Basic Guaranteed Income: The Next Big Thing? (Bloomberg)

This is a little off-topic, but I think relevant to the overall discussion in connection with E-Cat/LENR and any other revolutionary energy technology that might come along. On Facebook Mats Lewan posted a link to an article by Paula Dwyer on the BloombergView website titled “Basic Income Should Be the Next Big Thing”. The article discusses proposals for forms of guaranteed basic income that have been presented in various places around the world.

The article is here:

Where I think it fits with the topics we discuss on ECW is in the context of technological innovations that could replace many of the jobs that humans now do. There has been a lot of discussion about the impact of technological advancement on employment in recent years. What happens when factory workers are replaced by more robots? What happens to mining communities when coalmines are shut down? What about truck drivers and all the jobs surrounding the trucking industry if trucks no longer need human drivers? What if the E-Cat hits the mainstream and lots of energy related jobs are impacted? — and the list could go on. Dwyer writes:

The idea of a universal basic income is enjoying a renaissance today, not only in Washington think tanks but in Silicon Valley, as my Bloomberg View colleague, Justin Fox, has written. Y Combinator, a venture-capital firm, is launching a five-year research project, for example. The goal is to give a randomly selected group of people a monthly check to see if they sit around and play video games or create economic value.

Why does Silicon Valley care? It can see the role of technology in accelerating job losses in the U.S. Two Oxford University professors wrote recently that about 47 percent of U.S. jobs are at risk of being replaced by automation. If that happens, the economy would shrink, and fewer and fewer people would be able to buy the goods that Silicon Valley creates.

Mats notes in his comment on Facebook that with Bloomberg covering the topic, the idea of a basic income is now going mainstream. I put the idea here not to advocate it, but to stimulate thinking and discussion.

  • an article on automation that simply asser the obvious
    Robots won’t just take jobs, they’ll create them

  • a&an article on basic income

    A Basic Income Is Smarter Than a Minimum Wage

  • builditnow

    We could already know the answer from ants. According to research, about 50% of ants (who are largely identical) kick back and do not work. The other 50% are busy working and feed those that don’t work.
    What is the bet that it’s similar for humans.

  • Bob Greenyer

    The other option is that some in society work REALLY hard say 1.5 jobs, like in the UK, and then have to be taxed to pay for those on the dole. Doesn’t make a whole lot of sense does it.

  • cashmemorz

    Education is not a universal remedy. Those who are more able or willing to benefit from education will benefit from education. Those who do not want or are not able to take part in universal education will only be a leech on the universal education with little or no benefit to themselves or society. When I was in university on a bank loan, I saw some religious organized students protesting the rest of the “scientific” students. What is the point of such activity?

  • Bob Greenyer

    35 years ago, I was in Yogoslavia on holiday as a child. There they did not have enough jobs for everyone, so basically, everyone did a job share. You worked full time for 6 months and then travelled, studies, grew veg, improved your home etc for the other 6 months, you received you salary over 12 monthly installments. I am a big advocate of this approach in a jobless world – rather than messing up someones life all the time with half days.

    • if I look well I have a basic income, called a good work position.
      My wife have many various jobs, from civil-registry and law consultants, to maid, landlord, cooker, sociology conferencer, lobbyist.
      I work for her as taxi driver, nanny, IT expert, house builder… not much paid (she often manage to pay as …hum…) , but save money to her and since we share the same account I take this saving as a salary.
      I even work for her friends .
      I work for a business called LENR, in the hope it wis a startup investment.

      My kids have side jobs, like babysitter, transoceanic cargo concentrators, hotel keeper, food bike delivery, beside students.

      I thought about employing my daughter to sell coffee at work, but at 6yo it is illegal in france, even if she keep the money for buying a laptop.

      maybe we should accept we are already in that world, except the few who are excluded from basic income.

      note that even having a basic income, I have side jobs… (and I am more lazy than average, I a professional lazy, I’m an engineer).
      the excuse that basic income will reduce side jobs is simply refuted by evidences.

      however the taxes and the noticeable charity tax (when people remove your charity/social help because you no more need it) is proven to block people in non-work (poverty-traps in france).

  • Nigel Appleton

    Close down the tax havens (oh yes we can!)
    Tell the wealthy – Invest it directly in job-creating enterprises (not on the stock market) or lose it

    Imprison the non-compliant

  • Omega Z

    Two types of capitalism.
    Either people one property or the state owns it.
    If the state owns it, they own you…

    • cashmemorz

      What is yearly property tax on your house?

  • Albert D. Kallal

    Actually, we seen this level of automation before. It less than 100 years ago that MOST worked on farms. It is un-imaginable that automation (tractors, wheat combines, trucks etc.) could eliminate 80% of the jobs, but that’s exactly what occurred with mechanization of
    farming. And actually, I think the numbers are closer to 90%.

    Back then, one would ask what is 80% of the people going to do when 80% of the work is removed. It all turned out relative fine. And our standard of living boomed.

    The main issue is countries need to re-vamp their industrial policies. The free trade experiment simply wiped out most of the middle class and has been a disaster. In my city there are many old
    beer breweries that go back to the 1920’s. (there was a law (trade policy) that stated if you brew beer, you have to setup a brewery in the province)). So we had tons of breweries, and all the taxes, accouting jobs, purchasing of wheat (local) caused may jobs, and created wealth in that locale.

    The issue not automation, since we seen automation wipe out 80% of what the population did at one time (farming). So automation in virtually all cases I can see will RAISE the standard of living of people, but ONLY when such automation occurs in that given marketplace.
    If you move out all manufacturing to china, then no automation or tons of automation will not
    help your economy when that automation is occurring in China.

    And while I pointed out that a basic income concept can’t work now, it COULD WORK if proper trade policy are in place (like they used to be), and thus the wealth creating occurs in that economy. So with automation, we could EASY afford some type of basic income, but with
    open trade policies, I simply move my work (and jobs and income) to a location
    in which I don’t have to pay for that basic income, and simply ships the goods
    into that market. And the only reason stopping me from doing this in the past
    was a proper trade policy.

    The above by no means you don’t trade with other nations etc., but you only trade when it is a benefit to the people in the given locale and marketplace.

    The issue not automation, but WHERE that automation is going to occur. If it occurs outside of your economy, then you don’t have a wealth creating occurring, and thus no tax base to pay for schools, hospitals and yes some kind of basic income level.

    Albert D. Kallal
    Edmonton, Alberta Canada

  • it will be very hard to kill the parasits of all kind, the core of the crony capitalist socialism.
    the lords that ask regulation to protect their rents, and the servants who manage charity for poor (caring their clients don’t disappear) and for themselves.

    UBI would be good, but i’m afraid it is not possible like anything pure.
    at worst it can be implemented if our system explodes… maybe in france or in Greece.
    France at least have a working state , so UBI could work there.

    crowdequity and UBI goes together very well.
    there is also models of “equities” supported by blockchain

    it match the “Barbel” strategy of Nassim Nicholas Taleb.

    best strategy is to have a very safe income source added to incredibly risky investments (like entrepreneurship, changing life, travelling, moving, learning, cooperating, trusting, investing).
    mild risk is often underestimated and underperforming says Taleb.

  • Albert D. Kallal

    Been meaning to comment on this concept.

    While on paper such an idea sounds great, the problem is many fold.

    First up, most governments are running deficits, and thus they don’t have “extra” tax money to spend on some guaranteed income.

    Of course the real problem is much worse. A company does not hire someone unless the value of that employee makes the company MORE then what the employee costs. I know of several small manufacturing companies that I consult for, and the owner has stated that new employee don’t
    make the company money until they been working for about 8 months and have gained experience.

    For “entry” jobs in the market (this includes many type of service jobs), the entry pay is thus quite low. As these people gain experience, then the value of their work “increases” to such employer’s.
    No company can pay someone more than what the value of that employee creates
    for that company.

    If by hiring you, you can make me MORE then what you cost, then I will hire a million people like you, since I will make MORE money by doing so! I will in fact NOT stop hiring such people until I reach a point that for each additional employee, they don’t add more value then what they cost.

    Having a guaranteed income would thus decimate entry into the job market, since why would anyone go work when they don’t have to? This would put the governments squarely in HUGE competition for business attempting to hire people. Why work at an entry level job when the government paying you

    And I know many a people are not particularly motivated. So if they are paying say $800 for rent, and they move in with a friend and say rent a room for $300, then OFTEN they simply work less! They
    want to play video games, or their guitar! (they work as LITTLE as possible!).

    However, with a guaranteed income, then why work at any entry level job? And how are business then going to find people to work? (and they can’t pay more since the value of that employee is not sufficient
    to warrant higher pay).

    More important, that LARGE number of people entering the job market are in fact tax payers. (they are paying into the tax system). If you remove that group, then they can stay at home, and a HUGE group of people is now not paying taxes!

    We see this problem in places like Greece.

    The problem is that for the government to get tax dollars, they have to FORCIBLY take that money from people actually paying into the system.

    So for example (Canada), a teacher, a doctor, a police man ALL DO NOT pay into the tax system. And in fact someone in the military or even someone on welfare is the SAME as that doctor or teacher.
    They ALL TAKE from the government and none are paying into the tax system. And thus their pay is taken from people who actually pay into the tax base! I mean if we put more people on welfare, or hire more teachers, or hire more doctors, then in ALL OF THESE cases, they are drain on the tax base. If this was not the case, then hiring more policeman, or doctors or in fact putting more people on welfare would INCREASE the tax base of dollars that the government has. (each one of these people costs MORE tax dollars then they pay to the government).

    This is grade 2 math. You have to add up what the person on welfare (or the doctor) receives from the government (the tax base) and what they pay into that system. So while some people on welfare
    might pay taxes (and so does the doctor), their NET dollars they receive from the government is FAR MORE then what they pay (in fact they not paying taxes since they are receiving tax dollars from the government. Either you net paying in, or you are not – it is that simple).

    So the ONLY tax base is from those actually paying INTO the system. This is why Greece is such a mess. The only decent jobs left are government jobs (ones that don’t pay into the tax system). The
    rest are suckers! They work 14 hours a day, don’t have good pensions, and the crap
    is taxed out of them (to pay for all those doctors, teachers, and people on welfare who are NOT paying into the tax system). Since so few people are left over paying into the system (and you would be a fool to do so due to such high tax rates and having to work 12 hours a day compared to those government funded 9-5 jobs). The result is a broke government.

    In other words, too many people are in government funded jobs. Such people/jobs are taking from the government, and so few jobs remain that actually PAY INTO the tax system remain. (That’s the main issue with Greece – no jobs left that pay into the tax base).

    It called socialism and it failed EVERYWHERE it been tried. IN every country when the economy reaches a point in which LESS jobs exist in the private sector that pay into the tax base to pay
    for that teacher or person on welfare then the country becomes a big flushing toilet of misery and poverty.

    So keep in mind that people who work at NASA, or teachers, or someone on welfare don’t pay into the tax system. Their pay and money COMES FROM the tax base which in turn comes from people who actually pay into the tax base.

    The simple question is this:

    If we have MORE of these people with such jobs, does the government have a greater tax base (MORE tax dollars) to spend from that type of job?

    So each doctor, or teacher, or person on welfare TAKES MORE money from that tax pot then they put in.

    The only real tax base is those actually paying into the tax pot. So for police, or military or teachers or someone on welfare, they all take and are fed by the government tax base.

    So given these basic issues:

    Governments are broke everywhere right now

    Their tax bases are eroded

    Less and less jobs exist that pay into the tax base.

    Suggesting that we NOW give a guaranteed income to a HUGE swath of the economy that competes with entry level positions for business will decimate job creating.

    Such business thus face a double whammy:
    Business will not be able to find people to work at a given cost.
    Business will face increased tax burdens, and that means even LESS money will be available to
    pay their existing working people, let alone try ad hire new people!
    And worse, why work when one does not have to?

    I wish such a socialist dream could work, but it a formula for poverty and formula that will fast send any economy down the toilet – and worse so many western economies are in the toilet now! This guaranteed income would simply be hitting flushing handle on our ravaged and weak economies that we have now.

    Albert D. Kallal
    Edmonton, Alberta Canada

    • Mats002

      I disagree with respect. According to Franks site rules politic debate is not allowed here, so this article should not be discussed here anymore. Or Frank change the rules if he wish.

  • Iggy Dalrymple

    Pure socialism will not work. We are already at the point in the US that one cannot find anyone willing to do hot dirty grunt work. Why do unpleasant tasks if the govt guarantees you food, shelter, and beer for doing nothing? The elites solve this dilemma by employing illegals to do grunt work. Without a working class, our society will grow dumber and less skillful. If free enterprise prevails, people will be able to subsist on fewer and fewer hours of work………because food, transportation, and shelter will be cheaper and cheaper. Those willing to work hard for long hours will be the new upper-middle class.

    • Omega Z

      I agree Iggy, This has economic disaster written all over it. The system we have works. We just need to work on curing some of the warts. One caveat. There is some hot dirty grunt work that even illegals wont do when other options for them exist. This is where hard working country boys fill in. I take my hat off for those guys. They represent what the U.S. used to all about. Hard work.