i think the main problem is how to address cases where people mis-spend their basic income. someone is unemployed, and they blow the basic income on booze, etc. issue is how do we protect people from themselves. we can say damn the consequences and encourage prudence but i believe this is why most aid qualifications exist.
i know HN readers will be less likely to do have this problem (other than spending on a startup :) ) but HN readers are not a representative cross section of people.
Minimum cash transfers are one of the most effective methods of sustainably increasing the wealth of a population. There's a pretty successful charity that does this kind of work in Africa:
http://www.givewell.org/international/technical/programs/cas...
There's a guy at Columbia University that's running studies about giving drug addicts guaranteed cash, and it's actually allowing them to more easily break their addictions:
> My only worry about this program is if it will indirectly inflate the cost of everything.
I personally see this being too tricky for companies to try unless they're a monopoly.
If I run company A, and my competitors company B and company C raise their prices, I'm going to maintain mine, to increase my profit flow. Alternatively, company B and C don't even try raising their prices, for fear of competition doing what I mentioned.
Here are my thoughts: Of course, you're talking about an efficient market keeping prices at an optimum. I think at the crux of the matter is the supply elasticity of goods consumed by the least wealthy. The worry goes as follows: basic income guarantee (BIG) would line consumer's pockets, but what if rent (etc.) goes up concomitantly such that people are just as poor off as before BIG. In other words, they receive X dollars per year, but pay X extra in rent (etc.)
I think a good counterargument goes as follows: people have true security to move to a new location with cheaper rent. Thus supply and demand of goods become more efficient as the mobility goes up and people can act more efficiently/rationally.
Good points. I definitely see both sides of the coin playing out: with some landlords and sectors increasing prices, but others holding steady. I personally have no evidence to assert that over time, the battle would be won by the landlords and sectors that maintain reasonable prices, but your counter argument makes a great point.
I just feel like BIG would be ideal in so many ways. We can cut all social programs that are BIG for specific groups, and use those savings to help offset the massive cost of the program. The BIG would allow disenfranchised/unemployed persons security in food and housing (hopefully, as our discussion brings up the concerns), tt would allow part-time workers a chance to save money, and participate in the economy, and it would allow full-time workers to supplement their income, again allowing them to make larger purchases and save.
IMO, the current economic climate warrants experimentation. Where I'm from, we've had a study in BIG (http://en.wikipedia.org/wiki/Mincome), that showed promise not only in an economic sense, but a social sense as well. I truly think it could be a force of good. As a society, we need to either set the bar higher for our collective support towards to lower classes, or we need to come to grips with a class based reality that is projecting towards more inequality.
> I think at the crux of the matter is the supply elasticity of goods consumed by the least wealthy.
A very valid concern. I feel like landlords would be reticent towards increases initially, as their isn't any data to back your decision on the matter. Again, I feel like the holdouts combined with migration will pressure the groups wanting to raise prices enough to limit the increase. But then again, if everything raises in price by 15%, then you're not just paying 15% more, you're paying 100 dollars more for rent a month, 100 dollars more for food per month, etc...
We need to at least start implementing studies and experiments. I can't see any reputable economists dismissing the policy out of hand without proof of it's benefits/downfalls. Both you and I can only speculate. I'd love to change that and for us to talk about data regarding this someday.
If people waste their basic income on alcohol, well, so what? I don't know the tax situation in Switzerland, but in the US, that means a big chunk of that money is immediately reclaimed as taxes. The rest goes back into the economy, and the person is not really in any worse of a situation than they would have been without basic income.
It's one situation where basic income doesn't really help, but it doesn't really hurt either.
The money did come from someone else in the first place, where it would almost certainly have been better-spent than on getting wasted. And you may just be enabling a substance abuse problem to continue and worsen.
To put it another way, you end up where you would have without the guaranteed income, except that the alcoholic has done that much more damage to him/herself, and the taxpayers are that much poorer.
So I'd say that yeah, in that particular case it does hurt.
>issue is how do we protect people from themselves.
Sorry, but I think something is wrong with this kind of thinking. For e.g. someone who knows "better", could protect "you" by not funding your start-up! Also, if you read the article, Schmidt says "I tell people not to think about it for others, but think about it for themselves".
Well, as evidenced by this discussion, we do very often nerd-out on social psychology :) !
Here is a Seattle-based program that mitigates the huge costs of alcohol addiction by providing free housing and some realistic rules for staying there. The structure of the program both protects society from their addiction, and "them from themselves".
The built-in (and often clashing) drives for "fairness" and for "charity" often bubble up as we examine a program that helps someone who may not seem to deserve our help. But there are practical reasons to help people, with measurable results.
Still, when programs are developed, they must incorporate and mitigate the potential social side-effects!
In a reasonable society with universal healthcare, misspending the universal income on things like booze could be treated as a health problem. As for how to feed people who fall into that trap, there might need to be some emergency income available for which a doctor would need to sign off.
Of course, we'd have to fix healthcare first in the US, which is its own giant political argument.
i think the main problem is how to address cases where people mis-spend their basic income. someone is unemployed, and they blow the basic income on booze, etc. issue is how do we protect people from themselves. we can say damn the consequences and encourage prudence but i believe this is why most aid qualifications exist.
i know HN readers will be less likely to do have this problem (other than spending on a startup :) ) but HN readers are not a representative cross section of people.