I consider myself a left-libertarian, and I strongly support a basic income. I'm also a supporter of some amount of public health care.
In theory I support the elimination of taxation and a purely volitional society, but I recognize that such a thing is likely a very long way away. What we have now is not even close, and trying to shoehorn it into that vision prematurely will not work. That kind of moral futurism should not blind us to chances to radically improve human life here and now while working pragmatically within the bounds of the political realities we have.
One also must ask the question: given that the abolition of force and fraud is a moral long term goal, what sort of society would we want to build that would be likely to evolve in that direction? I don't think crony capitalism with fascist tendencies and no social safety net seems like what you'd want. Seems like that would be more likely to regress back to feudalism... which is exactly the historical path that we seem to be on. Regression to feudalism takes us further -- much further -- from that goal.
Seems to me that the precursors to a volitional libertarian state are radical reductions in violence both within and between nations, a highly educated and healthy populace that is capable of taking care of itself, and the abolition of caste systems (e.g. sexism, racism, classism, guild systems, etc.). A basic income is a step in that direction.
"Public health care" is interesting, because it usually involves first forcing everyone to pay for a government healthcare system, then (usually) regulating the private system into oblivion, or destroying it outright. "Public health care" is fundamentally incompatible with liberty.
Your third paragraph is interesting, because you appear (to me at least), to endorse liberty, yet without believing in it.
>"given that the abolition of force and fraud is a moral long term goal, what sort of society would we want to build that would be likely to evolve in that direction"
My answer to your question, (as quoted above,) is that I believe liberty would allow for people to prosper, and all the fascist, feudal, and that regressive tendencies we see are a product of coercion. I do not understand your answer to the question, as it seems to open the door for any type of coercive means with the stated intent (but not necessarily with the result) of improving the welfare of the populace.
The ends which you describe in the last paragraph are all interesting, and nice goals, but do not (in themselves) justify the use of coercive means; especially since the coercion presents many discrimination problems due to the discretionary powers granted to those who would 'solve' the problems.
> "Public health care" is interesting, because it usually involves first forcing everyone to pay for a government healthcare system, then (usually) regulating the private system into oblivion, or destroying it outright.
You seem to be using a strange definition of "usually" -- every OECD country has "some degree of public healthcare" (what the grandparent post suggested support for), and yet most of them have some degree of a private system.
If you define "destruction" that way, your argument is circular, as you've just made it:
1. Public health care usually leads to destroying private health care, and
2. "Destroying" private health care means the government not decreasing the public role in health care.
I left unstated the fact that many OECD governments are greatly increasing their roles in healthcare, because I thought it was readily apparent. Perhaps I should have been more clear.
My point is that many OECD states are (greatly) increasing the portion of the healthcare market controlled by the government, and few if any are decreasing it substantially (or at all). I define 'destroying' the private market in healthcare as the government taking over previously private activities, in effect nationalizing the industry.
> I left unstated the fact that many OECD governments are greatly increasing their roles in healthcare, because I thought it was readily apparent. Perhaps I should have been more clear.
It wouldn't change the basic problem; you first started with the claim that public health care usuually means destroying private health care and have progressed to define "destroying" private health care as government either not decreasing (your penultimate post) or increasing (your last post) its role in health care.
Which means that, stripped of the peculiar definition of destruction, your claims is that public health care means the government either not decreasing or increasing its role in health care. Which is trivially true, of course, but absolutely vacuous.
Clearly stated, you criticism should be that my claim is tautological, not trivial; this is a legitimate point...
But you seem to be forgetting that the proposition was part of a larger argument, where I was criticizing a previous post which claimed to support liberty, but was also supporting government healthcare programs. My argument was basically that the government health program destroys the private market, thus eliminating liberty (and choice).
If you take the statement that 'increasing government control destroys private markets' alone, it is tautological; but extracting that phrase from the argument of which it was only a part, then criticizing the statement is a pointless set of activities.
> Clearly stated, you criticism should be that my claim is tautological, not trivial
Its both, and "circular" is another word for tautological.
> But you seem to be forgetting that the proposition was part of a larger argument, where I was criticizing a previous post which claimed to support liberty, but was also supporting government healthcare programs.
No, I'm not. Your argument in support of government healthcare plans being inconsistent with liberty was that they destroyed private healthcare, a claims which, when questioned, required redefining "destroy private healthcare" to just mean that government remains involved in healthcare at the same or greater level.
So, the whole line of argument was superfluous abuse of language to cover up a bare assertion that government action in any domain is, in and of itself, inconsistent with liberty.
There isn't even an argument in any meaningul sense being made.
dragonwriter>Its both, and "circular" is another word for tautological.
wikipedia>"Circular reasoning differs from tautologies in that the premise is restated as the conclusion in an argument, instead of deriving the conclusion from the premise with arguments, while tautologies states the same thing twice."
dragonwriter>Your argument in support of government healthcare plans being inconsistent with liberty was that they destroyed private healthcare, a claims which, when questioned, required redefining "destroy private healthcare" to just mean that government remains involved in healthcare at the same or greater level.
Earlier on, you stated :
dragonwriter> You seem to be using a strange definition of "usually" -- every OECD country has "some degree of public healthcare" (what the grandparent post suggested support for), and yet most of them have some degree of a private system.
I have been trying to argue (with no apparent success) that the "some degree of private system" is gradually becoming little private or no private system, through a ratcheting up of government intervention, hence the statement that all have increased or kept constant their levels of participation in the healthcare system, and they rarely (if ever) decrease it. If the amount of state participation only ever increases or stays the same, and it increases often, then the government is 'taking over' healthcare.
> Seems to me that the precursors to a volitional libertarian state are radical reductions in violence both within and between nations, a highly educated and healthy populace that is capable of taking care of itself, and the abolition of caste systems (e.g. sexism, racism, classism, guild systems, etc.). A basic income is a step in that direction.
Does the libertarian within you believe that the State will accomplish this goal, without worse repercussions? Why remove the state at all if you think it can engineer society for the better in this way?
If you remove the state from a violent, fraud-ridden, still very feudal system, you will simply unveil the underlying less centralized tyranny latent in that system.
There's also a massive blind spot in most conventional libertarian thought with regard to soft power and indirect coercion. Eliminating direct coercion but leaving caste systems in place only frees those who are rich or powerful enough to evade those caste systems. The rest are consigned to poverty and oppression through manipulation instead of force.
So yes, I do think the state can play some role at this time in history at uplifting the human condition and empowering the general population in ways that could -- given a lot of time -- eventually lead to a future that is better and freer in multiple ways. Or it could not. The state can't be trusted, but I also don't think we can dispense with it (yet).
Simple reductio ad absurdium: imagine actually dispensing with the US Federal Government. Most US states in the interior would establish theocratic feudal totalitarianism along Christian Reconstructionist / Dominionist lines, and the coasts and anywhere resource-rich would probably be invaded.
A libertarian could be a minarchist, and anarchist, or simply someone who looks at our current governance architecture (state control focusing on finance and asset wealth growth) as counter intuitive.
> Does the libertarian within you believe that the State will accomplish this goal, without worse repercussions?
The libertarian in my worries that a state would either abuse a system for the benefit of a small elite, or purposefully skew results in favor for their brand of narrative (didn't work, too expensive, just not possible, abolishing labour laws because it needs to be done!, etc...).
Personally it depends on the policy details to me. If this leads to the abolishment of all other forms of social assistance, and can reduce the amount of government employees who simply decided who got them in our older models, then sign me up. A system would also have to not discriminate, neither down nor up in regards to income.
That said if our choices are current social assistance, negative income tax based minimum income, or minimum income for all without deductions, then both NIT-MI and MI work for me.
I'm confused as to how you think libertarianism is the path to get to that society, the only path, or even the best path. If we are dreaming futures, the goals you mention could just as easily be met by a system in which super-sentient AIs plan all the details, and robots provide all the labor. After all, the only monetary 'freedom' that is better than having complete control over one's money, is the freedom of not having to even worry about it.
This article is almost self refuting - objection (2) is killer.
Immigration is probably the most important issue of our time. If we have a BI, we can't have immigration in any form remotely resembling what we have today, let alone some ideal situation where we have drastically more immigration. It's as simple as that. The cost of a BI (and the welfare state in general, really) is that millions of people are stuck in Haiti, India, Afghanistan and other desperately poor locales.
I'm not an open borders activist. Most of the countries I mentioned are desperately poor due primarily to the people living there - any immigration policy needs to turn Haitians and Sudanese into Americans rather than turning the US into Haiti. But at the same time we need to recognize the tremendous humanitarian benefits of immigration.
If we prevent a Haitian person from selling his full time labor to an American employer for $7.25/hour, we are cutting his income by 90% (Haiti has a GDP/capita of $1300, cost of living adjusted). I can't see any benefits from a BI that would remotely justify doing this to millions more people. In fact, near as I can tell, virtually any policy which requires further restricting immigration is almost certainly a nonstarter for this reason.
A much better policy is the Basic Job, which is like Basic Income but you need to work for it (see FDR's CCC, jobs are things like improving public parks, planting trees, etc). This also has no disincentive effects and you get some productive labor out of the people who choose to make use of it.
There is a simple solution to this: An immigrant can become a citizen but doesn't receive the basic income until they have been here for 25 years, but also doesn't pay income tax until the amount they would have paid in tax exceeds the amount they would have received from the basic income. Thus, the immigrants who would have been a drain on the system become breakeven and net productive immigrants see no difference in practice from any other citizen.
A "Basic Job" is not a "much better policy" at all. Paying people to take care of our public spaces is worthwhile (and should be done regardless, and much is done regardless), but makework is a disease. With BI, I have assistance when I work on my startup or retrain for a different career or take care of my children or volunteer in my community - there's no bureaucrat judging my activities and deciding what is and is not worthy.
A lot of BI proposals pay the BI only to citizens. New immigrants aren't citizens; it takes many years to move from permanent resident status to become a citizen.
This would create an underclass of immigrants & refugees, and create incentives for voters & politicians to make getting citizenship even harder than it is today.
This is definitely not a good situation, but it is better than forcing people to stay in Haiti or Sudan.
This is a possibility - but so far the US tends to not do this very well. I don't have great data on the subject, but I've seen at least one study suggesting immigrants with children tend to be a net drain on the US.
Don't get me wrong - I'd love to do what you propose, though I think a BJ is a better policy than BI regardless of immigration. But I'm not aware of any western society that actually manages to do it.
The linked article does not support your assertion that "immigrants with children tend to be a net drain". it simply says that the majority of this population uses at least one welfare program. it highlights low levels of education as the main driver of this, with the benefits usually going to the american-born children.
I suspect programs like Head Start and the school reduced/free lunch program account for a significant portion of the reported welfare use. Do you think that a poor immigrant family with working parents that uses these programs is a "net drain" on society?
The linked article estimates tax liability for immigrant families and shows this is less than welfare consumed. Like I said, not great data, but I don't have anything better. If you do I'd love to see it.
Given that Head Start doesn't even have any measurable benefits, I definitely think those consuming it are a drain (if they pay less in taxes than Head Start costs).
"Given that Head Start doesn't even have any measurable benefits, I definitely think those consuming it are a drain (if they pay less in taxes than Head Start costs)."
Given that Head Start doesn't have any measurable benefits, we should conclude that Head Start is a net drain. It doesn't follow that those consuming it are. Head Start is probably an insignificant portion of the costs society invests in these people, and taxes are probably an insignificant portion of the benefit these people provide.
> In conclusion, children who were enrolled for 2 years had higher scores than those who only stayed for a year, which shows that being enrolled in Head Start for a longer duration benefited the children.[1]
Those effects were not present in the RCT. Even after reducing the p-value cutoff to 10% (rather than the standard 5%), only a few of the expected measures showed a statistically significant effect (some positive, some negative), and virtually nothing persisted as far as 1st grade.
There is already an underclass of immigrants, those on H-1 visa (work visa), with all the restrictions of their position (employment restrictions, conditions on the length of stay in the country, and so on). Also students (F and J visas), severe restrictions on work, sometimes a requirement to leave the country (USA) and never show up for two years. Probably more cases like that, these are just the ones I had to deal with.
>Immigration is probably the most important issue of our time. If we have a BI, we can't have immigration in any form remotely resembling what we have today, let alone some ideal situation where we have drastically more immigration. It's as simple as that. The cost of a BI (and the welfare state in general, really) is that millions of people are stuck in Haiti, India, Afghanistan and other desperately poor locales.
No. There are countries that have comprehensive social security and have immigration resembling what we have today - e.g. these countries have immigration that they already have.
A lot more than what? One can have welfare state and a degree of immigration. Usually more immigration means that it's more expensive. Sweden has considerable immigration when compared to many other countries, and is also a welfare state. Immigration doesn't mean open borders.
For humanitarian reasons, it's important to get as close to open borders as we can. What benefits of a first world welfare state do we gain that are worth consigning a human being to live on $1300/year (the GDP/capita of Haiti)?
Sweden is a pretty terrible example to cite. Go read the blog of Tino Sanandaji (an Iraqi immigrant to Sweden) - he does a great job showing why it's a failed policy and prevents some of the best arguments against immigration that I've read.
It's very difficult to design domestic policies optimized for a foreign population. Evaluation of the american welfare state need only consider the impact on the american population.
Simple solution, have X amount of savings, or a job lined up. I'd love your opinion on the merits of anyone else being allowed into a country without X amount of savings, or a job lined up.
A glib response: I'd love your opinion on the merits of deporting unemployed Americans with $0 in savings to Liberia.
More seriously, suppose we had no BI or other welfare state - what is the harm of allowing an Indian to show up in NY with no money or job? The only cost I see is that he might annoy 30-100 potential employers before he finds someone to pay him $7.25/hour to wash dishes, making him richer than 95% of his countrymen. He might sleep on the street for a little while.
Now, there are real worries - he might eventually become a citizen and vote for Indian-style governance (see, e.g., the voting behavior of Mexican Americans), contribute to a corruption-tolerant culture, or other such things. But those are second order worries.
> I'd love your opinion on the merits of deporting unemployed Americans with $0 in savings to Liberia.
Don't import them and provide them with a basic income? I was just saying that while we'd actually have to review some other policies that would be affected, many of our policies are sub par at best, so I fail to see how either limiting immigration to X amount of people a year or simply paying them X a year is a fail for basic income.
> What is the harm of allowing an Indian to show up in NY with no money or job?
I'd rather look at MI as an actual citizen's benefit. Maybe a year wait from immigration? If our current policy is to bring people over who have no means of funds or help or work, and who require assistance, then IMO that's a bad policy.
Also, what would be the largest difference between our current system and one where everyone who's lived in our country for a year, and is currently living in our country, gets X amount yearly? If you ask me, the risk for this person remains the same, and our obligations only begin once the person has established themselves within society at large by way of working or find assistance from family or friends or loans.
Note that minimum income is a very different (and to my mind far worse) proposal. If you make $Y and $Y < $X, you're paid $X - $Y. Which means there's no reason to work unless someone is offering you a wage above $X.
> $7.25/hour to wash dishes, making him richer than 95% of his countrymen.
Once you adjust for NYC's cost of living, he'd probably be poorer than his countrymen. Even a large percentage of Americans couldn't afford to rent an NYC apartment.
I am not convinced that BI and open borders are incompatible. So a lot of people move to the US - how is that harmful? Historically, increased immigration has lead economic happytimes. It's unlikely to get overcrowded; if the entire population of the world moved to the US we'd still be substantially less crowded than Singapore, and there's no freakin' way that would happen.
If we find that BI has problems, we roll it back. If we find that the only problem with BI is immigration related, we can encourage other countries to implement it too - possibly coupled with aid, if they need it.
I'd want to take a closer look before doing it, but it doesn't seem as crazy as common wisdom would suggest.
Objection (1) - a BJ creates no disincentive for work. You can earn $7.25/hour at the BJ or $7.50 at McDs.
Objection (2) - it reduces the incentives of immigration with the intent of collecting welfare, thereby reducing the objections to immigration.
Objection (3) - due to the fact that it has no disincentives for work, and the economic cost will be far less than a BI ( I did some back of the envelope calculations here http://www.chrisstucchio.com/blog/2013/basic_income_vs_basic... ), it's far less likely to reduce growth than a BI.
> Objection (1) - a BJ creates no disincentive for work. You can earn $7.25/hour at the BJ or $7.50 at McDs.
That's the problem, isn't it? It still creates a disincentive for "real" work. You get people who take and stay in the basic job instead of finding a "real" job because the basic job is no harder to do and much easier to get, which reduces economic productivity because the basic job is less economically useful than a bona fide mutually beneficial transaction between private parties. And someone who spends all day working the basic job in order to not starve doesn't then have as much time to earn a degree, practice making art or music, volunteer at the local community center, write open source software or any of a variety of other things that are more personally rewarding and socially valuable than digging holes and filling them back in.
> Objection (2) - it reduces the incentives of immigration with the intent of collecting welfare, thereby reducing the objections to immigration.
So you don't give immigrants the basic income right away.
> Objection (3) - due to the fact that it has no disincentives for work, and the economic cost will be far less than a BI ( I did some back of the envelope calculations here http://www.chrisstucchio.com/blog/2013/basic_income_vs_basic.... ), it's far less likely to reduce growth than a BI.
What happens when you account for the preference of those making minimum wage to take the basic job over a job that requires much seeking and interviewing to get but pays the same amount, and the cost of paying people to do unnecessary things when they could be doing productive things like working to improve their marketability for higher paying jobs?
The simple solution to that is to make the Basic Job worse than other jobs - for example reduce the pay to $7.00/hour and don't make them easy jobs. Then any private sector job will be preferable.
That doesn't do anything to address forcing people with no skills to do meaningless labor instead of spending their time to learn new skills. And making the labor intentionally hard just to make it undesirable seems unreasonably cruel, especially since the entire premise behind a basic job is to provide a job where none other is available, meaning that choosing to take a private sector job is by definition not possible for many people or the program would be unnecessary. Whereas reducing the pay leaves you in the position of either not providing a sufficient safety net, or having to raise the minimum wage (and correspondingly increase "real" unemployment) just in order to make it sufficiently higher than the amount set for the basic job.
The labor isn't meaningless, it's simply worth less than $7.25 to the private sector.
Do you consider the work of FDR's CCC (e.g., forestry, national parks) to be worthless? Do you believe that the CCC destroyed jobs via the mechanism you described here? All I'm proposing is replacing welfare with the New Deal. I take it you were opposed to the New Deal?
Also, you seem to be under the impression that people who would hypothetical receive the BJ cannot find a job. Most are not looking for one.
> The labor isn't meaningless, it's simply worth less than $7.25 to the private sector.
It's labor chosen by the government for arbitrarily many individuals with an unspecified skill level. The government is not suited to finding economically productive work for arbitrary individuals. The market would find far more productive work for these people at a wage that corresponds to the value of their work if there were no minimum wage, but then they wouldn't be making enough money to live. The government could provide for these people by paying the difference between the price the market values their labor and the minimum wage, except that all existing minimum wage jobs would then begin paying $0.01/hour knowing that their employees would have the rest made up by the government. The way to fix that is to pay the minimum wage unconditionally and then let people have whatever their private sector employers pay them on top of that, but that's just a basic income.
Step back for a minute and separate the two programs from each other. Suppose the government has work for these people at a value of $3/hour, and it a) provides a basic income, then b) offers to pay them the $3/hour their labor is actually worth on top of that if they do the basic job. The only reason they have to turn down the basic job is if they can find something more valuable than $3/hour to do somewhere else -- some other job, or some personally rewarding activity which is more valuable than being paid $3/hour. Why is that a problem? Why is it bad that a person has found some activity that they value at a higher amount than anyone is willing to pay for their labor in the market?
> Do you consider the work of FDR's CCC (e.g., forestry, national parks) to be worthless?
There aren't enough jobs like that for everyone who needs one, and not everyone who needs a job is qualified to do the productive work the government needs to be done. Also, those jobs today pay more than the minimum wage, so are you proposing to reduce their compensation?
> I take it you were opposed to the New Deal?
FDR would have been better off implementing a basic income than the New Deal, yes.
> Also, you seem to be under the impression that people who would hypothetical receive the BJ cannot find a job. Most are not looking for one.
You're assuming the people who take the basic job will almost entirely be people who are currently unemployed, rather than people who have horrible low paying jobs, or who lose their jobs and find it easier to take the basic job than find a different private sector job.
...value of their work if there were no minimum wage, but then they wouldn't be making enough money to live.
That might be true if minimum wage were $1/day (PPP adjusted). If you don't believe me, just read up on any of the countries I mentioned in my other posts on this thread.
Just out of curiosity, what is the motivation behind nonsensical claims like this? I ask simply because I've heard lots of people make the exact claim you did, and I wish I knew where this nonsense comes from.
Suppose the government has work for these people at a value of $3/hour, and it a) provides a basic income, then b) offers to pay them the $3/hour their labor is actually worth on top of that if they do the basic job. The only reason they have to turn down the basic job is if they can find something more valuable than $3/hour to do somewhere else -- some other job, or some personally rewarding activity which is more valuable than being paid $3/hour. Why is that a problem?
Ignoring the potentially bad incentives this creates for employers, I would generally have no issue with a program that allows the basic jobs to be performed in the private sector with government subsidizing them.
I do, however, object to paying people to play Call of Duty, which is what a Basic Income is.
You're assuming the people who take the basic job will almost entirely be people who are currently unemployed,
No, I'm assuming most of the people on the BJ will be the people who are currently not in the labor force.
It's strange how low skill workers are so lazy that they will all switch from McJobs to Basic Jobs just to avoid interviewing, while simultaneously so industrious that if you pay them to play Call of Duty they will instead go get a McJob. What kind of utility function causes this to happen?
> That might be true if minimum wage were $1/day (PPP adjusted).
PPP adjusting $1/day from the third world countries in which people live on it is approximately the minimum wage. If you live in the poorest parts of the world, you may have no money, but there is open land. You can construct some kind of hovel to live in. You live an agricultural or hunter-gatherer lifestyle. You buy poor quality food from unregulated sellers. It isn't fun, but it's cheap.
You can't do that in an American city. There is no land where it is legal for you to build a shelter, so you rent. There is no land for you to grow food or hunt game, so you buy food from a store. The store is not allowed to sell you unregulated food for a discount. That is certainly much easier than the way it is in the third world, but it is also much more expensive. You can't live on $1/day in New York City, no way no how. Depending on charity or welfare doesn't count -- that isn't living on $1/day, it's just sending the bill to someone else.
There is also the matter that there is more to being alive than not starving or freezing to death. "Living wage" doesn't mean the minimum amount you need to carry on breathing for another day:
> Ignoring the potentially bad incentives this creates for employers, I would generally have no issue with a program that allows the basic jobs to be performed in the private sector with government subsidizing them.
> I do, however, object to paying people to play Call of Duty, which is what a Basic Income is.
I think you're in trouble then. Because if you allow private sector employers to choose what jobs they hire people taking the basic job subsidy to do without the employer having to pay any minimum amount of money, you're inviting someone like me to pay someone who takes the basic job subsidy a trivial amount of money to play Call of Duty with me. And then the government is still paying people to play Call of Duty.
What you're fundamentally up against is the fact that enjoyable jobs (like "play Call of Duty with me") command less in the way of wages than less enjoyable jobs (like "flip these burgers"), because the "employee" prefers to take the enjoyable job and the employer can therefore pay commensurately lower wages. That means in a free market that some people will choose to spend their time doing things you think are frivolous.
Ask yourself this: Why is it so unreasonable that some number of poor people take the basic income and live extremely frugally so that they don't need any other job and can spend their time as they please, but there is no objection when some rich guy who inherited his wealth is permitted to do exactly the same thing and do as he pleases instead of working? Aren't we risking that society become too prosperous and then implode as everyone retires to video games and declines to do any productive work? Isn't this even more problematic in the case of people who earn their wealth, who are demonstrably capable of creating significant economic value but are then allowed to remove themselves from the workforce? If people choosing to play video games instead of working is a real problem then we need to implement Communism at once so that we can extract "from each according to his abilities," right? I want you to understand that you're challenging the efficiency of the market. There is no labor they can perform that anyone is willing to pay more to get them to do than the value they place on playing video games. In that situation, allowing them to play video games is what is supposed to happen, and that's fine because that situation is rare.
> No, I'm assuming most of the people on the BJ will be the people who are currently not in the labor force.
But why do you assume that? What stops people currently in the labor force from choosing the basic job instead of their existing job because they find it preferable in some way or another?
> It's strange how low skill workers are so lazy that they will all switch from McJobs to Basic Jobs just to avoid interviewing, while simultaneously so industrious that if you pay them to play Call of Duty they will instead go get a McJob. What kind of utility function causes this to happen?
1) Someone gets laid off, immediately takes the basic job to continue having income, now they spend 40 hours doing the basic job and have that much less time and substantially reduced incentive to seek out a real job.
2) You aren't paying them to play Call of Duty. You're just paying them. They don't have to play Call of Duty. They don't have to do anything, it's unconditional. Which means they only reason they have to play Call of Duty to the exclusion of all else is if they find nothing superior in life whatsoever, permanently. People soon find that they want more out of life: They want to go outside. They want to own a car so they don't have to schlep everywhere they go on foot. They want to take a vacation to another country, or buy a big screen TV, or live in a bigger apartment, or send their kids to college. But you can't afford those things on just the basic income, so if you want them then you have to go out and find a way to earn more money.
A person can have quite a simple utility function and prefer the basic job to a real job but also prefer a real job to playing Call of Duty all day, because the two are unrelated. If you want more from life than you can buy with the basic income (which is to say anything much more than food and shelter), you have to engage in some kind of activity that produces additional income. Which makes it easy for taking a real job and having spending money to be preferable to playing video games and remaining perpetually poor. Meanwhile you can see how taking the basic job would be preferable to taking a real job, because they're substantially similar (you do something you don't like in exchange for money) and the basic job has the further advantage that you don't need to do any work to get it. It may also have other advantages depending on what the real job would be: It may be that the real job requires you to buy something to do it which comes out of your wages (e.g. gas for a sales job that requires travel), or requires doing something you hate (e.g. putting up with unreasonable customers or bosses), or any of the long list of things that can make a job suck. People with low paying jobs of that nature can easily prefer the basic job to the even crapper private sector job, while still preferring both to the prospect of having less income.
I think the fact that there is so much tuning and adjustment by government bureaucrats in just what those jobs should be should give significant pause.
> Objection (1) - a BJ creates no disincentive for work. You can earn $7.25/hour at the BJ or $7.50 at McDs.
If the work they are doing has little value — which seems like it would have to be the case, since otherwise we'd already be paying all these people $7.25 an hour to do it — I don't see how it's substantially different from idleness. It seems like you're basically replacing "Do whatever you want and we'll pay you a basic income" with "Do a meaningless ritual as half-heartedly as possible and we'll pay you a basic income."
In fact, I'd say a Basic Job program might disincentivize meaningful work more than a Basic Income. Somebody could start a business using their Basic Income, but a Basic Job would not provide the same opportunity.
With a BI you have three options while still getting paid - productive work, unproductive work or Halo 3.
With a BJ, you have only two options - productive work or less productive work. Some of the people who would (given the option) choose Halo 3 will now choose productive work. That will be a net gain for society.
Further, we will get some value out of the Basic Jobs. We might pay $7.25/hour for the DMV to be $3.00 cleaner, for a net loss of only $4.25 rather than $7.25. We tried this scheme once already and got a national park system for our trouble: http://en.wikipedia.org/wiki/Civilian_Conservation_Corps
It's also vastly cheaper than a BI because most people will choose not to use the BJ. Rather than giving $7.25 to 300 million Americans you only give it to 30-40 million.
In response to (2), most would-be immigrants dream of entering the US with the intent of picking up work, and to be politically feasible in the US, the BJ would have to offer higher (PPP-adjusted) wages in better working conditions than most people expect in the developing world. BJ jobs would be very attractive to most would-be immigrants.
Since BJ labour generally provides less value per hour of work to taxpayers than it costs them to pay for the programme, taxpayers will still want the programme to be as small as possible, which means it's still going to be politically unfeasible to get much closer to open borders.
True - abolishing the welfare state entirely would be better for the cause of immigration than a BJ. I'm contrasting a BJ to a BI or the current system.
By "proposal", I assume you mean Basic Job? If you can't find a job, you don't get EITC.
A Basic Job means the government gives you a job if you can't find one. You show up, tell them you are unemployed, and they give you a job cleaning the DMV, filling in potholes, picking up trash at the park or whatever. At the end of the day they give you 8 hours x $7.25/hour. If you find a McJob paying $8.00/hour you quit the Basic Job and go take the McJob.
This is the most even handed treatment of this topic I've read yet.
One topic not addressed (but important) is what we do when someone spends the entirety of their basic income and has nothing left for food or shelter. Do we just let them starve to death in the street? Or do we create a "secondary" safety net that prevents this? If so, don't we just end up with the same sort of inefficiencies and problems that plague our current system?
He proposes dispensing the funds weekly. You can't starve yourself in a week and drinking fountains + free cups of water at restaurants ensure that you won't go thirsty. Exposure could be a problem in certain cities, but under the new system I'm sure low-cost housing would adjust to the needs of the tenants since there's a profit motive for doing so. You might have to bus to the edge of the city to get low-rent food and housing, but the option would be there (and administered by a competitive private market).
I like this idea more than "bread queues" because it forces recipients to take responsibility for their spending without using so much force that the damage it allows to happen is greater than the value of the sense of responsibility it aims to instill (which I believe to be the case in the present system). Also, it leverages the free market to optimize its administrative specifics. Massive influx of poor people due to economic downturn? More low-cost establishments get built/converted. Massive outflux of poor people due to economic upturn? Low-cost establishments get sold or converted into high-cost establishments. No need to wait for next year's appropriations bill.
I really like the implications UBI has for charity. because everyone has a minimum level of resources, charity's revenue can scale with the number of people they serve.
For example, a halfway house could collect BI funds on behalf of its residents. it uses these funds, plus monies from other sources like donations or grants, to provide in-kind aid (food, shelter, security, medical care). as a resident requires fewer services, you can progressively phase out the in-kind aid and pass the BI cash through directly.
obviously this would require oversight to ensure that the charity is a responsible steward of the residents BI. we do this with the foster care system already.
>Do we just let them starve to death in the street?
I imagine private charity would pick up some of the slack at this point. I feel that, if someone is given enough to live on but uses it irresponsibly, the state no longer has any obligation to provide for them (they already have.) It would fall to individuals to decide whether they personally have an obligation to assist them.
> One topic not addressed (but important) is what we do when someone spends the entirety of their basic income and has nothing left for food or shelter. Do we just let them starve to death in the street?
If you want to help, voluntarily, that is, of course, your choice. But if no one chooses to help them, well... the idea of individual responsibility for the outcome of your choices exists for a reason. By what possible argument can I claim that I should be able to blow all of my income on anything I want, except food and shelter, and then demand that someone else provide me food and shelter?
One might suppose that the reason many desire a government welfare program is to allow a complete abdication of responsibility (and disregard) for the situation of their fellow people.
It's possible, but I don't see a lot of evidence for it, and it seems needlessly (and unsupportedly) denigrating of the motives of those in support of a policy - and therefore somewhat suspect.
I think you could vastly reduce the number of people who are simply trapped in a gravity well of poverty, but there will definitely be need of additional programs. There are a lot of sociological problems that money by itself does not solve. For example, not everyone is capable of making decisions that will keep them alive and healthy. After all, a very large percentage of the homeless are not psychologically well. And we'll also still have orphans.
That is a good point. I view the poor and homeless as two different groups. Yes the homeless are also poor, but as you say they often have a whole set of other problems besides money. People who are just poor, money can help them.
I would say that a very large number of people in poverty have problems that money alone can't help. But the kicker is that a very large number of those problems can be attributed to consistent poverty. So a basic income would not make our sociological problems disappear immediately. But it would contribute greatly to ending the cycle of poverty-inflicted trauma that makes poverty strongly heritable.
Spends it on what? The mind goes easily to stereotypes like "gambling" and "drugs" but how about "medical debt from visiting the ER" or "the rustbucket car they rely upon for work just broke down again"? Unless the basic income is quite large, it will leave people in the same kind of precarious situation as the working poor.
Well, it'll leave the working poor and the non-working poor all a little better off, and give them the ability to shift resources as they see fit instead of as we see fit, which should typically help increase their welfare.
As a libertarian-socialist, I'd love for us to collectively and indiscriminately provide everyone with a fair and appropriate basic minimum income. The only problem with this policy is how you pay for it.
You can abolish all other forms of social assistance -but only if you can adequately justify the elimination of the bureaucratic government jobs associated with them. For an all inclusive basic income, no bureaucracy would be needed.
You could tax the wealthy heavily -in effect making the basic income a negative income tax policy. This also seems like a worthy policy worth investigating.
You could borrow the money by way of government securities. The only problem with this scheme however is that already you have people like myself, who are extremely skeptical of the long term health of the current world financial make-up of West versus Rest, which is already changing quickly.
Personally I dismiss all arguments regarding a basic income harming poor people in the form of "inflation". We're currently in a deflationary crisis according to the big banks, and the social and political benefits to these policy changes would make it extremely hard to simply get rid of due to "bubbles and pops" as we have that plenty as it is.
Can someone try to explain why something like this isn't possible? What if we increased taxes in the top most income bracket, abolished all forms of current social assistance, and took on more debt, hoping this can pay for itself (or to simply continue down the trajectory of more debt every year).
Can someone try to explain why something like this could be more simple than I'm guessing?
What is the justification for taxing the wealthy disproportionately to their income? Is it out of moral need, financial expedience, or economic efficiency?
If you wish to tax them out of moral need, you hold a normative belief which is unlikely to falter, so I will not challenge it.
There is no financial reason why a 'progressive' income tax is better than a flat tax, as the 'progressive' system encourages evasion, and makes it easier, as well as greatly increasing the scope of government, requiring regulation of marriage and more.
Economically, the 'progressive' income tax is completely unjustifiable, as the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods.
Your idea of borrowing money by way of government securities is not a long term solution, because interest gradually becomes an increasingly large part of the budget. In the long term, interest will either gradually take over the entire government budget, or an interest rate increase will force the government to default; in either case, borrowing to finance regular spending will eventually fail as a policy.
The 'inflation argument' against welfare policies is flawed as you point out, because it has never been demonstrated that wage increases cause inflation (so called "demand-pull inflation"). Whether or not some type of government welfare program should exist is an interesting question, and your answer seems to presuppose that the counter-factual is that there would be no social assistance program at all, whereas I would think that private charities would do a better job than the government, while avoiding coercion. If you require a government welfare program, I agree with you that a negative income tax is probably the least harmful, as it does not encourage unemployment.
One argument I would make is a marginal utility one - the marginal utility of $ decreases dramatically at higher incomes, so even if you have a (comparatively) punishingly high tax rate on the rich, the amount that your tax is affecting their lives in real terms is lower due to the marginal utility of money at those incomes. I'm in the camp that it's reasonable to want at least some semblance of equality of outcome though, so this argument resonates with me in a way that it might not to someone who favors a more lassez-faire approach. This probably falls under your "moral need" umbrella.
I don't agree with your statement about a progressive income tax being economically unjustifiable, especially in the economy that we find ourselves in at the moment (and, if secular stagnation proponents like Larry Summers and Paul Krugman are right, may be the structural norm these days). The current economy is strongly demand constrained, with plenty of money available for investment (corporate profits and cash holdings at record highs), but inadequate consumer demand to justify investments. From this perspective, a progressive transfer of wealth down the income scale makes a lot of sense economically because the poor are much more likely to actually spend that money than the rich are. There's also not much good evidence that high end tax rates affect macroeconomic growth as much as people claim - just in the US we've had tax rates all over the map over the past 100 years, and there's not much correlation with economic growth. We certainly haven't seen any miracles of economic growth for the economy as a whole since 1980 with the long running supply side, deregulation, and low tax experiment. If taxing the rich really has such a strong effect on economic growth and job creation, it's hard to see that in the data...
Finally, interest on government debt only becomes a long-term problem if the rate is higher than the rate of growth. It's not clear to me that that has to be the case, but that's another discussion ;)
The marginal utility argument you make is fair, but my question would be: marginal utility to whom, and when? The poor person who receives a government payout does benefit immediately, but poor people would benefit in the long term if that money had been invested in a job (and wealth) creating venture. This seems to me a difficult trade-off, and not a clear argument for or against welfare; my criticism of your argument here is that you presuppose an unlikely counter-factual.
You say "the poor are much more likely to actually spend that money than the rich are", but there is no evidence for the idea that poor people are less likely to hoard wealth than the rich. Rich individuals allocate their wealth to longer-term investments, whereas poorer people spend their money on consumption goods; both of these allocation systems allow the money to circulate in the economy. The notable difference is that the long-term investments create jobs in the long term, in exchange for forgoing consumption in the short term.
You're making the assumption here that the only way that money can be invested in a "job (and wealth) creating venture" is for the rich to make long term investments. Furthermore, you're assuming that taxing the rich more would decrease their job creation efforts and thus lead to less economic growth.
I don't think that these are valid assumptions. You're basically making a "trickle down" argument (if the rich do better, their heroic efforts will create so much economic growth that everyone benefits), and I would argue that our economic experience since 1980 argues pretty convincingly against that. In fact, studies on this topic (see http://www.fas.org/sgp/crs/misc/R42111.pdf) find virtually no correlation between top tax rates and overall economic growth, contrary to the belief of proponents of supply side macroeconomics.
I think the burden is really on you (or the supply side proponents) to demonstrate the truth of these long term economic growth claims, rather than just asserting them. In the absence of such proof, I would argue that concerns of economic equality and reduced suffering on the truly poor in our society far outweigh any of these nebulous assertions of promised future economic growth.
Finally, this doesn't have to be limited to a "welfare" vs. "investment" question. Government taking in money doesn't have to just give it out to people in welfare programs; it is perfectly capable of making investments too (infrastructure, basic scientific research, correcting market failures, etc.). There's no reason that a dollar invested by the government in infrastructure creates less growth than a dollar invested by a wealthy individual; in fact, given the propensity for wealthy individuals to park money in investments of questionable social value (see much of Wall Street's activities), I'd argue that the former is actually MORE beneficial to overall macroeconomic growth.
I was not talking about the disincentive effects of taxing income, (though I do believe they exist,) my reasoning was simpler, in that the rich cannot invest the money that the government took away from them.
This is why I made the comparison between what happens with the money if you have a progressive tax vs. flat tax.
But you're assuming here that "the rich" investing money is creating more growth (and you stated earlier, helping poor people more) than the government would.
I think that's a difficult statement to back up in the best of times, although it's certainly a difficult thing to prove either way (moving this question beyond the level of anecdotes is really hard). However, when we've got a persistent demand shortage like we have right now, it's much less of a tricky question because of the multiplier effects of consumer spending.
> but there is no evidence for the idea that poor people are less likely to hoard wealth than the rich
You can't seriously believe that? This is the most out of touch "let them eat cake" statement I've seen in a while. Poor people don't have any wealth to hoard; that's what poor means.
> Rich individuals allocate their wealth to longer-term investments
Because they have excess that can be invested after meeting their basic necessities.
> whereas poorer people spend their money on consumption goods
Yea, because they're poor and basic necessities eat up all of their money.
> the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods
This is a very strong claim that's difficult to justify by the data. Consumer demand is the largest driver of economic growth. Demand is what ultimately creates jobs. Capital cannot be applied to investment or growth if there is no demand to generate a return.
Investment creates demand as much as consumption does, they are just different types of demand. Investment creates demand for capital goods, while consumption creates demand demand for corresponding goods.
The market for capital goods is dependent upon the ultimate demand for the end goods. The cart most emphatically does not drive the horse, as anyone whose made malinvestment of capital can attribute.
"Economically, the 'progressive' income tax is completely unjustifiable, as the wealthy invest disproportionately in economic (and job) growth, while lower income people spend more on consumption goods."
That's bass-ackwards. All the money in the world can be available to fund companies; if there's no money to realize demand, it'll sit around unused. If there is demand for goods and services, people can borrow money to provide it, to be paid back out of the revenue stream. That's healthy. What we've been doing lately (and more especially pre-crash) is borrowing to consume instead, and as you say, "borrowing to finance regular spending will eventually fail as a policy" - as partly evidenced by the crash.
>What is the justification for taxing the wealthy disproportionately to their income? Is it out of moral need, financial expedience, or economic efficiency?
One argument I've seen is from marginal utility. To a person with few dollars, one more is quite useful. To a person with a million, one more (or less) is noise. J. S. Mill originally opposed progressive taxation, but may have changed some of his thinking on this subject later in life.
At what % do we draw the line on taxing the wealthy? 35% 40% 50%? These numbers would be outraging to any other section of the populace.
> dismiss all arguments regarding a basic income harming poor people in the form of "inflation"
Scare quotes on inflation? Lower and middle classes feel inflation the most when it affects the costs of basic needs: bread, milk, etc. Those are the very items a basic income intend to give ubiquitous access to. Practically by definition a basic income would raise the prices of those items.
> and took on more debt, hoping this can pay for itself
This is the critical assumption here. There is an ongoing debate whether or not college degrees can even pay for themselves in many areas of study. This is a heavy handed gamble, and one i would be unwilling to risk our fiscal futures on.
> Lower and middle classes feel inflation the most when it affects the costs of basic needs: bread, milk, etc.
Suppose there is a sudden massive increase in demand for basic staples after implementing basic income, isn't that an indicator that our current system + safety net is seriously inadequate? And that people were going hungry?
Really, I think there would be a small increase in demand sized to the backfill of the gap between basic income coverage and our current safety net. Maybe it would give us more leverage to remove some agricultural subsidies.
Depends whether the increase is in price or in quantity. If you give a lot of money to people to buy food, one possibility is that they will buy more food. Another possibility is that they will spend more money to purchase the same amount of food.
We saw this in the housing market. Between 2002-2007, a huge amount of cash went into the housing market in the form of housing subsidies, government-backed loans, interest-only mortgages, tax deductions, and other incentives to encourage an "ownership society". The result was that the home ownership rate increased from 63% to 65%, but the average price of a home basically doubled. And then it all came crashing down when the mortgage bubble popped and people couldn't afford the payments on these inflated prices.
While [i hope] no one is suggesting a tax rate of 90+ %, i have to imagine that anything even close to that will result in widespread shipping of jobs and management overseas. Once a few companies do that, how much revenue loss would the states encounter. Substantial, i would think.
It basically suggests that:
a)top tax rates have historically had virtually no significant effects on overall economic growth
b)we are well below the optimal tax rate for maximizing revenues
The authors of the paper on which this summary article is based on go on to suggest an optimal top effective rate of 68.7% as the revenue maximizing point (basically the optimal trade-off between revenue and dampening effects and/or evasion)
I fail to see why. Perhaps you could detail the jobs that would be shipped overseas as a result of this, particularly those that haven't been already?
Further, I don't really see how a high top income tax bracket would affect much. It doesn't look to me like it affects businesses (its not a corporate tax) - only the pay of people at the top of the chain. Are those people going to revoke their citizenship and move elsewhere to avoid the taxes?
It is important to make a distinction between shipping manual labor overseas vs cash stores. Apple came under fire for holding most of their finances overseas, and their argument was one of taxes.
The higher the tax rates go, the more fortune 500's will move their cash to places where it is not being taxed as heavily.
> At what % do we draw the line on taxing the wealthy? 35% 40% 50%? These numbers would be outraging to any other section of the populace.
I'd prefer if we didn't at all TBH, but something that would pass would most likely only be modest.
> Scare quotes on inflation?
More like skepticism. The FED wants inflation[1]. I may not agree with them but I'm not the central planner with a printing press. I doubt we would see prices go higher, as some people would quit the workforce and live poorly living exclusively through MI. Some would stop working full-time (myself included) and figure out the best way to work less for the same amount of money. And most would simply use the money to combat their debt they've collected over the last 15+ years. It helps everyone, including the markets, due to velocity. I'd love to compete against a company who would dare raise prices. Press Releases condemning them, highlighting my lower prices, etc, etc.
> This is a heavy handed gamble, and one i would be unwilling to risk our fiscal futures on.
Well how about we test it before dismissing it[2]?
Yeah, I was thinking the same. I'm wondering how much of that could be automated, though, through appropriate system design. The IRS knows when people are dead. Presumably, that system could then alert the BIG system to stop dispatching checks.
That's just one solution to one problem in a sea of them, but I think it's a representative example.
People are motivated to let the IRS know when they screw up and demand money, though. People are going to be less motivated to let them know about someone who was simply receiving money.
I agree and hope that bureaucracy can be reduced, though.
There is still motivation to be honest about receiving unwarranted money. Tax fraud is a felony and there are already regulations about receiving unwarranted tax funds.
Yes, for the ultra-wealthy basic income is essentially a fixed taxed deduction. I think almost everyone would agree that basic income would provide a marvelous opportunity to simplify things.
Inflation seems like the biggest risk to basic income, but I don't think anyone can say how big of a problem it will be in practice. I think people have already put up potential ways to remedy it as well.
"Libertarian-socialist" sounds like a huge contradiction to me; you can be either one or the other, but they contradict each other. You're either for personal freedoms and individualism (i.e., libertarian), or for "the common good" (as most socialists claim to be).
The problem with the whole premise of this analysis is that libertarianism is some kind of idealistic belief to appeal to the pillars.
This is wrong. Libertarianism is about pragmatism, and a basic income would simply drive up costs of all basic things needed to survive especially if any of those are scarce. This would likely hurt those just above that poverty barrier the most as they would no longer be able to afford basic shelter even though they are gainfully employed. Because of this, those people will find it better to move out to land no one cares about and just 'do nothing' as decreasing costs is the only way for them to live decently. These people will not provide value to society, resulting in net loss of value (read: happiness, whatever you want to call it) for all.
> basic income would simply drive up costs of all basic things needed to survive especially if any of those are scarce.
Sure, you'd expect some price increase -- anytime a group of people get more income, the maket-clearing price of things they have a non-zero propensity to consume can be expected to increase by basic supply-demand analysis. At the same time, except with completely inelastic demand, the increase in price will not be so much that the amount they are able to afford decreases, by the same analysis.
> would likely hurt those just above that poverty barrier the most as they would no longer be able to afford basic shelter even though they are gainfully employed.
I'd really like to see an argument for this. Since the people "just above the poverty barrier" are going to see the same increase in income as everyone else (basic income goes to everyone in equal amounts -- it isn't a minimum guarantee that is reduced 1:1 with outside income), what is the basis for concluding that the real purchasing power of those just above the poverty line would decline?
The real purchasing power of those just above the break-even point will decline (as will that of everyone else above the break-even point). If the break-even point is chosen to be the poverty line, then we have pushed everyone toward the poverty line, be it up or down, as a first-order effect of the policy. Second order effects might move things up (increased demand from those below the poverty line leads to increased opportunity to meet that demand and "lifts all boats") or down (inflation makes comparable quality of life less affordable)...
The poverty line has been suggested as a break-even point in some BI proposals, but certainly not all.
> The poverty line has been suggested as a break-even point in some BI proposals
I haven't seen any proposals that have explicitly targetted a particular break-even point -- most BI proposals I've seen have targetted near-poverty-line levels of BI, which suggests a substantially higher break-even point.
(I've seen a few discussions of targetting a no-nominal-income-effect point considering BI and any necessary revenue measures, typically around the median pre-BI income, but that's not exactly the same as targetting a break-even point as you've described it, as break even is no real income effect, after considering inflation effects.)
Far from it. Libertarianism is the most realistic and non-naive system around, exactly because it is the one system that does not pretend that we can fix all the flaws in human nature and socially-engineer a perfect society by just passing enough laws and creating enough rules and regulations and bureaucracies.
At it's core, libertarianism makes no statement about outcomes, but simply demands that people be free to make their own choices without being subject to force or fraud, and are then responsible for the outcome of their actions. Nobody is making any Pollyanna'ish guarantee that such a system will result in the most possible desirable outcome for everybody involved. The claim is that it's just the right thing to do, that most people will be better off (economically) than under other systems, and that you accept that every system - this one included - has its pathologies. You can't get much less naive than that.
Not really. I mean, economics is mostly voodoo science anyway, so it's hard to make a lot of objective statements about any of this, but it's hardly a stretch to suggest that laissez-faire free-market policies are generally better for economic growth.
But, again, none of this is really the point. Every system is flawed in its own ways, and the libertarian approach simply acknowledges that, rather than trying to distort reality and pretend that a "perfect" system is even theoretically possible.
Your assertion that a basic income would drive up costs is wrong. What evidence do you have of that? If it's done without printing money, it will not cause inflation. There will be more demand for housing, but how much more? The homeless will now be able to get homes. So, how much demand is that? How much will that drive prices up? The great thing about universal income is that people decide how to spend it. And they will not all spend it on "basic items", and they will not all spend it on the same things.
> Your assertion that a basic income would drive up costs is wrong. What evidence do you have of that? If it's done without printing money, it will not cause inflation.
Redistributing income can be expected to cause market-specific price increases in goods that the people benefiting from the redistribution have a greater propensity to purchase than those from whom income is redistributed. (And decreases in other goods.)
Adopting Basic Income is pretty clearly going to affect a redistribution of income.
So, the increase in prices for basic goods conclusion is sound (the idea that this will end up harming those just above the poverty line by giving them less purchasing power seems, however, far less sound.)
We can't make these conclusions until we precisely know how people will spend the money. It could go into paying off debt and savings. It could go into luxury items (which the poor love to buy). Also, proposals for basic income often involve curtailing other social programs, which would have an impact as well. A basic income could, for instance, supplant food stamps, thus potentially keeping food prices the same.
But there are many other factors other than people's propensity to consume that you need to account for. And I'm not sure if this degree of raise in income practically changes marginal propensity to consume that much.
> But there are many other factors other than people's propensity to consume that you need to account for.
Not to determine short-term demand effects of redistribution of income there isn't.
> And I'm not sure if this degree of raise in income practically changes marginal propensity to consume that much.
Probably not, but since marginal propensity to consume is the amount of the next dollar of income that will go to consumption, that means that the consumption effects are fairly straightforward if you have an idea of marginal propensity to consume.
It will increase demand for those goods. It will only decrease supply of those goods if we cannot increase production to meet demand. The US has price supports on an awful lot of basic necessities.
BI shifts spending from investment (money the rich would otherwise have saved) to consumption. Investment goods fall in price while consumption goods rise in price. CPI measures the price of consumption goods, hence it rises.
If all of your potential tenants are getting an extra >$10,000 per year, and the supply of cheap housing in your city is basically fixed in the short term, you're not going to be looking for a small increase in rent...
However attractive libertarianism might be in theory,
“Libertarianism…Starting Now!” has the ring of special
pleading, especially when it comes from the mouths of people
who have by and large emerged at the top of the bloody and
murderous mess that is our collective history.
Social justice libertarianism? I was not expecting that. Very interesting. (the website is beautiful, too)
I think it's fair to call 'libertarian' a descriptor of political, economic, or philosophical ideas. There are many different types of libertarians who have occasionally conflicting positions. The only thing they share is a vaguely similar anti-state "flavor". I think it's about as precise as 'liberal' or 'conservative', which is to say it isn't precise at all.
Background: I consider myself a Voluntaryist or Anarcho-Capitalist libertarian, and I can't see how I could ever support anything that violates NIF[1][2].
---
That was more interesting and enlightening than I expected, to be quite honest. My initial thought was that there would be no way to reconcile a "basic income" with the NIF principle, unless said basic income is paid entirely voluntarily. But the historical rectification argument strikes me, at first blush anyway, as having some credence.
That said, I'm a long way from fully onboard with this as long as it's rooted in our present system of taxation which is fundamentally based on coercion / force, or threat of same.
I want to point out that that there is no difference between a basic income and a negative income tax. Suppose you have a negative income tax rate of 30% up to $50,000, then an income tax rate of 30% thereafter. Compare this to having a $15,000 annual basic income and a flat 30% income tax rate starting from $0. They are the same thing using different words.
But the words matter, which is why I don't like calling it a negative income tax. Because if you call it that, people start asking questions like why should someone making up to $50,000 be getting the "subsidy"? And then people want to do something silly like make the negative income tax be something like 60% up to $25,000, then 0% to $50,000 and 30% thereafter, which is obviously very stupid if you stop to do the math on who gets screwed by that and what incentives to work it creates at the bottom: It's equivalent to a $15,000 basic income with the same tax brackets, and it makes no damn sense whatsoever for someone making $25,000/year to be paying a 60% marginal tax rate. But calling it "negative income tax" encourages people to think that way and expect high marginal rates on the poor to be Good when they are really quite Bad.
If the ethical case for redistribution rests on the view that (A) inequality is partly the consequence of injustices that need restitution and (B) some people really need the money, and probably deserve it because of A, I can't see why that would leave you favouring a crassly simply form of redistribution like BI over another hypothetical form of welfare system which is better at focusing the redistribution on suffers of injustice and things people really need. That probably wouldn't be identical in design to the current US welfare system, but it wouldn't be difficult to argue that many of the features present in most actual welfare states are better at delivering A and B than a simple monthly transfer of a small amount of income to everybody.
Which leaves us with two main lines of argument against some more traditional form of welfare state. It's "paternalistic", but so are employers when they impose conditions upon people that expect to receive money or expenses from them, and I so don't see anyone making the case that expecting minimum standards of behaviour from people in return for giving them money is in general a bad thing. Secondly, it's expensive to administer, but potentially not as expensive and wasteful as the adverse consequences of an overly-generous basic income (or as deadly as an insufficient basic income). On the whole, better to have lots of subtly wrong things than one big politically-sensitive number that can make or break your economy.
Once you've conceded the case that centralised large-scale distribution is inherently justifiable and worthwhile, saying no to "big government" starts to look more like a slogan than an argument...
Hold on now. While i am going to do my best to avoid a No True Scotsman here, i have never spoken to a self-described libertarian who supports in reparation or affirmative action.
This is not by chance either. The idea of fiscal freedoms comes at the cost of fiscal safety nets. Where you draw that line is a sliding scale of course, but i still fair to see how this article is speaking a libertarian mindset.
> Where you draw that line is a sliding scale of course
I disagree. As a libertarian-socialist, I think we can take care of ourselves while pursuing freedom in regards to economics.
In our current system, we judge people based on their employment, history, and need, and then select people to give benefits to. There are problems with this. Bureaucracy, favouritism, politicking, etc.
With a basic income, we can reduce spending by abolishing all social assistance, reduce the amount of government employees by firing the bureaucrats who used to deny/approve people for benefits, and simply guarantee everyone a minimum amount of support. This has the benefits of reducing bureaucracy, favouritism, and politicking.
> With a basic income, we can reduce spending by abolishing all social assistance
I would love to see the numbers that show a no-questions-asked basic income would be cheaper than the present social assistance monies.
There are a lot of logistics here. How do we prove you did not already get your check? What about those without mailing addresses. Or ID's? Is the basic income adjusted for families of 1 vs 7?
This idea of a minimalist ruleset for financial assistance seems like it is great at first, but will inevitably just get more and more bloated (and costly) as you actually implement it.
>How do we prove you did not already get your check? What about those without mailing addresses. Or ID's? Is the basic income adjusted for families of 1 vs 7?
Most Nordic social democracies already know the answers to those questions. Basic income could be used to reduce spending. I advocate a basic income model which doesn't reduce countries to these countries, though.
From the article: "She found that only new mothers and teenagers worked substantially less. Mothers with newborns stopped working because they wanted to stay at home longer with their babies, and teenagers worked less because they weren't under as much pressure to support their families".
To me that sounds like more adults would work, while those who have other obligations (childbearing) or goals (study, creative, startups) can focus on that.
I'm not saying it would be cheaper, but providing a guaranteed minimum to all adults, would remove the need for the other programs, saving THAT money. It would not pay for it completely. Removing the government jobs that oversee most of the selection and verification (fact checking if the person is pursuing offers) could be eliminated. This could also save money. Again not enough, but enough to help sigificantly.
> There are a lot of logistics here.
Absolutely. We need to take risks for rewards though, and there must be a way to test this without hurting the whole economy, but we need to all agree to take that risk before we work on the next step.
> How do we prove you did not already get your check?
Great question. My guess would be you only provide one per person per period. Any duplications would be search for via software, then again by a human. Any proven duplication will be deducted. Rinse and repeat, minimal bureaucracy. The government always pays me/requires me to pay them every year, but even though its not perfect, it works for the most part.
> Is the basic income adjusted for families of 1 vs 7?
In my mind it would be a set amount per adult. The argument that we need to provide more for larger families creates odd and sad circumstances of child farms and generational welfare homes. People need to start becoming responsible for their families. We'd still have child services. Besides, this shouldn't be comfortable for a single mother living alone who isn't working. These people can get family or charity to help them, not taxes. It SHOULD be comfortable for a single mother working 15 hours a week though, which would help a lot of people out there.
> This idea of a minimalist ruleset for financial assistance seems like it is great at first, but will inevitably just get more and more bloated (and costly) as you actually implement it.
Well, you could argue are current system will only get more bloated and costly as well (which is has). A major reform is necessary eventually, and this is an innovative and modern potential solution we should SERIOUSLY investigate past talking and move towards researching through small implementations.
As a side note, lest anyone be confused by confusing namings, "Mincome" is indeed a "Basic Income" program, which is distinct from "Minimum Income" programs (which work differently, and which I don't support).
Who says reparations are linked to "affirmative action"?
Here's a simple case of a prima facie case for economic reparations in the form of unemployment benefit: the government actively manages economic policy to ensure unemployment doesn't fall so low as to stimulate wage inflation. That's not speculation or conspiracy theory; it's explicitly stated as the objective of effective monetary policy in the economic literature. People are unemployed as a direct result of a policy aimed at ensuring macroeconomic stability. Therefore, some form of unemployment insurance is justified (as, for that matter, is expecting the beneficiaries of said economic stability to subsidise it)
NB. I realise that some libertarians would prefer a "gold standard". But the logical consequence is the same: an arbitrary decision of the government to restrict the currency supply[1] in the interests of preventing inflation causes people to be unable to find work for a period of time. Ceteris Paribus, many _more_ people since credit would be a lot more expensive under a gold standard
[1]in this case to "the quantity of gold held in the Fed", which actually sounds a lot less "free market" than the status quo of to "the amount of credit private banks are willing to supply given the Fed's interest rate"
Libertarianism is an assertion without a philosophy. You can't really define it. Usually it is synonomous with the non-aggression principle, but as you can see, oftentimes, even that is not the case.
There is an actual philosophy which defends individual freedom from aggression. Objectivism. About 5% of the whole philosophy deals with these kinds of issues.
Has anyone analyzed the impact on monetary policy and macroeconomics?
The Fed has a dual mandate of low inflation and maximal employment, and as a result, is currently printing money indefinitely. The ECB only has a mandate of low inflation, and has had an excellent track record. However, the Eurozone is currently having an unemployment crisis. The BI (potentially with abolition of the minimum wage) would then mitigate the impacts of unemployment. With basic income, couldn't the Fed become more like the ECB, and drop the employment mandate? Then, we could potentially greatly curtail our money printing.
Also, what are the effects on macroeconomics? Couldn't BI attenuate the boom-bust cycle? Deflation would even be constructive: the real value of the BI is increased without raising the nominal value. The Fed can then take its time, during recession, in deciding when to start the printing presses again.
In theory I support the elimination of taxation and a purely volitional society, but I recognize that such a thing is likely a very long way away. What we have now is not even close, and trying to shoehorn it into that vision prematurely will not work. That kind of moral futurism should not blind us to chances to radically improve human life here and now while working pragmatically within the bounds of the political realities we have.
One also must ask the question: given that the abolition of force and fraud is a moral long term goal, what sort of society would we want to build that would be likely to evolve in that direction? I don't think crony capitalism with fascist tendencies and no social safety net seems like what you'd want. Seems like that would be more likely to regress back to feudalism... which is exactly the historical path that we seem to be on. Regression to feudalism takes us further -- much further -- from that goal.
Seems to me that the precursors to a volitional libertarian state are radical reductions in violence both within and between nations, a highly educated and healthy populace that is capable of taking care of itself, and the abolition of caste systems (e.g. sexism, racism, classism, guild systems, etc.). A basic income is a step in that direction.