Basic Income Guarantee. An economic alternative for when robots do everything?
usbig.net/Posted Jan 26, 2012, 12:44 AM UTC
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usbig.net
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Very bad idea. The next step after the industrial economy is the service economy. It is the natural evolution. Of course the transitition period can be very painful, high unemployment for decades, another Great Depression.
A basic income guarantee would basically freeze history. There would be no need to evolve service jobs. We would be preventing that without knowing what kind of service jobs society could evolve. Historical progress, which could reach currently unseen heights, would be completely prevented.
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A basic income guarantee would basically freeze history. There would be no need to evolve service jobs.
Service jobs are not living jobs. How do you propose they become so in order to maintain mostly-full living-wage employment into the age of automation.
And how does a basic income "freeze history"? So people have something to live on when they're unemployed and a little more to live on when they work. Big deal. I don't see how it provides some barrier to a great historical shift.
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Service jobs are not living jobs
Are you sure management consultants and massage therapists and psychiatrist cannot make a decent living? I didn't mean service in the narrow customer-call-centre
I don't propose anything. That is the whole point. One person cannot solve something so complicated. It must evolve on the market. When it hurts sufficiently lot for a sufficiently large number of people, a lot of them will figure out some new kind of services to provide. I cannot figure them out beforehand. Just like in 1930 nobody could propose the new manufacturing industries which eventually evolved.
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Are you sure management consultants and massage therapists and psychiatrist cannot make a decent living?
Management consultants are fucking useless (especially without workers to manage!), massage therapists are code for prostitution half the time (and make shit wages when they're not turning tricks), and pyschiatrists are in medicine, not the service sector.
When it hurts sufficiently lot for a sufficiently large number of people, a lot of them will figure out some new kind of services to provide.
Yeah, starvation and homelessness will somehow make them smarter, better, faster. A new breed for a new age, the Uruk-Hai.
This kind of crap is why I support a basic income in the first place. Having life suck doesn't do anything for you but make life suck. Innovative, creative people are going to innovate and create whether you make them destitute, lower-class, or middle-class, whatever. You can't suddenly turn a generic worker into a new businessman by starving him; if you could, he was never really a generic worker at all but instead had his risk profile rearranged by the losses.
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We could actually fund such a program with a flat income tax. Everyone pays X% of their earned/capital income for the basic income pot, plus Y% for ordinary government administration. They then receive back a basic income stipend for X% of the mean income, as determined by tax filings. The stipend isn't taxed, which makes the resulting effective tax rate both progressive and actually lower than today's tax rates.
It meets a fundamental need of what we need to do for the coming economic future: socialize necessities, capitalize luxuries.
Its definitely not too hard to envision a few implementations like this that could be effective. And its a very effective way to guarantee a set standard of living provided it is managed correctly. I can't, however, see anything that would be opposed more strongly than this very idea by about 40% of the US for the foreseeable future. Rest assured however, i'll vote for it when the time comes.
Or just what Friedman suggested - a negative income tax.
Negative income tax and guaranteed minimum income are the two simplest welfare programs.
Negative Income Tax
Pros:
Cons:
Guaranteed Minimum Income
Pros:
Cons:
They somewhat cancel out each others' weaknesses, which is why it's probably best to mix them. The United States does this - its welfare system is actually pretty decent at what it does. The real inefficiencies lie in the tax system that funds it. That's why a lot of fiscal-minded people on both sides of the spectrum are interested in tax reform.
I would argue that at certain levels, these things are no longer bad. Our economy simply does not and will not, now and in the future, have enough demand for general labor to maintain full employment at living wages.
So we use a program like this to make unemployment decently livable. Not truly nice, but decently livable. It would also replace unemployment insurance for the skilled professional class (soon to be the only remaining middle class), who are still going to find themselves subject to periodic unemployment due to overly fast changes in required skillsets (as an example, I am half a year out of college and already underqualified for jobs in my field that didn't exist when I was starting college).
The interesting bit, however, is the effect on the underemployed. Right now, making a low wage of, say, $18,000/year means having a very low standard of living. On top of a basic income stipend, a low wage would still probably supply a half-decent standard of living, for example by adding that $18,000 (which will actually be taxed at 35% for this example) to a $15,000 (roughly 1/3 of the mean) stipend to equal an after-tax, after-basic income of $26,700, with an effective income-tax rate of -48.3%.
If we want to maintain large-scale employment, we need to shrink the labor force. If we don't want to shrink the labor force down to only those truly qualified for the jobs of the future (ie: those few jobs we can't automate away), we need to expect large-scale structural unemployment. One of these programs is a way out of that hole.
As the economy permanently restructures toward fewer hours worked, that change will be spread across all workers. Expect the US to move to something more like a France-style workweek, and eventually cut back even farther than that.