6 ms·

Guaranteed minimum income is: sustainable, sufficient for basic life necessities, can be implemented for the current population levels. Choose two. It is as in

Guaranteed minimum income is: sustainable, sufficient for basic life necessities, can be implemented for the current population levels. Choose two. It is as inevitable as CAP theorem.

goldbeck 10y ago
[citation needed]
- lamby 10y ago
  If only economics was this simple!
- atemerev 10y ago
  Some numbers: Current US population: 324 million people, 250 million adults. Poverty line income: $22,000 for the family of four (it is hard to estimate individual poverty line income, but it's more than $22,000 / 4. Let's say $12,000, which is $1000 / month). Total cost of universal basic income of $1,000/month for the US: $3 trillion per year. Total US income tax revenue: $1.8 trillion for personal income tax, $0.4 trillion for corporate income tax.
  - dllthomas 10y ago
    You are making the case that it's currently impractical. That is very different from "as inevitable as [the] CAP theorem". For instance, if the cost of "basic life necessities" was somehow $5/yr, but incomes (and tax revenues) similar to today (... presumably people are spending an awful lot on luxury goods?), it could certainly be all three of those things. It may be the case that that is somehow impossible, but that's a case that you need to make in some way other than listing off what the current numbers happen to be.
    - atemerev 10y ago
      Yes, the luxuries like rent, education and healthcare. And yes, "somehow" is a word that appears very often in every discussion about UBI.
      - dllthomas 10y ago
        I don't believe you're engaging in good faith, so I'm done here.
        atemerev 10y ago
        Why I wouldn't be engaging in good faith? I really believe that UBI is impossible.
        dllthomas 10y ago
        I expect that you believe that UBI is impossible. I am not interested in continuing to engage with you because you are not interested in engaging intellectually and analyzing why you might be wrong or helping others analyze why they might be wrong, but are focused exclusively on scoring rhetorical points. That's sometimes a fun game to play, but it's not productive and it's not why I come to HN.
  - chc 10y ago
    This appears to lead to the conclusion "UBI is impossible" only if we include the premises "It's impossible to reduce COL" and "It's impossible to increase tax revenues."
    - atemerev 10y ago
      Increasing tax revenues to 100% (assuming everybody will continue working like that) won't be enough. USSR learned it the hard way.
  - learc83 10y ago
    Every serious UBI proposal includes an progressive income tax increase. Everyone gets the UBI, but the more money you make, the more you're paying in additional taxes to support the UBI. At some threshold you're paying as much in additional taxes as your making in UBI payments. Past another threshold and you're paying more in additional taxes than you're taking in. Effectively you only need to provide the full UBI for people making very little per month.
kmicklas 10y ago
Why? The CAP theorem has a logical proof which can not be refuted, this seems unlikely to even have a strong informal argument to me.
drxzcl 10y ago
What do you base this on? Is there some theoretical limit to productivity?
- devrandomguy 10y ago
  There are real limits to everything, because the universe has a finite mass and volume. But, that doesn't mean that it is not possible to engineer a working UBI.
  - drxzcl 10y ago
    Productivity is usually value/worker or value/hour worked. There's no indication, as far as I'm aware, that value (inflation adjusted money) is a conserved quantity. In fact, most of the productivity increases are in industries where the value produced is not directly coupled to the resourced consumed. The software industry is a great example.
    - devrandomguy 10y ago
      The relationship between value produced and resources consumed may not be linear, but that does not mean that it is possible to have infinite production, or to produce a change in value from zero resources. If production is not limited, then we can instantly transform our solar system into a Dyson sphere, right now. What am I not understanding, of this theory?
      - drxzcl 10y ago
        You'd be right, if all value production was in utilitarian, physical stuff. Increasingly however we're spending a smaller percentage of our income on stuff, and more on services and immaterial goods. To produce a two ton truck, you need to use more than two tons of resource, that much is obvious. But how many resources go into the production of my copy of GTAV? Or my blue-ray of The Lord of the Rings? Or my viewing of a show on Netflix? The marginal resource usage is pretty much nil, just some electricity, paper of plastic. The resources expended in producing the work itself can be significant, but they are amortized among the many millions of copies. Now obviously there are limits. Humans need physical stuff to survive, that's not going to change any time soon. There's a limit on the amount of actual stuff we can make. But there's no clear limit on the value of that stuff. We keep finding new ways to make little pieces of plastic or bunches of electrons in wires valuable all the time.
danbruc 10y ago
Set the income tax rate to 100 %, give an equal share of that money to every citizen. That should check all three boxes, shouldn't it?
- BenjiWiebe 10y ago
  Personally I wouldn't bother working very hard if income tax was 100%.
  - danbruc 10y ago
    The incentive structure in this example is certainly bad, but that is an issue whenever you are planning to give things away for free, with a universal basic income scheme or otherwise. That my example is exceptionally poor in this regard should not matter too much for the point addressed unless you want to hint at a problem with sustainability. That might or might not be the case depending on the behavior of the people but given that universal basic income proponents argue that people would not get lazy and exploit the system I am happy to make that assumption. In case that turns out to be false, it is certainly possible to tweak the scheme in such a way that there remains an incentive not to become lazy, for example by lowering the 100 % tax rate but still keeping it high.
    - AnimalMuppet 10y ago
      Hint at a problem with sustainability? I'll come right out and say it: Your proposal is not sustainable. The only people who will work in that environment are those who will work for free. Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.
      - danbruc 10y ago
        First let me say that I am not trying to defend universal basic income schemes, I think they are not a great idea. With that out of the way, the point you are mentioning is a fundamental problem of universal basic income schemes. You can not promise to provide goods and services for basic needs to everyone unconditionally unless you have some magic black box providing the required goods and services. You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.
fahadkhan 10y ago
The current population is growing. Evidently there is enough resources to population at this level (food, water, space, air, energy, etc). If production of resources is automated why can't resources distributed to sustain current population?
- orthecreedence 10y ago
  Exactly. We have the resources. It's just a matter of redistributing them in a way that a) keeps people alive and b) doesn't grind the economy to a halt. People in the US need to let go of a lot of the ideas we cling to (taxing the rich slows the economy, UBI is communism, wealth redistribution == USSR) if we're going to live through the coming automation boom.
- atemerev 10y ago
  The bulk of costs of living in modern societies: rent/mortgage, healthcare and education. Can't be really automated in the near future, expected to cost even more as everything else becomes more automated.
  - fahadkhan 10y ago
    I believe education is currently undergoing a similar transition that music and film and been through. At the end of Education will be cheaper. It already is a lot cheaper in some cases. Health care is tougher, due to stricter regulations (rightly so) and reluctance from doctors but I think the transformation there is about to begin. Look at what is happening with (open source) prosthetics. Prime reason for rent and mortgage that I can see is wealth generation and in a society where wealth is less important perhaps these will also decrease. You can see more and more interest in open source, not just in software but also other fields, is this a shift away from wealth accumulation? From another angle, people are beginning build homes with recycled plastic and by 3D printing this hopefully will reduce build cost. And hopefully that will filter down to the end consumer.
DonbunEf7 10y ago
No, by counterexample of USA. The 2015 average income per capita was $57,540 [0]. The 2015 poverty guideline for a family of five was $28,410 [1]. Clearly there is more income per capita than required to keep everybody out of poverty. A second source, the Census, is pretty reputable too: "Median household income in the United States was $56,516 in 2015." [2] Edit: This statement isn't helpful since it is a median, not a mean. A better source from the Census is [3], which lists the mean average as $75,738. As a reply pointed out, the heavy income inequality in the USA is expected to cause this sort of skew in the median. Either way, I propose that taking everybody's income away and then splitting it evenly would apportion enough money to keep everybody out of poverty, that it would be sustainable (based on trends of past amounts of income per capita and poverty guidelines), and that it would clear the poverty guideline, a well-known bright line for "basic life necessities." Is this a good solution? Maybe. There's probably better ones. But they do exist. Edit: Specifically, would this system remain stable? It's hard to say. We can imagine that anybody on the sad side of the Pareto curve, which is a majority of the typical employed people in the USA, would not mind effectively having a big check from Uncle Sam raising their income to healthy levels. At the same time, we could also imagine that the wealthy few who are hit hardest in this scheme would try to find some way to get their income to be non-taxable, whether by lobbying for a proportional tax or inventing new capital transfer techniques. I'm not going to claim that this scheme is in any way socially workable over the long term, though. I personally feel that any UBI scheme is still socially unworkable; we need more small-scale evidence that UBI works. Still edit: As an example, imagine that the UBI payments were only sufficient to bring the impoverished up out of poverty, and not necessarily any higher. That means that over half of the income marked in my original scheme would not be needed, so the wealthy could keep it. This would effectively be a two-tax-bracket system, with the brackets labeled "below" and "above." Does it still work on paper? Yes. Do I think that people will like it? No. Do I think that people like taxes? Not really. [0] http://data.worldbank.org/country/United-States http://data.worldbank.org/country/United-States [1] https://aspe.hhs.gov/2015-poverty-guidelines https://aspe.hhs.gov/2015-poverty-guidelines [2] https://www.census.gov/library/publications/2016/demo/p60-256.html https://www.census.gov/library/publications/2016/demo/p60-25... [3] https://www.census.gov/data/tables/2015/demo/cps/hinc-06.html https://www.census.gov/data/tables/2015/demo/cps/hinc-06.htm... (Warning: XLS sheet!)

Guaranteed minimum income is: sustainable, sufficient for basic life necessities, can be implemented for the current population levels. Choose two. It is as inevitable as CAP theorem.

goldbeck 10y ago

[citation needed]

lamby 10y ago
If only economics was this simple!
atemerev 10y ago
Some numbers: Current US population: 324 million people, 250 million adults. Poverty line income: $22,000 for the family of four (it is hard to estimate individual poverty line income, but it's more than $22,000 / 4. Let's say $12,000, which is $1000 / month). Total cost of universal basic income of $1,000/month for the US: $3 trillion per year. Total US income tax revenue: $1.8 trillion for personal income tax, $0.4 trillion for corporate income tax.
- dllthomas 10y ago
  You are making the case that it's currently impractical. That is very different from "as inevitable as [the] CAP theorem". For instance, if the cost of "basic life necessities" was somehow $5/yr, but incomes (and tax revenues) similar to today (... presumably people are spending an awful lot on luxury goods?), it could certainly be all three of those things. It may be the case that that is somehow impossible, but that's a case that you need to make in some way other than listing off what the current numbers happen to be.
  - atemerev 10y ago
    Yes, the luxuries like rent, education and healthcare. And yes, "somehow" is a word that appears very often in every discussion about UBI.
    - dllthomas 10y ago
      I don't believe you're engaging in good faith, so I'm done here.
      - atemerev 10y ago
        Why I wouldn't be engaging in good faith? I really believe that UBI is impossible.
        dllthomas 10y ago
        I expect that you believe that UBI is impossible. I am not interested in continuing to engage with you because you are not interested in engaging intellectually and analyzing why you might be wrong or helping others analyze why they might be wrong, but are focused exclusively on scoring rhetorical points. That's sometimes a fun game to play, but it's not productive and it's not why I come to HN.
- chc 10y ago
  This appears to lead to the conclusion "UBI is impossible" only if we include the premises "It's impossible to reduce COL" and "It's impossible to increase tax revenues."
  - atemerev 10y ago
    Increasing tax revenues to 100% (assuming everybody will continue working like that) won't be enough. USSR learned it the hard way.
- learc83 10y ago
  Every serious UBI proposal includes an progressive income tax increase. Everyone gets the UBI, but the more money you make, the more you're paying in additional taxes to support the UBI. At some threshold you're paying as much in additional taxes as your making in UBI payments. Past another threshold and you're paying more in additional taxes than you're taking in. Effectively you only need to provide the full UBI for people making very little per month.

kmicklas 10y ago

Why? The CAP theorem has a logical proof which can not be refuted, this seems unlikely to even have a strong informal argument to me.

drxzcl 10y ago

What do you base this on? Is there some theoretical limit to productivity?

devrandomguy 10y ago
There are real limits to everything, because the universe has a finite mass and volume. But, that doesn't mean that it is not possible to engineer a working UBI.
- drxzcl 10y ago
  Productivity is usually value/worker or value/hour worked. There's no indication, as far as I'm aware, that value (inflation adjusted money) is a conserved quantity. In fact, most of the productivity increases are in industries where the value produced is not directly coupled to the resourced consumed. The software industry is a great example.
  - devrandomguy 10y ago
    The relationship between value produced and resources consumed may not be linear, but that does not mean that it is possible to have infinite production, or to produce a change in value from zero resources. If production is not limited, then we can instantly transform our solar system into a Dyson sphere, right now. What am I not understanding, of this theory?
    - drxzcl 10y ago
      You'd be right, if all value production was in utilitarian, physical stuff. Increasingly however we're spending a smaller percentage of our income on stuff, and more on services and immaterial goods. To produce a two ton truck, you need to use more than two tons of resource, that much is obvious. But how many resources go into the production of my copy of GTAV? Or my blue-ray of The Lord of the Rings? Or my viewing of a show on Netflix? The marginal resource usage is pretty much nil, just some electricity, paper of plastic. The resources expended in producing the work itself can be significant, but they are amortized among the many millions of copies. Now obviously there are limits. Humans need physical stuff to survive, that's not going to change any time soon. There's a limit on the amount of actual stuff we can make. But there's no clear limit on the value of that stuff. We keep finding new ways to make little pieces of plastic or bunches of electrons in wires valuable all the time.

danbruc 10y ago

Set the income tax rate to 100 %, give an equal share of that money to every citizen. That should check all three boxes, shouldn't it?

BenjiWiebe 10y ago
Personally I wouldn't bother working very hard if income tax was 100%.
- danbruc 10y ago
  The incentive structure in this example is certainly bad, but that is an issue whenever you are planning to give things away for free, with a universal basic income scheme or otherwise. That my example is exceptionally poor in this regard should not matter too much for the point addressed unless you want to hint at a problem with sustainability. That might or might not be the case depending on the behavior of the people but given that universal basic income proponents argue that people would not get lazy and exploit the system I am happy to make that assumption. In case that turns out to be false, it is certainly possible to tweak the scheme in such a way that there remains an incentive not to become lazy, for example by lowering the 100 % tax rate but still keeping it high.
  - AnimalMuppet 10y ago
    Hint at a problem with sustainability? I'll come right out and say it: Your proposal is not sustainable. The only people who will work in that environment are those who will work for free. Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.
    - danbruc 10y ago
      First let me say that I am not trying to defend universal basic income schemes, I think they are not a great idea. With that out of the way, the point you are mentioning is a fundamental problem of universal basic income schemes. You can not promise to provide goods and services for basic needs to everyone unconditionally unless you have some magic black box providing the required goods and services. You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.

fahadkhan 10y ago

The current population is growing. Evidently there is enough resources to population at this level (food, water, space, air, energy, etc). If production of resources is automated why can't resources distributed to sustain current population?

orthecreedence 10y ago
Exactly. We have the resources. It's just a matter of redistributing them in a way that a) keeps people alive and b) doesn't grind the economy to a halt. People in the US need to let go of a lot of the ideas we cling to (taxing the rich slows the economy, UBI is communism, wealth redistribution == USSR) if we're going to live through the coming automation boom.
atemerev 10y ago
The bulk of costs of living in modern societies: rent/mortgage, healthcare and education. Can't be really automated in the near future, expected to cost even more as everything else becomes more automated.
- fahadkhan 10y ago
  I believe education is currently undergoing a similar transition that music and film and been through. At the end of Education will be cheaper. It already is a lot cheaper in some cases. Health care is tougher, due to stricter regulations (rightly so) and reluctance from doctors but I think the transformation there is about to begin. Look at what is happening with (open source) prosthetics. Prime reason for rent and mortgage that I can see is wealth generation and in a society where wealth is less important perhaps these will also decrease. You can see more and more interest in open source, not just in software but also other fields, is this a shift away from wealth accumulation? From another angle, people are beginning build homes with recycled plastic and by 3D printing this hopefully will reduce build cost. And hopefully that will filter down to the end consumer.

DonbunEf7 10y ago

No, by counterexample of USA. The 2015 average income per capita was $57,540 [0]. The 2015 poverty guideline for a family of five was $28,410 [1]. Clearly there is more income per capita than required to keep everybody out of poverty. A second source, the Census, is pretty reputable too: "Median household income in the United States was $56,516 in 2015." [2] Edit: This statement isn't helpful since it is a median, not a mean. A better source from the Census is [3], which lists the mean average as $75,738. As a reply pointed out, the heavy income inequality in the USA is expected to cause this sort of skew in the median. Either way, I propose that taking everybody's income away and then splitting it evenly would apportion enough money to keep everybody out of poverty, that it would be sustainable (based on trends of past amounts of income per capita and poverty guidelines), and that it would clear the poverty guideline, a well-known bright line for "basic life necessities." Is this a good solution? Maybe. There's probably better ones. But they do exist. Edit: Specifically, would this system remain stable? It's hard to say. We can imagine that anybody on the sad side of the Pareto curve, which is a majority of the typical employed people in the USA, would not mind effectively having a big check from Uncle Sam raising their income to healthy levels. At the same time, we could also imagine that the wealthy few who are hit hardest in this scheme would try to find some way to get their income to be non-taxable, whether by lobbying for a proportional tax or inventing new capital transfer techniques. I'm not going to claim that this scheme is in any way socially workable over the long term, though. I personally feel that any UBI scheme is still socially unworkable; we need more small-scale evidence that UBI works. Still edit: As an example, imagine that the UBI payments were only sufficient to bring the impoverished up out of poverty, and not necessarily any higher. That means that over half of the income marked in my original scheme would not be needed, so the wealthy could keep it. This would effectively be a two-tax-bracket system, with the brackets labeled "below" and "above." Does it still work on paper? Yes. Do I think that people will like it? No. Do I think that people like taxes? Not really. [0] http://data.worldbank.org/country/United-States http://data.worldbank.org/country/United-States [1] https://aspe.hhs.gov/2015-poverty-guidelines https://aspe.hhs.gov/2015-poverty-guidelines [2] https://www.census.gov/library/publications/2016/demo/p60-256.html https://www.census.gov/library/publications/2016/demo/p60-25... [3] https://www.census.gov/data/tables/2015/demo/cps/hinc-06.html https://www.census.gov/data/tables/2015/demo/cps/hinc-06.htm... (Warning: XLS sheet!)