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Modelling a Basic Income with Python and Monte Carlo Simulation

111 points by spindritf 13y ago

maxerickson 13y ago
Such a post would really benefit from some analysis of how sensitive the model is to each assumption. I think that might be the most interesting way of looking at such an abstract model.
iSnow 13y ago
Without empirical data, it is next to pointless to throw together some assumptions and model them. No, writing code is not the point here. Anyone can write code to do this kind of modeling. Reducing the huge amount of degrees of freedom in the model in a meaningful and fact-based way is key. And here the author fails big time.
didgeoridoo 13y ago
This seems like a perfect scenario to try out Bret Victor's "explorable explanations"; i.e. not just documenting assumptions & code inline with your reasoning, but making the document itself explorable and reactive: http://worrydream.com/#!/ExplorableExplanations http://worrydream.com/#!/ExplorableExplanations
darkxanthos 13y ago
"If you disagree, write code." Love this. Also nice application of Monte Carlo simulations. They're great for thought experiments.
Bsharp 13y ago
Good article, it's nice to see someone not only provide some actual analysis, but also be clear with their assumptions and welcome critique.
- ronaldx 13y ago
  Welcoming critique? I didn't get that at all. I personally think writing "shut the fuck up" removes any sense of critique being welcomed. The author does kindly gives us permission to critique as long as we accept his model - a very naive device with zero academic or economic justification.
  - Bsharp 13y ago
    You're leaving the part out where he says "and write some fucking code." He wants people to show him he's wrong with analysis/simulation instead of tell him he's wrong with their opinions, which is entirely valid.
    - ronaldx 13y ago
      As long as the situation is mathematically more complicated than the board game Go (for example), opinions probably beat code. Expert opinions certainly beat naive code. This is not to say that code cannot be valuable, but the justification for this code does not even begin to touch upon real macroeconomic issues. One of the possible concerns of a basic income is rampant inflation - it's clear that the author has not even considered this.
      - Bsharp 13y ago
        Expert opinions are often based on economic models which use incredibly simplified assumptions and questionably appropriate mathematical techniques. At least this guy is willing to post his model for the world to pick apart.
        ronaldx 13y ago
        As a direct criticism, the choice of the Normal distribution adds nothing to the model other than acting as a cover for the author's choice of point estimates. I believe you would get the same results independent of the distribution. Choosing a Normal distribution serves only to create an apparent range of results that are weighted towards the author's preferred choices of values. Peer-reviewed economic models would have to justify their model assumptions in a more robust way, including empirical data where appropriate. I'm not an expert but I expect this is a good place to start: http://www.journals.elsevier.com/economic-modelling/ http://www.journals.elsevier.com/economic-modelling/ All models use simplified assumptions and questionably appropriate techniques, I agree - that is practically the definition of 'model'. However, a useful model should justify those assumptions and techniques using current research-level knowledge, and/or show how the model applies successfully to reality. I see this model to be as useful to economic discussion as saying "the world is flat, plus or minus 5 degrees". It ignores all current work in the field.
brador 13y ago
Complexity + assumptions. There are too many variables and unknowns to make even a reasonably accurate model. Also, you're dealing with rational and non- rational actors and the creation of new actors as time moves forward. Cute analysis though.
- grimtrigger 13y ago
  I think thats one of the most important points of the article. People who argue definitively one way or the other on basic income are simply making assumptions they can not logically make. I hope some country/state out there tries out an experiment with basic income (just not mine). Politically, I don't think it will happen. A few poor people getting benefits cuts will ring a lot more loudly than middle class and rich people getting benefits raises.
mk270 13y ago
if you disagree, write some code unstated assumption: and do so quickly enough for it to influence the discussion before it slips off HN
- yummyfajitas 13y ago
  Post it on your own blog and tell me when you do. I'll certainly upvote it.
  - mk270 13y ago
    Deal: I want to investigate the case where everyone is bullied into quitting their job, by thugs who don't want laziness to stop being a social norm
ckluis 13y ago
Overall good attempt, but there are factors which are harder to measure. How many people start new companies since they have a little fallback support? (potential increase or decrease) How many dual-income families can afford to have a single parent working with the income of two families coming in? (potential decrease) How many people can afford not to work while in college now? (potential decrease) In previous question, Does this mean their long term chances of success are higher? (potential increase) How many people could use the benefits after a layoff + savings to better them selves and their future before re-entering the work force? (potential increase)
- yummyfajitas 13y ago
  How many people start new companies since they have a little fallback support? This is partially modelled by the jk_rowling() function. If you feel that is insufficient (I agree, it probably is), add a term you feel is realistic and check if it changes the result. For any parameters you don't know, choose a probability distribution that you feel encompasses all plausible values of the parameter. Then run your new model. Who knows, it might be the case that no matter what plausible value you choose, it doesn't matter. Or it could change things entirely. These are both useful things to find out, and we'll only know if you write some code.
  - ckluis 13y ago
    Thanks for responding. I should have clarified in my initial post that I am marketer with only barely passible php hacking skills. If I were to spend more time learning to properly program, it would probably not be in Python. I'm sorry you felt I needed a downvote for offering suggestions for additional variables (I do not think the jk_rowling function alone solves those issues) was a negative comment. I was trying to help without having the skills to directly participate. Nevermind the dual Masters in Business or the Minor in Economics. Oh and ignore the fact that I talk to my brother about complex economic issues (he has a Masters in Econometrics). Ignore the fact, I think this is fascinating topic and have tried to read everything I can on the topic. I'm sorry I tried to help without code.
spindritf 13y ago
I don't think you use it anywhere but > The marginal income from labor under a BI is precisely (1 - tax_rate) * income, rather than (1 - tax_rate - lost_benefits) * income. shuldn't the second one be (1 - tax_rate) * income - lost_benefits? I don't know if/how benefits are taxed in the US.
- wavefunction 13y ago
  Many transfer payments in the US are subject to taxation. This includes Social Security, Unemployment, and some forms of Disability.
zoul 13y ago
I think the whole discussion boils down to this: An additional cost is the incentive or disincentive for engaging in productive work created by the Basic Income. On the one hand, the BI creates disincentives for recipients to engage in productive labor. If you are happy earning direct_cost each year, why bother putting down Call of Duty and getting a boring job? (…) My inclination is that it is more likely to reduce labor than increase it. So I’ll assume that the number of non-working adults will increase by up to 10%, or decrease by up to 5%. This is always going to be the crucial input parameter that makes or breaks the whole idea, and no amount of math modelling is going to tell you how millions of people will behave after such radical change.
- terhechte 13y ago
  Certainly true, though it would be interesting to simply model both cases and see how much the results deviate from each other.
- AndrewDucker 13y ago
  Absolutely. _My_ feeling is that people would always like a little bit more money. Basic income removes the "cliff" effect, whereby earning more money can actually reduce your income. Therefore people will work more. After all, if you could go out and work for five hours next week, and be guaranteed that those five hours would give you the cash to buy something you have your eye on, then why wouldn't you?
  - zoul 13y ago
    Agreed. But would those “five hours of work” be enough for the whole economy to stay afloat and pay the basic income?
    - AndrewDucker 13y ago
      Not by itself. The question is - once you start accumulating, how much will people prioritise "getting more stuff" over "playing computer games all day"? I mean, I earn about $60k. I'm not about to drop down to a $10k income, even if I could get that without any effort. And I think most people are like that - a big reason, as far as I can tell, that many people who could work, don't is that they would lose money by doing so, at least to start with, and they're terrified to take that risk. Let's say you're unemployed now - someone asks you to help them wash windows for a few hours next week. Doing so would jeopardise your benefits, and possibly leave you homeless if you were found out. If you could take that bit of work, you'd probably find the number of hours going up (if you were any good at it) and possibly leading into more, better, work. But if we stop people even taking that first step, we effectively shut them out of the job market. (I'm sure there would be _some_ people that decided to play games all day. But I'm fairly sure the free riders would be a tiny part of the population. People like stuff too much for that.)
shawabawa3 13y ago
I'm sorry but this is a bit ridiculous There are dozens of completely arbitrary assumptions and nobody could possibly know if they were anything close to being right > If you disagree, write code. Ok.. "With a Basic Job, you can’t - your choices are a Basic Job for $14480 or possibly a McJob for marginally more (say $15000). I’ll model this by assuming the number of non workers will increase by up to 5%, or decrease by up to 20%:" I disagree, I made my model assuming that the number of non-workers increases by between 60 and 80% Oh look! My results show that basic income is better! Great, that's what I believed before hand, my model must be good. edit: I'm all for mathematical modelling, but there needs to be some kind of basis for the assumptions, and it helps if there are less than a bajillion assumptions too. Anyone could tweak all the assumptions so they still sound reasonable and come up with any conclusion they wanted from this model
- yummyfajitas 13y ago
  Run the model with your altered assumption. The result might surprise you. http://imgur.com/KwJIZoM http://imgur.com/KwJIZoM Even with what I consider to be a wildly unrealistic assumption, the Basic Job is still cheaper than the Basic Income in well over 50% of possible worlds. I repeat: write some fucking code. Don't just say you did, actually do it.
- smackay 13y ago
  But writing some fucking code gives a good basis for a more informed debate since there could be a pool of models in existence which could then be refined. It also makes it a lot easier to test various assumptions and determine the sensitvity of various models. For example, take the number of non-workers a more plausible assumption is that everyone earning less than minimum wage + n, where n is the cost of maintaining the job would stop work immediately. That's a step forward from both figures used so far. A set of iPython notebooks on Github could inspire the inner economist in us all.
- Bsharp 13y ago
  All of your concerns are addressed in his article: > The basis of any informed discussion is a mathematical model. The best way to think of a mathematical model is a way to force everyone to clearly enumerate all assumptions being made, and to accept all logical reasoning that follows from those assumptions. Given a model, everyone involved in a discussion can agree that either the conclusions of the model are correct, or one of the assumptions going into the model must be false. This is very important when disagreement is reached - disagreement in the conclusions implies disagreement with some assumption, so it makes sense to figure out which assumption is the cause of disagreement. It’s also important not to be blinded by a model. The involvement of numbers does not make an argument empirically correct - it simply makes it more understandable and less likely to be logically flawed. He knows the limitations of mathematical modeling and is simply presenting a basic simulation of these two policies subject to various assumptions.
VLM 13y ago
"There are no qualifications beyond being an adult citizen to receiving a Basic Income." A minor mistake. The only "sorta well known to Americans" basic income is the Alaska fund which does only pay to adults. However most proposals seem to apply to "living humans" or whatever. After all, kids need to eat too. Or if using the franchise fee model of justification, kids lives are being ruined by the economic system too.
- jofer 13y ago
  As far as I know, Alaska's permanent fund pays to children too, as long as they're born in the state or have lived there long enough to be counted as residents (2 years, maybe? Can't remember.).
  - VLM 13y ago
    Well, that's embarrassing, you are 100% correct. I looked it up, and the only non-recipients other than non AK residents are felons in prison (no idea why, I guess to punish their families with less income or make sure they can't pay restitution to victims?) So, no, I have no idea where he gets the idea only adults would get an income.
freeman478 13y ago
Note that he did not substracte the current wealth_transfers from his cost/benefits analysis. it does not change the comparsion of BI vs BJ but it is interesting to note that even with his assumptions it means the effective impact on USG Budget is approx 0 for BI and a big reduction of $ 2 trillion for BJ.
- yummyfajitas 13y ago
  I forgot about that one. I don't actually expect to change anyone's mind on the political issue - my real interest here is simply writing a monte carlo tutorial and pushing the "model everything" ideology.
yetanotherphd 13y ago
This is great, if only the field of Economics would start to use models based on mathematical assumptions in order to predict the outcomes of policies.
Jacqued 13y ago
While interesting, I think this demonstrates why numbers are basically useless in these kinds of discussions. Even with a very simplistic model, there are too many assumptions that can be contested forever and that will ultimately only depend on what the people debating already think about it. I, for example, would make the assumption that the marginal value produced by a Basic Job worker in an hour would be close to 0, while administrative costs are underestimated by an order of magnitude. Now, it might be fun to try these out when I get home, but I don't think I can get any significant insight from it. And if you were to refine the model, it would then become too complicated to discuss in ways that could be comprehended by most people - too much effort and they'll stop listening. Moreover, it fails to account for larger benefits to society, which cannot be measured in the way such a simulation works. For this one we could seem crime dropping (happier society, prison costs diminishing, etc.), global health indicators improving (thus preventing tremendous cost), etc.
- yummyfajitas 13y ago
  Why can't you model a happier society, reduced prison costs, etc? Lets focus on the latter. How many people commit crimes due to lack of a Basic Income? (If you don't know precisely, choose a probability distribution that includes all values you find plausible. For example, choose a uniform distribution on [0, # of criminals/year].) How much do each of these criminals cost society? (If you don't know precisely, choose a probability distribution that includes all values you find plausible.) Multiply the former by the latter and subtract it from the result. Rerun the simulation. Maybe the result will change a lot, maybe it won't change much at all. I don't know what will happen, but the simulation will tell you what could happen.
- darkxanthos 13y ago
  So should we just go with our gut and intuition? There are places where that's a valid approach (a reason why Amazon Turk thrives) but understanding complex systems is probably not the place for that. I do agree his model is probably overly simplistic. What could be awesome though is open sourcing something like this and having the debate evolve as a series of pull requests and forks that represent different assumptions and scenarios.
bsbechtel 13y ago
I fully admit, I didn't read through the details of your assumptions, just skimmed the post, but I didn't see anything addressing the changes in prices of basic goods if everyone can afford them. Do you model any increase/decrease in prices - e.g., a 10% increase in demand for housing cause a 10% increase in housing prices?
- VLM 13y ago
  Everyone can already afford basic goods. Its just at the lowest of incomes instead of a varied portfolio of extremely expensive to administrate benefits, all that would be wiped out and replaced with one simple check. A slumlord can TRY to raise his rent 10% anytime he wants, including today, but if the residents aren't making any more money, that plan is not going to work very well. At the highest levels multimillion dollar lakefront homes aren't going to be affected unless we unleash subprime loans again (which would be profitable, so we will, but thats another discussion). The primary effect would be on the shrinking middle class. Many of those extremely expensive welfare administrators are middle class and replacing those jobs with an extremely small shell script is going to result in massive middle class job loss. That should be modeled. One mistake in the model was assuming "basic job" would produce anything at all. I suspect the most likely outcome of putting one dude in charge of two dudes, one digging holes, and the other filling the holes in, is both guys are going to pay a small bribe to the boss to falsify the paperwork. Another severe attitude problem issue is you assign a guy to a "basic job" picking up trash in a park, well, if he goes fishing instead, you can't fire him from a guaranteed job. You're supposed to be a teachers aide at school; well, yes, but I'm checking facebook on my phone instead, what are you going to do about it? I suspect the value produced will approach zero. Another model error is assuming the only unusual payoff will be JKRowling style, but I suspect you'll have 100000 amateur theater geeks and wanna be musicians for every billion dollar author. So the cultural production should explode. Hard to say if it'll be worth anything, but they'll be a lot of it, that's for sure.
  - bsbechtel 13y ago
    >Everyone can already afford basic goods. Its just at the lowest of incomes instead of a varied portfolio of extremely expensive to administrate benefits, all that would be wiped out and replaced with one simple check. I think you and I disagree on this assumption. For one, we still have homeless people, although for a handful it is a lifestyle choice. I'd say it's far more nuanced and complex than to just say everyone can already afford basic goods. If someone loses all their current gov't benefits, but starts receiving $1,000/mo which they are free to spend however they want, how do their buying habits change? No one really knows. As far as I know, food stamp programs and other current welfare programs have many restrictions on the types of goods you can purchase. In addition, we aren't considering the marginal costs of increased production of some goods, while others are negligible - e.g., software. I agree with your other criticisms of the model though.
transfire 13y ago
The purpose of economics is defeated by making "busy work". The government can pay everyone to dig holes, but do we need all those holes? That's the fundamental problem with the Basic Job concept. But give everyone basic income, now they have money to spend. When they spend the money it creates jobs to produce the things that people actually need and want. No simple programming model can account for this. I should also point out that governments already create far too many "busy work" jobs as it is. The IRS and welfare systems are some of the best examples due to overly complex regulations and means testing.
- tptacek 13y ago
  I'm not sure how this observation defeats the purpose of economics. The reason you give people a basic job is not that we need the work done --- after all, the alternative to it is the basic income, which pays them to do nothing. The purpose of the basic job is to fix the incentive problem of a basic income, which would encourage people not to work because there'd be inadequate marginal benefit to a low-wage worker to take a job.
  - yummyfajitas 13y ago
    That, and the fact that there are many jobs that could be done with some value. Picking up trash in a rarely visited park may not be worth $7.25/hour (presumably if it was, that job would already be being done in today's economy), but it might be worth $0.90/hour. Or maybe it's worth $2.34/hour or $7.23/hour. I don't purport to know the answer which is why that number is a random variable.
  - fleitz 13y ago
    It actually pays them to do whatever they are doing. Living != Nothing. There's no reason to imply that whatever the government tells them to do for their basic job produces more value than whatever they decide to do. It's pretty well established that the more government tells people what to do for work, the less an economy produces. Lets make people pick trash instead of helping educate their kids, surely picking trash is of much more societal value...
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wehadfun 13y ago
What about the increase in family size. If having more children increases a family's income people will have more kids. People receiving welfare do it all the time. These kids will not be contributing towards the basic income but will be drawing from it.
wmt 13y ago
I can't criticize a hypothesis if I cannot create a better one? That's extremely unscientific.
glomph 13y ago
A basic job system and a basic income system do not have the same effect in terms of replacing current 'wealth transfers' (what a ghastly term for such a disparate set of social policies and programs). 16% of US government spending is on pensions (by the posters own source). Those people need money to live. Unless you expect them to work until they die / become disabled, then they are not covered by the naive model of a basic job system. Indeed the basic job model completely ignores 52 million people who are not in the workforce or disabled (by their own numbers). Many of these people require government money to live as well. It is worth noting that in (small) trials in canada it was overwhelmingly students and parents that stopped working (and that is out of the labour force) and in much smaller numbers than the author suggests (although admittedly this may be because they knew the program was temporary). Most of the costs and benefits involved in a welfare system are not present in this model. The suggestion that the only value people receiving welfare create is the occasional one in ten million great work is frankly shockingly old fashioned. It is as if 300+ years of political philosophy have simply passed the author by. To say the least you need to think about the effects on child care, students, crime rates and all the latent costs that a lack of financial freedom creates.
truthteller 13y ago
What a bizarre article. this is a worthless exercise without any data. the task of building a model of labour market and estimating your model with real data is very complicated.
- lotyrin 13y ago
  Relevant username, really too bad you're down here. import random def sky_is_green(): return random.choice([True]) Please, if you disagree, write some fucking code.
zeteo 13y ago
>shut the fuck up and write some fucking code [links to argument that simply writing code is the best way to learn programming] Way to confirm stereotypes that programmers are abrasive and narrow minded. Writing code may be a good way to learn programming; that doesn't mean it's ideal for discussing economics. For one thing, even for an expert the code takes longer to read than a baldly stated list of assumptions. And not everyone is a Python expert. > if I’m wrong, either Python is computing the wrong answer, I got really unlucky [...] or one of my assumptions is wrong. Umm no. This is a false alternative. How about a lot of assumptions being left out altogether. E.g. it's pretty clearly assumed that this doesn't affect economic growth, any benefits resulting from changed income inequality [1] are left out, inflationary effects do not exist etc. Any half serious student of economic modeling would have a field day picking out all the details routinely discussed in macroeconomics that this analysis is ignorant of. And anyway who are these financial results even calculated for? If it's the government, then the expenses are fully incurred, but the "JK Rowling factor" is taxed at less than 100% to compensate. If it's the average person, you need to somehow factor in the benefit of reading Harry Potter! [1] http://en.wikipedia.org/wiki/Gini_index http://en.wikipedia.org/wiki/Gini_index
- maxerickson 13y ago
  Current GDP calculates the benefit of reading books by including their sales. It doesn't do anything to capture consumer surplus.
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- rbehrends 13y ago
  How about a lot of assumptions being left out altogether. Yes, and you didn't even mention some of the biggest assumptions. For example, because Basic Income is something that you get even if you work, you'd be looking at a completely different salary structure. If you earn $2500 now and a Basic Income of $1500 were introduced, then you wouldn't suddenly earn $4000. You'd earn something like $1000 (plus or minus a factor due to the incidental massive changes to the economy from a Basic Income/Basic Job setup) on top of your Basic Income. That also means that taxation would have to work completely differently. How that turns out is anybody's guess. With an emphasis on "guess". Code cannot magically substitute for the lack of the completeness of the underlying model, or for the research necessary to figure out the model. If you make stuff up from whole cloth and then bake it into code, it still remains stuff that's been made up from whole cloth. Running a program does not validate the underlying model.
bitwize 13y ago
Remember, folks, there are four kinds of lies: lies, damned lies, statistics, and computer models.
JackFr 13y ago
http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/hayek-lecture.html http://www.nobelprize.org/nobel_prizes/economic-sciences/lau... "It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences - an attempt which in our field may lead to outright error. It is an approach which has come to be described as the "scientistic" attitude - an attitude which, as I defined it some thirty years ago, "is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed."" "Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones. While in the physical sciences it is generally assumed, probably with good reason, that any important factor which determines the observed events will itself be directly observable and measurable, in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process, for reasons which I shall explain later, will hardly ever be fully known or measurable."
scarmig 13y ago
I've posted a much simpler model than what Chris did, to make it clearer what's driving his results: https://gist.github.com/anonymous/7452196 https://gist.github.com/anonymous/7452196 Run it, and it will look very similar to what the more complicated model results in. Almost the entirety of his model's result comes from the fact that the BI is given to everyone, while the basic job is not. All the other parameters he brings up are interesting asides but irrelevant to the actual results of the simulations. His model of the basic jobs proposal is pretty much equivalent to a proposal that "if you're unemployed, you should get a basic income; if you're employed, you shouldn't." Basic income advocates consciously reject this. I don't have time to finesse the simple model right now to represent why we reject that proposal (I have, well, a job to go to =). But I'll hopefully get to it this evening.
- yummyfajitas 13y ago
  In my opinion, yours is so far the best comment on this thread. You analyzed the model, made your own, and cut to the heard of the matter. That's probably because you actually wrote some code and played with the model. Thank you. I look forward to seeing your alternative model. Please email me if this thread vanishes before you write it up, I really want to see it.
  - scarmig 13y ago
    Thanks--I appreciate you starting this discussion with this approach, and I almost feel guilty about pushing BI incessantly without doing this as due diligence before. Most people don't seem to get that models are useful starting places and tools for understanding, not the answer itself. Even when you state that explicitly...
    - notahacker 13y ago
      A corollary of your observation is that the BI is proposed to replace retirement benefits, whereas the BJ as specified in the model provides income for employed people and registered disabled only. Since BJ advocates seldom oppose the principle of state-aid for the retired, you'd probably need to start by solving this (pretty easily by adding "retired_person" and "administrative_cost_per_retired_person" variables) which would substantially reduce the cost gap between the two proposals.
agentultra 13y ago
It seems to me that perhaps the title of this link is misleading. The author doesn't model anything and shifts the burden of proof onto the reader if any doubt is cast on his assumptions. He also invalidates any conclusions regarding BI in the premise which makes the entire model meaningless (a kind of syllogistic fallacy iirc). Really this article should probably be something along the lines of, "Monte Carlo Simulations in Python." This is not a discussion of BI at all.
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anonymoushn 13y ago
I'd like to propose a third policy, the NOPtransferpayment. The way the new policy will work is, a new tax will be implemented for 1000 times the net income of every person who earns an income (after all other taxes and transfer payments). A new transfer payment will be implemented for 1000 times the net income of every person who earns an income (after all other taxes and transfer payments). This tax and transfer payment will not count toward calculations used by other programs. A new department will be created and staffed by 0 people, and 0 new forms will be necessary to implement the tax and transfer payment. A policy like this could reasonably be said to cost nothing, produce nothing, and indeed do nothing. If we think that congress generally makes the world a worse place by implementing policies that do things, then it would be an improvement for congress to work on this sort of thing instead. However, its cost-benefit under the proposed model is not $0 or (pay_per_lawmaker * n_lawmakers * nop_debate_time) but $13 quadrillion. The proposed model indicates that this program costs about 180 years of global production at the current rate, or a substantial portion of the value of the entire planet and all humans living on it. If we suppose the planet is worth about $200 quadrillion, we will run out of it about 15 years after implementing this policy.
gknoy 13y ago
Interestingly, the cost of even the more expensive option in his model appears to be similar in magnitude of the `wealth_transfers` field (which doesn't seem to be plotted or used later). If the plan is to replace certain spending with a basic job or income, it would be interesting to see the comparative costs and efficiency of what we're replacing as well.
j2d3 13y ago
What if we tied a basic income to accepting 24x7 monitoring of the body and all communications from the body's point of view in space... i.e., a monitoring band that tracks health biometrics, as well as audio and video, ambient temp, humidity, etc. - full instrumentation of each individual who opts in. The monitoring band would also act as the recipient's communicator (smartphone) - so - they can freely use it to call, text, email, get apps, etc., it's just that all the data they generate - each individual participant's trace - is recorded. The massive amount of data collected from people willing to trade a homeless lifestyle for one with a steady income would have tremendous value in aggregate, and be unavailable to anyone for nefarious purposes. The only thing you have to do to get the basic income is be willing to have all your data recorded (but not shared publicly!) Your anonymized data will then be made available (along with everyone else's) via an API to developers of apps, and, assuming you give them permission, they will be able to access your sensitive / personal / private data as well.

111 points by spindritf 13y ago

Such a post would really benefit from some analysis of how sensitive the model is to each assumption. I think that might be the most interesting way of looking at such an abstract model.

iSnow 13y ago

Without empirical data, it is next to pointless to throw together some assumptions and model them. No, writing code is not the point here. Anyone can write code to do this kind of modeling. Reducing the huge amount of degrees of freedom in the model in a meaningful and fact-based way is key. And here the author fails big time.

didgeoridoo 13y ago

This seems like a perfect scenario to try out Bret Victor's "explorable explanations"; i.e. not just documenting assumptions & code inline with your reasoning, but making the document itself explorable and reactive: http://worrydream.com/#!/ExplorableExplanations http://worrydream.com/#!/ExplorableExplanations

darkxanthos 13y ago

"If you disagree, write code." Love this. Also nice application of Monte Carlo simulations. They're great for thought experiments.

Bsharp 13y ago

Good article, it's nice to see someone not only provide some actual analysis, but also be clear with their assumptions and welcome critique.

ronaldx 13y ago
Welcoming critique? I didn't get that at all. I personally think writing "shut the fuck up" removes any sense of critique being welcomed. The author does kindly gives us permission to critique as long as we accept his model - a very naive device with zero academic or economic justification.
- Bsharp 13y ago
  You're leaving the part out where he says "and write some fucking code." He wants people to show him he's wrong with analysis/simulation instead of tell him he's wrong with their opinions, which is entirely valid.
  - ronaldx 13y ago
    As long as the situation is mathematically more complicated than the board game Go (for example), opinions probably beat code. Expert opinions certainly beat naive code. This is not to say that code cannot be valuable, but the justification for this code does not even begin to touch upon real macroeconomic issues. One of the possible concerns of a basic income is rampant inflation - it's clear that the author has not even considered this.
    - Bsharp 13y ago
      Expert opinions are often based on economic models which use incredibly simplified assumptions and questionably appropriate mathematical techniques. At least this guy is willing to post his model for the world to pick apart.
      - ronaldx 13y ago
        As a direct criticism, the choice of the Normal distribution adds nothing to the model other than acting as a cover for the author's choice of point estimates. I believe you would get the same results independent of the distribution. Choosing a Normal distribution serves only to create an apparent range of results that are weighted towards the author's preferred choices of values. Peer-reviewed economic models would have to justify their model assumptions in a more robust way, including empirical data where appropriate. I'm not an expert but I expect this is a good place to start: http://www.journals.elsevier.com/economic-modelling/ http://www.journals.elsevier.com/economic-modelling/ All models use simplified assumptions and questionably appropriate techniques, I agree - that is practically the definition of 'model'. However, a useful model should justify those assumptions and techniques using current research-level knowledge, and/or show how the model applies successfully to reality. I see this model to be as useful to economic discussion as saying "the world is flat, plus or minus 5 degrees". It ignores all current work in the field.

brador 13y ago

Complexity + assumptions. There are too many variables and unknowns to make even a reasonably accurate model. Also, you're dealing with rational and non- rational actors and the creation of new actors as time moves forward. Cute analysis though.

grimtrigger 13y ago
I think thats one of the most important points of the article. People who argue definitively one way or the other on basic income are simply making assumptions they can not logically make. I hope some country/state out there tries out an experiment with basic income (just not mine). Politically, I don't think it will happen. A few poor people getting benefits cuts will ring a lot more loudly than middle class and rich people getting benefits raises.

mk270 13y ago

if you disagree, write some code unstated assumption: and do so quickly enough for it to influence the discussion before it slips off HN

yummyfajitas 13y ago
Post it on your own blog and tell me when you do. I'll certainly upvote it.
- mk270 13y ago
  Deal: I want to investigate the case where everyone is bullied into quitting their job, by thugs who don't want laziness to stop being a social norm

ckluis 13y ago

Overall good attempt, but there are factors which are harder to measure. How many people start new companies since they have a little fallback support? (potential increase or decrease) How many dual-income families can afford to have a single parent working with the income of two families coming in? (potential decrease) How many people can afford not to work while in college now? (potential decrease) In previous question, Does this mean their long term chances of success are higher? (potential increase) How many people could use the benefits after a layoff + savings to better them selves and their future before re-entering the work force? (potential increase)

yummyfajitas 13y ago
How many people start new companies since they have a little fallback support? This is partially modelled by the jk_rowling() function. If you feel that is insufficient (I agree, it probably is), add a term you feel is realistic and check if it changes the result. For any parameters you don't know, choose a probability distribution that you feel encompasses all plausible values of the parameter. Then run your new model. Who knows, it might be the case that no matter what plausible value you choose, it doesn't matter. Or it could change things entirely. These are both useful things to find out, and we'll only know if you write some code.
- ckluis 13y ago
  Thanks for responding. I should have clarified in my initial post that I am marketer with only barely passible php hacking skills. If I were to spend more time learning to properly program, it would probably not be in Python. I'm sorry you felt I needed a downvote for offering suggestions for additional variables (I do not think the jk_rowling function alone solves those issues) was a negative comment. I was trying to help without having the skills to directly participate. Nevermind the dual Masters in Business or the Minor in Economics. Oh and ignore the fact that I talk to my brother about complex economic issues (he has a Masters in Econometrics). Ignore the fact, I think this is fascinating topic and have tried to read everything I can on the topic. I'm sorry I tried to help without code.

spindritf 13y ago

I don't think you use it anywhere but > The marginal income from labor under a BI is precisely (1 - tax_rate) * income, rather than (1 - tax_rate - lost_benefits) * income. shuldn't the second one be (1 - tax_rate) * income - lost_benefits? I don't know if/how benefits are taxed in the US.

wavefunction 13y ago
Many transfer payments in the US are subject to taxation. This includes Social Security, Unemployment, and some forms of Disability.

zoul 13y ago

I think the whole discussion boils down to this: An additional cost is the incentive or disincentive for engaging in productive work created by the Basic Income. On the one hand, the BI creates disincentives for recipients to engage in productive labor. If you are happy earning direct_cost each year, why bother putting down Call of Duty and getting a boring job? (…) My inclination is that it is more likely to reduce labor than increase it. So I’ll assume that the number of non-working adults will increase by up to 10%, or decrease by up to 5%. This is always going to be the crucial input parameter that makes or breaks the whole idea, and no amount of math modelling is going to tell you how millions of people will behave after such radical change.

terhechte 13y ago
Certainly true, though it would be interesting to simply model both cases and see how much the results deviate from each other.
AndrewDucker 13y ago
Absolutely. _My_ feeling is that people would always like a little bit more money. Basic income removes the "cliff" effect, whereby earning more money can actually reduce your income. Therefore people will work more. After all, if you could go out and work for five hours next week, and be guaranteed that those five hours would give you the cash to buy something you have your eye on, then why wouldn't you?
- zoul 13y ago
  Agreed. But would those “five hours of work” be enough for the whole economy to stay afloat and pay the basic income?
  - AndrewDucker 13y ago
    Not by itself. The question is - once you start accumulating, how much will people prioritise "getting more stuff" over "playing computer games all day"? I mean, I earn about $60k. I'm not about to drop down to a $10k income, even if I could get that without any effort. And I think most people are like that - a big reason, as far as I can tell, that many people who could work, don't is that they would lose money by doing so, at least to start with, and they're terrified to take that risk. Let's say you're unemployed now - someone asks you to help them wash windows for a few hours next week. Doing so would jeopardise your benefits, and possibly leave you homeless if you were found out. If you could take that bit of work, you'd probably find the number of hours going up (if you were any good at it) and possibly leading into more, better, work. But if we stop people even taking that first step, we effectively shut them out of the job market. (I'm sure there would be _some_ people that decided to play games all day. But I'm fairly sure the free riders would be a tiny part of the population. People like stuff too much for that.)

shawabawa3 13y ago

I'm sorry but this is a bit ridiculous There are dozens of completely arbitrary assumptions and nobody could possibly know if they were anything close to being right > If you disagree, write code. Ok.. "With a Basic Job, you can’t - your choices are a Basic Job for $14480 or possibly a McJob for marginally more (say $15000). I’ll model this by assuming the number of non workers will increase by up to 5%, or decrease by up to 20%:" I disagree, I made my model assuming that the number of non-workers increases by between 60 and 80% Oh look! My results show that basic income is better! Great, that's what I believed before hand, my model must be good. edit: I'm all for mathematical modelling, but there needs to be some kind of basis for the assumptions, and it helps if there are less than a bajillion assumptions too. Anyone could tweak all the assumptions so they still sound reasonable and come up with any conclusion they wanted from this model

yummyfajitas 13y ago
Run the model with your altered assumption. The result might surprise you. http://imgur.com/KwJIZoM http://imgur.com/KwJIZoM Even with what I consider to be a wildly unrealistic assumption, the Basic Job is still cheaper than the Basic Income in well over 50% of possible worlds. I repeat: write some fucking code. Don't just say you did, actually do it.
smackay 13y ago
But writing some fucking code gives a good basis for a more informed debate since there could be a pool of models in existence which could then be refined. It also makes it a lot easier to test various assumptions and determine the sensitvity of various models. For example, take the number of non-workers a more plausible assumption is that everyone earning less than minimum wage + n, where n is the cost of maintaining the job would stop work immediately. That's a step forward from both figures used so far. A set of iPython notebooks on Github could inspire the inner economist in us all.
Bsharp 13y ago
All of your concerns are addressed in his article: > The basis of any informed discussion is a mathematical model. The best way to think of a mathematical model is a way to force everyone to clearly enumerate all assumptions being made, and to accept all logical reasoning that follows from those assumptions. Given a model, everyone involved in a discussion can agree that either the conclusions of the model are correct, or one of the assumptions going into the model must be false. This is very important when disagreement is reached - disagreement in the conclusions implies disagreement with some assumption, so it makes sense to figure out which assumption is the cause of disagreement. It’s also important not to be blinded by a model. The involvement of numbers does not make an argument empirically correct - it simply makes it more understandable and less likely to be logically flawed. He knows the limitations of mathematical modeling and is simply presenting a basic simulation of these two policies subject to various assumptions.

VLM 13y ago

"There are no qualifications beyond being an adult citizen to receiving a Basic Income." A minor mistake. The only "sorta well known to Americans" basic income is the Alaska fund which does only pay to adults. However most proposals seem to apply to "living humans" or whatever. After all, kids need to eat too. Or if using the franchise fee model of justification, kids lives are being ruined by the economic system too.

jofer 13y ago
As far as I know, Alaska's permanent fund pays to children too, as long as they're born in the state or have lived there long enough to be counted as residents (2 years, maybe? Can't remember.).
- VLM 13y ago
  Well, that's embarrassing, you are 100% correct. I looked it up, and the only non-recipients other than non AK residents are felons in prison (no idea why, I guess to punish their families with less income or make sure they can't pay restitution to victims?) So, no, I have no idea where he gets the idea only adults would get an income.

freeman478 13y ago

Note that he did not substracte the current wealth_transfers from his cost/benefits analysis. it does not change the comparsion of BI vs BJ but it is interesting to note that even with his assumptions it means the effective impact on USG Budget is approx 0 for BI and a big reduction of $ 2 trillion for BJ.

yummyfajitas 13y ago
I forgot about that one. I don't actually expect to change anyone's mind on the political issue - my real interest here is simply writing a monte carlo tutorial and pushing the "model everything" ideology.

yetanotherphd 13y ago

This is great, if only the field of Economics would start to use models based on mathematical assumptions in order to predict the outcomes of policies.

Jacqued 13y ago

While interesting, I think this demonstrates why numbers are basically useless in these kinds of discussions. Even with a very simplistic model, there are too many assumptions that can be contested forever and that will ultimately only depend on what the people debating already think about it. I, for example, would make the assumption that the marginal value produced by a Basic Job worker in an hour would be close to 0, while administrative costs are underestimated by an order of magnitude. Now, it might be fun to try these out when I get home, but I don't think I can get any significant insight from it. And if you were to refine the model, it would then become too complicated to discuss in ways that could be comprehended by most people - too much effort and they'll stop listening. Moreover, it fails to account for larger benefits to society, which cannot be measured in the way such a simulation works. For this one we could seem crime dropping (happier society, prison costs diminishing, etc.), global health indicators improving (thus preventing tremendous cost), etc.

yummyfajitas 13y ago
Why can't you model a happier society, reduced prison costs, etc? Lets focus on the latter. How many people commit crimes due to lack of a Basic Income? (If you don't know precisely, choose a probability distribution that includes all values you find plausible. For example, choose a uniform distribution on [0, # of criminals/year].) How much do each of these criminals cost society? (If you don't know precisely, choose a probability distribution that includes all values you find plausible.) Multiply the former by the latter and subtract it from the result. Rerun the simulation. Maybe the result will change a lot, maybe it won't change much at all. I don't know what will happen, but the simulation will tell you what could happen.
darkxanthos 13y ago
So should we just go with our gut and intuition? There are places where that's a valid approach (a reason why Amazon Turk thrives) but understanding complex systems is probably not the place for that. I do agree his model is probably overly simplistic. What could be awesome though is open sourcing something like this and having the debate evolve as a series of pull requests and forks that represent different assumptions and scenarios.

bsbechtel 13y ago

I fully admit, I didn't read through the details of your assumptions, just skimmed the post, but I didn't see anything addressing the changes in prices of basic goods if everyone can afford them. Do you model any increase/decrease in prices - e.g., a 10% increase in demand for housing cause a 10% increase in housing prices?

VLM 13y ago
Everyone can already afford basic goods. Its just at the lowest of incomes instead of a varied portfolio of extremely expensive to administrate benefits, all that would be wiped out and replaced with one simple check. A slumlord can TRY to raise his rent 10% anytime he wants, including today, but if the residents aren't making any more money, that plan is not going to work very well. At the highest levels multimillion dollar lakefront homes aren't going to be affected unless we unleash subprime loans again (which would be profitable, so we will, but thats another discussion). The primary effect would be on the shrinking middle class. Many of those extremely expensive welfare administrators are middle class and replacing those jobs with an extremely small shell script is going to result in massive middle class job loss. That should be modeled. One mistake in the model was assuming "basic job" would produce anything at all. I suspect the most likely outcome of putting one dude in charge of two dudes, one digging holes, and the other filling the holes in, is both guys are going to pay a small bribe to the boss to falsify the paperwork. Another severe attitude problem issue is you assign a guy to a "basic job" picking up trash in a park, well, if he goes fishing instead, you can't fire him from a guaranteed job. You're supposed to be a teachers aide at school; well, yes, but I'm checking facebook on my phone instead, what are you going to do about it? I suspect the value produced will approach zero. Another model error is assuming the only unusual payoff will be JKRowling style, but I suspect you'll have 100000 amateur theater geeks and wanna be musicians for every billion dollar author. So the cultural production should explode. Hard to say if it'll be worth anything, but they'll be a lot of it, that's for sure.
- bsbechtel 13y ago
  >Everyone can already afford basic goods. Its just at the lowest of incomes instead of a varied portfolio of extremely expensive to administrate benefits, all that would be wiped out and replaced with one simple check. I think you and I disagree on this assumption. For one, we still have homeless people, although for a handful it is a lifestyle choice. I'd say it's far more nuanced and complex than to just say everyone can already afford basic goods. If someone loses all their current gov't benefits, but starts receiving $1,000/mo which they are free to spend however they want, how do their buying habits change? No one really knows. As far as I know, food stamp programs and other current welfare programs have many restrictions on the types of goods you can purchase. In addition, we aren't considering the marginal costs of increased production of some goods, while others are negligible - e.g., software. I agree with your other criticisms of the model though.

transfire 13y ago

The purpose of economics is defeated by making "busy work". The government can pay everyone to dig holes, but do we need all those holes? That's the fundamental problem with the Basic Job concept. But give everyone basic income, now they have money to spend. When they spend the money it creates jobs to produce the things that people actually need and want. No simple programming model can account for this. I should also point out that governments already create far too many "busy work" jobs as it is. The IRS and welfare systems are some of the best examples due to overly complex regulations and means testing.

tptacek 13y ago
I'm not sure how this observation defeats the purpose of economics. The reason you give people a basic job is not that we need the work done --- after all, the alternative to it is the basic income, which pays them to do nothing. The purpose of the basic job is to fix the incentive problem of a basic income, which would encourage people not to work because there'd be inadequate marginal benefit to a low-wage worker to take a job.
- yummyfajitas 13y ago
  That, and the fact that there are many jobs that could be done with some value. Picking up trash in a rarely visited park may not be worth $7.25/hour (presumably if it was, that job would already be being done in today's economy), but it might be worth $0.90/hour. Or maybe it's worth $2.34/hour or $7.23/hour. I don't purport to know the answer which is why that number is a random variable.
- fleitz 13y ago
  It actually pays them to do whatever they are doing. Living != Nothing. There's no reason to imply that whatever the government tells them to do for their basic job produces more value than whatever they decide to do. It's pretty well established that the more government tells people what to do for work, the less an economy produces. Lets make people pick trash instead of helping educate their kids, surely picking trash is of much more societal value...

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wehadfun 13y ago

What about the increase in family size. If having more children increases a family's income people will have more kids. People receiving welfare do it all the time. These kids will not be contributing towards the basic income but will be drawing from it.

wmt 13y ago

I can't criticize a hypothesis if I cannot create a better one? That's extremely unscientific.

glomph 13y ago

A basic job system and a basic income system do not have the same effect in terms of replacing current 'wealth transfers' (what a ghastly term for such a disparate set of social policies and programs). 16% of US government spending is on pensions (by the posters own source). Those people need money to live. Unless you expect them to work until they die / become disabled, then they are not covered by the naive model of a basic job system. Indeed the basic job model completely ignores 52 million people who are not in the workforce or disabled (by their own numbers). Many of these people require government money to live as well. It is worth noting that in (small) trials in canada it was overwhelmingly students and parents that stopped working (and that is out of the labour force) and in much smaller numbers than the author suggests (although admittedly this may be because they knew the program was temporary). Most of the costs and benefits involved in a welfare system are not present in this model. The suggestion that the only value people receiving welfare create is the occasional one in ten million great work is frankly shockingly old fashioned. It is as if 300+ years of political philosophy have simply passed the author by. To say the least you need to think about the effects on child care, students, crime rates and all the latent costs that a lack of financial freedom creates.

truthteller 13y ago

What a bizarre article. this is a worthless exercise without any data. the task of building a model of labour market and estimating your model with real data is very complicated.

lotyrin 13y ago
Relevant username, really too bad you're down here. import random def sky_is_green(): return random.choice([True]) Please, if you disagree, write some fucking code.

zeteo 13y ago

>shut the fuck up and write some fucking code [links to argument that simply writing code is the best way to learn programming] Way to confirm stereotypes that programmers are abrasive and narrow minded. Writing code may be a good way to learn programming; that doesn't mean it's ideal for discussing economics. For one thing, even for an expert the code takes longer to read than a baldly stated list of assumptions. And not everyone is a Python expert. > if I’m wrong, either Python is computing the wrong answer, I got really unlucky [...] or one of my assumptions is wrong. Umm no. This is a false alternative. How about a lot of assumptions being left out altogether. E.g. it's pretty clearly assumed that this doesn't affect economic growth, any benefits resulting from changed income inequality [1] are left out, inflationary effects do not exist etc. Any half serious student of economic modeling would have a field day picking out all the details routinely discussed in macroeconomics that this analysis is ignorant of. And anyway who are these financial results even calculated for? If it's the government, then the expenses are fully incurred, but the "JK Rowling factor" is taxed at less than 100% to compensate. If it's the average person, you need to somehow factor in the benefit of reading Harry Potter! [1] http://en.wikipedia.org/wiki/Gini_index http://en.wikipedia.org/wiki/Gini_index

maxerickson 13y ago
Current GDP calculates the benefit of reading books by including their sales. It doesn't do anything to capture consumer surplus.
- deleted 13y ago
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rbehrends 13y ago
How about a lot of assumptions being left out altogether. Yes, and you didn't even mention some of the biggest assumptions. For example, because Basic Income is something that you get even if you work, you'd be looking at a completely different salary structure. If you earn $2500 now and a Basic Income of $1500 were introduced, then you wouldn't suddenly earn $4000. You'd earn something like $1000 (plus or minus a factor due to the incidental massive changes to the economy from a Basic Income/Basic Job setup) on top of your Basic Income. That also means that taxation would have to work completely differently. How that turns out is anybody's guess. With an emphasis on "guess". Code cannot magically substitute for the lack of the completeness of the underlying model, or for the research necessary to figure out the model. If you make stuff up from whole cloth and then bake it into code, it still remains stuff that's been made up from whole cloth. Running a program does not validate the underlying model.

bitwize 13y ago

Remember, folks, there are four kinds of lies: lies, damned lies, statistics, and computer models.

JackFr 13y ago

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/hayek-lecture.html http://www.nobelprize.org/nobel_prizes/economic-sciences/lau... "It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences - an attempt which in our field may lead to outright error. It is an approach which has come to be described as the "scientistic" attitude - an attitude which, as I defined it some thirty years ago, "is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed."" "Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones. While in the physical sciences it is generally assumed, probably with good reason, that any important factor which determines the observed events will itself be directly observable and measurable, in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process, for reasons which I shall explain later, will hardly ever be fully known or measurable."

scarmig 13y ago

I've posted a much simpler model than what Chris did, to make it clearer what's driving his results: https://gist.github.com/anonymous/7452196 https://gist.github.com/anonymous/7452196 Run it, and it will look very similar to what the more complicated model results in. Almost the entirety of his model's result comes from the fact that the BI is given to everyone, while the basic job is not. All the other parameters he brings up are interesting asides but irrelevant to the actual results of the simulations. His model of the basic jobs proposal is pretty much equivalent to a proposal that "if you're unemployed, you should get a basic income; if you're employed, you shouldn't." Basic income advocates consciously reject this. I don't have time to finesse the simple model right now to represent why we reject that proposal (I have, well, a job to go to =). But I'll hopefully get to it this evening.

yummyfajitas 13y ago
In my opinion, yours is so far the best comment on this thread. You analyzed the model, made your own, and cut to the heard of the matter. That's probably because you actually wrote some code and played with the model. Thank you. I look forward to seeing your alternative model. Please email me if this thread vanishes before you write it up, I really want to see it.
- scarmig 13y ago
  Thanks--I appreciate you starting this discussion with this approach, and I almost feel guilty about pushing BI incessantly without doing this as due diligence before. Most people don't seem to get that models are useful starting places and tools for understanding, not the answer itself. Even when you state that explicitly...
  - notahacker 13y ago
    A corollary of your observation is that the BI is proposed to replace retirement benefits, whereas the BJ as specified in the model provides income for employed people and registered disabled only. Since BJ advocates seldom oppose the principle of state-aid for the retired, you'd probably need to start by solving this (pretty easily by adding "retired_person" and "administrative_cost_per_retired_person" variables) which would substantially reduce the cost gap between the two proposals.

agentultra 13y ago

It seems to me that perhaps the title of this link is misleading. The author doesn't model anything and shifts the burden of proof onto the reader if any doubt is cast on his assumptions. He also invalidates any conclusions regarding BI in the premise which makes the entire model meaningless (a kind of syllogistic fallacy iirc). Really this article should probably be something along the lines of, "Monte Carlo Simulations in Python." This is not a discussion of BI at all.

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anonymoushn 13y ago

I'd like to propose a third policy, the NOPtransferpayment. The way the new policy will work is, a new tax will be implemented for 1000 times the net income of every person who earns an income (after all other taxes and transfer payments). A new transfer payment will be implemented for 1000 times the net income of every person who earns an income (after all other taxes and transfer payments). This tax and transfer payment will not count toward calculations used by other programs. A new department will be created and staffed by 0 people, and 0 new forms will be necessary to implement the tax and transfer payment. A policy like this could reasonably be said to cost nothing, produce nothing, and indeed do nothing. If we think that congress generally makes the world a worse place by implementing policies that do things, then it would be an improvement for congress to work on this sort of thing instead. However, its cost-benefit under the proposed model is not $0 or (pay_per_lawmaker * n_lawmakers * nop_debate_time) but $13 quadrillion. The proposed model indicates that this program costs about 180 years of global production at the current rate, or a substantial portion of the value of the entire planet and all humans living on it. If we suppose the planet is worth about $200 quadrillion, we will run out of it about 15 years after implementing this policy.

gknoy 13y ago

Interestingly, the cost of even the more expensive option in his model appears to be similar in magnitude of the `wealth_transfers` field (which doesn't seem to be plotted or used later). If the plan is to replace certain spending with a basic job or income, it would be interesting to see the comparative costs and efficiency of what we're replacing as well.

j2d3 13y ago

What if we tied a basic income to accepting 24x7 monitoring of the body and all communications from the body's point of view in space... i.e., a monitoring band that tracks health biometrics, as well as audio and video, ambient temp, humidity, etc. - full instrumentation of each individual who opts in. The monitoring band would also act as the recipient's communicator (smartphone) - so - they can freely use it to call, text, email, get apps, etc., it's just that all the data they generate - each individual participant's trace - is recorded. The massive amount of data collected from people willing to trade a homeless lifestyle for one with a steady income would have tremendous value in aggregate, and be unavailable to anyone for nefarious purposes. The only thing you have to do to get the basic income is be willing to have all your data recorded (but not shared publicly!) Your anonymized data will then be made available (along with everyone else's) via an API to developers of apps, and, assuming you give them permission, they will be able to access your sensitive / personal / private data as well.