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Unfortunately he was unwilling to reply to my proposed NOPTransferPayment, which is a system in which each person pays himself or herself a transfer payment. If

Unfortunately he was unwilling to reply to my proposed NOPTransferPayment, which is a system in which each person pays himself or herself a transfer payment. If the payment is large, his preferred model indicates that the cost of the policy is very high, but if the payment is negative, then his preferred model indicates that the policy creates a very great amount of value out of thin air. It is remarkable that someone would stick to such an obviously broken way of modeling the costs and benefits of transfer-payment-like policies (or of policies which have large transfer-payment-like parts, like Basic Job). He even goes out of his way to call attention to his continued insistence on this method months after the fact.

sheetjs 13y ago
Some people understand subject matters just enough to make a statement but not well enough to analyze others' statements. Economics in particular seems to be full of these people
- anonymoushn 13y ago
  His other posts lead me to believe he he is more capable than that.
  - nswanberg 13y ago
    Maybe he didn't see it? No one else responded to the comment either: https://news.ycombinator.com/item?id=6727029 https://news.ycombinator.com/item?id=6727029 It's hard to take many interesting ideas out of this implication of bad faith on Chris's part. Wouldn't it be better to talk about the topic of the post?
    - anonymoushn 13y ago
      I hoped that he would see it when it was cross-posted on his blog's comment section, but I also agree that this tangent is not particularly useful.
yummyfajitas 13y ago
I completely glossed over your comment because I thought it was just a snarky post advocating no transfers. Clearly I misinterpreted it, so I'll take a closer look. From this comment it sounds along the lines of classic "man marries his maid" macro critiques. The only thing I strongly advocate is actually thinking things through numerically rather than tribally. If you have some alternate accounting scheme I'd love to hear it. The only thing I object strongly to is the anti-rationalist "accounting is impossible, yay/nay basic income" types.
- anonymoushn 13y ago
  Great :) > From this comment it sounds along the lines of classic "man marries his maid" macro critiques. I'm actually not very well versed in this area, so I had to look this up. You're correct, the basic mechanism of the critique is identical. There have been a lot of scathing critiques of your position, so I'll try not to repeat them, especially since I basically agree. I'll put more thought into this, but coming up with a numerical justification for favoring one policy over another, without real-world data, seems really hard. If you take out the transfer-payment-like portion of both policies (nearly all of Basic Income and most of Basic Job), you can see that Basic Job has purchased something (jobs that need doing, but wouldn't pay well) and Basic Income has not. At this point, Basic Job has done pretty well. The disincentive to work when receiving a stipend that is sufficient to live on is definitely real. However, it's a bit hard to address the benefits associated with increased physical mobility and entrepreneurship under BI. Apparently some studies observe a decrease in economic activity upon the introduction of BI and others observe a decrease[0]. (Interestingly, some of the situations described are shades of "man marries his maid", like the mothers who stop working to take raise their children). The important thing to me is that I don't think there's much use in comparing the balance-transfer-like parts of the programs. We should compare the outcomes, because the fact that one program taxes and pays a stipend to everyone who already has a job and the other does not isn't a huge difference on net. I was a bit too snarky in the past, but this is the portion of the policy that is NOPTransferPayment-like. I'll go a bit further and claim that programs which arbitrarily redistribute income don't have a big economic effect; Social Security for instance does not greatly increase or greatly decrease the level of economic activity (assuming that it just pipes a fixed amount of income from young people to old people, which it doesn't, but anyway...). * ahem * Now that I've gotten myself to write this all down, I realize that my objection is actually compatible with your model, and I've just made the error of thinking otherwise because the dominant factors in your analysis were the ones I wish to disregard. I have installed the required packages, made some tweaks, and run your simulation. If we do not count money taxed and handed right back to citizens as a cost, the difference is small enough that reasonable people could disagree about which program to prefer: http://pastie.org/8987586# http://pastie.org/8987586# http://i.imgur.com/UeWTSko.png http://i.imgur.com/UeWTSko.png This quick and dirty run is biased in favor of BI - we've accounted for the disincentive to work at all due to BI, but not for whatever disincentive to economic activity introduced by setting taxes higher than under BJ. This wasn't a problem in the original analysis because it regarded the whole taxed amount as a cost. This factor should be some fraction of the difference of the amounts of tax between the two programs, but it is not clear what fraction. In fact, I've found a source that seems to indicate it should be a fraction greater than 1, in which case my whole objection could just make BJ win by an even larger margin. Perhaps I should not say this, because I have not modeled it... Here we go anyway: It seems very likely to me that both of these systems are better than our current system of somewhat excessive overhead and near-100% marginal tax rates for the non-working poor. [0]: http://en.wikipedia.org/wiki/Basic_income#Disincentive_to_work http://en.wikipedia.org/wiki/Basic_income#Disincentive_to_wo...
QuantumChaos 13y ago
Very well said, and thank you for taking on the task of debunking this flawed analysis. It is a mostly thankless task since the people who would be on your side (e.g. people with a good understanding of economics) tend to avoid articles like that in the first place.

sheetjs 13y ago

Some people understand subject matters just enough to make a statement but not well enough to analyze others' statements. Economics in particular seems to be full of these people

anonymoushn 13y ago
His other posts lead me to believe he he is more capable than that.
- nswanberg 13y ago
  Maybe he didn't see it? No one else responded to the comment either: https://news.ycombinator.com/item?id=6727029 https://news.ycombinator.com/item?id=6727029 It's hard to take many interesting ideas out of this implication of bad faith on Chris's part. Wouldn't it be better to talk about the topic of the post?
  - anonymoushn 13y ago
    I hoped that he would see it when it was cross-posted on his blog's comment section, but I also agree that this tangent is not particularly useful.

yummyfajitas 13y ago

I completely glossed over your comment because I thought it was just a snarky post advocating no transfers. Clearly I misinterpreted it, so I'll take a closer look. From this comment it sounds along the lines of classic "man marries his maid" macro critiques. The only thing I strongly advocate is actually thinking things through numerically rather than tribally. If you have some alternate accounting scheme I'd love to hear it. The only thing I object strongly to is the anti-rationalist "accounting is impossible, yay/nay basic income" types.

anonymoushn 13y ago
Great :) > From this comment it sounds along the lines of classic "man marries his maid" macro critiques. I'm actually not very well versed in this area, so I had to look this up. You're correct, the basic mechanism of the critique is identical. There have been a lot of scathing critiques of your position, so I'll try not to repeat them, especially since I basically agree. I'll put more thought into this, but coming up with a numerical justification for favoring one policy over another, without real-world data, seems really hard. If you take out the transfer-payment-like portion of both policies (nearly all of Basic Income and most of Basic Job), you can see that Basic Job has purchased something (jobs that need doing, but wouldn't pay well) and Basic Income has not. At this point, Basic Job has done pretty well. The disincentive to work when receiving a stipend that is sufficient to live on is definitely real. However, it's a bit hard to address the benefits associated with increased physical mobility and entrepreneurship under BI. Apparently some studies observe a decrease in economic activity upon the introduction of BI and others observe a decrease[0]. (Interestingly, some of the situations described are shades of "man marries his maid", like the mothers who stop working to take raise their children). The important thing to me is that I don't think there's much use in comparing the balance-transfer-like parts of the programs. We should compare the outcomes, because the fact that one program taxes and pays a stipend to everyone who already has a job and the other does not isn't a huge difference on net. I was a bit too snarky in the past, but this is the portion of the policy that is NOPTransferPayment-like. I'll go a bit further and claim that programs which arbitrarily redistribute income don't have a big economic effect; Social Security for instance does not greatly increase or greatly decrease the level of economic activity (assuming that it just pipes a fixed amount of income from young people to old people, which it doesn't, but anyway...). * ahem * Now that I've gotten myself to write this all down, I realize that my objection is actually compatible with your model, and I've just made the error of thinking otherwise because the dominant factors in your analysis were the ones I wish to disregard. I have installed the required packages, made some tweaks, and run your simulation. If we do not count money taxed and handed right back to citizens as a cost, the difference is small enough that reasonable people could disagree about which program to prefer: http://pastie.org/8987586# http://pastie.org/8987586# http://i.imgur.com/UeWTSko.png http://i.imgur.com/UeWTSko.png This quick and dirty run is biased in favor of BI - we've accounted for the disincentive to work at all due to BI, but not for whatever disincentive to economic activity introduced by setting taxes higher than under BJ. This wasn't a problem in the original analysis because it regarded the whole taxed amount as a cost. This factor should be some fraction of the difference of the amounts of tax between the two programs, but it is not clear what fraction. In fact, I've found a source that seems to indicate it should be a fraction greater than 1, in which case my whole objection could just make BJ win by an even larger margin. Perhaps I should not say this, because I have not modeled it... Here we go anyway: It seems very likely to me that both of these systems are better than our current system of somewhat excessive overhead and near-100% marginal tax rates for the non-working poor. [0]: http://en.wikipedia.org/wiki/Basic_income#Disincentive_to_work http://en.wikipedia.org/wiki/Basic_income#Disincentive_to_wo...

QuantumChaos 13y ago

Very well said, and thank you for taking on the task of debunking this flawed analysis. It is a mostly thankless task since the people who would be on your side (e.g. people with a good understanding of economics) tend to avoid articles like that in the first place.