4 ms·

While initially in favor of basic income due to the income trap created by the traditional approch, I have come to oppose it due to a better understanding I now

by awt 10y ago

While initially in favor of basic income due to the income trap created by the traditional approch, I have come to oppose it due to a better understanding I now have of the nature of money. Consider that basic income works when you think of money in the micro context as a means of exchange for goods and services, but not when you think of it in the macro context as a reflection of the wealth of a society. Simply transferring money from one group to another does not make the second group wealthier.

dragonwriter 10y ago
Basic income isn't designed to make the recipients wealthier directly (OTOH, access to greater goods and services produces more opportunities to become wealthier over time, which is more the point.)
- awt 10y ago
  This implies that they're not wealthy because they don't have access, would you agree? Is it possible they're not wealthy because of some other reason?
  - dragonwriter 10y ago
    > This implies that they're not wealthy because they don't have access, would you agree? Is it possible they're not wealthy because of some other reason? Two things: (1) opportunity for wealth building is only one, of many, reasons for BI, and (2) It is certain that for some portion of the population, additional income will not be sufficient for notably better wealth building. But its equally certain that some portion of the population that would net benefit from BI is held back solely by short-term resources.
  - mbil 10y ago
    I find it hard to imagine that if you're struggling to attain your own bare necessities you're going to have the energy or wiggle room to generate more wealth (e.g. to start a business)
    - awt 10y ago
      But why are they struggling so? Is it simply because of a lack of money?
      - mbil 10y ago
        Good point. They're struggling due to having unmet basic needs. Since money provides almost no nutritional value I can't see how it would help them. You've enlightened me; I'm now a social darwinist. /s
- maaku 10y ago
  Having sufficient passive income so as to not have to work is wealth.
NhanH 10y ago
Actually it does due to the very fundamental principle of economy: the same goods will have different utilities, and hence different values to each individual human being (and why trading IS creating value). 2000 calories to a starving person helps them alive, which translate to more wealth they can generate later on. 2000 calories to fat people is worth much less, if not harmful. Capital is just an abstraction of goods, and certainly their usage will have vastly different effectiveness depending on situation.
ThrustVectoring 10y ago
Money is not wealth - it is debt. That's what the fundamental purpose of money is: instead of trading your stuff for other things, you trade it for a certain value of things at an unspecified later time. With this perspective, there's no distinction between micro and macro contexts for money. It's all a unit of account for how the economic output of a society gets distributed. Transferring money from one group to another is the exact same thing as transferring real goods and services, except that the recipient gets to choose what slice of the economic pie to receive (by paying for it).
- awt 10y ago
  So let's say you give 1 bar of gold each to a group of 50 year olds, and 1 gold bar each to a group of 12 year olds. Each group is now equally wealthy and could each produce a cathedral of the same quality?
  - DougWebb 10y ago
    Yes, they could each hire a cathedral builder for 50 gold bars.
  - ThrustVectoring 10y ago
    No, because money is not wealth. Owning money is equivalent to being considered to be owed something by society at large. Each group is roughly equally capable of trading that debt for the real goods and services they wish to receive in order to consider society's obligation satisfied. They're going to get different things, of course, but that's a side issue.
    - awt 10y ago
      In that case, wouldn't you say though that if you receive money without working for it, you aren't really owed anything by society at large? Is it possible to transfer the "having done work" from one person to another? And no, investing does not fall into this category.
      - 10y ago
mac01021 10y ago
Why doesn't transferring money from you to me make me wealthier? It allows me greater access to goods and services, which seems to me to be almost the definition of greater wealth.
- awt 10y ago
  The wealth of a society is a reflection of the quality of the people in the society. 10 million in my hands isn't worth as much as 10 million in the hands of warren buffet.
  - shimon 10y ago
    There's an app for that: https://www.google.com/finance?q=NYSE%3ABRK.A https://www.google.com/finance?q=NYSE%3ABRK.A
  - Pyxl101 10y ago
    You're making a good point, and I'm sad that you're being downvoted. People who win a fortune by the lottery often lose all their money shortly afterwards, even those people who intend to save and invest it. The reality is that some people are better than others at turning capital into gains through investment. There's definitely luck involved too, but Buffet knows how to buy a business, be its steward, and generate growth, not just for his business but for the economy in which it resides too. Simply investment in diversified mutual funds is not the same thing. If you pick a typical poor person and give them $10m, they probably won't have the education or discipline even (to know how to) live off investment proceeds, much less grow the amount substantially. (See the outcome of most lottery winners) That being said, basic income is talking about something different entirely, which is giving a lot of people a little bit of money. I think that could have a positive effect, although for all we know it may be transitive and only lasts as long as the money is being supplied. I think the question is whether the money helps people lift themselves out of poverty, and educate themselves or their children so as to enter the middle or upper class. I think you could have expressed your first post more clearly -- I assume your point is that transferring wealth from one person to another in a particular society does not make that society as a whole better off. On a micro scale this is correct, but it may in fact make society more wealth if it leads to a more productive population in the long term. But it could just as equally lead to a less productive population. We'll have to see.
BurningFrog 10y ago
Please transfer all your money to me. As you say, it will not make you less wealthy.
- fche 10y ago
  In the longer & broader view, it may well not, I think that's the OP's point. This could be due to second-order effects such as the wealthy (= productive) people losing incentive (due to taxation) to work as hard, or inflation.
  - BurningFrog 10y ago
    I am willing to face that danger in OPs stead!

by awt 10y ago

dragonwriter 10y ago

Basic income isn't designed to make the recipients wealthier directly (OTOH, access to greater goods and services produces more opportunities to become wealthier over time, which is more the point.)

awt 10y ago
This implies that they're not wealthy because they don't have access, would you agree? Is it possible they're not wealthy because of some other reason?
- dragonwriter 10y ago
  > This implies that they're not wealthy because they don't have access, would you agree? Is it possible they're not wealthy because of some other reason? Two things: (1) opportunity for wealth building is only one, of many, reasons for BI, and (2) It is certain that for some portion of the population, additional income will not be sufficient for notably better wealth building. But its equally certain that some portion of the population that would net benefit from BI is held back solely by short-term resources.
- mbil 10y ago
  I find it hard to imagine that if you're struggling to attain your own bare necessities you're going to have the energy or wiggle room to generate more wealth (e.g. to start a business)
  - awt 10y ago
    But why are they struggling so? Is it simply because of a lack of money?
    - mbil 10y ago
      Good point. They're struggling due to having unmet basic needs. Since money provides almost no nutritional value I can't see how it would help them. You've enlightened me; I'm now a social darwinist. /s
maaku 10y ago
Having sufficient passive income so as to not have to work is wealth.

NhanH 10y ago

Actually it does due to the very fundamental principle of economy: the same goods will have different utilities, and hence different values to each individual human being (and why trading IS creating value). 2000 calories to a starving person helps them alive, which translate to more wealth they can generate later on. 2000 calories to fat people is worth much less, if not harmful. Capital is just an abstraction of goods, and certainly their usage will have vastly different effectiveness depending on situation.

ThrustVectoring 10y ago

Money is not wealth - it is debt. That's what the fundamental purpose of money is: instead of trading your stuff for other things, you trade it for a certain value of things at an unspecified later time. With this perspective, there's no distinction between micro and macro contexts for money. It's all a unit of account for how the economic output of a society gets distributed. Transferring money from one group to another is the exact same thing as transferring real goods and services, except that the recipient gets to choose what slice of the economic pie to receive (by paying for it).

awt 10y ago
So let's say you give 1 bar of gold each to a group of 50 year olds, and 1 gold bar each to a group of 12 year olds. Each group is now equally wealthy and could each produce a cathedral of the same quality?
- DougWebb 10y ago
  Yes, they could each hire a cathedral builder for 50 gold bars.
- ThrustVectoring 10y ago
  No, because money is not wealth. Owning money is equivalent to being considered to be owed something by society at large. Each group is roughly equally capable of trading that debt for the real goods and services they wish to receive in order to consider society's obligation satisfied. They're going to get different things, of course, but that's a side issue.
  - awt 10y ago
    In that case, wouldn't you say though that if you receive money without working for it, you aren't really owed anything by society at large? Is it possible to transfer the "having done work" from one person to another? And no, investing does not fall into this category.
    - 10y ago

mac01021 10y ago

Why doesn't transferring money from you to me make me wealthier? It allows me greater access to goods and services, which seems to me to be almost the definition of greater wealth.

awt 10y ago
The wealth of a society is a reflection of the quality of the people in the society. 10 million in my hands isn't worth as much as 10 million in the hands of warren buffet.
- shimon 10y ago
  There's an app for that: https://www.google.com/finance?q=NYSE%3ABRK.A https://www.google.com/finance?q=NYSE%3ABRK.A
- Pyxl101 10y ago
  You're making a good point, and I'm sad that you're being downvoted. People who win a fortune by the lottery often lose all their money shortly afterwards, even those people who intend to save and invest it. The reality is that some people are better than others at turning capital into gains through investment. There's definitely luck involved too, but Buffet knows how to buy a business, be its steward, and generate growth, not just for his business but for the economy in which it resides too. Simply investment in diversified mutual funds is not the same thing. If you pick a typical poor person and give them $10m, they probably won't have the education or discipline even (to know how to) live off investment proceeds, much less grow the amount substantially. (See the outcome of most lottery winners) That being said, basic income is talking about something different entirely, which is giving a lot of people a little bit of money. I think that could have a positive effect, although for all we know it may be transitive and only lasts as long as the money is being supplied. I think the question is whether the money helps people lift themselves out of poverty, and educate themselves or their children so as to enter the middle or upper class. I think you could have expressed your first post more clearly -- I assume your point is that transferring wealth from one person to another in a particular society does not make that society as a whole better off. On a micro scale this is correct, but it may in fact make society more wealth if it leads to a more productive population in the long term. But it could just as equally lead to a less productive population. We'll have to see.

BurningFrog 10y ago

Please transfer all your money to me. As you say, it will not make you less wealthy.

fche 10y ago
In the longer & broader view, it may well not, I think that's the OP's point. This could be due to second-order effects such as the wealthy (= productive) people losing incentive (due to taxation) to work as hard, or inflation.
- BurningFrog 10y ago
  I am willing to face that danger in OPs stead!