Basic Income is perceived by many to be a socialist utopia fundamentally flawed due to economic incentives that encourage consumption without production. What if basic income could be compatible with the selfish profit seeking behavior of free individuals. What if basic income could be implemented without taxation and without price inflation? What if basic income were to be a necessary precondition for securing life, liberty, and property in an increasingly automated industrial society? These are the questions I plan tackle in this article.
Property Rights
Property rights are the cornerstone of a peaceful society. Without property rights there is no basis to resolve disputes aside from violence. Furthermore, without property rights there is no incentive to generate a profit. The tragedy of the commons is the logical outcome anytime society attempts to ignore the necessity of property rights. If we are to consider any concept for basic income, then it must be fully compatible with the concept of property rights.
The Means of Production
The means of production includes natural resources and the tools (factories) that convert resources into the products we all demand. If you don’t own the resources or the factories then you don’t own the means of production. We all own our labor, skills, and knowledge as inalienable means of production.
All of society benefits when technology enables us to produce more with less. Profit is the result of converting natural resources (and lower level products) into higher level products of higher value. Profit shows up as an increase in the resources owned by the producer.
Free market competition naturally selects for the most profitable activities and those that are not profitable end up owning fewer and fewer resources. The process of natural selection is what directs the scarce resources of society toward their highest use and minimizes resource utilization that lowers our global standard of living.
The value of Labor
Human labor has value because of its ability to generate a profit by converting resources of lower value into resources of higher value. Not all labor is equally valuable because not all individuals are equally skilled nor gifted with equal ability.
Automation increases the virtual supply of labor and therefore reduces the market value of unskilled labor. Eventually, this process causes unskilled labor to be valued below the cost of living.
Market value of Life
The free market solution (i.e. non-violent and voluntary) is for unskilled labor to rely upon donations from those who value the life of another individual more than they value an incremental increase in their own wealth. Absent voluntary donations, someone who is unable to produce more value than they consume will starve (or live in extreme poverty).
A starving individual will resort to violence and will not be concerned with the philosophical position that they should just die. A libertarian would end up killing the starving individual by claiming self defense. All of a sudden philosophy is in direct contradiction of biological imperative to survive at all costs.
From a purely darwinian perspective, letting these individuals starve would probably advance the species and dramatically increase the standard of living of those who remain. From a human conscience perspective, watching someone starve is very painful. It is the conflict between our own selfishness and our natural empathy that is the root of the socialism / free market debate.
It is the pain of watching others suffer that motivates free market donations to help the poor. However, if those who suffer are out-of-sight and out-of-mind then the pain is numbed. This ultimately means that a capitalist, voluntary, and free market society will necessarily allow the unproductive individuals to die, likely violently as they fight for survival.
Living without Producing
The issue at stake is whether or not a person has a right to consume resources without producing an equal or greater quantity of resources. Why would anyone produce anything if they had all of the food, shelter, and clothing they need to live? Why should anyone be required to support another with the fruit of their own labor?
There is a very real threat to all of society if the total level of consumption exceeds the level of production and prevents necessary investment into future production. In effect, the amount of free-loading an economy can tolerate is fundamentally limited by the amount to surplus production. In a shrinking economy (due to famine, war, resource exhaustion, over consumption, etc) there is no surplus production. In such an economy those who cannot produce must be cut off even if it means death; otherwise more people will die in the future due to the declining means of production.
The moral conscience of the free market capitalist is repulsed by the idea of partially enslaving one individual in order to support the life of another individual. No one likes a roommate who makes a mess, eats your food, and watches TV all day without lifting a finger to help around the house or pay for anything. It doesn’t matter if they are capable of helping or not, they are a burden and lower your own standard of living.
Rent Seekers
What if your roommate had an robot capable of cleaning, cooking, and generating enough income to cover rent? This roommate would be just as slovenly, lazy, and unproductive as before with one small difference: he has productive property. The possession of productive property entitles this individual to “produce nothing himself”.
Economic theory would dictate that the price people would be willing to pay for such a robot would equal the net present value of the future wealth produced by this robot. Therefore, the fact that your roommate owns the robot is proof that he previously produced wealth and is now living on his savings. It is no different than earning interest on money and using the money to hire a maid, cook, and pay rent
Now imagine a situation where the cost of the robot is prohibitively high such that only a few can afford it. Once they purchase the robot the rate at which their wealth grows accelerates relative to everyone who was unable to purchase a robot. Eventually they will accumulate enough wealth to purchase an even bigger robot that far fewer can afford.
Economies of scale cause large concentrations of wealth to be far more productive and profitable than widely distributed capital. You can get much more done paying one software engineer $100K per year, than paying 100 thousand engineers $1 per year. This is the power of concentration of capital.
The logical outcome of this process is a concentration of capital in the hands of a few. With the concentration of capital is the concentration of the means of production. The masses will starve due to their inability to produce value competitively.
Owning the Means of Production
The fundamental principle upon which basic income can be derived is ensuring everyone owns an inalienable share in the means of production. If everyone owned a robot capable of producing what they need, then there would be no conflict between basic income and free markets.
The challenge is how do we give everyone a robot? What do we do when someone is born?
Let's assume that each robot is capable of replicating itself at a similar rate to human reproduction. On this basis, each individual would have the ability to give a robot to his children. Alternatively, assume a world with a stable population. Each time someone dies, they give their robot to someone who was born.
Moving beyond Magic Self Replicating Robots
The entire free market can be viewed as the collective interaction of people and “economic robots of different types”. We don’t need everyone to have their own “personal robot”, if everyone can own a share in a factory or global resources. If everyone owned a share in the means of production, then a basic income would be the natural outcome.
Capital could be heavily concentrated, but ownership and therefore the share of the productive outputs would be heavily distributed.
Tragedy of Private Property
If we were to give everyone an equal share in the means of production today, then tomorrow half of the population would have sold their share to increase their consumption today beyond what their share could produce that day. These people would be poor and looking for another handout.
The capitalists among us would say, “let them die, they sold their life for hookers and blow”. The bleeding heart socialists among us would say, “we cannot let them die from their own stupidity! Give them another share of the means of production!”
If the capitalists win, those who consumed their seed corn would die while those who remain grow wealthier. If the socialists win, then all of society will grow poorer as the means of production is consumed. Both ways result in death and poverty of a large percent of the population.
Inalienable Property Rights
What if everyone held a share of the means of production, but they were unable to sell this share? This would be an extension of their ownership of their own labor, skills, and knowledge. It would be like everyone earning interest on money in the bank, but being unable to spend the principle.
Under this model each individual would have income equal to the productivity of their “virtual robot”, aka share in the economy. Each year the robot becomes more efficient and productive the income increases. In years where the robot is less productive, the income would necessarily have to decrease.
In order for the robot to grow (and become more efficient), some of its productive output would have to be reinvested into growing the robot. Maximum growth would occur if there was 100% reinvestment, but that would mean everyone would starve. We do need to consume some resources to live!
If each individual was free to choose whether to invest in the robot or to consume for today, then over time ownership of the robot would become concentrated in the hands of the savers. That isn’t necessarily a problem though, because the consumers smaller slice of a larger pie would still be bigger than their previous equal slice of a smaller pie. For example, today’s poor live better than the kings of 300 years ago.
Implementing Basic Income via Monetary Policy
Money is effectively a share in the means of production. If the economy was a company, money would be its stock. Each individual upon birth would receive an inalienable endowment equal to the money supply divided by population. This money would be placed into a savings account from which only interest may be withdrawn. On death, the savings account principle would be destroyed. This would create an natural monetary inflation / deflation rate equal to the change in population.
Each month money held in savings accounts would earn interest paid for by printing money at a rate that maintains price stability of a basket of necessities defined by the consumption habits of the average individual. If the cost of this basket of consumption increases, the interest rate will fall (reducing basic income thereby reducing demand and lowering prices). If the cost of the basket falls, then interest rates will rise (increasing income and therefore demand and prices).
As the economy grows more productive, everyone’s ability to consume grows proportional to their ownership of the means of production. If a drought causes food production to decline, then everyone will receive less interest due to the drop in production.
Any individual can “save for retirement” by investing in the means of production. This investment will earn interest at the prevailing rate and the principle could not be withdrawn. When the individual dies, their surplus savings would pass down to their children.
Economic Consequences
The first and most important economic outcome of this policy is that due to the lack of price inflation enforced by the monetary policy the currency could be a trusted unit of account over time. Any attempt to implement basic income with an inflationary currency would result in capital flight toward appreciating assets (gold, silver, and other less inflationary currencies).
A second outcome is that the rate of return earned by holding money in savings would equal the average productivity of the entire free market. In a world with a fixed money supply, this rate of return would show up as deflation (increase in the purchasing power of money). This means the economic consequences of the monetary policy should closely mirror those of an economy with a fixed currency supply.
Debt
One of the biggest challenges of basic income is that individuals can effectively sell their stake in the means of production by borrowing money today and using their basic income to pay the interest on the debt. If this were to occur then half of society would end up in debt and have no money left over for food, shelter, and clothing after paying the interest on their debt.
A society based upon these rules would have to exclude basic income from being a source of debt collection. A creditor would not be able to go after that money under any condition.
The Root Problem
The root problem that society faces is that many individuals will live beyond their means even if it ends up killing them. Take all of complex abstractions away, a farmer on an isolated island will die if he eats all of his seed corn rather than save for the following year. Society is filled with these kind of suicidal farmers.
Any implementation of basic income must protect against consuming societies seed corn. Capitalism does this naturally by allowing those who are that careless to die off. Socialism is either corrupted by centralized administrators or through allowing an ever increasing number of suicidal farmers to vote to increase todays benefits.
Basic Income is Possible
It is entirely possible to bootstrap a free market implementation of basic income that is decentralized and actively protects against consumption of the seed corn. For this to work a community of people must adopt a currency with a monetary policy that recognizes all individuals own an inalienable share of the means of production. If enough people were to adopt such a currency then society could function with an incorruptible distribution of the means of production.
Actual Results may be Less than Desired
Those who support the idea of a basic income start with a preconceived notion of what everyone “deserves” and then attempt to redistribute resources to achieve that effect. Under the system I propose I define what everyone “deserves” in percentage terms and allocate the productive capacity rather than the products produced.
Think of it as allocating the fishing rods rather than the fish. We may not be able to guarantee everyone a certain number of fish, but we can guarantee them a share of whatever fish are caught. We must simply ensure people don’t sell their ownership interest in the fishing rod!
Conclusion
Failure to implement a sound economic policy will result in increasing poverty and death as the value of unskilled human labor falls below the cost of living. Implementing overly generous welfare can and will take the entire economy down and result in even more death and destruction. Only a principled approach that is compatible with property rights and protects individuals against their own over consumption will be able to produce a peaceful and sustainable society.
Update: I have outlined a hypothetical cryptocurrency protocol based upon these ideas in a new post.
I think the limit you defined as "if the total level of consumption exceeds the level of production" is really the key to the whole discussion.
If we are in a society where there is no surplus, then having a basic income is not possible. In a theoretical society where there was unlimited resources and robots to provide anything of value, then there would be no need for a basic income because everybody's wants and needs would be met.
So in a way, the purpose of basic income is to divide up the surplus 'fairly' and to some extent equally when society is in a state where there is a large enough surplus to cover everyone's basic needs, but not enough to cover all of society's wants.
There is also the point you touched on, which is that once the requirement to work in order to meet basic needs goes away, there will most likely be a drop in the surplus, because many people would prefer not to work.
While it disproportionately benefits 'rich' people, the stock/equity market actually has some similarities to what you describe, in that people are purchasing ownership in production robots (companies) that provide a share of the production profits to their owners. I'm curious if the expanded ownership of companies through stock ownership has the potential to serve as a vehicle for moving our current society more in that direction.
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The Choice is Ours
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A very interesting FAQ about basic income from Scott Santens.
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This is brilliant in so many ways.
From a strictly pragmatic point of view, you could never expect people to change and many people will spend beyond their means and scarify tomorrow for today. So they will need to resort to either starting or supporting unproductive and maybe violent recourse.
So if the goal is moving towards a voluntary society, instead of complaining about certain traits if human behavior, a much better way is creating solutions that deal with these situations solving the problem, and this is where you robot idea is genius.
So much food for thought, and so many things come to mind reading this including how these solutions could encourage a change of perception from good people who see basic income as a corner stone of a good society, and who are wary of Libertarianism because of that.
The robot, automatization aspect is certainly something that I will be thinking about now. It's like a click that just sparked right there.
Thank you Dan.
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This is pretty much how I felt about the article too. Thank you Dan and thank you @thealien for that comment.
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Well written, as usual. Some very good food for thought here. I tend to be the capitalist and not a fan of socialist approaches, but I think you also illustrated very well the problems that can occur with both the capitalist (aka Free Market in your article) and socialist approach.
Central planning doesn't work. It doesn't matter if we are giving out food, shelter, etc. Someone still has to plan that. In creating the gate keepers who handle this planning the door for corruption or simply ignorance of requirements is opened. It is not something that MIGHT happen, it WILL happen eventually over time.
I do like the idea you propose with that basic income being provided on a daily basis rather than a monthly. I also am fine with it coming as a portion of shares. That eliminates any need for central planning, and is purely based on how things are going over all. If things get bad overall then a lot of people are dead, yet this is true of all scenarios. This one at least removes the central planning, is not redistributionist in nature, and still encourages people to excel and do better and thus earn more than just that basic income. When they do well the entire economy should do well, so the basic income for everyone would increase.
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F.A Hayek in The Constitution of Liberty: The Definitive Edition explains how the point is not to give everyone equal amount of wealth, but to ensure the means upon which it will render citizens immune to market coercion and ensure liberty.
Many people forget that basic income is up and foremost a libertarian philosophy.
Very nice piece Dan.
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Instead of a basic income, I would suggest that societies give out the basic of survival.
The reason for this is that money really does not fix these problems.
Having dealt with man poor, I find that most have no clue about money or budgeting, so if you give them enough money to eat all month, they will blow it all in the first couple days and eat out of trash cans the rest of the month.
People at the low end of the totem pole are also hell on housing. Every section 8 house I have had to repair... oh, the horror stories. What is needed is a small room with a door that locks on the inside. Radiant floor heating and bullet proof walls. And building 300 million of these little rooms would cost less than a 1/10th of what we currently spend on subsidized housing.
Why do we desire to give out money, when what is really needed is food, clothing and shelter? We can provide these at a fraction of the price.
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I think you may find this interesting: http://boingboing.net/2015/05/26/poverty-is-a-tax-on-cognition.html
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Yes, thanks. Looking at it now.
Another apropos piece written here today: https://steemit.com/health/@mindhunter/poverty-and-wealth-is-there-a-mind-connection-involved
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The problem is the definition of Minimum is all relative. It is also centrally planned and inflexible.
Those among us who are unable to budget for 30 days at a time can receive daily payouts.
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This is why I said "community" and not govern-cement. This doesn't work well as a centrally planned thing. But each community building a sets of minimum-condos is some of the cheapest social work that could be done. A heated room that is about the size of two beds is all anyone needs. (That they can go out and make money and buy/rent something better is also essential)
Community equals tiny houses. Govern-cement equals jail cells.
I don't know how to put this nicely. You haven't worked with homeless.
Giving money out doesn't work. Many don't even know how to keep track of it. A bank account is foreign concept that you will never be able to adequately explain. It really doesn't work.
And, payouts just ignore a huge problem with people. Like the elderly homeless couple that gets a social security check once a month, and gets beaten up once a month for that check.
Yes, it is so much easier to throw money at the situation. But, as a community, solving this problem really requires supplying the basics.
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Your 300 millions little rooms compare to what we currently spend on subsidized housing was very stimulating intellectually as well as the daily meal.
I do agree with Dan when he talks about daily payouts. I think something like a hardware Bitshares wallet could be handed out and daily payout could be made through it. This would ensure only a set amount of daily meal is distributed.
I used Bitshares as currency due to to its ability to create crypto assets.
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I agree that providing cheap or free basics is good way, but you can easily solve "money blow" problem by giving or even better refiling money every day (is easy to do so with cryptocurrencies) so every morning everyone have $100 for example, which they can't transfer to anyone, but can use to buy/rent basic stuff for himself.
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Yes, crypto-currencies easily solve that part of the problem. But, you left out everything below it. Like:
(If every vendor accepts bit-payment. Then all you need to do is have a front that sells something, then your goons, take your machine and go shake down some undefended oldies for their daily bit-transfer)
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This model makes everyone dependent on the state and increases the low self-worth that is already the cause of people not being able to look after themselves or be productive in the first place.
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UBI makes everyone dependent on the state, so the argument is a non-starter.
Read my most recent article on "Better Than UBI" for my thoughts on solving this conundrum.
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Sorry, I should clarify. If we were dependent on the state for housing and if we don't toe-the-line as it were, that housing will soon disappear. A Universal credit scheme (i.e. providing homes, food, etc. for people) would easily encourage fascist policies.
UBI works on the premise that everyone is given an income, regardless of who they are, what they believe, where they work etc. Recipients can actually afford to live and pay rent on (which might depend on where one lives to cover rent prices).
If your house is taken away from you, even by mistake, computer error or fascist state, you and your family is pretty much ruined. If your income was taken, that would be another matter..
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Theres overwhelming evidence in the study of psychology that the urge to create is universal in all people. Maslows needs hierarchy explains why many people currently live 'parasitical existence'
Some people will have conditions due to personality that render them non-contributers, which is no different than having a physical handicap as a justifiable reason for lack of contribution. This is a minority currently and will remain.
Also, basic income allows for labour being devoted to endeavors which may not have much monetary value, but high value nonethless. Basically, the Arts. (essential luxuries do exist))
Teenagers would pursue much better education on their own than through workforce oriented schooling.
Basic income would make society truly free in expression; the cultivation of the truly Sovereign Individual.
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I agree there are many huge benefits to a basic income so long as it is implemented in a way that doesn't result in overconsumption or disproportionate consumption. It must have a natural means of expanding and contracting with the actual productivity of the economy.
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Even overconsumption / underconsumption is related an individual's needs (defined by Maslow) not being met. Advertising and consumerism thrive on unhappy/unfulfilled people.
When our needs are met we consume what we need and tend to create more value.
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if it can be implemented in a voluntary manner - leaving those free to opt out who want nothing to do with it - then i'm all for it :)
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Grantcoin is just that.
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Shared on twitter
Another point to add. Maybe basic income could (help) cover costs of living. Which may help people better work towards value. Instead of the value of trying to survive, which should be free. Life itself is free after all.
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Basic income cannot be set by the "cost of living". Life isn't free. In a world with 10 billion people and only enough food for 5 billion it is impossible to give everyone enough income to eat. You can only give everyone a share in the produced food. In this case, everyone would have an income of half a meal and then have to trade with others.
Money and shares are just a more efficient form of rationing the production proportional to ownership. Basic income is nothing more than guaranteeing every individual a share in the means of production.
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Seems I should write a post to better explain myself.
Thank you very much for your time and reply.
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Disclaimer: I am just a bot trying to be helpful.
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I love that more people are taking about this. Four month ago I wondered if STEEM could power a basic income. Thanks for tackling this question.
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"If the cost of this basket of consumption increases, the interest rate will fall (reducing basic income thereby reducing demand and lowering prices)."
This is assuming the whole of this society uses only that currency as money correct? Otherwise prices could go up for other reasons, regardless of this currency's rate of deflation -- making it harder to afford a decent living.
In other words, it is entirely possible at the lowered interest rates of his currency would in no way affect global demand and so wouldn't lower prices either.
So this system would need to be accepted by all of earth from day 1 in order to function no?
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I lived in communism for 19 years. It wasn't nice. It was - gently put - a failed experiment. That's probably the reason I cringe whenever I hear anything about "guaranteeing" some income to everybody.
What you're saying, basically, is that you will allocate the production means based on merit, but then you will allocate the resulted production evenly? Or you will allocate a "minimum survival kit"?
My life experience tells me that the problems are not there, but deep down, at the core of the human being. Greed is a problem. Lack of compassion is a problem. If there's an economic system that can fix that, I'd be very curious to try it out.
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I agree, communism doesn't work and neither does capitalism as they are expressed via today's governments.
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If only we had some sort of set of principles that combines Anarchy and Capitalism!
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Communism don't work just because we don't have enough good robots then. =) When robots will be able to do all of the work it's can work very well. =)
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Well, not really. It must be fixed at the human level, namely who you are, not how much do you have. In communism we were supposed to have all access equally to the resources, but people are different, they want different things, so in the end the balance was tilted.
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I love thought provoking posts on conscious living. Thanks for the post.
Trying to come up with an "ideal" way to live for everybody is just about impossible.
Most people agree on very basics but even free speech or property rights are not agreed upon more doesn't every couple nary even have these basics. It's actually quite sad to look at the standard of life around the world including cultures of great excess such as the USA.
I feel discussion of these topics is valuable yet what I have found to be far more valuable is deciding for ones self what priorities are and putting ones self in a situation to succeed.
I for example, did not agree with my countries way of life or the "American Dream" but instead of complaining about the way it was or talking about the way it should be, or evleadn trying to get anyone to agree with me, I just threw out what I didn't like about the way of life and embraced everything that I did want. I have been extraordinary successful because I built my ideal world without waiting or being dependent/reliant on anyone else.
@gardenofeden is not only a place where everyone their is living the best life they ever have but is also living in a way that feeds over 5x as many meals to others as we consume our self. We did that without having no to have a lot of money or doing things we don't want to do. We participate in very little of what people around the world do and a lot of what we have found to be a huge upgrade.
If groups of people were simply to come together for common purpose living their ideals it would be lil paradise vortexes, thriving in reliance not dependent on agreement of the world, others are then free to do the same even if what their group embodies is different.
This is the only way I can see paradise being possible, simply because of the huge relative differnice in people's opinion.
The problem is not that we don't agree, the problem is that people are focusing on what is not the way thto y want rather than just living the dream.
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This is interesting as a future move for society. The savings locked amount when we are born, that gets burned when we die, or transferred to new born, and an interest amount based on economic productivity, with a currency pegged on the value of a basket of necessities. This is quite an idea I have not thought of. Thank you for sharing this. It has merit for development.
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It is a complex system which can react in unintended way if any string is pulled. We must redefine our goal, which should be to find an optimal balance where robots who work hard and deliver benefits are rewarded and yet where the society is not an unhealthy place to exist. We are aiming for a moving target where trade-offs must be respected as we pursue a common goal. The first problem is that we cannot agree on what that goal should be.
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I think he is proposing removing this decision. You say WE. That ultimately boils down to X amount of individuals deciding on behalf of everyone. The WE essentially become the central planners. Central planning will always fail in the long run. I believe he was proposing a basic income in terms of shares in the economy so as the economy improves regardless of the producers all share holders (which would be everyone) would receive a portion. If the economy does well the portion grows. If the economy fails the portion shrinks. Yet if the economy fails this will happen under every system. You eliminate central planning and simply give a portion of income from shares on a daily basis.
Whether it would work or not... not sure. I do know that central planning ultimately always fails. It involves people making decisions on behalf of all others and this leads to corruption, or sometimes it simply fails because the decision makers didn't have sufficient knowledge to make some correct decisions. This eventually will always be the case in such scenarios with people. None of us can know all the details. There is only one thing we have that can react to change and new creations, new information, and new skills and requirements quickly. So far that thing is the market. (If it is free and not hindered by central planners).
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Such a direction allows for anyone to do nothing and be supported by those who choose to work. This brings down the expectations and thus the total outputs. For example, many people work hard for many years as to earn a pension. If they were given the basics without any contribution, how many would just float? This then becomes a drag on growth, innovation, and reward systems that promote risk taking for significant rewards. It also lowers the total pool of people who will choose to become highly qualified in various fields. Without the potential significant pain of failure, there is little growth. Without the lure of significant benefit, there is little growth. We must avoid such situations as the rate of growth is important.
We have seen such stagnation in 3rd world countries where many survive on the governments subsidies. History shows a similar pattern. Low growth, little stimulus, high unemployment, much lower standards of living, smaller economies leading to less demand for products, low demand stifles innovation as there are not markets to support it, which makes education not as important, so stagnation occurs. This is not a healthy system.
Look to nature, which tends to optimize resource constrained systems. Do all the plants in the rain forest equally share the sunlight? No. This would lead to homogeneous environments which are susceptible to catastrophic impacts from unexpected entities (fungus, predators, invasive species, etc.). Instead, there is an imbalance which drives innovation necessary to survive. It creates a complex yet highly diverse and successful ecosystem which is resistant to a variety of external/internal dangers.
If you want an example in nature where a base level of resources are allocated to an entire community, then look to the ants or termites. But these highly successful colonies are strictly controlled by a central authority (queen). Their success has also caused stagnation, as they have not evolved very much over the millennia. I don't think that is where we want to go as a society.
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It actually doesn't. You are mistakenly comparing this to socialist redistribution. In which case you would be correct. He was not proposing that. He was proposing something that has never been done before so those comparisons do not fit.
He was proposing more like every person is given a share in a company. Let's call it our GLOBAL or NATIONAL economy depending upon how large the location was it was implemented.
You have one share that you cannot get rid of. You CAN invest your own dividends to get more shares over time if you want.
When the economy makes income it distributes dividends to all shareholders based upon how many you have. In a sense, he was talking about something like Steem Power, but unlike steem power you cannot get rid of it.
I'd even argue that people need not reinvest in it. The idea is that if the economy fares well then those dividends paid on a daily basis should hopefully be sufficient for basic food, clothing, and shelter. They may be worth more than that, but the hope is they would provide that.
So let's say the economy does poorly and it DOES not produce enough. Now that dividend would not be enough to provide those things. Yet, neither would those needed resources materialize in another system simply because you willed them into existence.
He was also NOT proposing people not work. He was proposing a way such that as we increasingly remove the need for some human jobs, that people could still be cared for. You would be receiving a dividend based upon how the economy fared. This would not stop you from intentionally doing other work, being entrepreneurial and getting income and producing in other ways. However, if you do invent something and are doing great then odds are the economy is going to do better as well, so all dividends increase.
It requires no central planning. It does not require planned handouts. It is purely mathematical based upon what funds and resources may actually be there. It does not magically solve all problems as this cannot be done. If the resources are not there then they cannot be magically distributed regardless of what system you use.
He is also NOT proposing taking funds from people and redistributing them. It is interesting and the first time I've heard such a proposal. As such it gives a lot to think about.
However, it is NOT what you just described. That fits nicely with traditional socialist and redistributionist ideas. I'm a bit opponent of such ideas.
EDIT: One thing I am unclear of (like I said this is a new idea) is where this idea of the economy doing well, where IT's FUNDS come from. Is it a tax? If so then that is redistributionist.
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Given a fixed supply of money and a growing supply of goods prices will fall. This system prints new tokens to match and counter natural deflation in a productive economy.
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How about increasing supply of money used to finance UBI. There would be higher nominal value of UBI causing inflation but the real value would be the same. Money is neutral.
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I think you are bringing your own preconceived ideas without reading what I wrote.
If the economy is not growing then there is no basic income. If it does grow it isn't funded by taxation nor price inflation.
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I like the perspectives and insights you wrote. I find them to be relevant, but not comprehensive to the problem at hand. We are all discussing our preconceived ideas (which makes this a productive discussion). I find there are other aspects which are part of a hugely complex situation. Theories of changing global macro/micro-economics cannot be easily covered in a blog. All fiat currency, in one sense is a measure of work/worth and flexes based upon many factors.
My point is this: when it comes to the work and reward of people over generations, the situation becomes very complex. There are social, emotional, economic, and psychological, and time-based factors in play. To define a strategy around a 'basic income' requires such a measure to first be defined. This is problematic.
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Wow, a ot of assumptions in here that are, positively put, debatable.
However, I want to correct you in one very basic and important point:
You mentioned the tradegy of the commons.
First, its the tragedy of the unruled commons. Its when there is no commons, because commons mean that there are enforcable rules that (should) prevent "oversheeping". You can see a modern example in the fishing industry: Because there is no real ruling outside the 200 miles zone and for most parts of the world there is no enforcement, the seas get overfished.
BUT at the same time, there are lots of examples that in those areas where there are rules given by the fishermen themselves which are enforced, the number of fishes increase.
The same principle applies to current capitalistic "market" societies, that ruin our only earth because the rules are not decided by all stakeholders, but mainly the rich subset that profits from the "oversheepment" and is not hold in check because necessary rules are often not enforced, even if they exist.
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Yes, there are a lot of unsupported assumptions due to my limited time to explain. Some of the questions I failed to answer to the extent that I would like:
I will have to dive into all of these topics in greater detail.
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@dantheman
I do like your concept. I can say that my wife and I have been in the overspending group for awhile and are working our way back to not overspending. Yet, if there was a system ike this in place where a part of living was covered I do believe like you said things would be better for all, then the work we do would ad quality to life. I think there needs to be a much better system inplace and it looks to me like some of the work being done through cryptocurrencies is a huge step in the right direction. I would love to see the answers you have to those 3 main point you did not yet get to touch on.
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I think I just found a way to answer my own question. The BIC that is issued daily would need to have a life time expiration so a whale could not hoard the coins to price manipulate the market, as in the coins are valid for lets say 1 day or 1 week, to give them time to be used yet not hoarded
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You're very charitable. I thought of Ortega Y Gasset, and extract called The Age of Barbarism.
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While reading this I thought about Donald Trump several times
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Keep working, stop paying.
Production for need will never take as many man hours as production for greed.
If you can't give your products away what better 'pricing' do you need?
If you can't produce enough, employ your neighbors.
Here is a book that talks about what causes civilizations to collapse: https://archive.org/details/revoltagainstciv00stod
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Social expenses are nowadays directed to banks and Kiwi :(
If kiwi was distributed to the ones who really needed it, at least the economy would be pumping up better:)
In Europe liberals(against) and the left(in favor) are always fighting about Social expenses.
Liberals have a problem, they can feel in their skin what is being poor
But of course in Europe is much better than the US, for poor or impoverish people
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There are some small-scale projects that follow a similar cooperative model. I drew one up for investors a couple years ago, resulting in a little interest but nobody was ready to pull the trigger.
Basically, it's a piece of property that belongs to the cooperative. Owners receive a portion of land with a small liveable house on it (very basic). The rest of the land is managed as an intensive farm by one employee. All owners are free to consume for personal use. The farmer takes the rest to market, receiving a cut and putting the rest in an account from which regular distributions are made to the owners.
The owners could use their portion of the property however they wanted, within reason. It would have to be agricultural, for instance, rather than industrial. But perhaps rentals or a B&B would work too. They could also hire the gardener/farmer to include their property and get a proportionate cut if it was profitable.
Owners can sell their portion, but the terms never change unless there's 100% agreement among the owners. So it's a voluntary cooperative business.
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This is a brilliant article. I am not completely comfortable with Basic Income, but there haven't been other solutions that really address the problems society will soon be facing (with continued efficiency and technological progress pressuring the labor market). You have re-envisioned the problem and presented a new way of addressing it.
I still am not convinced that the system you describe could prevent someone from selling or trading his/her stake in the means of production, since at some point, I think the proverbial ATM machine allocating benefits still must spit out something valuable that could be taken/exchanged/bartered (money, resources, food). The stake may remain, but how could you prevent someone from exchanging anything that's produced from it?
Maybe there are ways. I will continue thinking about it. You've provided some good food for thought.
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While reading this I couldn't help but think of the steemit economy... was this post directed at possible ideas being implemented within the community? It was very well written and explained btw.
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Cryptocurrency projects such as Steem have to work within relatively narrow constraints of their founding principles and economics. Changing a system, even if some perceive it to be better, will often cause more people to leave.
I think the ideas expressed in this article need to be refined and may well serve as the foundation of a completely different cryptocurrency. Each cryptocurrency project needs to be pure to its founding vision or it can risk falling victim to mob rule.
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Let the steem to the whales and subscribe for the Grantcoin universal basic income.
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Upvoted and shared on Twitter✔. A great piece. Thanks for sharing. Stephen
https://twitter.com/StephenPKendal/status/797190941375365120
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Disclaimer: I am just a bot trying to be helpful.
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I am very impressed with your vision of the world and your reasoning. I support you 100%
I am always with great pleasure that I read your posts
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You are implying something for the platform @dantheman and I kinda feel that its something advantage. I can't understand well but are you referring that people can only withdraw interest out of their produced steem or this post is just for the purpose of sharing your ideas and has nothing to do with the platform?
I like the idea of robot being shared to everybody.
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This post is for academic purposes only. It may be an interesting experiment to run on its own, but is far to controversial for Steem.
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But it could be a possibility for steem?
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the World's Natural resources (including the Land) should belong to everyone, by natural right.
if a DAO could be setup to manage the World's Natural resources, and every person on the planet by right was given a share/stake, then that would already go some way in guaranteeing a Basic Income.
In Alaska all citizens are paid some dividends from their region's Oil Revenues, not sure how much they get but I bet more than some people earn in 3rd world countries.
Extending the right also to the Tools of Production (the machinery, the robots etc) it sounds a bit like Communism ("the means of production belong to the proletariat"), although you envision a system where people through the free market can own more shares than others.
thanks for another great read, hopefully I'll find some time in the coming weeks to start blogging here myself.
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The ideas outlined in this post are backed by the same type of thinking at the basis of the Steemit platform : great insights, wrong assumptions.
The most problematic assumption I would mention here is the idea that "money is effectively a share in the means of production. If the economy was a company, money would be its stock." Money gives you access to a fraction of what is created through the means of production, but it does not give you ownership over the means of production themselves. And there's a considerable difference. Money does not give you any direct power over how the means of production are used - your use of it does influence what is produced but your ownership does not entitle you to any right in terms of economic returns (dividends) or voting power (what and how the economy produces).
Money is just a means to exchange your workforce with someone else's. It is a token of trust, nothing more. The other components of the monetary ecosystem (interest rates, financial derivatives and so on) are just other tokens created on top of it. But ultimately, money is just what allows us to exchange our workforce in a complex environment in which trust needs to be validated by a common denominator.
So why is this assumption problematic? Because if money is not a share of the economic apparatus, then there is no reason to expect any dividend on what the economy produces (i.e. the basic income).
Your vision would probably make sense in a world in which the vast majority of the economic apparatus were automated. Companies would be owned by citizens who would thus benefit from the fruits of automation. But we are very far from this: automation occurs mainly in the primary and secondary sectors, which only represent 30% of the economy in countries like the US. Optimistic studies estimate that about 45% of our current economic activities could ultimately be automated, which still leaves us with a significant portion of the economy requiring human activity - without even counting the human input needed to produce, operate and maintain the automated economic sector. All this to say that your vision is not conceptually applicable in the current context or even in the medium run.
SO what could be done right now? There are lots of options to investigate, such as the creation of public investment funds specialized in automated technologies. The fruits of automation need to be shared throughout the whole society. Otherwise, the next technological revolution will only benefit a few ones, thus perpetuating the viscous cycle in which we already find ourselves.
Thanks a lot for sharing your ideas, it's important that we collectively think about these issues. The only suggestion I would make is that you identify more clearly the assumptions on which these ideas rely. The logic underlying your reasoning (A+B=C) is sound but the validity of your assumptions is questionable (are A and B good representations of reality or misconceptions?).
See you around!
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Great article.
A crucial point seems to be missing: people with universal income will be more productive than starving people. This argument supports a free market based universal income.
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I'm of the opinion that in some cases when the standard of living INCREASES, then consumption may, in some cases decrease.
Consider Maslow's Hierarchy of needs. Consider Walden pond...consider snowbirds.
Some folks don't need 'stuff'.
It's evident that a high standard of living results in a decrease in population. Might think about that.
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Take a look at the native Alaskan corporation platform. It works similar to what you talk about. Shares are not transferable, and while some cash out and blow the cash each year they have a better way of life then most.
You would enjoy the book series https://en.m.wikipedia.org/wiki/The_Expanse_(novel_series)
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