universe before the heat death of the universe seems rather minimal. Until we achieve that though we will likely always have some form of scarcity in that our planet can only reach a certain level of productivity based on the resources on the planet itself. However what I mostly mean post-scarcity is if we manage to get to the point where by combining abundant cheap energy production and automation of both physical and cognitive labour we would be to a point where very few humans are useful to society in any measurable way when related to things such as GDP.

I am actually in favour of accelerating the process of getting to this point, however it is unfortunate that people on both sides of the political aisle are fighting the progress towards this in different ways.

I believe many on the left are way too critical of things such as nuclear energy which at this time seems a far better way of producing energy. It is cleaner than fossil fuels and doesn't cause global warning and at the same time is much more efficient than any of our alternatives currently are. Countries that are shutting down their nuclear plants are actually seeing an increase in both fossil fuel and alternative use meaning more pollution and higher cost. Far more people have died from the burning of fossil fuels than from nuclear, but unfortunately when nuclear goes wrong it is far flashier and more newsworthy than the way people die from fossil fuels.

On the other side we have many on the right that either don't want the minimum wage to be a living wage and succeed in preventing that leading to the government subsidising inefficient human labour. When you have people that have a job, but still need welfare to get by something is wrong because it is obvious that those jobs would be done more efficiently if automated.

If we could both lower the cost of energy and stop reducing productivity by subsidising human labour I believe the process could be sped up. However, I do worry that if we do so without making sure that we minimize the amount of people falling through the cracks throughout this process that we could have a revolution of some sort.