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Warning, more highly simplified economics. Another possibility is that the redistribution acts as a true Keynesian stimulus, giving money directly to those who

Warning, more highly simplified economics. Another possibility is that the redistribution acts as a true Keynesian stimulus, giving money directly to those who will immediately spend it (rather than banks), increasing demand and bringing us out of a recession. But who knows. The economics are so complex that unless someone tests it at least at a town-wide level, nobody can predict the outcome. This Namibian town and Dauphin, Manitoba are two such sites. Some other experiments have failed because tests were not done with 100% of the local population, which creates an unwanted interaction between the BI and non-BI group. A very simplified view of a basic income is that your new post BI income becomes a percentage of the population's average income plus 1 minus that percentage of your current income: > I_post_bi = aI_ave + (1-a)I_pre_bi If a=0 we have capitalism, a=1 communism. For small 'a', this does change individual incentives a bit, but not much for those with very high income. That is because your incentive to produce is a function of how much more you will make (as a percentage) vs. how much more time you invest (as a percentage). For incomes much larger than the basic income, this ratio remains the same. What is the optimal 'a'? Who knows. Just start with a low one and slowly increase it to find out. If one really wanted incentives to be neutral across the board, one could try: > I_post_bi = a*(I_pre_bi)^p, where 0 < p < 1, a<1 This would be a subsidy for lower incomes and a (pre-Reaganeque) progressive tax for higher incomes. The more important question is what will happen to the group that is around the cusp of working/not-working. Some may choose not to work post-BI. Some may choose to stay home and take care of the kids, elderly parents (which is not necessarily "bad" for the economy when you factor in future earnings of children and reduced health care costs of parents). Some might even choose to start a business.

vidarh 12y ago
> If a=0 we have capitalism, a=1 communism. I realise you're intentionally oversimplifying, but it's worth pointing out that Marx wrote page up and page down to complain about simplistic ideas about redistribution, including simplistic ideas put forward by other socialists and communists about the practical politics of redistribution. To Marx, under socialism it seemed reasonable to push individual incomes closer to an equal proportion of their contribution to production (but even then distorted in various way by welfare), while under communism he made the point that distribution would explicitly be unequal not just as a side effect of imperfections, but as a fundamental property of the system, because the goal according Marx would be for distribution to follow need independent of your ability to produce, and peoples needs are wildly divergent. Under no circumstances did he advocate a "flat" equal distribution per person (nor anything similar to that). Instead he explicitly argued for unequal distribution. In the Critique of the Gotha Program, he wrote: "Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labor, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal." He then went on to argue the famous "from each according to ability, to each according to his needs!" [as a goal for an advanced communist society] after explicitly pointing out the unequal nature of such redistribution, and went on to write: "Quite apart from the analysis so far given, it was in general a mistake to make a fuss about so-called distribution and put the principal stress on it." Instead, according to Marx "any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves" - in other words, it is the working class control of the means of production that is important; redistribution would follow from that - an argument that e.g. the Bolsheviks either learned from or ignored, depending on how cynical you are about their intentions, when they started reigning in their early experiments in worker control in favour of the control of their party.
yummyfajitas 12y ago
Keynesian stimulus is only a temporary measure to create inflation to get around sticky wages. Namibia's inflation rate is 5%/year. If wages are sticky 10% below marginal product, then any BI in Namibia should last well under 2 years. http://www.tradingeconomics.com/namibia/inflation-cpi http://www.tradingeconomics.com/namibia/inflation-cpi Also, even testing at a town wide level is insufficient. This BI is merely a transfer of resources from outside the town into the town. How could that not make the town richer? At the nation level the only way to accomplish that is imperialism.

vidarh 12y ago

> If a=0 we have capitalism, a=1 communism. I realise you're intentionally oversimplifying, but it's worth pointing out that Marx wrote page up and page down to complain about simplistic ideas about redistribution, including simplistic ideas put forward by other socialists and communists about the practical politics of redistribution. To Marx, under socialism it seemed reasonable to push individual incomes closer to an equal proportion of their contribution to production (but even then distorted in various way by welfare), while under communism he made the point that distribution would explicitly be unequal not just as a side effect of imperfections, but as a fundamental property of the system, because the goal according Marx would be for distribution to follow need independent of your ability to produce, and peoples needs are wildly divergent. Under no circumstances did he advocate a "flat" equal distribution per person (nor anything similar to that). Instead he explicitly argued for unequal distribution. In the Critique of the Gotha Program, he wrote: "Further, one worker is married, another is not; one has more children than another, and so on and so forth. Thus, with an equal performance of labor, and hence an equal in the social consumption fund, one will in fact receive more than another, one will be richer than another, and so on. To avoid all these defects, right, instead of being equal, would have to be unequal." He then went on to argue the famous "from each according to ability, to each according to his needs!" [as a goal for an advanced communist society] after explicitly pointing out the unequal nature of such redistribution, and went on to write: "Quite apart from the analysis so far given, it was in general a mistake to make a fuss about so-called distribution and put the principal stress on it." Instead, according to Marx "any distribution whatever of the means of consumption is only a consequence of the distribution of the conditions of production themselves" - in other words, it is the working class control of the means of production that is important; redistribution would follow from that - an argument that e.g. the Bolsheviks either learned from or ignored, depending on how cynical you are about their intentions, when they started reigning in their early experiments in worker control in favour of the control of their party.

yummyfajitas 12y ago

Keynesian stimulus is only a temporary measure to create inflation to get around sticky wages. Namibia's inflation rate is 5%/year. If wages are sticky 10% below marginal product, then any BI in Namibia should last well under 2 years. http://www.tradingeconomics.com/namibia/inflation-cpi http://www.tradingeconomics.com/namibia/inflation-cpi Also, even testing at a town wide level is insufficient. This BI is merely a transfer of resources from outside the town into the town. How could that not make the town richer? At the nation level the only way to accomplish that is imperialism.