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The major reason why I think UBI is a bad idea is that money is a unit of measurement, not a quantum of consumable production. The flow of goods and services f

The major reason why I think UBI is a bad idea is that money is a unit of measurement, not a quantum of consumable production. The flow of goods and services from producer to consumer is lubricated by money, not entirely controlled by it. That economic fluid, like blood, has to circulate in order to be useful. In many places, the flow is very asymmetric. A region has natural resources, or a cultural significance, or a coincidental concentration of skills. But for whatever reason, the value is then extracted and sent elsewhere, rather than staying in the community that produced it. Absentee landlords take their rents and spend them in a different city. Chain and franchise businesses send their profits to distant owners that spend their dividends and distributions elsewhere. Worker wages are sent to families that live in another city. Local money is spent mostly on consumables instead of development capital. When owners don't spend money where they earned it, it becomes a circulation problem. The work that people do in their own communities is then being used to develop and improve someone else's community. Coal miners in West Virginia are actually digging up million-dollar houses in Washington DC metro area. Farmers in Iowa are actually growing luxury cars in Chicago. Software developers in New Mexico are actually launching a new live-act auditorium in Las Vegas. All the work done, everywhere around the world, is developing mostly the places where the owners live, and those people don't want to live in undeveloped places, even if those places are only undeveloped because all the development potential is continually sucked out to be sent to the owners. So what is needed is universal basic ownership. If you just dump helicopter cash onto an undeveloped area, the owners can suck harder on their rent straw until they drain away all the excess. Live in a home you own, with no mortgage, and there are no checks being sent out of town for rent or interest. Buy fiber-to-the-home network access from the municipality, and the service fee is not being sent to Comcast or AT&T headquarters; it's being spent on local capital and jobs. When most of the ownership is local, it's much easier to balance the production that the community exports with the consumables that it imports. The only way to unbalance it from there is to make the community want more imports, without buying more of its exports. That extra cash in the mailbox isn't going to fix the economic problems inherent in locally unbalanced earning and spending. It is only a short term fix to tax the high-ownership individuals and move the money to where it should have been spent. It's like performing a cardiac bypass without also attempting a lifestyle intervention with the patient. That new flow route will work for a little while, and then it too will get clogged with calcified plaques, just like the others. UBI treats a symptom, instead of curing the disease, which is that too few people own too much property, and thus they literally cannot spend enough in all the communities in which they own that property to keep them all healthy.

CuriousSkeptic 7y ago
Interesting line of thought. What’s your take on Henry George? (Arguing for distributing land rent equally, which would counter your concerns somewhat)
- logfromblammo 7y ago
  I think Georgism has a calculation problem, and furthermore I don't believe one can model the supply of land as a perfect vertical supply curve. I don't think that it is possible to fairly assess the value of a location separately from the permanent improvements to the land. And I don't like systems that produce scenarios wherein a hostile party could potentially make adversarial plays to force a disadvantageous sale onto a cooperating person and profit from it. I'm not entirely sure that the problem George was trying to tackle is even fixable. A human as an economic entity is a bundle of connections that are sometimes dependent upon distance, and sometimes dependent upon time, and other times dependent on information. These threads tangle in a way that cannot be easily unraveled. And frankly, I'm not convinced that land value is even the most significant keystone factor in modern economies any more. The new land rush seems to be in intellectual property. Having already perfected the extraction of rents from the biological necessities of breathing, drinking, eating, and sleeping, the rentiers have climbed higher on the hierarchy of needs by establishing privileged positions in education, social connections, and entertainment.
dllthomas 7y ago
UBI shifts money from concentrations of income to concentrations of people, where those differ. That seems like it makes the circulation better, not worse. A similar view is why I very much support UBI.
- logfromblammo 7y ago
  It makes the circulation temporarily better. The concentrations of income and the concentrations of people should be geographically coincident. If you look at poor neighborhoods and rich neighborhoods very closely, you will see all the little pumps operating that move money from one to the other. The apartment building residents live here, but they send their rent checks over there. They consume water, electricity, and telecoms here, but send their utility checks over there. The socialize here, but then send licensing and royalties over there. When they need to find extra cash, it isn't here; it's all gone over there. And they can't get over there, because there's an admission fee at the gate, and guest fees for every hour they stay, that the members don't have to pay. The reason the people that UBI would help most don't have additional productive capacity to improve their own lives is not because they are lazy or unfit, but because they are already attached to a system to siphon off their excess and shunt it elsewhere, whose capacity is currently limited by the amount of excess there is. You can't pump enough money into UBI to overwhelm the system. So if you create an artificial excess by cutting $1000 checks to people, the siphon can just be dialed up from 2 to 3, and that excess gets (mostly) drained, too. If you start sending $100000 checks to people, that's probably more than the existing systems can drain away, but it's also more than the government revenue system can generate without annihilating the regular economy. In order to solve the problem that UBI seems to want to solve, you have to disconnect people from the siphoning machines. That means owning the homes they live in, owning the tools they use, owning the businesses that use their labor, owning the culture they live in, and owning the infrastructure. No matter how much money you put in a UBI check, if someone pays rent on their home, pays utility bills to private companies, shops at businesses that don't spend where they earn their money, and lives under a government that does not respect their interests, they will have just as much trouble saving or investing that extra cash as they had with the paychecks from their job(s). Instead of dropping all that UBI cash from helicopters, use it to build or renovate houses that are sold at 10% over cost, regardless of what the market will bear. Use it to create municipal-owned utilities wherever private utilities are the only option. Use it to build municipal-owned health care facilities. Use it to build municipal-owned community colleges that can grant bachelor's degrees in at least one locally-relevant discipline, or grant educational credit that is transferable to any other college. Use it to keep public libraries, public radio, and public television operating. Use it to build separate passenger rail and cargo rail links to the nearest big city. Use it to promote small, locally-owned businesses in the community. Use it to smash political corruption in local government. Use it to pry all the money-draining machines off of the people that want to invest in themselves and their neighbors, instead of being human resources to be mined dry and then discarded. If more money stays in the community, the opportunities to earn money will stay in the community, and there will be less need to inject money back in via tax-funded government spending. You don't need to go Marxist and seize the means of production. You just have to dismantle the mechanisms that automatically siphon off excess production and send it off to someone else. Hammer away the props that hold up the rentiers, and make the easiest path to great wealth to be providing great value to society--by seeking out win-win propositions, rather than playing a zero-sum game. Fewer people get rich, but more can climb up out of poverty, and more can be middle-class with reasonable working hours and retire with enough to maintain their previous lifestyle. You will not see this proposed by any politician in 2019, because implementing it would be exceedingly difficult, and require a sharp political focus, that has not existed in the US since 1968. It is far easier to promise that checks in your mailbox every month will make it all better.

CuriousSkeptic 7y ago

Interesting line of thought. What’s your take on Henry George? (Arguing for distributing land rent equally, which would counter your concerns somewhat)

logfromblammo 7y ago
I think Georgism has a calculation problem, and furthermore I don't believe one can model the supply of land as a perfect vertical supply curve. I don't think that it is possible to fairly assess the value of a location separately from the permanent improvements to the land. And I don't like systems that produce scenarios wherein a hostile party could potentially make adversarial plays to force a disadvantageous sale onto a cooperating person and profit from it. I'm not entirely sure that the problem George was trying to tackle is even fixable. A human as an economic entity is a bundle of connections that are sometimes dependent upon distance, and sometimes dependent upon time, and other times dependent on information. These threads tangle in a way that cannot be easily unraveled. And frankly, I'm not convinced that land value is even the most significant keystone factor in modern economies any more. The new land rush seems to be in intellectual property. Having already perfected the extraction of rents from the biological necessities of breathing, drinking, eating, and sleeping, the rentiers have climbed higher on the hierarchy of needs by establishing privileged positions in education, social connections, and entertainment.

dllthomas 7y ago

UBI shifts money from concentrations of income to concentrations of people, where those differ. That seems like it makes the circulation better, not worse. A similar view is why I very much support UBI.

logfromblammo 7y ago
It makes the circulation temporarily better. The concentrations of income and the concentrations of people should be geographically coincident. If you look at poor neighborhoods and rich neighborhoods very closely, you will see all the little pumps operating that move money from one to the other. The apartment building residents live here, but they send their rent checks over there. They consume water, electricity, and telecoms here, but send their utility checks over there. The socialize here, but then send licensing and royalties over there. When they need to find extra cash, it isn't here; it's all gone over there. And they can't get over there, because there's an admission fee at the gate, and guest fees for every hour they stay, that the members don't have to pay. The reason the people that UBI would help most don't have additional productive capacity to improve their own lives is not because they are lazy or unfit, but because they are already attached to a system to siphon off their excess and shunt it elsewhere, whose capacity is currently limited by the amount of excess there is. You can't pump enough money into UBI to overwhelm the system. So if you create an artificial excess by cutting $1000 checks to people, the siphon can just be dialed up from 2 to 3, and that excess gets (mostly) drained, too. If you start sending $100000 checks to people, that's probably more than the existing systems can drain away, but it's also more than the government revenue system can generate without annihilating the regular economy. In order to solve the problem that UBI seems to want to solve, you have to disconnect people from the siphoning machines. That means owning the homes they live in, owning the tools they use, owning the businesses that use their labor, owning the culture they live in, and owning the infrastructure. No matter how much money you put in a UBI check, if someone pays rent on their home, pays utility bills to private companies, shops at businesses that don't spend where they earn their money, and lives under a government that does not respect their interests, they will have just as much trouble saving or investing that extra cash as they had with the paychecks from their job(s). Instead of dropping all that UBI cash from helicopters, use it to build or renovate houses that are sold at 10% over cost, regardless of what the market will bear. Use it to create municipal-owned utilities wherever private utilities are the only option. Use it to build municipal-owned health care facilities. Use it to build municipal-owned community colleges that can grant bachelor's degrees in at least one locally-relevant discipline, or grant educational credit that is transferable to any other college. Use it to keep public libraries, public radio, and public television operating. Use it to build separate passenger rail and cargo rail links to the nearest big city. Use it to promote small, locally-owned businesses in the community. Use it to smash political corruption in local government. Use it to pry all the money-draining machines off of the people that want to invest in themselves and their neighbors, instead of being human resources to be mined dry and then discarded. If more money stays in the community, the opportunities to earn money will stay in the community, and there will be less need to inject money back in via tax-funded government spending. You don't need to go Marxist and seize the means of production. You just have to dismantle the mechanisms that automatically siphon off excess production and send it off to someone else. Hammer away the props that hold up the rentiers, and make the easiest path to great wealth to be providing great value to society--by seeking out win-win propositions, rather than playing a zero-sum game. Fewer people get rich, but more can climb up out of poverty, and more can be middle-class with reasonable working hours and retire with enough to maintain their previous lifestyle. You will not see this proposed by any politician in 2019, because implementing it would be exceedingly difficult, and require a sharp political focus, that has not existed in the US since 1968. It is far easier to promise that checks in your mailbox every month will make it all better.