In defense of a Basic Income (Response to McArdle)

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Re: In defense of a Basic Income (Response to McArdle)

Postby phyllo » Fri Oct 30, 2015 11:10 pm

"worthy" - That's a society as a whole, not individuals - a society worth participating in.
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Re: In defense of a Basic Income (Response to McArdle)

Postby phyllo » Sat Oct 31, 2015 4:52 pm

"No problem can be solved by the same kind of thinking that created it." -Einstein

BIG is the same old thinking. Throw money at a problem.

There has to be a shift to teaching people how to use their own money effectively and how to use other people's money effectively(debt). Without that education, the majority will not be able to climb out of the hole that they are in.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Peter Kropotkin » Sat Oct 31, 2015 5:13 pm

[quote="phyllo"]"No problem can be solved by the same kind of thinking that created it." -Einstein

BIG is the same old thinking. Throw money at a problem.

K: ok, so, we should throw batteries at it, whip cream, old socks, cats, I open to
what the answer is, however in this case money is exactly what is needed.

P: There has to be a shift to teaching people how to use their own money effectively and how to use other people's money effectively(debt). Without that education, the majority will not be able to climb out of the hole that they are in."

K: education by whom? and who decides what method of education is being used?
See almost every answer creates its own questions.

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Re: In defense of a Basic Income (Response to McArdle)

Postby phyllo » Sat Oct 31, 2015 5:58 pm

K: ok, so, we should throw batteries at it, whip cream, old socks, cats, I open to
what the answer is, however in this case money is exactly what is needed.
I just told you the answer : people need to be educated on how to use money effectively. That way, they will be able to use the money that they are given - either through BIG or another program - to improve their lives. If you just give them money without education, then a large portion will be mismanaged and they will remain dependent on handouts.
K: education by whom? and who decides what method of education is being used?
See almost every answer creates its own questions.
Seriously?
It's not rocket science.
Avoiding service fees and high interest rates. Consolidating debt. Using debt to make purchases which move you a chosen direction. Managing business based on services or products.

It should be common knowledge but it's not because the education system is designed to create dependent hourly labor. The educational system has to teach people to be independent.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Uccisore » Sat Oct 31, 2015 6:33 pm

If the BIG's amount wasn't mandated by the Constitution, people on it would just vote to increase it- perpetually, with no regard for the strain it puts on the system. So it's just a catastrophe waiting to happen.

Free basic income increases the value of labor to the laborer without increasing the value of what's produced by the labor. I.e., if people can make 6k a year sitting around doing nothing, that's a disincentive to get a part time job flipping burgers. You can say 'but whatever people earn from a job would be on top of the BIG' all you want, but if I can survive (in a household) without that part-time job, that's a huge disincentive for many people to get it. A disincentive to work results in one of two things- increased wages being offered, or less work getting done. Increased wages OR less work getting done both result in the same thing- increase cost of whatever is produced by that labor. Free money does this too, by the way. If you give everybody an extra 6k a year that isn't tied to any labor they did, rich people will not change their habits at all. But poor people will suddenly have more to spend on the things that take up the bulk of a poor person's budget- utilities and basics goods. If everybody suddenly has more money to spend on something, and this money doesn't represent an increase in production, prices go up. This becomes an inflation generating machine- everything poor people spend money on becomes more expensive thanks to the BIG, lefties argue the BIG has to be increased to keep up with inflation, etc. Notice that this effect is far far worse than minimum wage laws, as at least with those you are getting labor out of the people you are paying.

As far as the immigration thing is concerned, there is no mystery as to whether or not immigrants are good for a nation or not. If you have an excess of workable land an exploitable resources, then more immigrants to develop that land and exploit those resources is good for your economy. If you are exploiting all the resources you are able/willing to exploit (i.e., running out of land or environmental regulations protect remaining natural land) then immigrants provide nothing. Simply put, immigration is good for a country if you can point to the shortage of something in that country that the immigrants will provide for. It should be fairly obvious that the time for that in the U.S. has passed.

And yes, bringing in other cultures is bad for the natives when the same people that advocate for loose/mass immigration are the people 'embracing diversity', pushing multi-culturalism as a virtue, and discouraging integration in general.

Besides, the whole thing is moot- an immigrant that's just here to collect a BIG from the state is a drain on the economy by definition. The size of the BIG will either be limited by the number of people who collect it without working (i.e., the fewer people taking from the system without paying in, the more we can all have) or it won't be limited at all and is just a fast track to economic collapse.

And before anyone says it, no Alaska does not have a BIG. They have a dividend tied to the profits made by a specific industry. This ensures that the entitlement is actually funded.

All sorts of lefty fantasies become feasible if you first create an absolute limit in the Constitution to the % of the GDP that can be taken in taxes. Once you do that, every entitlement or proposed program competes for a slice of a pie that only gets bigger if the economy grows. Every increase in taxes is a shift of the burden from one group to another and has to be justified as such. People who promise 'everybody gets free everything!" for votes or internet back-pats have to actually explain what isn't getting funded to pay for tuition, BIGs, etc.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Ecmandu » Sat Oct 31, 2015 6:59 pm

I think in general when considering broad distribution schemes, people need to look at issues of the vastness of corporate welfare which makes complaining about non-corprate welfare look absurd. For example.. I remember about 8 years ago, that Chase was given 70 billion to pay back on all that predatory lending, this is your hard earned money here, your taxes… what did chase do? It opened up hundreds of branches on the west coast to which it previously didn't have a market, and didn't pay anyone back. It reminds me of Bush Jr. using taxpayer money to buy and build a stadium for the rangers and then selling it all for hundreds of millions of dollars… he used taxpayer money to give him free hundreds of millions of dollars. That's corporate welfare. Much larger problem than the average person calculations.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Carleas » Mon Nov 02, 2015 4:03 pm

phyllo wrote:If I question it then I get a knee jerk reaction that I'm imposing my morality on others.

I don't mean to criticize you for this, and if I have I acknowledge that it was unfair. Indeed, it is in large part my morality, which values agency as a social good in itself, that motivates my support for a BIG.

phyllo wrote:You are proposing to take money from one group of people and to give it to another.

I don't think this is an accurate description. I am proposing that we use the money we already take from people differently. We're already taking money from people, I'm proposing this in a world where that's already the case, so I don't need to justify taxation generally in order to justify my proposed spending. Taxation is a given. My burden here is just to argue that a BIG is better than alternative spending proposals, such as welfare, food stamps, in-kind aid, etc.

phyllo wrote:I mentioned micro-lending because it has a proven track record in developing countries. And it's relatively cheap.

GiveWell, an organization dedicated to maximizing the effectiveness of charity, suggests that the track record for microlending isn't actually that good. They find no good evidence of poverty reduction as a result of lending programs. The reason they hypothesize is one I mentioned earlier: interest rates on mircrolending programs are high, and need to be high to make them "relatively cheap". Loans with high interest rates can have significant negative impact, and that negative impact balances out the positive impact the loans have. However, it's worth noting that part of the reason GiveWell favors cash transfers over microlending is that microlending is already well funded, and additional donations into microlending won't improve much, while direct cash transfers have effectively infinite "room for additional funding".

phyllo wrote:- make micro-loans easier and cheaper. The poor are underserviced by a banking system which does not trust them and charges them exorbitant rates. It seems that the only time that you can get money from a bank is when you can prove that you don't need it.

There is a floor to how cheap the programs can be. Ultimately, microloans are risky. They are loans being made to people about whom no good information exists about their credit worthiness, and into societies that are unstable and unpredictable. A significant number of the loans will default. So either the rates have to be high to make the loans either break-even or profitable, or the programs need significant charitable contributions to support. That is to say, they must either have high rates or not be cheap, and that's the nature of the endeavor and not mainly a result of failures in the banking system.

phyllo wrote:If you want other suggestions :
- teach people how to handle money (in high school). People don't know how to effectively use the money that they have.
- teach people how to start and manage a business. If people knew how, they could create service businesses with little up-front capital.

I think these are a good idea, but they are not inconsistent with a BIG. Indeed, teaching people how to manage money and start a business is useless without them actually having access to money or the realistic opportunity to start a business, both of which a BIG would provide.

phyllo wrote:BIG is the same old thinking. Throw money at a problem.

And yet you yourself have pointed out that it's never been tried, that the best evidence we have is small studies. How could it be the "same old thinking" when it is a radical and vilified departure from the current status quo in programs to address poverty?

Uccisore wrote:If the BIG's amount wasn't mandated by the Constitution, people on it would just vote to increase it- perpetually, with no regard for the strain it puts on the system. So it's just a catastrophe waiting to happen.

While I don't have a problem with a constitutional cap, pegged either to GDP or tax revenue, I don't think this actually that big a problem with the BIG. Most of the people in a given society won't see a net payout from the BIG. For any realistic BIG, most people will pay more in taxes than they are given by the government. Every one of those voters would have reason to vote to decrease the BIG and the taxes that fund it, rather than to increase it perpetually.

Furthermore, if the BIG were a program which, once in place, everyone would support increasing indefinitely, why would there be so much resistance to creating the program in the first place? Wouldn't anyone who would want an exorbitant BIG want to see the program put in place now? The fact that few support it now suggests that few would support it one it's in place (though of course I must acknowledge the political reality that programs create constituencies, c.f. Social Security and Medicare).

Uccisore wrote:This becomes an inflation generating machine- everything poor people spend money on becomes more expensive thanks to the BIG, lefties argue the BIG has to be increased to keep up with inflation, etc.

There are a lot of good points to respond to in this paragraph, and I appreciate the move towards macro-economic aspects of the program. I agree with your point that the price of certain classes of goods would rise as a result. However, this point conflicts with (or at least tempers) your claim that there would be a net disincentive to work. If the price of goods increases, people need more money, and must work more to get it. And that counteracts the increase in the cost of labor.

Though, I think these countervailing effects are only partial, and we can agree that 1) prices will increase, 2) the incentive to work will decrease, and 3) the cost of labor will increase. However, we should also note that consumption of certain goods will increase, and combined with the increase in price will make those industries more profitable, and increase labor demand in those industries, even at the new, higher price for labor. And the spending will be on much more socially valuable goods: the marginal dollar spent by a poor person is worth more than the marginal dollar spent by a rich person, because the rich person is likely to be spending it on something they value less (since they've presumably already purchased all their most-valued goods or services).

I would also suggest (and this is speculative, I don't know of any studies that back this up) that industries that cater to the rich tend to employ the rich to a greater degree than the industries that cater to the poor. Grocery stores and gas stations tend to employ less wealthy individuals to stock shelves and pump gas, and people who grow up in poverty are competitive in these jobs. Luxury industries often seek those with experience in the luxuries they sell (think boats, skiing, cars, vacations, etc.), and also who convey a certain social signaling of wealth and appropriate cultural capital (employees who speak with right inflection, look and dress like wealth, and know the wealthy-class norms). I hypothesize that shifting spending towards goods valued by the poor would make more jobs available that the poor actually have a chance of getting.

Uccisore wrote:As far as the immigration thing is concerned, there is no mystery as to whether or not immigrants are good for a nation or not. If you have an excess of workable land an exploitable resources, then more immigrants to develop that land and exploit those resources is good for your economy.

This undervalues humans as a resource. Large, diverse societies are more innovative, both producing better ideas and responding more quickly to social changes. Niche-seeking immigrants adapt to new opportunities faster. They increase labor competition and decrease prices. Immigrants are generally less prone to criminality and more productive than their native counterparts, and those traits are valuable to society as a whole. The odds that an immigrant is "here just to collect a BIG" and be a drain on society is significantly lower, so if decreasing the rate of labor participation is a concern, immigration would alleviate that problem.

Uccisore wrote:And before anyone says it, no Alaska does not have a BIG. They have a dividend tied to the profits made by a specific industry. This ensures that the entitlement is actually funded.

I do think this is effectively the same as a BIG. The distinction that it's pegged to revenue from a state industry doesn't change that it's an unconditional income paid to every citizen. The money the state takes in could be spent on social programs or means-tested welfare instead of dividend distributions to all residents. And the effect is the same as a BIG would be: if a BIG disincentivizes labor, so does the Alaska program; if it increases prices, so does the Alaska program; if it implicates immigration, so does the Alaska program.

It does more resemble your proposal that any BIG be pegged to GDP, but that is still a BIG.

Ecmandu wrote:people need to look at issues of the vastness of corporate welfare which makes complaining about non-corprate welfare look absurd.

Spending on corporate welfare is between 100 and 200 billion. Spending on welfare is around 700 billion. While we can and should reduce corporate welfare, non-corporate welfare spending is significantly greater.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Uccisore » Sat Nov 07, 2015 6:08 am

Carleas wrote:[\
While I don't have a problem with a constitutional cap, pegged either to GDP or tax revenue, I don't think this actually that big a problem with the BIG. Most of the people in a given society won't see a net payout from the BIG. For any realistic BIG, most people will pay more in taxes than they are given by the government. Every one of those voters would have reason to vote to decrease the BIG and the taxes that fund it, rather than to increase it perpetually.


First of all, 40-something percent of Americans pay zero federal taxes right now, so unless the BIG is funded by sales or income tax, there is no connection for those people between the BIG and the taxes that fund it: their BIG is coming from taxes that other people pay. Second, even for the people who are paying in, entitlements have never worked the way you describe. Every politician who advocates raising taxes will have to explain how they will do it without cutting the BIG or Democrats will just make commercials of them pushing people in wheelchairs off cliffs. There is no connection between these taxes and this entitlement. Even if specific tax increases are often justified through reference to a specific expenditure, a politician will always be free to promise to increase one without decreasing the other.

Furthermore, if the BIG were a program which, once in place, everyone would support increasing indefinitely, why would there be so much resistance to creating the program in the first place? Wouldn't anyone who would want an exorbitant BIG want to see the program put in place now?


There's a huge difference between proposing a new entitlement, and proposing a change to an entitlement that people are already getting and feel, well, entitled to.

There are a lot of good points to respond to in this paragraph, and I appreciate the move towards macro-economic aspects of the program. I agree with your point that the price of certain classes of goods would rise as a result. However, this point conflicts with (or at least tempers) your claim that there would be a net disincentive to work. If the price of goods increases, people need more money, and must work more to get it.


Two counter points here.

1.) If the choice is between people working and their wages paying for their needs, and the people working and their wages+BIG paying for their needs, I'm not seeing the purpose of the BIG. Justifying it on the grounds that it won't be enough to sustain anybody just tells me it won't be replacing other welfare programs.

2.) The price of goods increasing will be the primary thing that justifies people to vote to increase the BIG, which will in turn push prices higher, etc.

Though, I think these countervailing effects are only partial, and we can agree that 1) prices will increase, 2) the incentive to work will decrease, and 3) the cost of labor will increase. However, we should also note that consumption of certain goods will increase, and combined with the increase in price will make those industries more profitable,


I don't follow this. Higher consumption, higher price and higher labor costs doesn't necessary equal more profits. If the higher price is just to match inflation then higher labor costs and higher consumption may just mean shortages.

And the spending will be on much more socially valuable goods: the marginal dollar spent by a poor person is worth more than the marginal dollar spent by a rich person, because the rich person is likely to be spending it on something they value less (since they've presumably already purchased all their most-valued goods or services).


That's true. I just think it's up in the air whether spending increases, labor cost increases, and increased need for production are going to add up to any sort of net good. Even if things reach some sort of equilibrium, what was gained other than giving the State more control over the economy?

I would also suggest (and this is speculative, I don't know of any studies that back this up) that industries that cater to the rich tend to employ the rich to a greater degree than the industries that cater to the poor.


In the United States that's true. What seems to me to be the case (equally speculative) is that industries to that cater to the rich employ the poor in other countries.

Uccisore wrote:This undervalues humans as a resource. Large, diverse societies are more innovative, both producing better ideas and responding more quickly to social changes.


Only if the diverse people you're admitting into that society are chosen because they have those traits. I don't see why just letting random whoevers into the nation like we do now contibutes anything. If anything, you're undervaluing native Americans if you're prefering an unknown elment from abroad.

Niche-seeking immigrants adapt to new opportunities faster.


Not in a society in which they're paid six thousand dollars for breathing, and another six thousand for every child they pop out, they don't. The niche-seeking immigrants making their way in the U.S. that contributed so much that the left likes to romanticize found those niches and make their contributions because they were facing starvation if they didn't.

They increase labor competition and decrease prices.


They only decrease prices if they work and aren't on the dole. And why the hell would people currently living in the U.S. (or any country, really) want increased labor competition?

Immigrants are generally less prone to criminality and more productive than their native counterparts,


In the United States they make up a disprorportionately high percentage of the prison population. Anyway, this is either irrelevant or trivially false. There's a couple obvious controls to consider:

1.) If the nation in question is only allowing immigrants who are very unlikely to commit crimes then what you're saying makes a whole lot of sense. That's not the situation in the U.S.
2.) Why are these people leaving their native-born country to begin with? War criminals fleeing prosecution probably have a different incarceration rate than families fleeing genocide.

To imply that an immigrant is a 'kind of person' that we can rely on to behave a certain way is just silly. The immigration and emmigration processes of the countries in question will determine that.

The odds that an immigrant is "here just to collect a BIG" and be a drain on society is significantly lower,


Nah. We don't have a nation with a BIG that allows immigrants to collect it as soon as they show up, so there's no possible way you can make a statement like that. I can say as a function of basic human nature if that if you incentivize people to come into a country by offering them a free income, that many people will do it. You seem to be relying on 'immigrants' as being a sort of magical better man than the rest of us independant of the policies in the host nation that draws them.

I do think this is effectively the same as a BIG. The distinction that it's pegged to revenue from a state industry doesn't change that it's an unconditional income paid to every citizen.


That's a *huge* change. The fact that it's funded, and it's amount fluctuates according to the economy is specifically what makes it viable. If you proposed a BIG like that for the U.S., I wouldn't be against it.

if a BIG disincentivizes labor, so does the Alaska program; if it increases prices, so does the Alaska program; if it implicates immigration, so does the Alaska program.


In 2012, the Alaska program payout was 878 dollars. In 2015 it was 2072 dollars, the highest it has ever been. So no, I don't think it really has that effect.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Tom » Sat Nov 07, 2015 11:20 am

Uccisore wrote:
Carleas wrote: Immigrants are generally less prone to criminality and more productive than their native counterparts,


In the United States they make up a disprorportionately high percentage of the prison population. Anyway, this is either irrelevant or trivially false. There's a couple obvious controls to consider:

1.) If the nation in question is only allowing immigrants who are very unlikely to commit crimes then what you're saying makes a whole lot of sense. That's not the situation in the U.S.
2.) Why are these people leaving their native-born country to begin with? War criminals fleeing prosecution probably have a different incarceration rate than families fleeing genocide.


This is absolutely fucking hilarious.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Carleas » Tue Nov 10, 2015 6:20 pm

Uccisore wrote:First of all, 40-something percent of Americans pay zero federal taxes right now

This is only true if you don't treat payroll taxes, which I don't know why we'd do. According to the ever helpful Wikipedia, the lowest quintile pay about 2% of their income in taxes (roughly $368), the next quintile pays 9.% ($3868), and the next pays 12.7% ($8192). If those numbers are right, if the BIG is set at the number I suggested ($3000), somewhere between 60% and 80% of the population would pay more in taxes than they get from the BIG. If we set it at the level you suggested ($6000), it's still likely that more than half of the population would pay more in taxes than they get from the BIG.

This may be beside the point, because I think your next point is stronger, but accuracy is always worthwhile.


Uccisore wrote:There is no connection between these taxes and this entitlement. Even if specific tax increases are often justified through reference to a specific expenditure, a politician will always be free to promise to increase one without decreasing the other.

Entitlements do create perverse incentives, and there is some reason to think that the BIG as an entitlement would have the same problem that Social Security has. However, part of the beauty of a BIG is that is pays out equally to everyone. That kind of payout probably won't have the same level of perverse outcome as Social Security. Social Security creates a benefit paid to a specific group who coalesce around ensuring that that benefit keeps coming. It creates one of the 'factions' that Madison describes in Federalist X. By contrast, there is less of a coalescence around a policy that benefits everyone, because the faction tends to fracture into competing sub-factions based on other policy interests.

That is, of course, speculative, and poorly explained, but suffice it to say that it might not be possible to map from our experience with targeted entitlements directly onto a non-targeted, universal benefit. The political economy of the BIG is likely to be somewhat different from that of Social Security.

Uccisore wrote:1.) If the choice is between people working and their wages paying for their needs, and the people working and their wages+BIG paying for their needs, I'm not seeing the purpose of the BIG. Justifying it on the grounds that it won't be enough to sustain anybody just tells me it won't be replacing other welfare programs.

Similar to what I said earlier about taxes, for the purposes of this discussion I'd rather assume that welfare already exists, and just argue that it would be better in the form of a BIG than in the form it takes today (various vouchers and in-kind benefits). As such, the choice isn't between paying with wages and paying with wages+BIG, but between paying with wages+various vouchers+in-kind benefits and paying with wages+BIG. I'm not trying to lift a BIG off the ground, and if you oppose all welfare, you're unlikely to accept the BIG. But we already have welfare, we already spend a lot of money giving people things for free that they didn't earn. The purpose of the BIG is to give them money instead and let them decide what they need the most.
Uccisore wrote:I don't follow this. Higher consumption, higher price and higher labor costs doesn't necessary equal more profits. If the higher price is just to match inflation then higher labor costs and higher consumption may just mean shortages.

In the short term, that might be true, but in a market economy shortages don't last. Prices will change, allocations of resources will change, and a new equilibrium will be found. And really, that's the whole point: find an equilibrium that better includes meeting the needs of the very poor. Give the very poor money, give them purchasing power, thereby raise the demand for goods and services that serve them, and thus change the shape of the market in response.

Uccisore wrote:That's true. I just think it's up in the air whether spending increases, labor cost increases, and increased need for production are going to add up to any sort of net good. Even if things reach some sort of equilibrium, what was gained other than giving the State more control over the economy?

First, I think it must be said emphatically that this policy gives the State less control over the economy. The State is already taking money from the top to help out the bottom. The difference is that currently, the State makes the spending decisions: if the state decides that e.g. corn is a nutritious food, then corn is covered by food stamps. The State is picking winners and losers based on lobbying pressure from interest groups. If instead the State just gives the poor money, individuals make the spending decisions. The poor, rather than the State, are getting more control over the economy.

Why that's a good thing depends on values. I think there are a few reasons to support that (increased equality of opportunity, increased agency, decrease suffering), but I'm not sure how far down that hole we should go. Perhaps the best justification is that it achieves the ostensible goals of the current welfare state better than the current welfare state (though one unstated goal of the current welfare state is to benefit e.g. producers of certain foods, and that goal is not as well achieved).

Uccisore wrote:What seems to me to be the case (equally speculative) is that industries to that cater to the rich employ the poor in other countries.

This may be true, but cheap goods are frequently made overseas as well, I'm not ready to concede that industries that cater to the rich tend to send more money over seas (or rather, that a BIG would decrease net cash outflows; the rich are currently probably responsible for more cash outflows). If it is true, it would be a problem, and again, I'd like to see a global BIG.

Uccisore wrote:Only if the diverse people you're admitting into that society are chosen because they have those traits ["more innovative... producing better ideas and responding more quickly to social changes"]. I don't see why just letting random whoevers into the nation like we do now contibutes anything.
...
In the United States they make up a disprorportionately high percentage of the prison population.
...
You seem to be relying on 'immigrants' as being a sort of magical better man than the rest of us independant of the policies in the host nation that draws them.

I think you make other good points on this issue, but like with the tax issue above, I'd just like to clarify what the situation is now so that we can start from the facts and speculate how they would change under a BIG.

My understanding, which is based on the findings in the paper, is that immigrants are less likely to be criminals than their native born counterparts. They are less likely to be incarcerated, and rising immigrant populations have been paired with falling crime rates nationally (hardly enough to draw the causal connection, but enough to question the idea that more immigrants = more crime). Here are some excerpts:
[R]oughly 1.6 percent of immigrant males age 18-39 are incarcerated, compared to 3.3 percent of the native-born. This disparity in incarceration rates has existed for decades, as evidenced by data from the 1980, 1990, and 2000 decennial censuses. In each of those years, the incarceration rates of the native-born were anywhere from two to five times higher than that of immigrants.

...incarceration rates among the young, less educated Mexican, Salvadoran, and Guatemalan men who make up the bulk of the unauthorized population are significantly lower than the incarceration rate among native-born young men without a high-school diploma. In 2010, less-educated native-born men age 18-39 had an incarceration rate of 10.7 percent—more than triple the 2.8 percent rate among foreign-born Mexican men, and five times greater than the 1.7 percent rate among foreign-born Salvadoran and Guatemalan men.

A variety of different studies using different methodologies have found that immigrants are less likely than the native-born to engage in either violent or nonviolent “antisocial” behaviors; that immigrants are less likely than the native born to be repeat offenders among “high risk” adolescents; and that immigrant youth who were students in U.S. middle and high schools in the mid-1990s and are now young adults have among the lowest delinquency rates of all young people.

I think what's happening is that, though immigrants aren't magically better, they're not "random whoevers" either. Immigration, supplanting oneself and one's family into a new, foreign society in order to seek a better life, is a daunting prospect. The people that end up here will tend to be smarter, more driven, more capable, etc. than the ones who stay home. The population is self-selecting for entrepreneurship and ability (and possibly means, since getting here is not cheap). Once here, our policies probably help to keep them in line, since a slip up could mean screwing things up for one's whole family.

So, while immigrants aren't a 'kind of person', there are trends that can be explained in terms of who immigrants tend to be and why they tend to come to the US. And of course, as noted, policy matters, but it isn't the whole story. We can reason that, if the people who tend to come here are less criminal and harder working than their native counterparts, and the reason for that is that they are the ones who have the gumption to make the journey, while adding a $3000 or $6000 BIG will decrease their drive and will move the trend more towards the lazy immigrant stereotype, it is likely to move the trend less than it moves the trend for natives, who include everyone an not just those who would leave for greener pastures.

And a BIG will provide a new incentive towards lawfulness (so that one isn't thrown out of the land of free money), and it will making tracking immigrants much easier, since they have to check in regularly to pick up their dole. Given how much tracking immigrants costs now, that feature alone may pay for itself, especially in freeing up enforcement resources to pursue people who are here to do bad things and so don't come in for the dole.

Uccisore wrote:In 2015 it was 2072 dollars, the highest it has ever been. So no, I don't think it really has that effect.

Again, I think a BIG is worthwhile at about $3000, enough to get a day's worth of calories every day* in most place in the US. I don't think the difference in size is that significant, and Alaska hasn't had the perverse effects you describe, though, as you point out, the payout is fixed, which solves most of the problem you describe right there.

To the latter point, my concern with fixing it is this: as I've been arguing elsewhere, I think that unemployment will increase going forward. I'm also certain that automation is already creating large gains for society. A BIG that can grow as employment levels fall can prevent costly unrest we already see as a result of rising in equality, and it more fairly distributes the benefits of the labor of robots. Perhaps a schedule where the BIG can only move a certain amount relative to GDP, or pegging the payout to an 'automation tax' (although that seems like a very perverse incentive to me!), but part of the benefit of a BIG is that it can grow, and easily, without changing the size of the Administrative State.


*edited to clarify that $3000/year is equivalent to enough money per day to get a day's worth of calories.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Red Skull » Wed Nov 11, 2015 3:22 am

There would be some semblance of a basic income for all if the west wasn't so damn deindustrialized.

Until we talk about the deindustrialized nature of western nations for at least here in the west nothing would ever be solved.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Carleas » Fri Nov 20, 2015 8:29 pm

Came across a study today that I thought was relevant to this discussion, as it found that welfare programs in general, including Basic Income programs, do not significantly decrease work (here's a summary of the study and other related material from the flagrantly-neoliberal-but-still-reputable Vox). Here's the punchline:
[W]e do not observe a significant effect of belonging to a transfer program on employment or hours of work in any of the seven programs. Turning to the pooled estimates[...], we also cannot distinguish the effect of the program [on employment or hours of work] from zero. These insignificant results are not just driven by large standard errors, as the estimated magnitudes of the pooled treatment effects are, in fact, very small.

I do think that a BIG will change the landscape of labor in the US (indeed, that's part of the point), but it probably won't do that through increasing laziness.
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Re: In defense of a Basic Income (Response to McArdle)

Postby phyllo » Mon Dec 07, 2015 7:54 pm

This will be interesting.
Finland’s government is drawing up plans to pay every citizen a basic income of euros 800 ($1,165) each month, scrapping benefits altogether.

Under proposals drafted by the Finnish Social Insurance Institution (Kela), the tax-free payments would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income.

While it may sound counterintuitive, the basic income is intended to encourage more people back to work in Finland, where unemployment is at record levels. At present, many unemployed people would be worse off if they took on low-paid temporary jobs due to loss of welfare payments.
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The measure will cost Finland euros 46.7 billion per year. Kela’s proposals will be submitted in November 2016.

http://news.nationalpost.com/news/finla ... yment-rate
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Re: In defense of a Basic Income (Response to McArdle)

Postby Carleas » Mon Dec 07, 2015 11:01 pm

Yes, I too am very interested to see what happens. Finland is a very different society from the US (as evidenced by the fact that this is even politically feasible there), but it will still provide real world data about how a basic income will change labor.

A couple things to note:
- Not sure how volatile the exchange rate is, but right now Google says 800 euros is more like $870.
- Finland has a much larger welfare state than the US does, so they have more programs that they can cut, and thus more savings that can offset the payouts.
- Finland's larger welfare state means more of their unemployment (which is quite high) is directly attributable to the structure of their welfare state.
- It isn't finalized yet, so we don't know how much of the welfare state will be cut, and that question could drastically affect the value of the program.

Still, exciting times. This also illustrates the value of some degree of local decision making: Finland can experiment, and other states can watch and change their behavior based on the outcome.
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Re: In defense of a Basic Income (Response to McArdle)

Postby phyllo » Mon Dec 07, 2015 11:20 pm

The article came from a Canadian newspaper, so the conversion was into Canadian dollars.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Mr Reasonable » Tue Dec 08, 2015 2:10 am

phyllo wrote:You're going to take away $3000 from somebody who worked to earn it and you are going to give it to someone else



Most people who are really paying shit tons of taxes aren't earning their money in the sense that we normally think of when we think of what we mean when we say "earn".

If I have a huge tax bill because my company made a shit ton of cash, but then my company only made that shit ton of cash by hiring 1000 people and paying them 7 bucks an hour for their work...then...I mean...you can go ahead and put 2 and 2 together yourself.

No one's asking the coal miners and the lumberjacks and the restaurant and retail employees who work 50 hours a week to pick up the tab for welfare.
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Re: In defense of a Basic Income (Response to McArdle)

Postby CelineK » Tue Dec 08, 2015 4:43 pm

Carleas wrote:A couple years ago, Megan McArdle summed up a debate she'd been a part of with a short post on the problems with a Basic Income Guarantee (BIG). Here, I'll lay out responses to each of her four criticisms.
(NOTE: in the interest of space, I won't quote her whole argument for each point, and instead I'll pull what I think is representative or summary language from them. One useful response to this post would be to point out if I am misinterpreting her argument or responding to a straw version of it.)

Megan McArdle wrote:Cost: ...[Z]eroing out our current income security system wouldn't provide much of a basic income... Getting rid of all of our spending on welfare and so forth would be enough to give each of those people less than $3,000 a year. For a lot of poor people, that's considerably less than what they're getting from the government right now.

First, I think this calculation is off. McArdle only considers spending on "income security", but the programs that could be replaced with a BIG could be much broader. Social Security ($1.3 trillion), disability ($200 billion), agricultural subsidies ($20 billion), and likely many other large government programs could be eliminated or reduced and replaced by a BIG (that "or reduced" is important: any program whose justifications include the well-being of workers should be reduced commensurate to the degree that that justification supports the program; if the well-being of family farmers is part of the justification for agricultural subsidies, then agricultural subsidies will be less necessary if we have a BIG).

However, such calculations might not even be necessary: $3000 a year is not a trivial sum. Globally, $3,000 dollars a year is near the median individual income. Guaranteeing that every person in a country is above the median globally is an absurd achievement. Even in the US, for the median household it would be 6% raise, a not insignificant change. But perhaps the best way to look at it is this: every citizen would get enough money to eat a nutritious meal every day of the year.

Finally, to the point that it's "less than what [a lot of poor people are] getting from the government right now", it's not a 1-to-1 comparison. McArdle treats $1 dollar of food stamps as $1 in value, but any first year econ student can tell you that their values aren't equivalent. Giving people cash is more valuable than giving them vouchers or in-kind services, because cash can be used on whatever an individual values most. You can't save up food stamps to start a business. You can't buy stocks with services. You can't invest in yourself to the same degree with vouchers and in-kind services. And you have to spend vouchers and in-kind services where you're told, so that most of your spending goes right back out of poor communities. Cash lingers, and allows for trade and development within communities, which tends to break the cycle of poverty.

Megan McArdle wrote:Reciprocity: ... How can you say that the affluent have an obligation to give a considerable portion of their income to their fellow citizens, precisely in order to free said fellow citizens from any obligation to the people who are paying their bills?

McArdle touches on the response to this when she considers "trust fund babies", but I think she takes that point too literally. The better statement of the point is not "trust fund babies", but "the average middle class American", who has non-reciprocal benefits from their family and social network throughout their lives. A BIG just adds in the same safety net already provided to anyone who's family makes median wage. Moreover, people who grow up in communities of people making median wage or better have plenty of non-reciprocated benefits: better schools, better services within closer distance, less crime, etc.

And while the focus of BIG is frequently on the individuals receiving the BIG, many of the benefits and justifications for it are in externalities. A wealth transfer from top to bottom is a net increase in the value of the currency, as people who might have bought a third car instead give money to someone who can then buy a first (and so contribute better to society). A BIG will decrease crime, it will stimulate the economies of the most depressed areas, it will bring into the economy through opportunity many people who would otherwise be excluded, increasing diversity and thus likely the speed of innovation and the richness of culture. Those are reciprocal benefits, not paid directly by BIG recipients, but nonetheless reaped by those funding it.

Megan McArdle wrote:Politics: As I pointed out recently, any sort of guaranteed basic income means ending immigration from poor countries... There is no way that we are going to admit people to this country in order to hand them, and all of their descendants, a check for a thousand or two every month...

...Some people would make bad decisions with their cash, and then we would have to bring back various programs to help the people who make those bad decisions. There's also the issue of people who don't make bad decisions but simply have greater needs: the disabled, the mentally ill, those with cognitive disabilities and so forth. A guaranteed basic income instead of a welfare state might be attractive, but a guaranteed basic income on top of a welfare state presents a lot of problems, not least that it would nearly double everyone's tax bill.

To immigration: first, I think the point is a dodge. It's effectively arguing that McArdle isn't convinced because not enough people are convinced, which is empty. As it stands, not enough people support a BIG to replace other government programs with it, that's clear. What I take the goal of the argument to be at this stage is to convince the thought leaders, intellectuals, and influencers that it's a good idea, so that they can convince the body politic.

And on immigration, a BIG has a lot going for it. First, recall again that we aren't necessarily talking about "a thousand or two every month." A $4000 BIG would be a significant improvement, could replace a lot of programs, and would be a much easier sell. Moreover, there are great security benefits to a BIG. Immigrants would have to make themselves known in order to be eligible for it, so it would encourage honest immigrants looking for a better life to come forward, increasing the presumption of guilt on anyone who remains undeclared.

Otherwise, the argument really boils down to ones stance on immigration. If you think that immigration is good for the country, good for the economy, or that immigration is a right, you will likely not have any problem allowing immigrants and come and participate fully in a society, however it is structured. If instead you see immigrants as a drain or as a threat to "natives", you will likely oppose it regardless of how society is structured. Immigrants use the roads, no matter how much we spend to repair them. They are protected by police, no matter what those police are paid. If a BIG makes things better, there's no reason to deny it to immigrants, and if immigrants add value, they will still add value through the use of their BIG to pursue their happiness.

In-kind services: With judicious elimination of in-kind programs, we can avoid many of these problems. First, many programs that support people who have made bad decisions in the past would be unnecessary: the BIG is not a one-off payment, it's a continuing payments, and misspending last month's check does not need to affect next month's. Also, it should be noted that substance abuse is closely associated with economic hardship. Given a more fulfilling life, many who might otherwise waste away in a bottle would choose otherwise.

Other programs could be reduced without being eliminated. Some people with disability are merely subsidized, and such subsidies could be replaced by the BIG. Moreover, private services would develop to cater to people who might not otherwise be worth building a business around, because suddenly they have available resources to spend on what they value most.

And of course, some services would always remain. Services for those with severe disabilities; legal services; child welfare services. But criticizing BIG on the basis that it can't replace every program is an absurd standard that no program can meet. If BIG can replace welfare and improve lives in the process, we should do it, even if it only means giving people $500 dollars a year and leaving every other program intact.

Megan McArdle wrote:Work: If you make it possible for some people to live without working, some people will live without working. That decision will be rational in the short term but disastrous in the long term... Discouraging people from making the short-term sacrifices necessary to gain a long-term foothold in the job market is not good social policy.

First, again, McArdle over-estimates the level of comfort that a properly calibrated BIG will provide. It is possible to live on $4000 a year, and some people live. But many more people will use that to supplement rather than replace their other income. And, they'll use it to fill gaps in employment, so that they can transition to better and more fulfilling jobs, or to gain additional training to be able to contribute more and better.

In addition, an influx of money into economically depressed areas means more jobs available to those most likely to drop out otherwise. Shoveling steps and walkways door to door, babysitting, car washes, these are jobs frequently available in wealthier areas that are unavailable to those whose neighbors are all as poor and desperate as themselves. Or, consider a corner store in a poor neighborhood, surrounded by a populace that can't afford to shop there. An influx of money into the area means more business, hiring someone to stock shelves or wash the floor. The commensurate reduction in crime means less spending on security, freeing up more capital to hire, to develop, to expand and innovate.

Of course, some people will check out. But few who do would have been long-term employed otherwise. The marginal person influenced to drop out by a modest BIG is a vanishingly small number, and to weigh that more heavily than the economic gains, especially in the area of work, is myopic.


To sum up, I've taken the easy route of criticizing someone else's argument rather than make an argument of my own. But in doing so, I think I've provided several compelling arguments in favor of a BIG in some form and at some level.


Hello there,

I dont think money will ever mean anything when robotics and mega computers will fully replace man, from the surgeon, the factory worker to the cubicle job. Money and knowledge become kinda incompatible at some point. More knowledge eventually turns the quest for materialism into a mirage.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Carleas » Tue Dec 08, 2015 9:28 pm

Money isn't only about materialism, it's also about exchange: trading a good for a dollar tells us something about the value of the good relative to other goods. And because it's about exchange, it creates a system that quickly and efficiently aggregates information about the preference of everyone participating in the exchanges. It's a form of voting, and will remain useful even in a post-scarcity economy, though I think something like a Basic Income would be necessary to be just and to maximize participation.
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Re: In defense of a Basic Income (Response to McArdle)

Postby James S Saint » Tue Dec 08, 2015 10:00 pm

CelineK wrote:I dont think money will ever mean anything when robotics and mega computers will fully replace man, from the surgeon, the factory worker to the cubicle job. Money and knowledge become kinda incompatible at some point. More knowledge eventually turns the quest for materialism into a mirage.

Actually and perhaps interestingly, machines are already "trading with" and "employing" each other based upon money. They don't call it "money". They call it "statistical usefulness". Machines choose which other machines to employ based upon their "credit history" (historical success ratio). More advanced systems choose "who to work for" or which other machine to respond to, based upon the machines own assessed needs. Your PC is already doing that to a degree right now.
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Re: In defense of a Basic Income (Response to McArdle)

Postby Jakob » Wed Dec 09, 2015 2:06 am

Turd/Omar, I agree that Bama should not have said that; however I am sure I dont know that it was an actual mistake. Backtracking; A lot has changed in Lybias financial word (extremely wealthy nation) that is literally never talked about officially, same goes for all Nato politics. Basically I dont tend to take things as much at face value, especially not in geostrategy. ISIS represents a couple of things for Nato interests, most of all a handy powervacuum. It cant have eluded you that the group never mentions Israel. Why is that? Im on the side of Israel so I wont divulge any strategies I perceive but on the surface we can be pretty clear that if they were to harm an Israeli publically, they would find themselves under burning skies in a matter of hours at gigantic civilian cost. Isis being openly backed by a bunch of powerful 'friendly' sunni states I should not have to mention either, is programmed to avoid causing WW3. Israel wont hesitate to set it off if triggered. It would likely play to their advantage in the end. They are one of the very few nations in this theatre that play by the ruthless ancient calculations and dont have to worry about public consensus. All its enemies know this. For example Iran is much more modern in its calculations as it has a delicate electoral balance to keep. The country is divided 50 50 between backward and secularized types. If war were to loom the regime might fall. In Israel the reverse is the case.

Russia would love to carpet raid the group but is modern as well in its political strategies, mwaning again respecting a fickle popular basis, and can not interfere too much, it is playing the European game, having just won the Ukraine standoff it knows to abide its time and not to risk what it does not absolutely need to risk (such as over Crimea, integral part of its military architecture). It also knows that it doesnt know precisely and for a country this big with this much border and so many powerful bordering ootential enemies (EU, Turkey, Iran, Paki-Afghanistan, China, US (Alaska) It will always choose the small underground game. It counts on surviving this by clever situation-by-situation play and not lose too much economic range -that is the bit I agree with.

Whatever very clearly 'doesnt make sense' in light of thenassumed will to bring stability to the region is part of a dtrategy to cause chaos and make the muslim world into a plasmic state ready for total transformation. The aim I see is very simple, I leave it up to you to either or not dare to think it as I sure as hell wont speak it, (it is precisely what is never mentioned, it is very naive yo think any strategist would even so much as suggest his true aim) and Russia is trying to figure out a way to benefit from that aim rather than get isolated.

Finally, what Obamas motivations are is truly beyond me as I am not at all sure how the alliances within Nato run, it is only clear that that is the sort of stuff I dont want to know - the sort of knowledge that is the opposite of power.

Im just watching it unfold now. In any case we now all know that WWI never ended.
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Re: In defense of a Basic Income (Response to McArdle)

Postby CelineK » Thu Dec 10, 2015 2:17 am

Carleas wrote:Money isn't only about materialism, it's also about exchange: trading a good for a dollar tells us something about the value of the good relative to other goods. And because it's about exchange, it creates a system that quickly and efficiently aggregates information about the preference of everyone participating in the exchanges. It's a form of voting, and will remain useful even in a post-scarcity economy, though I think something like a Basic Income would be necessary to be just and to maximize participation.


hey there, I do get what you mean and am very well versed in economics. I am not looking at what money is or is not, but if the current trends are any indication, we can rightfully assess that corporations will always seek to optimize returns and end up robotizing and computerizing as much as they can. Eventually there will be no jobs out there and it is a mere 20 years or so ahead. I am even not mentioning AI that will replace politicians and decision makers.

Maybe it is time to consider abandoning the concept of money and give more attention to our passions?

Okay I admit that I am precisely writing about the topic and expect to have my thesis ready by next March and which is about a Money Free Society,
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Re: In defense of a Basic Income (Response to McArdle)

Postby Carleas » Thu Dec 10, 2015 5:09 pm

CelineK wrote:Maybe it is time to consider abandoning the concept of money and give more attention to our passions?

I agree with your description of the problem, I made similar a prediction here:
I wrote:At some points, some humans will just get in the way of projects already under way. This seems certain if automation continues. And it presents a big problem for policy. What do we do with such workers? Do we just watch unemployment increase? Do we create make-work jobs to keep them busy? Do we provide sufficient welfare to keep them alive? I don't see[] most modern policy approaches as particularly well poised to deal with this problem, but it's one we would be wise to consider before it presents itself.

I don't agree, however, with your solution. Because of the information-aggregating nature of money, it will remain a vital part of a society even when automation takes over production. Humans will still need to collectively define what is valuable: should we set the machines to building a colony on Mars, or just more and better virtual reality systems on earth? In my view, a Basic Income solves the problem long term: whatever percentage of GDP is attributable to robots, pay that out as Basic Income and let people indicate their values through their spending decisions.

As I understand money-free societies, the effect would be similar, but it would retain a valuable tool that humanity has developed. The market will probably always be the largest, most parallel computer we can build, and even automated governance could be fed by the data it crunches.

I will be interested to see your thesis when it's done. Have you read any of the discussion of the Star Trek economy that was percolating in the econ blogosphere not too long ago? It got into very interesting ruminations about the operation of a post-scarcity economy. Such an economy often looks money-free, but I think the case is compelling that there's still a place for money.
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