6 ms·

I think this touches upon one of the biggest weaknesses of the current economic system. We systematically waste the human capability of millions of people becau

by dv_dt 10y ago

I think this touches upon one of the biggest weaknesses of the current economic system. We systematically waste the human capability of millions of people because the system essentially randomly gives much better opportunity to some over others. Meritocracy somewhat exists but mostly to the extent that people can maximize the opportunity they've drawn as their lot in life. I like the idea of Basic Income, but it's a somewhat limited solution to capping how far down someone can fall in society - what would really supercharge a future economy is opening up avenues to truly distributing equal opportunity. Wealth inequality suppresses this strongly, when people receive better margin of income over the absolute minimum economic allocation of their wages, they can then allocate their own wealth from their personal outlook in multiple ways - including starting businesses which may change the world.

kyleschiller 10y ago
At the risk of sounding too Paul Graham, how much of what you're talking about is due to poverty more than inequality?
- crdoconnor 10y ago
  Poverty and inequality are two sides of the same coin. Massive inequality is driven not by productivity but by compounding debt and other forms of rent-seeking. This always spirals out of control eventually leading to poverty, default or both.
  - lisper 10y ago
    Absolutely right, but it's important to be aware of why it always spirals out of control: it's because part of people's decision making is based on their expectations about the future, and part of those expectations are the result of the societal rules that are in place at the time. So people get used to planning, for example, on the basis that they can expect an annualized 8% return from the market. It has been that way for decades, so why should it not continue to be that way? Well, the reason is that it cannot continue to be that way. An 8% return is not sustainable. Exponential growth is never sustainable in the long run. Even if we colonize the stars at the speed of light with 100% efficiency, that only allows quadratic growth in the long run. So when we start to hit the limits of growth, one of two things can happen. Either everyone accepts that things are slowing down and agrees to accept less than they were expecting based on the exponential projections, or some people don't accept this and use their political power to change the rules so that they can continue to live according to their expectations, which necessarily comes at the expense of everyone else at that point. To transition smoothly from a period of exponential growth back to a steady state, or even just sub-exponential growth, -- heck, even to exponential growth with a smaller exponent! -- requires a degree of cooperation that is very difficult to achieve in human societies.
    - crdoconnor 10y ago
      Rather than considering whether an 8% return is "reasonable" perhaps we should be considering whether distributing unearned income unequally is a good thing at all.
      - lisper 10y ago
        If you don't, how are you going to convince anyone to invest in anything?
        crdoconnor 10y ago
        1) By trusting in people's self interested desire to magnify their own earnings rather than their desire to capture the value of somebody else's work. 2) Via the same community which invests in roads, schools and (in other countries) hospitals.
- supremus_58 10y ago
  wouldn't poverty largely be a product of inequality?
  - kyleschiller 10y ago
    In the current system, yes, properly implemented, UBI would end poverty in America while still allowing for massive inequality. It sets a floor, not a ceiling.
    - thaumaturgy 10y ago
      I'm not sure that inequality is necessarily the thing to be fixed. I suspect that when most people talk about inequality, what they mean is, "a few people are doing really good and a lot of people are doing really bad". If you can lessen or remove the "doing really bad" part, whether through UBI or some other means (progressive taxation to fund other programs, whatever your ideology prefers), then statements of inequality start to mean just "a few people are doing really good" and I think there are far fewer people that are bothered by that. I also think these conversations tend to get stuck on the definition of poverty. Some people say, "well, it can't be poverty because they all have smartphones", and other people say, "well, it's poverty because they lack any opportunity". I think that if these discussions are going to get anywhere we have to start by convincing people that the definition of poverty is allowed to change and that we shouldn't in the 21st century be defining poverty in 19th-century terms.
      - coldtea 10y ago
        >I suspect that when most people talk about inequality, what they mean is, "a few people are doing really good and a lot of people are doing really bad". If you can lessen or remove the "doing really bad" part, whether through UBI or some other means (progressive taxation to fund other programs, whatever your ideology prefers), then statements of inequality start to mean just "a few people are doing really good" and I think there are far fewer people that are bothered by that. I'd say the problem with inequality is something else entirely than "some people doing really good" vs "lots of people doing really bad". It's that there are resources in the world, and some people have way more access to them. This can hold even when all people are out of poverty: of the potential and resources of the world, still some people could take the lion's share to the exclusion of others, regardless of whether everybody has a house and food on their table. And this inequality (with the true sense of the word, not mere poverty vs richness) is also related to opportunities and squandered potential (as in: yeah, we all have UBI, but this dumb mega-rich person could pay his way to Harvard, whereas some other with much larger potential -- e.g. smarts, inventiveness, etc-- had to settle for some lesser school, and didn't get as far in their career).
- dv_dt 10y ago
  I see poverty (and UBI) as fixing the problem of people not even having enough to live on, but inequality having a much wider range of impact. Maybe UBI could lead to fixes in other areas - but there is this other problem economically, of people making rational decisions based upon the limited resources they have to draw upon (capital, experience, network connections, family fallbacks, etc). How may good ideas are never explored because someone has an idea that is a 0.001% of success, but could benefit the world 1000x over? Then they look at their personal resources and just push that idea away? This isn't a problem just on an individual basis. For instance, I sometimes idly wonder how many fairly sharp and/or self-driven people ended up working for the illegal drug industry vs how society (and those individuals) could have benefited had other paths been available to them. Maybe we've missed out on many exceptional CEOs because they were taken up by the illegal drug industry, became drug lords then somewhere along the line locked up or killed. Or the looming Automation issue. We may take care of many basic economic activities by automation, and now many people will be out of work - we see that couched as a "jobs" problem, but looked at another way it's and extension that our economic system really doesn't know how to harness human capability. Our current economic system says only give people just enough resources - any excess is pulled away from people who lack leverage (like many who exchange labor for income). And increasingly I think the fact that allocating for leverage != allocating for potential is unbalancing our economy. Now most wealth has accumulated at the top to a very few - and, from world economic growth numbers, that group basically doesn't know how to more productively allocate it on a world-wide scale (or maybe doesn't want to to preserve the accumulated wealth, or some mix).
AndrewKemendo 10y ago
We systematically waste the human capability of millions of people because the system essentially randomly gives much better opportunity to some over others. We don't do anything. The nature of reality is that there is not equal distribution of [anything]. The universe is a dynamical system - portions of the system will through probability always get stuck at local/global minima.
- kyleschiller 10y ago
  Ok sure, it could be rephrased as we systematically fail to develop the full human capacity of millions of people and make the same point.
- tossacct7777 10y ago
  The financial system is not a manifestation of physics. We created it and continue to rely on the belief in it. So to say we do nothing is nonsense. We conjure these things and peddle them to the masses as the "one true path" for human development and expansion, which is BS.
- Florin_Andrei 10y ago
  Sure, but the universe is also a place where it rains on your head, and then the sun burns your skin off, and wolves casually stroll in and eat your children. That's what the universe does when left to its own devices, and we don't like that, and we change it. "It is the way it is because it's natural" is a pretty naive fallacy.
  - AndrewKemendo 10y ago
    You're reading my statement as saying that this is preferable when in fact I'm staying that it's improbable to expect we could do otherwise. Unless you want to go down the AGI/transhumanism path with me, which I doubt you do.
    - Florin_Andrei 10y ago
      Is it "improbable" that we build houses and dams to try and correct traits of the universe that we deem undesirable? Stop typing and look around you. You live in a huge improbability already.
drzaiusapelord 10y ago
>but it's a somewhat limited solution to capping how far down someone can fall in society That's welfare's job. UBI is to provide a living wage when its not possible or difficult to do so (depressed areas, automation taking jobs, etc). As a social safety net UBI does nothing welfare doesn't, and in most cases does worse. Welfare can be controlled via food stamps that stop people from wasting their money on alcohol, cigarettes, lottery tickets, and casinos. UBI is just a cash handout which absolutely will go to those things as well as illegal drugs and other vices. Why shouldn't it? Forcing people to spend responsibly is not solved with UBI. As someone who has lived in Chicago's not so great neighborhoods, this is a common sight. Cash handouts do not suddenly make good people. >including starting businesses which may change the world. If the government guaranteed me $100k a year I wouldn't work. I mean I'd "work" but at being a rock musician or comic book artist or a non-practical technical pursuit. I think UBI would lead to leisure lifestyles, not nose-to-the-grindstone business stuff that we're used to in the startup world. Look at the wealthy who don't run their own businesses and who live off their investments or trust fund kids in general. Sure a few engage the business world and do interesting things, but its mostly do nothing lifestyles of learning to paint, kinda sorta finishing that phd, being an 'author' or 'photographer', etc. In fact, I know several people like this. One of the things UBI advocates don't like to talk about is that the carrot approach isn't usually effective. The stick gets most of the results. In capitalist society the stick is failing economically and living a poor and unsatisfying lifestyle. People work to stay out of the ghetto, if not more so, than for nice things. Middle-class life is pretty nice. If UBI lets me keep mine, I really see no incentive to work and I suspect many agree with me. A UBI society will be a lot of things, but it will not be productive or innovative like modern society is. I think that's just something you need to accept if you truly advocate for UBI. Not to mention, how price gouging will match UBI. If the poor go from making $8,000 a year to $50,000 then their rent and cost of food, etc will go up to match. So you can't have an 'income floor' where everything 'just works.' Unless you want to move into a command economy with authoritarian control of all pricing and labor. At that point you've just re-invented authoritarian communism, which history has shown absolutely doesnt work. -- The system won't let me post (posting too much?), so here' my reply to novia: >Why are you so opposed to allowing people to spend money on mood altering substances? Because many are physically addictive and when money runs out the rational move is to rob/murder your neighbor for more. Addiction is that powerful. The idea that all drugs are perfectly fine and addiction doesn't happen is naive fairly naive. I don't think we can assume that a UBI society will be people just smoking pot and doing shrooms the same way modern drug use is not just those things. >And maybe your artistic pursuits would help make others happier and motivated and inspired to work on their projects that would qualify as real "work" to you. That's fine, I made that argument I believe, but productivity and innovation will absolutely not be the same. We'll make great strides in 3 chord rock and super hero storytelling, but not much else. In the off chance we do better in any realm, it will be the Arts, which is nice but not nice for the guy waiting on a parkinson's or alzheimer's treatment. The gal who would have cured it is instead a harp player and romance novelist. Or maybe she did try but where are the billion dollar investments for her startup going to come from when everyone lives in what is going to be like a retirement arts community because of UBI? I don't think we can assume there are no tradeoffs with UBI. I think you need to accept a certain level of lack of innovation. The capitalist system works as-is because of many incentives and disincentives which will largely disappear with UBI. I'm not sure why we're assuming that innovation, investment, and progress will be exactly the same. It seems very unlikely. The culture and system UBI brings may not be to our liking at all, especially those of us who saw so much progress and innovation in our lifetimes.

by dv_dt 10y ago

kyleschiller 10y ago

At the risk of sounding too Paul Graham, how much of what you're talking about is due to poverty more than inequality?

crdoconnor 10y ago
Poverty and inequality are two sides of the same coin. Massive inequality is driven not by productivity but by compounding debt and other forms of rent-seeking. This always spirals out of control eventually leading to poverty, default or both.
- lisper 10y ago
  Absolutely right, but it's important to be aware of why it always spirals out of control: it's because part of people's decision making is based on their expectations about the future, and part of those expectations are the result of the societal rules that are in place at the time. So people get used to planning, for example, on the basis that they can expect an annualized 8% return from the market. It has been that way for decades, so why should it not continue to be that way? Well, the reason is that it cannot continue to be that way. An 8% return is not sustainable. Exponential growth is never sustainable in the long run. Even if we colonize the stars at the speed of light with 100% efficiency, that only allows quadratic growth in the long run. So when we start to hit the limits of growth, one of two things can happen. Either everyone accepts that things are slowing down and agrees to accept less than they were expecting based on the exponential projections, or some people don't accept this and use their political power to change the rules so that they can continue to live according to their expectations, which necessarily comes at the expense of everyone else at that point. To transition smoothly from a period of exponential growth back to a steady state, or even just sub-exponential growth, -- heck, even to exponential growth with a smaller exponent! -- requires a degree of cooperation that is very difficult to achieve in human societies.
  - crdoconnor 10y ago
    Rather than considering whether an 8% return is "reasonable" perhaps we should be considering whether distributing unearned income unequally is a good thing at all.
    - lisper 10y ago
      If you don't, how are you going to convince anyone to invest in anything?
      - crdoconnor 10y ago
        1) By trusting in people's self interested desire to magnify their own earnings rather than their desire to capture the value of somebody else's work. 2) Via the same community which invests in roads, schools and (in other countries) hospitals.
supremus_58 10y ago
wouldn't poverty largely be a product of inequality?
- kyleschiller 10y ago
  In the current system, yes, properly implemented, UBI would end poverty in America while still allowing for massive inequality. It sets a floor, not a ceiling.
  - thaumaturgy 10y ago
    I'm not sure that inequality is necessarily the thing to be fixed. I suspect that when most people talk about inequality, what they mean is, "a few people are doing really good and a lot of people are doing really bad". If you can lessen or remove the "doing really bad" part, whether through UBI or some other means (progressive taxation to fund other programs, whatever your ideology prefers), then statements of inequality start to mean just "a few people are doing really good" and I think there are far fewer people that are bothered by that. I also think these conversations tend to get stuck on the definition of poverty. Some people say, "well, it can't be poverty because they all have smartphones", and other people say, "well, it's poverty because they lack any opportunity". I think that if these discussions are going to get anywhere we have to start by convincing people that the definition of poverty is allowed to change and that we shouldn't in the 21st century be defining poverty in 19th-century terms.
    - coldtea 10y ago
      >I suspect that when most people talk about inequality, what they mean is, "a few people are doing really good and a lot of people are doing really bad". If you can lessen or remove the "doing really bad" part, whether through UBI or some other means (progressive taxation to fund other programs, whatever your ideology prefers), then statements of inequality start to mean just "a few people are doing really good" and I think there are far fewer people that are bothered by that. I'd say the problem with inequality is something else entirely than "some people doing really good" vs "lots of people doing really bad". It's that there are resources in the world, and some people have way more access to them. This can hold even when all people are out of poverty: of the potential and resources of the world, still some people could take the lion's share to the exclusion of others, regardless of whether everybody has a house and food on their table. And this inequality (with the true sense of the word, not mere poverty vs richness) is also related to opportunities and squandered potential (as in: yeah, we all have UBI, but this dumb mega-rich person could pay his way to Harvard, whereas some other with much larger potential -- e.g. smarts, inventiveness, etc-- had to settle for some lesser school, and didn't get as far in their career).
dv_dt 10y ago
I see poverty (and UBI) as fixing the problem of people not even having enough to live on, but inequality having a much wider range of impact. Maybe UBI could lead to fixes in other areas - but there is this other problem economically, of people making rational decisions based upon the limited resources they have to draw upon (capital, experience, network connections, family fallbacks, etc). How may good ideas are never explored because someone has an idea that is a 0.001% of success, but could benefit the world 1000x over? Then they look at their personal resources and just push that idea away? This isn't a problem just on an individual basis. For instance, I sometimes idly wonder how many fairly sharp and/or self-driven people ended up working for the illegal drug industry vs how society (and those individuals) could have benefited had other paths been available to them. Maybe we've missed out on many exceptional CEOs because they were taken up by the illegal drug industry, became drug lords then somewhere along the line locked up or killed. Or the looming Automation issue. We may take care of many basic economic activities by automation, and now many people will be out of work - we see that couched as a "jobs" problem, but looked at another way it's and extension that our economic system really doesn't know how to harness human capability. Our current economic system says only give people just enough resources - any excess is pulled away from people who lack leverage (like many who exchange labor for income). And increasingly I think the fact that allocating for leverage != allocating for potential is unbalancing our economy. Now most wealth has accumulated at the top to a very few - and, from world economic growth numbers, that group basically doesn't know how to more productively allocate it on a world-wide scale (or maybe doesn't want to to preserve the accumulated wealth, or some mix).

AndrewKemendo 10y ago

We systematically waste the human capability of millions of people because the system essentially randomly gives much better opportunity to some over others. We don't do anything. The nature of reality is that there is not equal distribution of [anything]. The universe is a dynamical system - portions of the system will through probability always get stuck at local/global minima.

kyleschiller 10y ago
Ok sure, it could be rephrased as we systematically fail to develop the full human capacity of millions of people and make the same point.
tossacct7777 10y ago
The financial system is not a manifestation of physics. We created it and continue to rely on the belief in it. So to say we do nothing is nonsense. We conjure these things and peddle them to the masses as the "one true path" for human development and expansion, which is BS.
Florin_Andrei 10y ago
Sure, but the universe is also a place where it rains on your head, and then the sun burns your skin off, and wolves casually stroll in and eat your children. That's what the universe does when left to its own devices, and we don't like that, and we change it. "It is the way it is because it's natural" is a pretty naive fallacy.
- AndrewKemendo 10y ago
  You're reading my statement as saying that this is preferable when in fact I'm staying that it's improbable to expect we could do otherwise. Unless you want to go down the AGI/transhumanism path with me, which I doubt you do.
  - Florin_Andrei 10y ago
    Is it "improbable" that we build houses and dams to try and correct traits of the universe that we deem undesirable? Stop typing and look around you. You live in a huge improbability already.

drzaiusapelord 10y ago

>but it's a somewhat limited solution to capping how far down someone can fall in society That's welfare's job. UBI is to provide a living wage when its not possible or difficult to do so (depressed areas, automation taking jobs, etc). As a social safety net UBI does nothing welfare doesn't, and in most cases does worse. Welfare can be controlled via food stamps that stop people from wasting their money on alcohol, cigarettes, lottery tickets, and casinos. UBI is just a cash handout which absolutely will go to those things as well as illegal drugs and other vices. Why shouldn't it? Forcing people to spend responsibly is not solved with UBI. As someone who has lived in Chicago's not so great neighborhoods, this is a common sight. Cash handouts do not suddenly make good people. >including starting businesses which may change the world. If the government guaranteed me $100k a year I wouldn't work. I mean I'd "work" but at being a rock musician or comic book artist or a non-practical technical pursuit. I think UBI would lead to leisure lifestyles, not nose-to-the-grindstone business stuff that we're used to in the startup world. Look at the wealthy who don't run their own businesses and who live off their investments or trust fund kids in general. Sure a few engage the business world and do interesting things, but its mostly do nothing lifestyles of learning to paint, kinda sorta finishing that phd, being an 'author' or 'photographer', etc. In fact, I know several people like this. One of the things UBI advocates don't like to talk about is that the carrot approach isn't usually effective. The stick gets most of the results. In capitalist society the stick is failing economically and living a poor and unsatisfying lifestyle. People work to stay out of the ghetto, if not more so, than for nice things. Middle-class life is pretty nice. If UBI lets me keep mine, I really see no incentive to work and I suspect many agree with me. A UBI society will be a lot of things, but it will not be productive or innovative like modern society is. I think that's just something you need to accept if you truly advocate for UBI. Not to mention, how price gouging will match UBI. If the poor go from making $8,000 a year to $50,000 then their rent and cost of food, etc will go up to match. So you can't have an 'income floor' where everything 'just works.' Unless you want to move into a command economy with authoritarian control of all pricing and labor. At that point you've just re-invented authoritarian communism, which history has shown absolutely doesnt work. -- The system won't let me post (posting too much?), so here' my reply to novia: >Why are you so opposed to allowing people to spend money on mood altering substances? Because many are physically addictive and when money runs out the rational move is to rob/murder your neighbor for more. Addiction is that powerful. The idea that all drugs are perfectly fine and addiction doesn't happen is naive fairly naive. I don't think we can assume that a UBI society will be people just smoking pot and doing shrooms the same way modern drug use is not just those things. >And maybe your artistic pursuits would help make others happier and motivated and inspired to work on their projects that would qualify as real "work" to you. That's fine, I made that argument I believe, but productivity and innovation will absolutely not be the same. We'll make great strides in 3 chord rock and super hero storytelling, but not much else. In the off chance we do better in any realm, it will be the Arts, which is nice but not nice for the guy waiting on a parkinson's or alzheimer's treatment. The gal who would have cured it is instead a harp player and romance novelist. Or maybe she did try but where are the billion dollar investments for her startup going to come from when everyone lives in what is going to be like a retirement arts community because of UBI? I don't think we can assume there are no tradeoffs with UBI. I think you need to accept a certain level of lack of innovation. The capitalist system works as-is because of many incentives and disincentives which will largely disappear with UBI. I'm not sure why we're assuming that innovation, investment, and progress will be exactly the same. It seems very unlikely. The culture and system UBI brings may not be to our liking at all, especially those of us who saw so much progress and innovation in our lifetimes.