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> The question I’m interested in: How do we unlock maximum human potential? > Last I checked, welfare does the opposite of this. It helps people merely subsist

by Suncho 9y ago

> The question I’m interested in: How do we unlock maximum human potential? > Last I checked, welfare does the opposite of this. It helps people merely subsist, not strive for greatness. It depends what you mean by "human potential." I agree with you that "human potential" is not the right way to frame what basic income unlocks. By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. We won't produce wealth that people won't buy and basic income allows more people to buy more wealth. It also gives people the freedom to choose how they spend their time. We have a lot of pointless jobs in the economy that really only exist as an excuse to provide people incomes. A basic income can allow us to eliminate those jobs. The people who aren't working at those useless jobs anymore are now free to do something useful with their time. So in that sense, basic income does unlock human potential. But by boosting demand and by doing it in a way that flattens out the demand curve, it unlocks resources in general, not just labor. > If he weren't a millionaire and the current president of YC, would we keep seeing articles about his vision on the front page of HN? I don't think so. I don't believe his arguments are that cogent or compelling. I agree with you that his arguments could certainly be more compelling. But he's not wrong that basic income would be a good thing. > If you take Sam Altman out of this article, would we discuss it at all? If the answer to that is no, then why are we discussing it? I would certainly be discussing it. Maybe nobody would be listening to me. But I've been involved with basic income since 2011 and I think it's hugely important.

disc 9y ago
Do you have any links I could peruse that explain how UBI would flatten the demand curve, rather than just shifting it?
- Suncho 9y ago
  Hmm. Not off the top of my head. The intuition is pretty straightforward though. Imagine the difference between doubling total amount of money in the economy by either: a. doubling the amount of money each individual person has. b. distributing that new money evenly across every person. In the former case, the demand curve would get steeper, no? And in the latter case, it would get flatter. In case a, you'd decrease the price elasticity of demand and people would have an incentive to raise prices. You'd have inflation. In case b, you'd increase the price elasticity of demand providing an incentive for producers to keep their prices lower and compete with each other on price. Of course it all depends on where on the demand curve we're talking about. But for many of the goods we produce, their market-clearing prices are at a quantity such that they would benefit from an additional even distribution of income to every person.
dahdum 9y ago
"By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. We won't produce wealth that people won't buy and basic income allows more people to buy more wealth." Doesn't UBI reduce the economic productivity by both driving up the cost of labor through increased taxation and lowering the supply? Until (if) we are in a post-scarcity world how will lowering productive output ever increase the overall wealth? I don't see how 1 Apple can offset 1 million unemployed, and really skeptical such a company could grow to that size/profitability under the necessary labor/tax system to support UBI.
- Suncho 9y ago
  > Doesn't UBI reduce the economic productivity by both driving up the cost of labor through increased taxation No. First of all, there's no reason that basic income has to have any taxes associated with it. A common mistake people (including the government) make is to assume that government spending must be funded by taxation. It doesn't have to be. If the government spends and the economy responds productively to that spending, then you're fine. Taxing is a separate issue. You should only really tax when you want to remove money from a specific part of the economy. To put it succinctly, increasing taxes does not increase the amount of money the government can usefully spend unless you directly taxed the use of some resource and the spending is going to put that particular resource to use in a more desirable way. > and lowering the supply? Labor is a resource that goes into production just like any other resource. Depending on the context, labor can be substituted for various other resources (including foreign labor, automation, etc.). So it's possible that some forms of labor could become more expensive under basic income. But it could just as easily go the other way. There are plenty of jobs people would love to do if only they could afford the low pay. These desirable potentially socially beneficial jobs might get cheaper. It's hard to say exactly what the effect of basic income will be on the labor market. But, in aggregate, we do know that the economy is capable of producing at levels higher than current output levels. If we give more people the ability to spend money, we'll produce more stuff to meet the demand. > I don't see how 1 Apple can offset 1 million unemployed, and really skeptical such a company could grow to that size/profitability under the necessary labor/tax system to support UBI. I can understand why you're skeptical. Just keep in mind that we're currently introducing many inefficiencies into the system just as an excuse to provide people incomes through the labor market. And even then, we're still not maxing out the productive capacity of the economy. I would encourage you to ponder what you think might happen if the government stopped trying to balance its budget and just spent as much money as the economy could absorb without causing inflation? What amount should that be? How does the distribution of the spending affect the amount they can spend? Surely if they spent it by tossing it down a hole, there would be no limit. But there is a limit. Where does that limit come from? How do taxes factor in?
deleted 9y ago
[deleted]
neonhomer 9y ago
What are the pointless jobs you're referring to?
- Suncho 9y ago
  > What are the pointless jobs you're referring to? They're everywhere. We could have let GM die. We could abandon all tariffs on imports. Any time a policymaker uses "job creation" as a selling point for a policy initiative, that means jobs that exist for the purpose of providing people with incomes. Even the Fed has "full employment" as part of its dual mandate. The private financial sector funds small businesses that probably shouldn't exist. We still have local farms producing food when large-scale farming is far more efficient. Now that's fine if it's your hobby and that's how you want to spend your time, but we actually subsidize farming.
WalterBright 9y ago
> By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. This is a corollary to the myth that wealthy people hoard cash. They do not. 100% of their cash is invested, even the money held in a checking account (because the bank loans it out to people who spend it).
- Suncho 9y ago
  > > By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. > This is a corollary to the myth that wealthy people hoard cash. They do not. It depends on your definition of "hoard." I agree with you that they don't literally stuff it into mattresses... usually. > 100% of their cash is invested, even the money held in a checking account (because the bank loans it out to people who spend it). I agree. But a question we might ask ourselves is how much of that money is invested productively. In other words, how much of it flows back into the hands of the consumers for the purchase of useful wealth that benefits them? The answer is: not all of it. Then we can ask ourselves how much of that money flows into the financial sector and accumulates there without fueling the productive economy. The answer is: some of it. From the perspective of the productive economy, the result is the same as if rich people were stuffing their money into mattresses. So that money needs to be replaced. Historically, to the extent that we've replaced that money, we've tried to do it through the labor market and we've been moderately successful. One of the things we do is monetary stimulus that increases the amount of lending in the private financial sector. Some of that lending goes to the creation of jobs that we probably don't need. It also destabilizes the economy by fueling credit bubbles like the one we saw collapse in 2008. Basic income is an alternative. If you prefer, you can think of it as a form of fiscal stimulus that would allow the Fed to normalize interest rates.
tomcam 9y ago
> We have a lot of pointless jobs in the economy that really only exist as an excuse to provide people incomes. Examples, please? Who are the benefactors giving away these jobs? EDIT: Parent's answer is at https://news.ycombinator.com/item?id=15919065 https://news.ycombinator.com/item?id=15919065
- deleted 9y ago
  [deleted]
prawn 9y ago
I agree that it'd be on the front page regardless of the author. It's always a popular discussion topic on HN, and that's predated Altman's newest thrust.

by Suncho 9y ago

disc 9y ago

Do you have any links I could peruse that explain how UBI would flatten the demand curve, rather than just shifting it?

Suncho 9y ago
Hmm. Not off the top of my head. The intuition is pretty straightforward though. Imagine the difference between doubling total amount of money in the economy by either: a. doubling the amount of money each individual person has. b. distributing that new money evenly across every person. In the former case, the demand curve would get steeper, no? And in the latter case, it would get flatter. In case a, you'd decrease the price elasticity of demand and people would have an incentive to raise prices. You'd have inflation. In case b, you'd increase the price elasticity of demand providing an incentive for producers to keep their prices lower and compete with each other on price. Of course it all depends on where on the demand curve we're talking about. But for many of the goods we produce, their market-clearing prices are at a quantity such that they would benefit from an additional even distribution of income to every person.

dahdum 9y ago

"By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. We won't produce wealth that people won't buy and basic income allows more people to buy more wealth." Doesn't UBI reduce the economic productivity by both driving up the cost of labor through increased taxation and lowering the supply? Until (if) we are in a post-scarcity world how will lowering productive output ever increase the overall wealth? I don't see how 1 Apple can offset 1 million unemployed, and really skeptical such a company could grow to that size/profitability under the necessary labor/tax system to support UBI.

Suncho 9y ago
> Doesn't UBI reduce the economic productivity by both driving up the cost of labor through increased taxation No. First of all, there's no reason that basic income has to have any taxes associated with it. A common mistake people (including the government) make is to assume that government spending must be funded by taxation. It doesn't have to be. If the government spends and the economy responds productively to that spending, then you're fine. Taxing is a separate issue. You should only really tax when you want to remove money from a specific part of the economy. To put it succinctly, increasing taxes does not increase the amount of money the government can usefully spend unless you directly taxed the use of some resource and the spending is going to put that particular resource to use in a more desirable way. > and lowering the supply? Labor is a resource that goes into production just like any other resource. Depending on the context, labor can be substituted for various other resources (including foreign labor, automation, etc.). So it's possible that some forms of labor could become more expensive under basic income. But it could just as easily go the other way. There are plenty of jobs people would love to do if only they could afford the low pay. These desirable potentially socially beneficial jobs might get cheaper. It's hard to say exactly what the effect of basic income will be on the labor market. But, in aggregate, we do know that the economy is capable of producing at levels higher than current output levels. If we give more people the ability to spend money, we'll produce more stuff to meet the demand. > I don't see how 1 Apple can offset 1 million unemployed, and really skeptical such a company could grow to that size/profitability under the necessary labor/tax system to support UBI. I can understand why you're skeptical. Just keep in mind that we're currently introducing many inefficiencies into the system just as an excuse to provide people incomes through the labor market. And even then, we're still not maxing out the productive capacity of the economy. I would encourage you to ponder what you think might happen if the government stopped trying to balance its budget and just spent as much money as the economy could absorb without causing inflation? What amount should that be? How does the distribution of the spending affect the amount they can spend? Surely if they spent it by tossing it down a hole, there would be no limit. But there is a limit. Where does that limit come from? How do taxes factor in?

deleted 9y ago

[deleted]

neonhomer 9y ago

What are the pointless jobs you're referring to?

Suncho 9y ago
> What are the pointless jobs you're referring to? They're everywhere. We could have let GM die. We could abandon all tariffs on imports. Any time a policymaker uses "job creation" as a selling point for a policy initiative, that means jobs that exist for the purpose of providing people with incomes. Even the Fed has "full employment" as part of its dual mandate. The private financial sector funds small businesses that probably shouldn't exist. We still have local farms producing food when large-scale farming is far more efficient. Now that's fine if it's your hobby and that's how you want to spend your time, but we actually subsidize farming.

WalterBright 9y ago

> By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. This is a corollary to the myth that wealthy people hoard cash. They do not. 100% of their cash is invested, even the money held in a checking account (because the bank loans it out to people who spend it).

Suncho 9y ago
> > By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. > This is a corollary to the myth that wealthy people hoard cash. They do not. It depends on your definition of "hoard." I agree with you that they don't literally stuff it into mattresses... usually. > 100% of their cash is invested, even the money held in a checking account (because the bank loans it out to people who spend it). I agree. But a question we might ask ourselves is how much of that money is invested productively. In other words, how much of it flows back into the hands of the consumers for the purchase of useful wealth that benefits them? The answer is: not all of it. Then we can ask ourselves how much of that money flows into the financial sector and accumulates there without fueling the productive economy. The answer is: some of it. From the perspective of the productive economy, the result is the same as if rich people were stuffing their money into mattresses. So that money needs to be replaced. Historically, to the extent that we've replaced that money, we've tried to do it through the labor market and we've been moderately successful. One of the things we do is monetary stimulus that increases the amount of lending in the private financial sector. Some of that lending goes to the creation of jobs that we probably don't need. It also destabilizes the economy by fueling credit bubbles like the one we saw collapse in 2008. Basic income is an alternative. If you prefer, you can think of it as a form of fiscal stimulus that would allow the Fed to normalize interest rates.

tomcam 9y ago

> We have a lot of pointless jobs in the economy that really only exist as an excuse to provide people incomes. Examples, please? Who are the benefactors giving away these jobs? EDIT: Parent's answer is at https://news.ycombinator.com/item?id=15919065 https://news.ycombinator.com/item?id=15919065

deleted 9y ago
[deleted]

prawn 9y ago

I agree that it'd be on the front page regardless of the author. It's always a popular discussion topic on HN, and that's predated Altman's newest thrust.