Facebook founder Mark Zuckerberg Supports Universal Basic Income.
In its basic form, universal basic income means “everyone gets a paycheck, whether they have a job or not.”
Many expect even more. They want a guaranteed “living wage”.
Useless Trials
Such schemes cannot possibly work. But that does not stop fools from trying.
For example, Finland is giving out a guaranteed monthly income of nearly $600 to 2,000 citizens.
Canada’s province of Ontario, which includes Toronto, started a pilot program in April that provides 4,000 citizens with an unconditional income of about $12,600 a year. Applicants must be between ages 18 and 64 and living on a limited income.
Those studies cannot prove anything, no matter what the results.
Free Money Proposals Do Not Scale
Sure, one can do a trial and show that 20,000 or whatever sample size is better off.
However, any benefit to the trial participants must at the expense of a bigger deficit or higher taxes on everyone else.
Imagine giving 200 million people a guaranteed living wage. Who is going to pay for it?
Next, imagine all of Europe doing this coupled with freedom of movement.
Why stop there? Imagine the same program for the entire world? Free money for everyone!
Mike “Mish” Shedlock
Unfortunately, I believe a constituency exists for this.
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Walk up to anyone and offer them 500 dollars just like that.
There is your constituency.
Most of the rest are living off 0% money so maybe their only scruple is a veneer of legitimacy….what they gonna do when everyone gets free money, I guess collect it back somehow.
Should be fun.
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If we can create trillions from nothing and call it a loan, a loan that need not necessarily be repaid, how is it not possible to supply the world with an “income”?
If we are going to replace every REAL job with automation/imports/illegal labor, the Utopian view MUST embrace universal income. Math is a dead science now and EVERYTHING is possible!
We live our lives as though we are destined to live forever, so why put limitations on our notion of money, or even reality?
Millions died for the communist dream. What’s a few more?
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It’s a shameless bid on Zuck’s part to keep the pitchfork-bearing masses from showing up at his front gate.
What he fails to realise is that the pitchfork-bearing masses will be the formerly middle-class people who have been pushed into poverty by the globalisation he has also shamelessly championed through things like H1B, so they might happily take the sop, but they will still have an axe to grind.
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What you fail to realize is that merely opposing Zuckerberg’s views while not providing any solutions (NOTE: Nothing from Ayn Rand’s books will qualify to be called a “solution” out in the real world) will only ensure that the pitchfork-bearing masses will put you ahead of Zuckerberg in the queue! 🙂
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“(NOTE: Nothing from Ayn Rand’s books will qualify to be called a “solution” out in the real world)”
There is no solution in the real world. Since it was discovered, the sum of 1+1 has always been 2.
Everything moves in cycles. Ben Bernanke is supposed to be some major student of the Great Depression. Well, despite all that is known about what lead into the Great Depression, here we are, in another depressionary era.
The pendulum has never stopped swinging back and forth from boom to bust and back again. It’s what cycles do. Conditions are always in a state of change. When does full employment occur? Just before the next recession. Why doesn’t full employment occur just after the recession and continue unabated for 6,7,8 years until the next recession? It’s the way the cycle works.
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On ne saurait faire d’omelette sans casser des œufs.
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“We live our lives as though we are destined to live forever, so why put limitations on our notion of money, or even reality?”
That’s the problem though. If we lived like we were going to live forever maybe we’d save a lot more. If we had a stable currency there’s the possibility that we could all set up interest savings accounts and eventually they’d be large enough to just live off the interest. This works quite well in classic free market banking. Large charity institutions, trust funds, pension funds, and university endowments, designed to “live forever” do just this very thing. And technology, being deflationary, will insure that the nest egg will continue to hold value. At least until the white shoe boys on Wall Street convince the FED that they are the economy not the rest of us.
I’m reminded of the 80’s movie “Highlander.” You’ll remember the plot is that there are some people who are immortal unless they are decapitated in battle with another immortal. It is explained that the main character, MacLeod, has been able to build up a very large fortune and pass it on to himself over the years by taking on assumed identities then “leaving” the trust fund over to the new identity.
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That Mark Zuckerberg statement alone is enough to prove Mark Zuckerberg is a Democrat Party sucking……….donkey!
Did Mark Zuckerberg ever have an original idea of his own?
SNARK
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You hit the nail on the head. Banks print money out of nothing (thin air, not backed by anything) & charge interest (usury) so there’s no reason that money, credits, currency (what ever you want to call it) be created for people as their portion of the earths resources. This will be even more important as many jobs are replaced by automation.
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In order to even consider a basic income, you need to allow deflation. As productivity increases, prices should decrease. Allowing prices to drop, they can theoretically reach zero and a basic income would also be zero, which is workable. On the other hand, forcing inflation to be 2%, or anything greater than zero, raises prices on a theoretical path towards infinity. That would require a basic income that also increases to infinity, which is not possible.
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Well, “those people” are gonna find out just how worthless free is, aren’t they. I avoid anything Zuckerberg anyway. He’s a CIA tool.
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“I avoid anything Zuckerberg anyway.”
Spot on.
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Same here.
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CIA Tool?
That would explain a lot of what Facebook has gotten away with doing?
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I believe that was tried before……..In Weimar Germany.
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Give everyone a million dollars. Then we can all be rich.
I feel like shopping. Honey, where’s the Bernie card?
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“Is you, or is you ain’t my constituency?”
great line, and fitting
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Mish what do you think unfunded pension liabilities represent?
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Defaults and pension haircuts coming up
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lol ,gov’t welfare check,gov’t handout check,gov’t disabilty check,gov’t entitlement checks,gov’t retirement checks, gov’t loan,gov’t subsidy chk,gov’t contracts,gov’t pay check,gov’t UE check,snap,sec 8,3 hots and a cot,and that’s just scratching the surface of the massive welfare state yo,point is we’ve long been on guranteed income/dependecy on big gov,it is what it is
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Oh, it’s been done before, and will be done again. It won’t all happen in one step, but the process is fairly straightforward. To pay the ones who don’t work, you have to raise the taxes on those who do work higher and higher, until they eventually are little better off than the ones who don’t work, at which point they stop working, too. Eventually there are too many people getting free income, and not enough people producing, and there aren’t enough goods and services to go around.
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“They pretend to pay us, and we pretend to work”. Yeah, just like that.
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Personally I’ll be happy when they tax Popeyes Chicken for enough funds to pay me to eat there.
Sweet!
Maybe we really do live in the Matrix/? Soon…..
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“I avoid anything Zuckerberg anyway.”
Spot on.
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“and there aren’t enough goods and services to go around.”
Just another way to get inflation.
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They said food stamp is a success. Universal income will be great success!
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Yeah, they voted for Bernie
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Basic income should be for non whites only. Native americans and blacks are owed reparations. Refugees/immigrants are the down trodden of the world.
Whites need to work to pay for this. They have their privilege.
/s
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There are always supporters for freebies. Unfortunately nothing is really free,
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This is why Japan is going to boom. As they go full automation and AI and their working population declines they will be the only nation in the OECD not pushed towards UBI. They will become the low cost producer. The CB being long equities will use the cap gains to pay down debt.
Mauldin will pay twice what he thought on his house for being super smart to mortgage it in Yen.
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There’s something to be said in avoiding the rush to higher headcount in a country if you can automate.
Imagine all those people with nothing to do, a king for trouble.
Japan may yet be shown to be cleverer than many other places and its recent pain payback in future benefit.
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More likely mauldin mortgaging his house in Yen marked the bottom in Yen
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They feed on this …
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If robots take 50 million jobs in the next 30 years, what to do with these people?
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Exactly! If people can no longer get jobs, then they won’t be able to eat or pay for rent. So either the government pays them or they riot and take from those who have. Or force those who have to live in strongly guarded walled cities.
Only real solution is mandatory birth control for the above scenario.
But with less population and no jobs, where will the tax money come from to pay Medicare, SS, food stamps and so forth? The well-off will have to ante up.
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The real problem is that government policies have made it harder for the economically productive people to reproduce and easier for the nonproductive to reproduce.
The “mandatory birth control” scenario is, in a manner of speaking, being implemented through economics rather than medicine. It’s a deeply dysgenic set of policies.
The working people either can’t afford to have kids or can only afford one or just maybe two. They aren’t reproducing at replacement rate.
The unproductive welfare class is reproducing above replacement rate. Why not – they have nothing better to do with their time.
We’ve been doing this for about 50 years now, ever since the “Great Society” plan of the Johnston administration, and we are watching the net producers die away while the net consumers multiply.
If everybody gets a “basic income” then the best reproductive policy is no longer to work hard to provide for your family in a monogamous partnership. The best strategy is to bang with as many different people as possible so you can spread your genes and make babies with as many different baby mommas or baby daddies as you can. This then gives the kids a share of the UBI from multiple sources, so they are paid for by somebody else’s labor.
That’s why single moms often will have five kids from five partners – they get the most money in child support from the first child with a man, and decreasing amounts for additional kids from the same father, so they maximize their income by rotating their baby daddies in and out of their beds. Replace wages with UBI, and the strategy remains viable.
If you are an unmarried and unemployed male, you will pay very little in child support for additional children that you father because the government has to give you enough resources to keep you alive. They can’t take money that you don’t have, and it’s not cost-effective to try to squeeze money out of a guy with 20 kids who then fathers a 21st kid. He’ll end up paying $1 a week in child support per kid because more than that will push his income below survival level. He might as well spend every waking hour perfecting his seduction techniques, because if he ever does get a job he’ll spend every dollar he makes in increased child support. Any job that he does get will be off the books, because there’s no incentive for him to work if every dollar is going to be garnished for increased or backlogged child support.
The incentives are all optimized to reward more bad behavior rather than more good behavior.
Cads will rule, dads will drool, if a ‘dad’ is defined as a traditional father in a long-term monogamous relationship.
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Left out of your scenario is the fact that the baby daddy who can only afford to pay child support for the first child due to “inability to work” is either dealing drugs – or doing other “cash only” work on the side.
I know, I’ve seen it. I used to live in it.
He has no place to live – he crashes at various apartments and duplexes – or government projects – with his various baby mommas and just keeps moving around.
Meanwhile he’s pulling down $50K a year and paying zero taxes.
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Soylent Green.
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You can’t micromanage reality.
You only increase global misery when you try to protect a select few from reality
We need all 7 billion hands on deck finding ways forward.
Socialist people ranchers offer the diametric opposite of what is needed
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“socialist people ranchers.” THAT is a good one. I may use that term in the future if you don’t mind.
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“The well-off will have to ante up.”
Is that what you think, Joe? Castro was the richest man in Cuba.
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Not very long ago, the majority of people were small business owners (mostly farmers). There isn’t a reason that cannot be again. People can & will find a niche to fill. People are not dependent on others for their existence. There is a choice that can & will be made
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Watch that old movie “Soylant Green”. Nothing is free.
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The unemployed, the redundant, WILL be made “useful”.
What IS the correct wine with Soylent Green?
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People keep saying that like the economics of manufacturing will be exactly the same as today, just instead of paying labor the factories will just run robots. Yes, that will happen for many products, but remember that 3D printer or robot will follow Moore’s law to some extent. Today I can buy a fairly capable desktop 3D printer. It can be used to make cheap trinkets, or make molds for lost wax process metal casting (jewelry), cases for small electronics, etc. Yes, they won’t be as fancy as a Rolex or the iPhone X, but we’re still in the first and second generation of the things. They are already surprisingly good though.
As artists and designers figure out how to use the things, they will use them to create things. Custom things. One-off things. The only cost will be the artist/designer’s time. Engineers are getting into the act too. Right now there are companies that will “print on demand” printed circuit boards in small quantities. You can use a desktop CNC machine called an Othermill to prototype PCBs in your office. Companies like Seeed Studio in China will do small production run board assembly, using high amounts of automation. Once they get the process completely automated there’s no reason why they couldn’t open up small batch factories in the US in the top 20 cities and be able to deliver a small production run, assembled and tested, in 2-3 days after the order (Seeed Prime?). The main reason why you don’t want one on your desk is because of the hazardous materials BTW.
Even things like infrastructure will be highly automated. Right now it is extremely expensive to run telecommunications infrastructure, so the established players are doing whatever they can to avoid having to run new cables, and new entrants are unable to get funding to achieve scale. But a very large part of the cost is labor and liability. When you can have a self-driving car there’s no reason that tech couldn’t be adapted to run a trencher. A trencher with ground-penetrating radar that has a 3D map of the existing utilities so it will always avoid them. Cell and radio tower inspections are already being done with drones because they can produce good results, stream video to an engineer in real time and keeping climbers on the ground is much safer. Once the FAA allows flight “beyond visual line of sight” power utilities will begin using them to inspect big transmission lines, not only to improve safety but also to increase the frequency of inspections, leading to improved reliability and fixing problems before they get out of hand. The increased frequency being the key. The drones will still require someone to oversee and manage their operation.
Think about what that will do for the medical industry. Or the aftermarket automobile market. What happens to houses when your architect can get the exact molding he designs on demand? Now not only can you pick the exact paint color of your wall, you can have a robot come in and paint frescos on the ceiling.
There’s going to be a lot of work out there. And it will look nothing like what we see today.
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21% of the population is on some form of government dole. 18% on Social Security (probably overlap, maybe all that 18% is included in the 21%, don’t care it’s Sunday night and I shouldn’t be Googling for facts). Either way a big chunk of people are being supported by the productive class. And let’s not forget the government workers, military industrial complex, and incarcerated individuals.
Hot damn, he might be on to something. If you can’t beat ’em, join ’em. Now who’s got my check?
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Meat Head!! Probrably just now feeling remorseful for the screwin he gave is roomie’s At Harvard. The only other explanation is Zuker spent the weekend in the Netherlands, got himself hopped up in the redlight district, talked to some of the peeps there, ….yada yadda botta boom, hey everybody try this one on for size!! Free Money!!
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Remorse requires a conscience.
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guarantee everyone a job with a liveable wage ! The military industrial complex do not seem to have a problem with freebies from the tax payer!
What is your solution austerity for the poor and banquets for the rich! The real problem is the capitalist system with its built in systemic failure doesn’t give a toss about a liveable wage just a nanny state for the rich!
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What’s your definition of a “capitalist system”?
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Nail on head.
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A system that works primarily for Main Street and then maybe for Wall Street later.
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True capitalism doesn’t protect any class but benefits all classes. It has been so perverted by politicians and crooks that what today’s campus idiots complain about isn’t really capitalism in the first place. If they weren’t idiots they would be yelling FOR capitalism. What real capitalism would have done to LTCM, the S&L crisis and the sub-prime meltdown etc. would have been restorative, not a theft of opportunity from the better operators and the future.
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A silly idea remains a silly idea even if expressed by billionaires. Gates’ tax on Robots and Mark’s UBI fall in this category.
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At a smaller scale but we just voted for that in Switzerland and the people clearly rejected the idea. So what’s in for the future; since Swiss people are more or less average and normal (the majority thinks it’s normal and expected that you work for your money) and said no, this is not a popular idea. So you can bet that the authoritarian in charge in the US will impose it to us.
Furthermore, in Geneva, Switzerland, there is a political push from the socialist party to tax robots (actually we are only talking about self check-out machines in super markets) to the tune of CHF 10,000 a month.
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+100
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+1000
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I took a screen shot of that!
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Non of the minimum living wage proponents understand what money truly is. It’s a representation of work and/or value, it is devalued when it is distributed without something of equal value in exchange. Neither do they understand math; wouldn’t someone actually earning the minimum living wage be entitled to double their current wage if those performing no work are entitled to the minimum.? What has been accomplished is only the appearance of having done something, all that really happened is that the set point for zero has been reset.
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Unless there is increased productivity price point moves up to compensate = inflation.
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Actually, the increased amount of money in the system is the “inflation”
The movement of the price point is one of many symptoms – a list which also includes sub-standard materials, smaller serving and/or packaging sizes…etc.
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Someone told me once that political leadership is a matter of getting out in front of the stampeding herd and saying “Follow me!”
Head smashed in civilization jump is dead ahead!!
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Imagine giving 200 million people a guaranteed living wage. Who is going to pay for it?
Certainly not those who support such schemes.
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FREE money for ME?? I AM FOR THAT!!!
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Sorry, Mish. Your negative comments are based on factually wrong information. I’m sure you understand that a federal[monetary sovereign] government cannot go bankrupt [unless they pass a law to do so] and that the constitution gives the government total control over their currency. So funding for a Job Guarantee and or a universal basic income [UBI] can be found. It only needs political will to enact.
Taxation does not even pay 1cent of federal government spending. I care not you don’t believe this. It happens to be fact. [see below]*
You mention a bigger deficit. That shows you don’t understand you have to have deficit spending to feed the economy. I trust you refute the balanced budget nonsense politicians parade with? Balanced budgets strip spending power out of the economy and the Clinton surplus became the Bush1 recession. The best news about a UBI etc is that the spending will go straight into the real economy and raise GDP. and not be lost in the financial economy. So it will possibly be revenue neutral in that the spending will equal the improvement in the economy. It will certainly reduce unemployment. It is very affordable.
*http://www.huffingtonpost.co.uk/lee-carnihan/uk-tax_b_17700084.html
[this is just one example conveniently to hand]
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It is beyond idiotic to propose paying people a living wage for doing nothing, creating no incentive to produce anything. The more money you give away, the higher the living wage will go. Scale the thing to the whole world or all of the EU along with rights to movement.
I cannot believe the stupidity here of people who think this can possibly work.
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Believe it.
Utopian dreams die hard, and take a lot of victims with them.
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Another benefit of a universal basic income would be no need for student loans. It is simplistic to say it is paying people to do nothing.
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It’s all down Mish to your lack of understanding of what money can and cannot do. Money is a law construct and a monopoly creation by the constitution, It has no intrinsic value, but it cannot exist without a debt to relate to. Money cannot be given away – it has to relate to energy and work. A pension is there to allow recipients to participate in the economy, There is an implied debt the government owes to its citizens. A UBI is one method of remunerating them. You can choose also a job guarantee but either way the government owes it to its citizens. Your fear of it being a waste is unfounded. A pension or whatever it takes in form is going to be spent into the economy. That is far from “doing nothing” That is after all how the economy grows. Spending will create jobs and improve the economy.
As long as there is fiscal space and production etc for sale, money will circulate without excess inflation. Money is not at fault in a crisis, it’s entirely political mismanagement we have to worry about
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I nearly deleted your comment. I know full well how money and debt work. Of the Austrians, I was the only one who predicted deflation, not massive inflation in 20007. We had a deflationary collapse and I think we have another.
The idea we can spend our way out of a mess and debt does not matter has been disproved. Look at Japan. The idea that we can get an overall benefit from UBI is absurd for all the reasons I stated.
You are just another brainwashed believer in something from nothing.
The Keynesians, the MMTers and all the fools who think UBI scales are wrong, not me. Please don’t post more pure BS or I will delete it immediately. I don’t have time to repeatedly respond to total nonsense.
Mish
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Obviously society would crash and burn. Who’s going to keep the power and water running when everyone is at the beach writing poetry?
It will be impossible to find people to do the unpleasant or dangerous work that someone has to do.
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You are missing the point of a UBI. It comes into effect because there are NO JOBS LEFT for the majority of people, typically because the scenario is that most jobs have/will be replaced by automation/robots. And at some point in the [not?] distant future, government/politics/economy/etc. will be controlled by a computer AI.
There’s much babble on this thread about population of the nonproductive and general undesirables increasing almost exponentially because of the free money.
But what will really happen is that the right to procreate will be limited somehow – either through drugs in the water/food or genetic modification such that in a couple of centuries, the human population will likely shrink to less than 1 billion worldwide. Meanwhile all products necessary for life will be created by the robots as needed. It could be a true nirvana!
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“However, any benefit to the trial participants must at the expense of a bigger deficit or higher taxes on everyone else”.
We can learn a lot from the Swiss referendum on Citizens Income as discussed here.
´However, the nearly universal misunderstanding of money is a major obstacle. For too long we’ve allowed a small coterie of bankers and “court economists” to hold the secrets and “tutor” us. So, it’s time for total openness.
First, regarding the claim that the Swiss proposal would’ve been too costly, what’s entirely omitted from the discussion is that the proposal (and similar proposals elsewhere) appear to call for re-distribution of existing money—taking money from certain sectors through taxation and re-allocating it to the people at-large.
The implication is that the money supply is basically static and that re-distributing limited funds would require tough budget decisions—sparking tax hikes and associated spending increases in several areas; hence the claim “costs too much.”
But a successful basic income plan can and must be based on the creation of new money, or “distributism,” not on reshuffling existing money, which is “re-distributism.” That’s the “state secret” that no one wants to touch.´´
http://leconomistamascherato.blogspot.se/2016/07/basic-income-lets-name-real-problems.html
This question is rather deeper than Your summary dismissal Mitch, further, there is the question also regarding Energy Returns on Investment, As Energy resources become more expensive in terms of Watts invested for Watts extracted the present inefficient concepts of money how-ever Honestly or soundly grounded will fail to provide a useful analog to production realities. Factor in also automation and you get to a new era of enclosure, whereby whole livelihoods disappear in a fundamental sense, Uber is an interesting intermediary case study, which through fraud basically based upon huge debt leverage they have been forcing viable mini cab businesses out of business, its a similar process to ENclosure of common lands and then outlawing gleaning.
In the existing paradigm, Aggregate demand is collapsing in the world the solution lies in something new, what that is is a very open question, raising the question and making proposals for treating some of the obvious symptoms in the meantime is not a foolish task, it may help to alleviate some of the huge problems already evident in the nascent collapse of the petrodollar.
http://letthemconfectsweeterlies.blogspot.se/2017/08/renewableseroi-why-money-doesnt-cut-it.html
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Is the statement below expected to remain so?
“Energy Returns on Investment, As Energy resources become more expensive in terms of Watts invested for Watts extracted”
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There is a conceptual Curve known as the Energy Cliff Movement along the curve is possible in either direction, it does though seem likely that a return to very high return on energy invested that was enjoyed when the most accessible HydroCarbons were in full flow is unlikely under current technology.http://euanmearns.com/eroei-for-beginners/
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A couple of thoughts roger.
A) “under current technology” – it won’t stand still. I am an optimist some of the time and expect shift down in energy costs. Predicting precisely what shifts it – fusion, energy storage + renewable sources, etc is way beyond me, as is timing, but humans are special. Humans want lower energy costs, they’ll get it one way or another. Current wind in UK is cheaper than new (efficient?) Nuclear. I expect further shifts down.
B) Under the Paris Climate deal, if applied, there is potentially 4x more (possibly even 5x -6x) more hydrocarbons already discovered than will be extracted to meet C02. Granted extraction costs higher than the past but massively potential supply if need be and extraction costs will fall imho into a reduced demand market. What happens if there is a wash out in the oil sector? Massive resources could be picked up cheap and costs shift down as previous discovery costs are sunk. The only thing stopping a shift down in cost in that scenario is the Climate According that may not hold anyway. The Accord might accelerate a wash-out if oil has to be parked for a while. Complex.
3) C02 capture alongside 2) above. What impact?
I still consider deflation in the energy complex to be possible.
There’s too much at stake to accept ever rising energy costs and humans are ingenious.
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Hi,
As a cornucopian, I agree We Humans are ingenious, solving the energy question is well within our compass of ingenuity, what is a problem and obstacle to doing so is though the Existing monetary paradigm which is both poorly understood and also disputed.
With respect to Mish´s post regarding Universal Basic Income, those arguments are based upon certain assumptions as to Scarcity, Employment, and Work-based measures of contributing to society.
The Current monetary Paradigm does not, even, with all the ingenuity in the world, get us away from the exponential function, and the problem our ingenuity needs to solve is actually how to stop the Debt/finance dog wagging the Economy Dog. For Economy read all stakeholders in society, ultimately one assumes that human ingenuity is aimed at the Pursuit of Happiness.
https://en.wikipedia.org/wiki/Life,_Liberty_and_the_pursuit_of_Happiness
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Sure, the concept of universal income could be used to return somewhere closer to capitalism with a common minimum base, e.g. you erase thousands of laws and bureacrats and social expenses, tax everyone a fixed % on their spending, then redistribute that revenue equally to all, rich and poor alike, with the implicit aim of being able to reduce that tax to 0%.
I don’t see it happening that way though, plus personally ethically there are people that just don’t agree with the idea of state management.
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Subdividing intrinsic value and having some entity then pick winners and losers is , has been, and always will be a fool’s errand leading to disaster and inflaming and energizing identity politics, tribalism, among other terrible outcomes.
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Just write the checks Zuckerberg. And ask Gates to help you.
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I can’t see what the problem is. If everyone of working age, is getting a minimal amount that enables them to scrape by, most people will want to do better than that so they will continue working. No more pensions, unemployment payments etc so a whole level of government bureaucracy and fraud is removed. Would be entrepreneurs, artists , musicians and crafts people would be able to take the first steps that may lead to greater things or just more self fulfilment and a far more interesting society. It helps solve the problem of automation removing jobs. The minimum wage distortion would disappear.
I guess the trick would be setting the level to provide the right amount of disincentive to just idling ones life away. There will always be some who would rather do that but they are just a nuisance in the workplace anyway.
Go ahead convince me otherwise
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+1
What’s truly silly, is that few seem to have similar objections to handing out money to people, as long as the money is used to buy so called “government services” and “asset appreciation.”
Over time, any scheme like this will fail. For reasons as fundamental as evolution itself: All species will breed, and spread out, until they run into hard resource constraints on a global basis.
But for a long period of time, in a somewhat closed and resident-enumerated society like the US or Switzerland, where the government already hands out massive amounts of other people’s money, just in forms that doesn’t benefit anyone but the government itself and it’s selected supporters, it cannot help but be much more efficient and utility generating, to hand the money out in cash. No strings attached. No means tested. No eligibility determination. And no taxfeeders getting paid to sit around and “determine” who “deserves” what.
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When you consider what Zuckerberg has done he might be used to money for nothing.
What does he really produce? What useful item does Facebook leave behind?
Want to increase human productivity (?), ban Facebook and the time wasted on it will be available to utilise.
At least Uber has a physical utility, same for MSFT that can offer increased productivity.
Facebook?
A tool of the State going forward.
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One last thing.
Pensions go to a % of the population for later life stages – becoming (or are) unaffordable – after some labour. How come everyone getting an income, however basic, is affordable?
The Lorenz Curve and Gina coefficient is what it’s really all about. By all means attempt to equalise but perhaps only in exchange for some output that is of use to society – if only tidying the streets or tending some communal lawn.
People need useful work and a sense of contributing – it’s good for our psyche. It’s what humans developed to do – contribute and share – in return for sustainance and a sense of belonging/well-being.
Take away labour/contribution/some routine and we will have mass psychological problems no matter how much money people have.
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Gina Coefficient, the Italian actress, or Gini Coefficient by that other Italian? 😉
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Auto complete strikes once more.
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I know the feeling.
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UBI has nothing to do with equality and everything to do with Aggregate demand. Here is the comment I made earlier still awaiting moderation.
Hi,
As a cornucopian, I agree We Humans are ingenious, solving the energy question is well within our compass of ingenuity, what is a problem and obstacle to doing so is though the Existing monetary paradigm which is both poorly understood and also disputed.
With respect to Mish´s post regarding Universal Basic Income, those arguments are based upon certain assumptions as to Scarcity, Employment, and Work-based measures of contributing to society.
The Current monetary Paradigm does not, even, with all the ingenuity in the world, get us away from the exponential function, and the problem our ingenuity needs to solve is actually how to stop the Debt/finance dog wagging the Economy Dog. For Economy read all stakeholders in society, ultimately one assumes that human ingenuity is aimed at the Pursuit of Happiness.
https://en.wikipedia.org/wiki/Life,_Liberty_and_the_pursuit_of_Happiness
On questions of Redistribution, they are optional and politically determined and as such ideological and not scientific.
Pigou Dalton Principle is key to understanding Status Aspects of Political Economy over pure Monetary measures. Status is very important to we social animals and Pigou Dalton Principle enumerates that concept.
https://en.wikipedia.org/wiki/Pigou%E2%80%93Dalton_principle
A wider context to this question.
http://letthemconfectsweeterlies.blogspot.se/2017/09/mish-shedlock-dr-tim-morgan-warren.html
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Perfect equality.
Equality gap.
There is equality or inequality.
What two jobs are equal? What two people’s skill levels are equal? At one time i worked with the person who was arguably the best sitcom editor in Hollywood at the time. His services were in great demand and he was financially rewarded for that.
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Zuckerberg no doubt happy about it as more people will have more time for FB without work getting in the way.
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“For example, Finland is giving out a guaranteed monthly income of nearly $600 to 2,000 citizens.”
Well, the basic unemployment benefit is a similar amount and on top of that is living allowance depending on your rent. The maximum basic benefits are about 1000 euros if one is not getting salary based unemployment benefits that are about 70% of the wage for 500 days (I am not sure whether it is 300 days nowadays).
The point in this new system is that one is able to work simultaneously without immediately losing the welfare benefits. Meaning that a days or a weeks work doesn’t cut ones income for a 5 to 6 weeks while the paperwork is processed. The aim is to allow one to work and later adjust the taxes and benefits accordingly.
So the aim is not to guarantee benefits but rather make it easier to find temporary jobs and cut the bureaucracy.
If one wonders why we have such a system or somehow feels that the benefit level is high, in our climate one would freeze to death during the winter. The cost of living is very high and average wage is about 3500 on private sector so anyone can feel jealous of such benefits but they merely guarantee survival.
I would appreciate more accurate reporting.
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“However, any benefit to the trial participants must at the expense of a bigger deficit or higher taxes on everyone else.”
Only if the Basic Income/Living Wage is paid in the same type of money. BI could work if we had two types of money: security money and “venture” money.
That would also prevent reckless use of money by banks from destroying the social security model.
And the overwhelming argument remains that technology is replacing human labour at a record pace. I recommend Paul Buchheit’s “The Technology” speech to understand how we are at a tipping-point in social development.
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Mish:
I think everybody fundamentally agrees whit what you say.
However: If robotics and AI leads to 50% plus unemployment, what can be done in such a case?
If the robots are producing things that nobody can buy because they are unemployed, then the economy breaks down and a solution must be found.
Do you have a suggestion for solution in such a case ?
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I think this view of the future is all too gloomy. If robotics and AI are producing most of what we need, that makes everything very cheap indeed. And at the point everyone has a 3d printer or its successor at home, with the 3d plans to everything on line, look at the energy saved too in transportation.
I can see a time when most stuff is almost free anyway.
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Reblogged this on MUSO MUSINGS ON FATHERHOOD THEORY AND STUFF and commented:
Skepticism awaiting added argument.
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a free monthly income of $600-$1000/month still allows the person to “qualify” for food stamps, Medicaid, etc. so what’s the point? I think 1K/month is below the federal poverty line. so this handout wouldn’t solve the poverty/anger problems that exist. so what is it?
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Hell, they just print that currecy ino exitance anyway…. why not just give everybody 60, 000 dollars a month?
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Mish, no arguments have been provided. There is also no calculation of the costs of the present system with all the bureaucrats deciding on people’s lives, nor a comparison of the proposed change, not a tabulation of benefits and drawbacks for both schemes. Just saying free money will cost too much is not an argument.
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It’s idiotic to propose giving the world or even the entirety of the US or EU free money for doing nothing.
It cannot scale. I cannot believe some of the comments here from people who think it can possibly work.
As soon as you give enough free money way prices will go up and the alleged living wage will rise too.
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Exponents of MMT propose a Job Guarantee to get around this type of objection Mish. I remain in the group of people you call Idiots, I do think that a Minimum guaranteed income will and can work although the more fundamental problem in my own view is that of Usury on Debt based money and the Unearned income that Interest payments represent and which are very extensively proven by Helmuth Kreutz´s work.
The Minicom scheme in Canada was very successful and the Point about UBI is that it represents a baseline and those who wish to and can find work will be better off. Capitalism will perish under the current massively mismanaged monetary system of cronyism.
Ultimately money or exchange value tokens will be based and priced upon a fixed datum rather than the variable subjective system we currently have. I argue that Price Discovery is an empty concept where the Monetary Unit is corrupt by definition.
https://en.wikipedia.org/wiki/Mincome
University of Manitoba economist Evelyn Forget (/fɔːrˈʒeɪ/) conducted an quasi-experimental analysis that compared health outcomes of Dauphin residents with other Manitoba residents.[9][10] This research did not use the Mincome data directly, but under the assumption that if a high proportion of Dauphin residents participated in Mincome, one should be able to discern differences in social, economic and health outcomes for that group, compared to the general population. 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, which resulted in more teenagers graduating. In addition, those who continued to work were given more opportunities to choose what type of work they did. Forget found that in the period that Mincome was administered, hospital visits dropped 8.5 percent, with fewer incidents of work-related injuries, and fewer emergency room visits from accidents and injuries.[11] Additionally, the period saw a reduction in rates of psychiatric hospitalization, and in the number of mental illness-related consultations with health professionals.[12][13]
A review of the Mincome experiment appeared in the Winnipeg Free Press on 23 January 2017.
This is empirical evidence that the scheme has been tried for an extended period of time and had proven benefits. This is food for thought for even a very strong Skeptic Mish. Have you any evidence to back your intuition or perhaps some evidence to raise my Minicome Evidence?
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There is no scheme that has been tested. The Canada experience is absurd for reasons stated. It will not scale to all of Canada.
MMT is pure idiocy in and of itself, also for reasons stated.
It assumes a benevolent govt
It assumes govt knows how to spend money wisely
It proposes something for nothing
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As I said, UNFORTUNATELY there is a constituency (the FSA or Free $hit Army) for this and a group of insane, amoral people willing to ride it to power.
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But it is somehow less problematic to give people free shares in Iraqi bomb craters? Union pensions? A run amuck “court system” so everyone can sue everyone all the time always, as long as it makes lawyers wealthier?? Massive unearned wealth through asset pumping????
Of course an open ended “living wage” cannot, as you say, even remotely possibly work. Only the usual Zuckerbrain suspects cannot see past that. But something like 50% of whatever gross revenue the government raises, getting immediately recycled by splitting it up evenly and handing it to every resident, is most certainly money better spent than whatever that 50% is currently being spent on.
The potential benefits doesn’t arise from the process of handing out money in and of itself. But instead from being able to deprecate all manners of more inefficient programs that are currently in place. With everyone getting, say, $10K /year, you can replace welfare and foodstamps. And with it the “means testing” that currently encourages recipients to do exactly nothing. If the money just flows regardless, those same guys can do some work to supplement their “citizen’s salary.” Also, this gives residents an edge vis-a-vis those much aligned H1B’ers, as it allows them to work for less than those not receiving the stipend. In both cases, cutting out efficiency inhibiting bureaucracy and lawyers, which are the real problems.
You’d probably have to mandate that in order to collect their money every week, a resident would have to show up in person, or most of them would just move to a cheap, tropical beach and stay there, but aside from technicalities like that, it’s not as if such a scheme is fundamentally unworkable. At least in the short run.
In general, it is always more utility-efficient to disburse value in the form of cash. That way, the recipients can use the value they receive in a way that maximizes their utility. Something giving people “government services” will never do.
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Untenable pensions, bombs etc at of course problems. I would default on the former and stop the latter.
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Awesome! Once there is no need to work, there is no longer a need to be educated. I hated work, and I hated school. Two things the world would be better off without.
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I think that would be the great question. If the government just gave you $12,000 per year, would everyone just stop working? Or would some people want to make a lot more than that and continue working? I’d hope for the latter, but someone would have to do an experiment to find out.
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Sure to be lots of volunteers.
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If you’re scaling annual stipend as a percentage of government revenue, the scheme becomes self correcting: If the payout is too high, noone works and revenue falls. So payout falls. Which will encourage more people to work a bit more, to supplement the dwindling amount of money they are getting.
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Reblogged this on John Barleycorn and commented:
Agreed.
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Certain people are much more productive by not working. Think where we would be now if Washington DC shut down for the last twenty years. Congress and Executive branch pay checks continue but politicians instructed to stay on permanent recess producing no legislation or policy of any kind. I think at the least govt. debt would be gone and national security would be enhanced.
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+1
A bloody shame Jefferson didn’t enact that policy as the last thing he did before leaving office.
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“Imagine giving 200 million people a guaranteed living wage. Who is going to pay for it?”
The productivity improvements resulting from automation and the excess profits from exporting jobs that resulted in those 200 million people needing assistance in the first place.
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Is mankind culturally progressed enough to embrace UBI?
May be 500 years from now.
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Maybe those who have never had teenagers will vote for “The world owes me a living” wage.
The funny thing is it can be sold as a way to put people who make a living administrating welfare programs out of a job.
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Imagine giving 200 million people a guaranteed living wage. Who is going to pay for it? Mish
We can start by eliminating welfare for the rich, e.g. positive yields on inherently risk-free sovereign debt.*
*e.g. US Treasury Bonds, accounts balances at the Federal Reserve in excess of a, say, $250,000 individual citizen exemption.
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We can start with a free market economy, and yes that would end all kinds of corporate things.
If we want safety nets, that’s exactly what they should be, and no more.
Food stamps should not allow pop, candy, snacks, etc, but should allow soap and cleaning items.
Give people money and guess what it would be used for.
We also need to stop giving benefits to illegal aliens.
Change the food stamp program and disability program and guess what? People will try to find a job instead of collect welfare.
Give everyone a “living wage” for doing nothing and the cost of that “living wage” will skyrocket because millions would choose to do nothing.
Every one of these social programs has failed: War on poverty, war on drugs, dozens of affordable housing programs, Obamacare, etc. All failures.
Yet people believe we can throw more money at things and it will work. Amazing.
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Worldwide, there are many types of programs to help the poorest among us: unemployment benefits, disability, welfare, food stamps, subsidized housing, subsidized education, benefits for children, guaranteed minimum retirement income, and hundreds more. Most of these programs are targeted at specific needs. Some argue that it would be cheaper/more efficient to replace this chaotic mix with one simple program such as a guaranteed minimum income. I have no idea if this is correct or not. I can’t be bothered to waste my time arguing about it.
What I do know, is that I would not want to be on any of these programs, because that typically means that I am so poor, that I need these programs. To the best of my knowledge, none of these programs will give you a decent standard of living, only a bare subsistence existence.
Any individual who wants a better life needs to acquire the necessary skills and apply those skills to achieve success. As the world changes, we need to keep acquiring new skills to continue our success.
Many on this site feel sorry for the disappearing middle class, yet they complain about those on social assistance. I fail to see the difference. Guaranteeing someone a high paid job that shouldn’t exist because it can be done by someone at a lower wage, or by automation, is just another form of welfare.
The job market has been changing for hundreds of years and it is going to keep changing. If you don’t keep up, you will end up on social assistance. And you will become the person you are complaining about. And it won’t be a happy life. Guaranteed living wage, is bare subsistence.
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Zuk advocate sending $USD, in monthly installment, to the suffering poor in NK, in order to protect SF and Ah LA LA LA from Kim nu nu nu.
Perhaps Zuk should be speaking in the UN, this week, asking 192 nations for protection.
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I think that these schemes can work, but they can be broken by politicians that think that you can make all of the people rich by giving all of the people free money.
If the payment is limited to citizens only, and is a low portion of what is needed to live well, there isnt much disincentive to work. In the UK I think that amount might be £70. Sure, there will be some disincentive to work, but I doubt it would be huge.
The advantage of such a scheme is that if this is the only benefit for able bodied adults, then there is no perverse incentives from this as a welfare scheme. Practically all other welfare schemes have some very strange incentives indeed at certain points. But with this scheme, if you earn more money, you will get more money in your pocket. One only needs to look at the UK with its tax credits and social housing to see huge numbers of people gaming the system and who are disincetivised to go and do more work by the rules of the system. A basic income welfare system doesnt have this problem if run correctly, ie there is no point at which someone isnt better off by working in monetary terms.
It does have a small issue thought. It may reduce the value of additional work when compared to leisure at the margin, so it is bound to reduce the work incentive by a small amount. The administrator of such a scheme can finesse this, if payments become too high and people choose leisure as a result, the income has to be reduced.
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The Congress handed out 3 years of unemployment benefits after wall street blew up the economy and most of those people stayed unemployed, applied for disability or welfare. Free money is a disease propagated on the people bypoliticians to get them hooked on poverty.
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“Free money is a disease propagated on the people by politicians to get them hooked on poverty.”
Hooked on poverty?
Nonsense.
Who wants to be poor?
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Just look at our welfare society and tell us it works. Once people have the taste, then they will find any way to avoid going back to work.
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If you truly believe that, then you should join the welfare class and live the good life.
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Believe it not, and apparently you don’t believe it, the answer is – no shortage of people. Not that they want to, but they see no way out. You are looking at it through a first world lens.
Brazil has almost 46 million people on a plan called Bolsa Familia. A literal pittance given to them every month. None leave, none work, none send their kids to school. But they all vote for the party that provides it to them, which happily keeps them dependent on these payments, which then steal Billions and Billions. It’s like a study in a circular reference error from hell.
Travel into the Northeast of that country and you would be shocked. Illiteracy rates of over 30%.
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Hey wrld. I have not yet been to Brazil. You have me there!
There will always be a percentage that have no alternative for a variety of reasons; given a choice between starving to death or social assistance, they will obviously choose social assistance.
Even in well-off developed countries like the US, there will be a percentage who are incapable of acquiring the necessary skills to get a good job. I see the same problem in my own country. However, the majority of people that I work with, want to acquire the skills and want to get a decent job, because that is still better than trying to survive on social assistance programs.
It has been my experience that people will normally choose to better themselves, if the opportunity exists. And if that opportunity is there, they will not choose to be poor.
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Spend time in any of the Bolivarian countries and you would be in for a shock. The mentality is the state is the wealth, work should somehow magically be done by the people elected to run the state, and the wealth should be distributed by the state. Absolutely no concept of individualism and industrialism.
But in only the one country I mentioned, think what percent 46 million people are. You drive through some of the towns on the way to the beach resorts and every house just has people sitting there in front doing nothing. The kids have opportunity to go to school, they know it would better them, but nonetheless they don’t. Coming from the 1st world, it’s hard to wrap your head around when you see it.
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This exemplifies the progressive thought. They believe that there is a deplorable percentage of people who will continue to labor to advance themselves regardless of how punitive the tax system becomes. They believe they could tax 100% of some people’s income and they would still work.
They equally believe that they can provide some people a living without work and the deplorable would reject it and continue to work, even without pay, to satisfy their principles.
Values, such as the embarrassment of charity, CHANGE. Government cheese used to be concealed, but is now bragging rights. The “entitled” berate the fools who continue to work, when thirty years ago they would deny receiving any of it.
You offer free while disparaging work as a mental defect and it WILL alter social values, and once altered, will be intractable over any useful time period.
I find it amazing how many are willing to risk civilization itself to perpetuate their Utopian vision. Destroy human productivity and let’s see how we do. The USSR and red China are probably meaningless outliers.
And to use our existing and destructive social programs as the justification for doubling down is CLASSIC progressivism.
And PLEASE, can we stop with the “everything will be free with automation”. People do not own the technology they are dependent upon. To assume that our corporate masters will simply GIVE us what comes to them cheaply, defies everything we know about human nature. At the very least, the price and availability of these treasures will be dependent upon our behavior, our compliance to their wishes.
Freedom and liberty have never been sold so cheaply.
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They should not disincentivize work. If you are getting $100 in unemp benefits, and then earn $100, the benefits should not go away entirely. Perhaps 2 dollars for every dollar earned or something like that. So, the benefit goes away completely only when the person earns $200 or more.
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I believe that the vast majority of social assistance programs still give people an incentive to work. The ratios vary. I have seen some programs where you lose 15 cents of assistance for one dollar of earnings, and other programs where you lose 50 cents. It depended on the program. However, I feel badly for anyone on these programs. That is why I spend some of my charitable time, helping to train these people and give them the skills they need to get back into a decent job. (Teach a person to fish, vs giving them fish.)
No one is going to “give” you a good life. You have to earn it.
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I didn’t really learn to swim until my hands were tied behind my back and I was thrown into the deep end of the pool.
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What? You weren’t put into a burlap sack first?
But seriously, lifelong learning is a requirement today. The people that I help seem to understand that now, as many keep upgrading their skills, even after they find another job.
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Mike,
Ever think your parents were trying to send you a message?
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There’s no reason for the “benefits” to “go away” at all. Zuckerberg himself should collect his benefit, just like anyone else. The whole purpose of a scheme like this, would be to get rid of the layercake of administrators, bureaucrats, lawyers, politicians, “case workers” and other net-negatives that do nothing but act as boat anchors around the ankles of everyone else.
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Does ANYONE think that a supplemental income would eliminate the huge number of social programs and employees on the taxpayer’s back?
We can talk of crazy theories but the most insane is the belief that government will ever back away from ANY program.
Obamacare?
Every plan leaves out the most important factor…human nature….from the bottom to the top.
There is only ONE workable program, and that is CONSEQUENCE.
What is truly destructive is the concealment of consequence, to allow bad decisions to compound to create a much larger calamity. We’ve seen it many times.
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“Does ANYONE think that a supplemental income would eliminate the huge number of social programs and employees on the taxpayer’s back?”
I certainly don’t. No government ever gives up any program without a fight. And none of them since Jefferson’s, have been OK with their underlings being properly equipped to take that fight to them.
Which is why The Somali Way has so far been the only proven path from totalitarian dystopia to anything resembling any kind of freedom. Let’s just hope they can hold on to it, instead of giving it up at first opportunity, the way Jefferson’s descendants were so quick to do.
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The best way to make something worthless is to give it away. This includes money as well. Currencies must purchase items of worth to be effective. If currencies are worthless then they cannot effectively buy items of worth. Therefore either the currency collapses or their items purchased must inflate to compensate. This is common sense which is in short supply.
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“Imagine giving 200 million people a guaranteed living wage. Who is going to pay for it?”
Well, what you are really asking is “if these people are going to be spending a living wage, where is all the stuff they are going to buy going to come from?”. I would say it would come from manufacturers hiring more people and producing more stuff.
So the people paying for it are going to be the newly employed workers who are now working for a living instead of getting to be idle.
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Mish is spot – on. Anyone believing this nonsense is CLUELESS.
The 200 million getting a $1000 / month?
$2.4 trillion … per year
WHERE are the $$s coming from? Taxes? Tax whom? “Printing”? How long till run on currency?
Sheer idiocy. And we’re not even getting into the weeds of what this will do to society / economy.
Self worth of individuals? We only need to look at those on long term disability / welfare. Productive members of society? Without a job many will drop into depression, alcoholism, what not.
Who will work the low dead end jobs? What will happen to businesses counting on those employees? Not to mention GDP.
I could go on all day,but I won’t.
Suffice to say proponents haven’t thought this thru very well.
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Bingo
And it will not stop there either because as soon as the program starts, inflation will necessitate an even higher “living wage”
It amazes me that people cannot see the obvious idiocy of the proposal. And think about the implications of the EU’s freedom of movement.
Finally, tell me how this scales to India.
Mish
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I’m certainly not advocating but:
“WHERE are the $$s coming from? Taxes? Tax whom? “Printing”? How long till run on currency?”
Printing obviously. One time addition of $2.4 trillion to the economy resulting in an annual increase of $2.4 trillion worth of production. Depending on how it is spent/velocity/etc…
“Self worth of individuals? We only need to look at those on long term disability / welfare. Productive members of society? Without a job many will drop into depression, alcoholism, what not.”
The children of the wealthy seem to get along fine. Lots of folks on SS seem to get along fine. But there is no assumption that you don’t have to work. Why not get your $12k and have another job making $50k? But I agree, those who don’t know how to get into the real work world and come from less able parenting would likely suffer.
“Who will work the low dead end jobs? What will happen to businesses counting on those employees? Not to mention GDP.”
Yes. A viable concern. Nobody would work those jobs. So owners of these companies would have to find a way to automate them away, or shut them down.
I’d much prefer a guaranteed minimum job than a universal basic income. Preferably administered at the local government level than at the federal level. It would cost about what welfare costs today, but people would at least be learning to be productive.
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Good Luck!
Capital is liquid. Productive people – and their capital – will get the hell outta Dodge.
I’ll watch the US of A go down the tubes from afar.
If I were to leave today, Costa Rica
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That’s been happening for 40 years without a basic income guarantee.
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Is not what you suggest exactly what debt was supposed to solve? Pumping unearned cash into the system to stimulate commerce and job growth, and instead we have more imports, more out of the workforce, and more automation.
Will there ever come a time when we will voluntarily take responsibility for ourselves?
We have come to accept as normal that we would have zero economy without debt, blatant money creation and transfer of wealth from workers to nonworkers. Now we believe that as those miracles of modern economics are failing, the apparent solution is to simply GIVE money for nothing.
Working for a living, at a REAL job, is So yesterday. Now we will rely on automation owned by corporations for our sustenance, and the only jobs will people who hold title and authority over the rest of us.
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Mish – you talk a lot about automation and how technology is massively deflationary and how this will be a defining moment for jobs, with robot factories, self driving trucks, etc.
Take this to its conclusion, and where do you end up? You end up with a universal income.
I know you don’t like it — but what is the alternative? Think 10-15 years out from now.
We will have massive amounts of goods and services, an overabundance of food, housing, consumer goods being produced by robots. On top of that, the population will start to decline, meaning there are less people who need all this stuff.
In addition, as you point out, the jobs will go away.
How do you square the circle? How do you get the massive amounts of stuff being produced to the people without jobs? The universal income is the obvious way I see to do this.
You’re saying we can’t afford it, but I think you will agree that modern fiat money is a fiction anyway. Money basically means something because we humans want it to mean something. But when we have more goods and services than people can ever need, then money is not important anymore. You can create government credits, do QE, issue some bitcoin clones – call it whatever you like – there will be enough money sloshing in the system to pay for this.
For those who cry socialism!!, I will point out that the universal income will be pushed hard by the capitalists in the future. Look at who is pushing it now – the CEO of Facebook. The people who own the companies of the future know that their company’s survival depends on being able to sell stuff. To sell stuff, people need money to pay. Without jobs, they have no money. So they get the money from the government instead. Expect the Wall Street Journal to endorse the idea.
I’m not saying it’s a perfect solution, I’m saying the UBI will be a very strong and almost unstoppable force in the future.
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Capitalists, by definition, cannot by definition push massive socialist plans
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It will be pushed by big companies. Whether the CEOs of big companies are really true capitalists – I see your point, they may not be – but in the minds of most Americans, and in the popular culture, CEOs of big companies are capitalists.
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Capitalism and Socialism are out of date. This fiat money system is neither. You are quick to call names but provide nothing else than a dystopian future for everyone where everything is plenty but owned by few and nothing shared.
That – if nothing – does not scale.
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So, you will use government (that is owned by corporations) to FORCE same corporations to either provide goods and services for free, or tax them to create the funds with which to buy their products.
Outside of your Utopian socialist mind, have you REALLY thought this through?
Do you have even a small clue what dependency on this scale actually means?
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Dependency?
Now we have corporate communism rampant. The companies pay pittance to their workers while that state and tax payer provides these working modern day slaves benefits to survive their rents and buy food.
When there are improvements in productivity it spells lower wages and longer hours to the average worker while the earnings are pocketed by those who own the system.
In the USSR the state gave everyone their “fair share” which was enough but not enough at the same time. One couldn’t buy anything of value with it. Now we have similar system where winnings are private and losses are paid by the state. Sounds otherwise similar but we call it Capitalism.
Some here have this illusion that what they call Capitalism would improve the workers life if they just could understand their own benefit of slaving for nothing. Or they say that there should be more Capitalism to make the system better. As long as the profits of corporations don’t benefit everyone, I call it BS.
Confounded!
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Even though I see UBI as coming down the road, and there are some things I like about it, I do have one big issue with it. The issue I have is that people need meaning in their lives. People want to feel like they are contributing to something bigger than just themselves.
Today, for many people, this meaning is provided by work.
If you have no job, and get money for sitting around, where is the meaning in your life? I am afraid this will lead to depression and other mental and physical health issues.
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I think you are looking at this incorrectly, almost like a nanny statist.
Depression is rife TODAY and desperately slaving away each day is not the solution to that.
How do you know it will not be the opposite to what you suggest?
Maybe the coming mass redundancy is going to set the human race free.
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You must have missed the memo….and indoctrination.
We are no.longer to gain satisfaction from our work as that smacks of a lack of equality in outcome. Instead, our satisfaction, contentment, are to come from consumption, our self worth defined by the size of our home and brand of our cars and clothes.
I certainly hope your life is stacking up….compared to the Joneses. If not you can always take another mortgage on your home. Yes, even your exorbitant level of debt defines your self worth.
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I used to post on Mish’s blog during the GFC and the year or two after it. I was totally an Austrian Economics cheerleader. And elements of it may have been the best system for a certain period of the advancement of the human race. But it is going to be obsolete.
Technology is so obviously going to solve so many problems that mankind and society is going to be unrecognisable. Food, shelter, transport, education, manufactured goods… it is all going to be solved. Maybe not in our lifetimes, or maybe it will for those younger among us. But these things are so obviously going to be solved. They are going to require no labor to produce. No finite fossil fuels. But people hear this and think “how will all those now unemployed people be able to buy that stuff” but what they don’t consider is that something that requires so little to produce is by definition almost free.
The real problem will be the proportion of society that is of the personality type that needs to dominate and control others to feel better about themselves. But the issues of these people will likely be solved too.
I am not nearly as pessimistic for the very long term future as I was 7 years ago. It is absolutely amazing some of the things that are going on in technology. Absolutely amazing. And absolutely amazing that some can only see it as “job destroying” rather than freedom giving.
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So “job destroying” is not so bad if we instead simply tax our existing jobs and everything we consume enough to pay those displaced by technology to sit at home watching TV.
We used to despise and fear communism for how we saw it infect and destroy millions of lives. Now, well, it seems quite okay. Everyone is doing it.
There is only one path to FREE and that is force and theft. You will empower your government to steal for you, too cowardly and weak to do it yourself.
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The CEO of FB is obviously suffering from embarrassment at his success. When not waging war against those ruining his view in Hawaii, he is trying to be” just a t-shirt guy like you” so that the masses he mines, farms, exploits for mind blowing profit come after him last with the torches and pitchforks. Hell, they’ll even live stream video of the attacks on the other wealthy targets of popular ire on FB.
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How do we know a guaranteed income can’t possibly work? If you add up the costs of ALL the social programs society currently offers (e.g. welfare, food stamps, education grants, etc) and replace that with a universal guaranteed income how much more does that wind up costing?
Also, is it possible that some people who are currently unemployed or employed in very marginal jobs would get a leg up and move onto better jobs? If a universal income resulted in an over-all higher level of employment and education then it might wind up paying for itself.
I am not saying that a guaranteed income would work, I am merely wondering how we can be certain that it wouldn’t? Why not do testing in smaller populations to see what happens? If the tests show that employment and tax collections don’t improve then we can drop the whole thing. What harm can there be in doing some experiments?
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Tests do not scale
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Why can’t tests scale? It depends on how they are designed, doesn’t it? If testing was pointless we wouldn’t ever move forward with finding new medicines through clinical trials, etc.
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In one Canada example, taxes went up on some to pay for benefits for a few.
Give free money to everybody and tell me how it scales.
Understand the push here. Guaranteed income will never be enough because guaranteed “living” income is next.
There will never be enough money to pay for it. Moreover, due to inflation, living wages will keep rising and rising and rising.
Free “living wage” money for everyone is the path to hyperinfalation.
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Canada provides “free” medical care for all and that seems to work better than what the US does (e.g. life expectancy, per capita medical spending, etc).
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Even if everyone gets this free “money” how do you then get anyone to work? Are those “greedy bastards” who go out and work hard to do what the drones won’t do to be punished? Taxed? If people are needed to perform tasks there will always be an elite and multiple financial tiers. This will undermine this scheme right at the start.
Mish, do you think this has come about because people really think printable fiat paper has intrinsic value? Is this an example of the Moses Principle? That it has been so long since the paper represented deposited Gold or Silver available on demand that unbacked paper has achieved parity in the popular mind with a Gold Certificate $20 Bill?
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Reblogged this on World4Justice : NOW! Lobby Forum..
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Automate everything and tax the machines. Humans should live like royalty.
What a laugh.
_aleph_
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Life is materialistic not idealistic. Society creates its own demise,it either solves its problems or face it must face bloody chaos.!
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Zuckerberg es un gran hipócrita… y globalista. La renta básica de estos perversos es lo que piensan dar a la gran masa (y no a todos) una vez la hayan expoliado completamente. Tienen mentalidad feudal, dan migajas a los siervos para que puedan hacer el trabajo duro.
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¡Olé!
Hay cosas que no suenan hasta que hayan sido escritas en Español.
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Moreover, since even the longest maturity sovereign debt (e.g. 30 yr. US Treasury Bonds) should yield at MOST zero percent minus administrative costs, shorter duration sovereign debt should cost even more with zero maturity sovereign debt (e.g. account balances at the central bank*) costing the most (most negative yield/interest).
So the US can, over time, transform its sovereign debt from being a revenue consumer to a revenue producer.
That’s how you pay for it, Mish, by eliminating the free ride for the banks and the rich they’ve been getting.
*with an individual citizen exemption up to, say, $250,000 US.
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I have no doubt this will work, if it’s taxed at a rate of 100%.
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I have no doubt this will work, if it’s taxed at a rate of 100%.
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The issue which is terrifying is not the suggestion but the lack of understanding of the speaker. From the earliest days of Marx, to the “progressives” of today, the concept that you can get something for nothing, without a consequence to the people who provide it, evidences a stunning lack of economic or mathematical skill. This failure should mark those who propose such ideas as mental defectives sufficient to remove them from the gene pool.
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the concept that you can get something for nothing John B. Goodwich
Sovereign debt (e.g. 10 year US Treasury Bonds, e.g. account balances at the central bank, aka “reserves” in the case of banks) is inherently risk-free so it should yield AT MOST ZERO PERCENT MINUS ADMINISTRATIVE COSTS to avoid something for nothing.
Agree? Or does that gore your ox and will you excuse that “something for nothing” in your case?
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And who would buy them?
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Negative yielding sovereign debt has already been sold – Google it.
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Fiat exists in only two forms:
1) physical fiat, i.e. coins, bills and actual paper bonds
AND
2) account balances at the central bank in either demand or savings accounts.
So, by eliminating physical fiat or restricting it to petty amounts, negative yields/interest on fiat can be made inescapable – and that’s good since taxes should be inescapable to avoid unequal protection under the law in favor of tax cheats.
Besides, negative yielding sovereign debt has already been sold – Google it.
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We already have a minimum income program. It’s called welfare. I’ve never seen welfare solve any real problems in the long term.
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Guaranteed living wages can, and do exist. Just like we keep pets to entertain us, we pay people to write about the economy. Directly, or indirectly through ads. We pay for numerous civil servants who do things we could do without. And the military, who fight wars in countries we cannot locate on a map, for reasons unknown, or too far fetched to put in writing, so we simply say they are ‘bad’ people.
What we can do without, is people who claim the benefits of ownership, and ‘rights’, and ‘patents’, even though they never put in any effort whatsoever. And certainly not the kind of effort we used to call ‘work’ before automation and robots arrived to do the REAL work for us.
At some stage we need to acknowledge that only (industrial) robots are working in a real sense. And the rest of us is kept busy. Even though we feel truly important, and this or that agency, or advertising company won’t pay us if we don’t show up to produce an article, or offer our thoughts on how others are doing.
If we don’t recognize that, with robots and automation, we are turning ourselves into ‘pets’, and insist on pretending we are ‘in charge’, we end up murdering others sooner, rather than later. In fact, we’re already doing that around the world, and in our own neighborhoods. So, we’d better wise up, and ‘buy’ our freedom. The freedom of our pets. Purring and eating, and doing whatever we feel like doing, while the robots take care of businees. Or we end up with robots programmed to kill and maime to defend our ‘rights’ to exploit our fellow-men.
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Looks like we have two Jakes here. If you just arrived how about putting a 1 behind your handle as in Jake1 or something like that? Save confusion in the future. Unless you are extremely brilliant and I can steal credit for your ideas. LOL!
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How about unintended or unconsidered consequences? What if after twenty years we get nailed by an EMP or a comet explodes over us like happened to the Clovis people and Wooly Mammoths 13,000 years ago? Almost everyone would die because no one knows how to do anything. The countdown to the end begins the day there aren’t humans turning the machines on and off.
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Of course this idea of anything being “free” is ludicrous, yet there are billions of lazy, stupid, people who love the idea of everything free and never taking responsibility for their own lives.
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An earlier post said that a UBI would cost $2.4 trillion and there is no way we could pay for it.
I beg to differ, not with the amount that I calculate at $2.3 trillion, but with the ability to pay for it. Remember this is a federal plan and states and charities are free to do as they will to help those that have needs beyond a poverty level income. It also will leave existing coverage for disability and age with no net change in support.
Those currently using the safety-nets, which include welfare, unemployment, disability, Medicaid, Medicare, and ACA will see reductions in their plans, by about $0.9 trillion. In addition, all “tax expenditures” will be eliminated. This is currently not an expense, but a reduction in revenues of about $1.4 trillion. These currently go to those at the top who itemize their deductions. Instead those funds will be distributed evenly among all income levels.
When matched with a flat tax, this UBI will make our tax system more progressive but also fairer, in that everyone will face the same tax code, the UBI plus 25% of earned income. The UBI will of course be adjusted for family size. There will be no disincentive to earn income since the Basic Income is Unconditional.
This system will be neutral as to expenses and revenues [given adjustment for the accounting change]. Approximately 1,000,000 bureaucrats can be terminated.
For more on this watch this YouTube video:
It’s 30 minutes, but the first 3 minutes will give you an overview.
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Looks like the video above is too big. It can be found on YouTube, by searching “Fixing the Federal Government”.
Love to hear your comments, especially yours Mish, I’m a huge fan!!
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You cannot look at a UBI plus flat tax in the abstract. That utopia does not exist, you must look at it as a 21st century replacement for our horrendous welfare system that traps people in poverty.
My brilliant quadriplegic nephew cannot earn a living without risking his $60K annual support. He would love the opportunity to pay back much of that support through a 25% tax, while improving his own life and that of the community. He can’t drive, drink, or party and spends 16 waking hours, 7 days a week playing computer games and watching the History channel.
This trap is also set for a single woman with kids. In MA, she can get benefits from all sources of about $50K, but by the time she hits and income of $60K, she has lost all benefits, and she pays taxes for a net loss.
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I’m really curious to know why you think this cannot work. You said that the successful trials aren’t enough proof that it would work, but even so they don’t prove that it cannot work!
After all, this scheme would be more secure than welfare and it would lead to more people taking jobs and paying taxes. Even if it doesn’t fix everything it cannot make things worse.
Many people have written about how this kind of scheme could be funded – have you read any of them? I’ll be summing up a couple of these in my blog next week if you want to take a look.
JD
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I stated full well why it cannot possibly work.
Try giving a guaranteed wage to everyone on the planet, many of then not qualified to do a damn thing and many others not willing to do a damn thing if they get free money for doing nothing.
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Let’s abstract one level higher. Instead of “money” let’s talk about a free living. Free medical care, food, shelter, etc. At some point in the future all of these things will likely be possible. Cold fusion is promising to become a virtually limitless energy source in the future. It can power robots which are controlled by AI. At this point no human labor (AKA “value”) has to be transferred from one person to another in order for the system to work. Nearly free energy powers robots controlled by AI to do everything, including self maintenance, needed to provide for everyone for free forever.
So you see, once the infrastructure is in place then it certainly becomes POSSIBLE to give everyone a free living. The only problem with this is that of basic resources. If there are no hardships to overcome then people will reproduce in massive numbers until the machines have to use up all the resources in order to support them. And sadly at that point, people begin to think of some lives as being useless. The elite are already there in their reference to a large part of the population as “useless eaters”. Like all things, there is an element of truth and correctness to both sides of the argument. On one side the elite will say, “yes we can support you but WHY would we want to do it? You are useless eaters!”. This was the situation depicted by the Matt Damon movie Elysium. The elite lived apart from the rabble and they had all kinds of abundant and idle technology for healing people yet they did not offer it to the useless eaters on the surface.
On the other side the poor suffer needlessly. Some of them are just human waste (as are many of the elite!) with little to no redeeming value. But some of them are good souls who were just born into a bad situation and never got a chance to develop their potential. The result is that “many of then not qualified to do a damn thing”. I ask you – did you earn all that you currently enjoy? Sure, you worked hard to get it but you were first GIVEN sound mind and body and an aggressive spirit to go achieve something. Did you “earn” those as well? I think not. So what seems like a cut and dried argument of “did they earn it or not” is really not so cut and dried because many who have much had no other choice than to achieve it given the DNA lottery that they won. They were given the drive and to not achieve would have been against their very nature. I know it is the case with me. I cannot be happy sitting around. But neither do I want to grow to be so arrogant as to think I can judge others so easily.
All I’m saying is that the question is more complex than many here try to make it seem. The undeveloped rabble might in fact contain the seeds of a better world if we don’t flush them out the airlock simply because “many of then not qualified to do a damn thing”. What should be the criteria for flushing human waste? I don’t know but I don’t think I will find the answer in the comment section here.
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I read through the post again and I genuinely can’t see where you explained why it cannot possibly work.
For the record I absolutely would give a guaranteed wage to everyone on the planet, but unfortunately I don’t have the trillions of dollars it would cost to do that. That’s why I want governments to do it. To provide for their people as they should.
JD
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Yes let’s give everyone in the world $5 million dollars to provide for the people
Why not?
How can that possibly fail?
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I can see why you’d be opposed to it if you thought a basic income was $5 million dollars.
No one is suggesting that, although it’s quite telling that that’s the figure your mind jumps to when people talk about a basic income.
So is the fact that you still have not explained why you’re opposed to it with anything other than sarcastic rhetorical questions.
JD
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