A Solution – The Shorter Version
12/20/2016: The Truth on the Ground https://en.wikipedia.org/wiki/Mincome - see related articles as well as today's NPR/CBC coverage of the breakout of this long-delayed news:
AND! (I LOVE THESE GUYS): http://freakonomics.com/podcast/mincome/
(09/17/2016: For a really insightful take on some of the issues raised below, please check out http://frogboy.joeuser.com/article/479588/Economic_Singularity_The_Gods_and_the_Useless)
(12/10/2016: For a recent new take see also - http://finance.yahoo.com/news/give-poor-money-directly-and-they-dont-spend-it-on-alcohol-and-cigarettes-135858208.html
Short Summary: (11/13/2016)
The core of this solution to poverty is justice. What is justice? Part of the difficulty of formulating the answer is that we generally don't notice when we have it; it's only the lack that sets off the alarms.
Intuitively, most of us recognize some form of justice or injustice in practice. Most of the evidence would seem to suggest that we are either born with or strongly disposed to this recognition, and further evidence comes from the behavior of other animals who could not have "figured out" the concept. We and many other animals notice injustice (and other fundamentally social attributes) and often respond with outrage, even when the actual loss may be trivial.
However, a primitive recognition of a social or interpersonal situation is not sufficiently robust to take one directly to a fully formed conceptualization that could support a set of economically valid legal principles. We cannot simply take our feelings, however well grounded in custom and perhaps basic brain functionality, and translate them directly into law or sustainable culture.
Biological evolution for humans does not, by itself, explain the point we are at now. We have certainly not stopped our physical evolution, but our various technologies put us typically well outside of that box. We are winging it and trying to substitute other resources to stand in for that which we are not specifically prepared by natural selection.
On the bright side, we can look at such outstanding feats as the various space programs, which required that millions of decisions be RIGHT. (But why does Snow's position on the "Two Cultures" still prevail? How is it that we still have a multitude of naysayers denying that the moon shots were real? Would everyone have to get a degree in physics to resolve this onrushing crisis in general - especially scientific - credibility? Would it even help?)
On the dark side, we do not seem to be improving in general in the ways that we treat each other. There are major truths that are not spoken. Part of the reason is connected with what I just wrote above about the limits of human evolution. We will drive a mile to save $1 on a discount hamburger, while signing off on a $20,000 car purchase after 15 minutes of negotiating. Our biological core never evolved to handle large quantities or urban life.
Most of us will also spontaneously respond to threats to life on an emergency one-on-one basis - such as someone having a heart attack, but we cannot translate the pixel images from Syria into something of felt significance beyond it's moment on screen.
JUSTICE: In general socioeconomics terms, justice is a measure of how well outcomes reflect the value of input. A just system promotes a proportional Return On Investment (ROI), which in turn incentivizes rational productivity and punishes destructive behavior. In contrast, an unjust system penalizes or fails to optimally reward productivity, reducing the typical ROI while often allowing predators and parasites to cash in on illegitimate rewards.
For the individual, justice can be paraphrased as a fair deal, e.g., as exemplified in the breach by the Marxist position that the return on capital unfairly outweighs its contribution to productivity, such as when we see the wealthy son or daughter of a factory owner partying on the value-added produced by the marginalized, disrespected workers.
But justice is an inherently complex subject. What appears to promote justice within a particular legal/political/historical/cultural/moral space may be totally at odds with it if any of the dimensions of analysis changes significantly. E.g., a hypothetical dam project might be on track right up to the point that a native tribe brings suit over sacred land that would be inundated, or the discovery of unforeseen damage to the ecology may emerge from academia, or a new source of cheaper energy may make the dam obsolete before it is started.
And perhaps we all more often than not reap the rewards of proprietorship, despite our feelings of envy or outrage. After all, even star cooperative performers such as the Mondragon Cooperative find it desirable on many occasions to bring in outside profession management, to take the internal infighting and politics out of the daily workplace. A single proprietor has a natural vested interest in the success of the entire enterprise, as opposed to the divided interests of an entire workplace, much less a Board of Directors.
While Mondragon often limits the pay ratio for one of their enterprises - 20 to 1, typically, I believe - they also recognize, I'm sure, that a competent, incentivized management is worth a premium wage.
Let us examine an extreme, yet frequent, controversy over economic justice:
Joe Doe likes to kick it on weekends, drowsing in his back yard as the local house mice literally eat his lunch. One day, just from idle speculation in his back yard, Joe Doe invents a really better mousetrap, one that works, that the mice haven't figured out! He patents his new trap and sells it worldwide at twice what all the R&D, manufacturing, quality control, marketing, distribution total up to. His trap costs him $1 each and does a better job. He charges a suggested retail of $2, essentially the same price as the ones his better mousetrap supplanted. He personally makes $1 per new mousetrap purchased, and his market is one billion strong. He makes a cool $billion - for a simple mousetrap that he almost napped through.
What is WRONG with this? If we say that it's wrong for Joe to make a $billion off a simple mousetrap, while other inventors starve in their garages, pouring their lives into the technology for some complex product such as Oculus's Rift VR system, then where did the error occur? What would be the alternative?
A hard-core socialist, such as the "father of socialism" August Comte, might make the following argument: Everything that you possess, including your knowledge, character, skills, physical and intellectual properties, etc., is mostly the product of millions of other humans and their efforts over millennia. Thus, as a child of humanity and the Earth, you begin with an equal claim to the inheritance of this wealth, and society has a corresponding claim upon your life and and the fruits of its labor. I.e., forget individual rights, including property. And forget about becoming Joe Doe, billionaire. His better mouse trap could have been invented by virtually anyone.
Of course, somewhere in there, Isaac Newton got misplaced. His contribution was probably in excess of a century or so of general human progress and there are many, many more like him.
How does a uniform theory of justice encompass both Newton and Comte? I'll get to that.
Cultures also influence our assessments of justice. The Christian ethos, for example, discourages "judgment," leaving it to God. This is an example of the authoritarian school of morals. The buck stops with God, who cannot be challenged, as He is the source of reality itself - the game designer. God may, for example, reverse what we mere humans regard as just, as in the cities and land that the Torah specifies as God-titled for his "Chosen People." Oops. No wonder we're still fighting over the "Promised Land." (The lesson: don't fight God??)
Secularists often have a similar authoritarian position, that justice is the vox populi - or at least the voice of the elite closer to the mouth of Plato's Cave.
A major factor in achieving real justice is the correct identification of who was actually responsible for the value added - or subtracted - against which we measure the ROI. The current system of analysis here in the U.S. pretends that for the most part, the last or most current claimant deserves all, which seems to directly contradict our intuitive understanding that any value one possesses reflects the combined efforts of humanity.*
Yet how does anything get done if we are restricted to collective decisions? There are reasons for the success of the proprietary model. Property is simply a way for an individual or group to claim the right to unimpeded action over time. If you want to farm, then you generally need to restrict people from walking over that territory. Property also provides an enhanced feedback loop. The owners benefit from good thinking and learn from errors - signals that can be lost in a collective.
*(This is actually a reflection of the pseudo-Lockean theory of property, starting with the original claim based on "mixing ones labor with the land." It has been remarkable helpful as well to all the various private and public thieves who cashed in on the idea that native peoples did not possess valid property rights - a position which Locke himself vigorously opposed, BTW.)
And, just as we write off the costs that bankrupt and/or corrupt corporations impose on us on the theory that we needed to add additional incentives - specifically to encourage risk taking - to the process, so we fail to take into account the downside on the property end in any systematic way. There is no room in the Lockean calculus for losses in the creation of property. That calculation requires a very different model for property as such, which I will discuss further on in this piece as well as in my blog on property itself. http://philosborn.joeuser.com/article/449510/Property_Foundations
This all leads up to the following central thesis: A major problem facing our species and life in general on earth is the failure to reflect basic justice in our economies. How is it that we humans, the greatest problem solving engines in our solar system by far, tolerate 1 in 6 of our fellows on the edge of starvation - a billion people living on less than $1 per day? How is it that we know about this and yet do nothing? How is it that we let it happen to begin with? Something is very, very wrong.
Injustice emerges and grows like a cancer when the moral/political/economic systems that are supposed to promote a close relationship between return and investment break down and instead become promoters and protectors of systemic corruption, a corruption that only survives by control of what poses as the truth... For example, the disaster around Apple's Siri, in which reportedly the developer ended up making nothing due to apparent troll suits over patents.
Paradoxically, on the surface, the perceived ROI may be quite positive, even while the real ROI is very negative. This often happens when the values measured exclude key factors. E.g., toxic gold-mine tailings that represent billions of dollars in return to the mine owners, so long as we fail to notice those Superfund sites in the making, externalities that will be billed to the general public as the original mine owners disappear and the mine goes bankrupt.
The current situation is that an increase in general wealth is being ever more concentrated in the hands of a tiny minority, without much evidence of that tide that raises all boats. In addition to the privileges of wealth to buy out of liabilities, there is an increasing load for all producers in terms of fixed costs, such as maintaining an army of lawyers. But, as these costs keep rising, many of the lower end small and medium businesses are being squeezed out.
We are in fact in a runaway collapse in which economic power fuels political policy conducive to its own interests - and damn those externalities. But those hidden costs do not magically go away. Instead, the artificial person of the corporation stands in like the lamb on the altar, absolving the actual persons who are responsible, while foisting off the costs to the public.
And nowhere is it reflected in the accountings of our economies that we each as individuals and everything that we value are largely the consequence of thousands of generations of pooled effort. Meanwhile, on the other side of the world ledger, externalities are written off, to be paid for by unknowing, powerless victims who are incapable of enforcing any real solutions and are thus fodder for violent and destructive forces.
(Consider the nuclear power industry, which only became economically possible when Congress imposed an arbitrary $800Million cap on liabilities per accident. Prior to that point, the insurance companies, whose job it is to accurately assess projected liability, had refused to insure the proposed plants, on the basis that they had no good baseline or analysis to support any limit.
So, the power plants represent an unsecured risk, riding a wave of hopeful nonsense. Yes, it is in their interest to deal with risks up to $800Million, but past that point there is no additional incentive. An $800billion - note "Billion", not "Million" accident, such as well might have occurred had a few brave airline passengers not taken personal responsibility on 9/11, is certainly within reason, but it makes more bean-counting sense to put the money for risks under the $800Million wire as they will not be held responsible for anything over that fiat base. The real liabilities might well make nuclear power financially impossible, and how many power company lobbyists do you see promoting that position?)
As this situation worsens on its own, with ever more costs being foisted off on those lower down on the pyramid, while the perps rewrite reality to justify their theft, additional factors have recently been at the top of the news, especially the recognition that advances in robotics and AI will soon eliminate a great number of "unskilled" jobs. What will happen as that pool of unemployed, often severely impoverished workers grows?
One of the canaries in the mine is the coffee shop. When anti-remedies such as a minimum wage are instituted, then the traditional coffee shop is in trouble, along with all the disabled net-workers doing medical transcription or tech support out of their homes or a plethora of other contract net jobs that often pay $2~$5 per hour. For someone who is elderly and/or disabled, often dependent on Social Security, that $2 per hour may make the difference as to getting $300+/month medication vs food or shelter.
The usual "solution" that is posed, is to try to outlaw net jobs altogether. However, a crackdown on such "loopholes" means that many jobs are simply not affordable, as well as a shift to automation and foreign outsourcing - and the death of many community coffee shops, as well as disaster for the multitude of low-income workers on Social Security who were just barely making it on $1500/month plus the contract labor money from the net.
A case in point involved a long term friend of mine with a college degree who had originally done reasonably well as a professional medical transcriptionist working out of her home with her life partner, who was blind. About a decade ago the higher minimum wages, together with ever better transcription software began reducing her net income, eventually fording her to move to another state to find affordable housing - and then move again to even cheaper housing. Finally she lost the gig and ended up on straight disability, which meant choosing between health care and medication versus food. I knew Pam from the late '70's. She fought the good fight to survive and died about a month ago.
The "solutions" to all these problems so far have been piecemeal, targeted band aides whose funds often end up in the pockets of corruption, creating incentives for more problems, not real solutions. However, in Switzerland, an actual movement very similar in focus to my blog below, made worldwide news in 2016 with a referendum on the issue of a basic income, citing the ongoing move to robot labor as a clear and present danger to lower-skilled human workers.
The real solution that closely reflects the underlying ledgers of injustice is a world dividend, a uniform settlement that matches roughly the legacy of value added that each of us inherited as humans. As a first step, calculated on the basis of general need and affordability, such a world-wide uniform income would enable a billion or more people who currently have dismal prospects at best to move up to a sustainable lifestyle, empowering many of them to actually become contributing members of our human community, instead of a net liability.
Such a change would actually reduce the net costs of treating "needs." Large problems at present in the "need" complex are the high costs of targeting such as "means testing," plus the incentives of corruption to make matters worse. A basic income or planetary dividend could reduce that total expenditure as targeted needs programs would be phased out or reduced, replaced by a much more efficient uniform sum that would take care of the essentials for most recipients. For those remaining, the current need-based welfare payments should be more than sufficient.
This means that the uniform dividend would eliminate all the effort that the recipients have to lose in the process of applying for targeted needs programs, as well as the associated uncertainties and the disincentives for becoming productive that such programs usually include. "Sorry. You have to be needy to qualify... OK." Perhaps the worst case example of this was the alleged deliberate self-infection with AIDS by African teens in order to get food aid.
My estimate is that a $500 ~ $1000 per year dividend would be affordable - not killing or significantly impacting the incentives to be productive - and would be sufficient to tilt the balance toward a worthwhile life for most of the people who are in dire straights.
The opposition: There are three main clusters of groups apposing any such idea.
The first are those who appose any kind of "socialism" on principle, as a slippery slide to a dismal future exemplified historically by the USSR and China under Mao.
The second are those various groups whose bowl of rice is the return on corruption that the current non-solutions such as targeting needs make possible, as well as the huge number of social service jobs held by the bureaucrats whose incentives are to make needs assessment ever more costly.
The third group are those with practical objections to the implementation of such a plan, such as "where will the money come from?"
The first and third groups can be addressed rationally, as they reflect real, legitimate concerns. For example, one influential subgroup are the libertarian oriented business communities, who see such programs as social engineering and a violation of their concept of morality as applied to property. They see property as something outside and independent of any implied social contract, typically citing Locks's derivation of property as originating with the owner's mixing of his labor with the land. This is itself a complex issue and one whose roots and derivation have gone far astray, IMHO. See my JoeUser blog on property for a detailed analysis.
First, breaking news... this is for real: http://www.basicincome2016.org/
This Swiss group thought of a lot of dimensions to the idea that I didn't or didn't find time to include anyway.
I came at it primarily from a moral-economic analysis. I claimed that a basic income is a moral right, derived from a proper, moral concept of property as such. Property, I claimed, by its nature deprives all but the owner of its use. Unless you want to argue that some people have an inherently greater claim to the resources of the universe than others - which is how wars get started - then morally sound property titles have to incorporate a just compensation to everyone else for their loss of access and use of that part of the commons, either actually or potentially. Not a confiscation of wealth, but simply compensation for what is reasonably due. Thus, in a nutshell, we arrive at what I called a dividend - what the Swiss call a basic income.
Check out their site (above) for a wealth of additional reasons why the concept is both sound and beneficial, as well as ideas for how to implement it. Note that the Swiss group wants to end other such transfers of wealth, abolishing Social Security and Medicare kinds of programs up front, whereas I suggested that this would evolve naturally over time... What I'm trying to do is keep the politics out of it - for many reasons, not the least being the costs inherent in any political issue. Factoring in the multitude of separate political claims, such as welfare or medicare, in a determination related to the Basic Income will kill it. Cancelling or reducing transfer programs will happen, very likely, as people have more disposable income, but introducing it as a starting issue is a formula for disaster.
It all started here on JoeUser.
Please note that this blog came out of a wider context, including major blogs on morals ("On Morals") and property as such.
I.e., this is not an ad hoc compilation of mere opinions or isolated positions. It has a coherency and little by little I stitch the various dimensions of analysis in the six or so major blogs on these subjects together like a Bucky Ball, ever stronger. I could use some more intelligent critique, BTW. The various threads of what I'm doing sometimes lose themselves in abstraction. I try to maintain a style similar to Robert Pirsig in "Zen and the Art of Motorcycle Maintenance," shifting back and forth from concrete example to abstract idea. Restating from a slightly or radically different view to enable the reader to see the commonality. Sometimes it works. Thanks for any help.
Phil Osborn 07/06/12, 11/16/13, 12/28/13, 06/30/14, 07/17/14, 12/1/14, 06/05/16, 06/22/16, 08/28/16, 12/10/16
08/28/16 Some new relevant links:
06/22/16: News. A recent editorial in "Scientific American" threw its weight behind some form of world-wide guaranteed income.
And, now the "Wall Street Journal" http://www.wsj.com/articles/a-guaranteed-income-for-every-american-1464969586
A good start. Note that I suggested this for the U.S. when the recent recession hit, and extended the concept in the blog below.
02/19/15: Further problems with the Standard Model of free market economics (This is REALLY GOOD!):
I.e., what if the "market price" for property conceals the real cost? As in the $billions needed to clean up mining tailings and ground water pollution, long after the mining company has taken its profits and is long gone. What if you could place a precise value on those pesky "externalities?" up front and explicitly taken into consideration regarding that application for a title?
(Q: Is "property" that fails to take into account prior claims by others and future expenses billed to them without their sanction legitimate at all?)
This excellent and thoughtful take by RadioLab reflects a study conducted by Scandinavian economists at least a decade ago, wherein they established that in many cases, such as replacing a wetlands with a parking lot, when you calculated the loss in fishing and other eco impacts, you had to conclude that the parking lot ran at a huge net loss, which was paid for by the victims, most of whom had no idea that the reduction in take-home had even occurred, much less who to hold accountable.
So, if we did take that into account up front, in the act of creating titled property, then, ultimately, it would have to involve a calculation over the entire human population and perhaps the eco-sphere and the stored value implicit in the DNA of all organisms on the planet, reflecting the past 3 billion or so years of selection. On the basis of such a calculation of universal value, many proposed titles would not be worth it - eaten up by inherent externalities, while others would turn out to be hugely profitable. The objective basis for title would not have changed - just the relevance and accuracy of the calculations. (Nuclear power plants would likely not survive any such reasonable accounting.)
I could make an additional moral argument here, as to the selection pressures that determine who succeeds under what model. In today's world, the failure to objectively assess costs and benefits in the granting of title, coupled with the shielding against liability provided via the corporate model (Ltd) and the natural advantages accruing to concentrated interest, pays off to the least responsible players in proportion to their ability to identify opportunities to profit off the hidden or diffuse losses to others. I.e., we are breeding sociopaths, some of whom are well aware of their evil and who search out and destroy incipient agents of change that might threaten their good times.
There is also, of course, the scary possibility that we are already existentially bankrupt, reflected not just in potentially catastrophic climate change, but in having eaten our seed corn in way too many cases, accepting quick and easy profits that concealed real costs and selecting for a system in which the supporting rip-off memes are themselves selected for, perhaps constituting buy-in and support for the meta-perversion that enables the perverted version of an ecosystem that we all too frequently endure. On that note, I suggest and recommend Vinge's "A Fire Upon the Deep," in which he never truly identifies "the Blight," but posits an obviously parasitic ultimate evolution of purest evil.
This perspective naturally fits right into my proposed solution for poverty below.
(Note: I DO appreciate the ~200 comments so far, but how can I possibly read them all? I have tried to skim or sample from the existing logjam of comments, but it will clearly take most of a day to sort through. Does anyone have any suggestions as to how to deal with this so that important information is not lost and spam or completely new threads can be bypassed? Thanks...
If someone were to actually carefully read all 200, then they might well learn a few things about different economic perspectives, but nothing that I spotted in the way of a flaw in my post or anything that I was not already personally aware of, at least as a principle. If there were a way to separate out the thread diversions without deleting someone's otherewise good effort, it might be nice, but I don't so far see any point in my intervention. Most of the time, the critiques of my post were answered by someone else or were clearly based on imposing unjustified assumptions on top of what I actually said. So, I stand with my original analysis. Thanks, people.)
My own comments on some random issues raised by other people here:
Nobody paid much attention to my subtitle. Most real-world attempts to deal with poverty have wallowed in corruption as various middlemen have taken their cut and ensured that the problem continues. That's an inherent danger in any "need-based" system. The more you "need," the more you get. As Jarret Wollstein pointed out at the Ist Southern Libertarian Conference in 1971, Police get bigger budgets when crime increases. When you add in the factor of a required detailed analysis of how much any particular individual "needs," as in most U.S. welfare programs, you end up spending huge amounts of energy on a political football, without any major improvement in ROI.
For a really good - often hilarious - analysis of how incentives work, google on "freakonomix."
As Milton Friedman recognized, the beauty of a guaranteed minimum is that it undercuts a big chunk of the political transaction costs. The "Give Directly" people have meanwhile been demonstrating that eliminating the "need" analysis and simply giving works pretty well in comparison to most of the NGO efforts.
And, of course, I recognize the differences between my own worldwide plan and Friedman's. The world could not afford what I suggested back around early 2008 - giving everybody in the U.S. $10,000, twice a year, similar to Friedman. The U.S. and the rest of the comparitively wealthy Ist World could do it, but the limit for the entire planetary population is probably between $500 and $1,000, which would net/net save about a billion people from useless lives and miserable deaths, and put a lot of them on a track of positive contribution to the world economy. Reality is. Trying to finance the 3rd world to a 1st world economy would be a disastrous failure. But we could get there incrementally by first providing one step beyond mere survival and then letting the market take its natural course.
I will end up repeating my original post here, if I'm not careful: My plan is grounded in natural law and the inherent obligations that we inherit as the product of our history and evolution - detailed by August Comte. "Privilege" (literally "private law") in general is a violation of the implicit social contract, setting us against each other as predator and prey. The opposite of "privilege" is the Commons, to which each human has an equal right. But this is nowhere similar to "communism."
Free markets and capitalism are natural social technology that are fully consistent with the Commons. We have to have some method of "proprietorship" in order to organize long term efforts, such as farming. "Property" and markets (and money) are a brilliant solution to the need to be able to organize and act long-term in a social context. However, they are derivatives of the Commons. There IS no "unclaimed" property to mix ones labor with. And Locke didn't mean it that way anyway. See my article on Property.
So, the long term idea is that we establish legal mechanisms by which a bundle of rights called a lease allows the accumulation of property, wealth, capital and trade, while at the same time requiring that the lease-holder compensate the Commons for privatizing, and forbidding the property owner from imposing externalities on his neighbors. Under this system, that part of the lease fees over and above what was required to maintain the Commons itself, its infrastructure, etc., would be paid back directly to the people of the Commons, equally, as their rightful due.
And, of course, the property owners - who are also commoners - would get the same cut of that compensation as everyone else, plus or minus their earnings.
But, since we are not in that mode, or only partially so, having inherited a motley conglomeration of different legal/property systems, usually based on conquest or corruption, the best we can do as a stopgap is an approximation - what I call a planetary dividend, based in part - I hate to admit - on an assessment of global "need." I.e., given that this is at best an approximation, what level of dividend can we afford that would have the maximum impact?
We don't want to be killing incentive or ignoring critical global infrastructural problems such as climate changes. We definitely need to deal with 1/7 of population living and dying on the edge of survival. But we don't need any more "need" contests and political chicanery, which means that EVERYONE gets the dividend. And, BTW, we are running a global shortage of children to take care of the growing bulge of elderly. Children are included in that "EVERYONE." And, of course this can be seen as an "inflation tax." Is there a better way?
If you have a specific bone to pick that you think was not covered, of course feel free to comment further... Meanwhile, I will attempt to come up with a better way to deal with an overload of information here.
Also, on the onrushing robotics revolution, check this out from a few months ago:
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The problem: People are starving while the disparity between rich and poor is growing. Meanwhile, class, ethnic, religious, etc. divisions are created, nurtured and exacerbated for the profit and power of people who are fundamentally sociopaths, and profit from misery. While the planet heats up, due to our failure to incorporate externaities, such as Carbon emissions and their impact, into our economic decisions, more and more of our available resources are wasted in political battles based on and resulting in a limited planetary pie of wealth and productivity, at the same time that our actual capabilities for positive production are on a steep exponential curve. And, we are undercutting our own future intellectual productivity by leaving people so undernourished and stressed that their brain functions are often seriously impaired. And, on top of all that, we are finally facing a serious competitor in the smart and cheap robots that are moving into virtually every area of production and will soon obsolete all the low-tech jobs, leaving a HUGE block of humans without employment.
A solution: Give everyone money, the same amount to every man, woman & child, to the tune of at least $500, but no more than $1,000, going – with U.N. supervision – directly and solely to the individuals, untaxed and secured against private or state confiscation. And keep doing it, on an annual basis, so that everyone can make rational economic decisions based on it.
Impact: The 1.1 billion people barely surviving on less than $1 per day would suddenly be able to purchase reasonably healthy basic food, cheap multi-vitamins, basic medicine and vaccinations, school books, seeds and a plow perhaps - or at least a plow rental - and a cheap cell phone. I.e., they would have the capacity to be productive, instead of a net drag on the planetary production, existing only through charities that generally go to the most needy, thereby incentivizing failure and setting class against class.
The 2nd world, such as Mexico, would see a minor windfall that would help boost their struggling economy. In the 1st World, the lowest income rung – who are still richer than most of the world’s population – would have a significant chunk of cash to repair their car or go to the doctor, etc. The working class would about break even with the inevitable inflation of 5~10%. The middle class would suffer a slight inflationary net loss. And the 1% would experience it as perhaps a 5% drop in net worth.
(Note that the middle class – the home owning class – in theU.S. has suffered a 40% decline in their average net worth since 2007. Another measure of this is to look at the $3~6 trillion of bailouts and divide by the population. That’s $10,000~$20,000 per man, woman and child that was given largely to the very crooks who caused the mess, in hopes that they would reform and give it back to us in the form of legitimate investments and jobs… Still waiting… (05/17/2015 - recent news reveals that the apparent recovery was largely limited to the manipulators of capital and management with unused options. Family wealth has remained fairly static since the crash, while only with the con-artist trick of writing off those workers who are no longer seeking a job has the employment picture looked reasonably good.)
What would have happened if the fed had simply printed the money and given the same amount - ~$10,000 – to every individual U.S. citizen? They would have kept their homes in most cases, bought cars, etc., anything but sit on it, because they would have known that inflation was coming and their dollars would be worth 5~15% less in a year or so. Of course the major state creditors – such as the Chinese – would not have been pleased. Too bad.)
By the numbers:
Justice - is it fundamentally fair? – We KNOW that much of the money and assets held by the ultra-rich and the banksters, etc., was stolen and there is no practical way to get it back in most cases. In the case of long-standing disputes such as natives vs. colonizers, often the property in dispute was stolen repeatedly by waves of aggressors. So, let’s make a reasonable assumption that some portion of the planetary wealth rightfully belongs predominantly to the people at the bottom, as the disparity in wealth is often provably the result of theft of the poor and powerless by the wealthy and powerful. People are generally pretty productive, given half a chance, so a lot of the poorest of the poor are there through no real fault of their own. See the Drunkard's Walk for a clear, cogent eye-opener on the basic issue of just how much of our lives are subject to random influences - and how we systematically mis-assign causes to random events. http://www.amazon.com/The-Drunkards-Walk-Randomness-Rules/dp/0307275175
Practicality - can we physically/economically do it? - The planetary net income is on the order of at least $70 trillion. Paying everyone $1,000 would cost one-tenth of that. However, the money would be going mostly to people who would spend it, rather than sitting on it in hopes of deflation, as in our banking system. That spending and inflation would have the impact of forcing the money that has just been sitting back into investing - which is better than the fed has accomplished to date.
Alternatives - after all other considerations, are there alternatives that might be better? Maybe… Let’s hear them!
(The Progressive Left to whom I’ve marketed this likes it up to a point. Of course, what they want is more like having a bureaucracy of sociologists design a system that evaluates what people “should” need – food, housing, medical care, etc. - and then target the “needy” with those items that they “ought to” value.
An alternate solution, however, is providing a very nice counter example. Check out http://www.givedirectly.org/. This NGO has demonstrated that very low income people actually make generally good decisions when simply given a lump sum of cash. Give Directly was interviewed at length on NPR. They are financed by some of the major players – Google, for example – with the goal, not to provide succor to the needy as such, but rather to do exhaustive research on actual policy and its outcomes. They are currently analyzing the data from a comparison project in which they matched up recipients of cash with people who had received a cow or goats, etc., via the well-known and well-respected “Heifer Project.” So far, my understanding is that the data indicate that simple cash is at least about as good in long-term relief of poverty as the targeted planning that Heifer engages in, where the "targeting" itself costs $1200 per $300 cow, which seriously undercuts the Progressive Left’s objections to my proposal.)
Acceptability - will people actually buy into it? – If people label this as left-wing, socialist, one-world, etc., then the labels may block them from accepting this as a reasonable plan. If it is seen as charity stolen from the productive to subsidize the lazy and unproductive, then the Republicans and everyone to their right will reject it out of hand. But if it is seen as simple fairness, then it may fly. And if it is sold as a planetary dividend, based on the Law of the Commons, applied to the planet, then the smarter people will realize that it actually gives the entire planetary population a vested interest in productivity. I.e., this should not encourage people to vote themselves ever more money, but rather to look for how to optimize returns for the planet via public policy, as productivity in general will result in larger dividends for everyone.
(Imagine if everyone’s income came from a position in Google stock. Would most people vote for a Board that favored more dividends at a cost of lowered future profits or would they vote for more reinvestment of profits into expanding the income base via marketing, new products, and R & D? That’s a very different perspective than trying to lobby for more welfare to finance “needs.” In the first situation, keeping the Golden Goose alive and well has to be a major decision factor, whereas the second position pits every group against every other group in a political battle that eats up the general resources. Which decision process is preferable?)
Sustainability - is this part of a long-term perspective or just a stop-gap? (Note: Stop-gaps are better than nothing.)
There’s no apparent reason why this should stop. I.e., assume that for the future everyone on the planet will expect to get that regular dividend. Recent studies have indicated that more egalitarian societies, where there is less disparity between rich and poor are also happier and have fewer internal conflicts. The wealthy also benefit as they are seen as being valuable super-contributors, rather than class enemies to be taxed.
Objectivity - are we considering this as far as possible without bias or preconceptions, basing our thinking solely on facts and logic?
So what IS the underlying philosophy of this, beyond the practicalities? I suggest the Commons model, or Bucky Fuller’s "Spaceship Earth."
Under the Law of the Commons,* all land and natural resources are owned in common, equally by everyone. However, this is a lousy way to get things done. Privatization and proprietorship are powerful mechanisms by which people invest their energy and talent into long-term projects, such as farms and businesses. The Common Law handles this by opening up the commons to bidders, who have to bid at least enough to cover the losses to their neighbors of the privatization, and then cover insurance against future damage. And, once there is a market economy functioning, then would-be entrepreneurs will bid the prices up, and there will be a surplus from the leases coming into the Common treasury. This surplus from the fees or land rent is used first to deal with infrastructure issues and then the remainder is split equally and paid out to every individual as a dividend.
The logical sequence of derivations is as follows: We all owe our existence to the Big Bang or however our universe got started. As living creatures we also have a debt to the planet earth and to the two billion years of reproduction and evolution that resulted in our generic species – homo. As humans, we carry with us a specific history of two million or so years of choices and ongoing physical evolution to where we are today. And, as modern men and women, we owe 99%+ of everything we have or can do to the history, culture, knowledge and organization that enabled us to survive and prosper, not to mention our parents and families. Of course, we individuals also contribute or detract from that embodied value. There are Newtons and Hitlers. Some people make a net positive contribution and some people are parasites or predators. Newton probably set us forward in overall wealth as a species by a hundred years. Hitler probably wiped out thirty or so.
For most of the 2 million or so years that we could be called human – educable to modern human capability – we lived in small tribes in which everything was held in common and hoarding got you expelled or killed.* When we finally broke through the barriers to larger groups (mostly infectious diseases that rely upon a larger population) and developed specializations and long-term land use for grazing or farming, we had to invent rules for use of the Commons to prevent Garrett Hardin’s “Tragedy of the Commons.” The need for proprietorship as a means of protecting long-term investments of labor – raising a crop, for example – led to the evolution of private property. However, recall that most of what we own, including our capabilities in every field, were inherited or are acquired from our association today with other human beings, themselves products of eons of effort to survive and prosper.
*see "Sex at Dawn" https://en.wikipedia.org/wiki/Sex_at_Dawn
To claim that an individual then has the capability of owning something absolutely is absurd. We carry into our every action the claims upon us from our ancestors and family and friends and the culture that supports and protects us. What we do own as individuals is the moral right to our lives. And, since we cannot survive on a range of the moment basis, we have the abstract right to physical property, ownership – the right to morally prohibit other people from interfering with our long term actions. One legal vehicle by which this is accomplished is private property. However, to get to private property, we must satisfy the moral obligations I have sketched above. We must specify a moral route by which that which is owned in common – the Commons – can be held privately. That route consists of a binding contract with the rest of humanity (in practice, a court or title agency), in which every member of the Commons is compensated for real or potential losses from the removal of that property from common use.
Which brings us back to where we started. If we had a Common Law society, then there would BE a net dividend from the leasing of the commons, unless we were totally destitute. That is clearly not the case today. Whatever our common problems, we are incredibly wealthy as a species, at least 100 times as wealthy per capita as our ancestors only a few generations ago, and there is no end in sight, unless we kill the biosphere via something like global warming or nuclear war .
So, how is it that we are in the process of destroying the planet for living creatures, anyway? Maybe one reason is that we are using an invalid concept of property, namely the Lockean idea of creating property by mixing your labor with the land. Not a bad idea, as a moral theory, but it actually does not provide a basis for the reality that everyone has multiple claims on the commons. And, every potential piece of property has many claimants. There is no “un-owned” land to mix one’s labor with. Instead there is a legal process based on fairness (one that we have largely abandoned in favor of the law of conquest) that sets out reasonable methods by which property can be legitimate and responsible, instead of the corporate practice of simply off-loading ones externalities…
So, what I’m suggesting is not a perfect solution, but I haven’t seen many of those anywhere else, either. A planetary dividend can be justified as reflecting the known practical and moral realities that I outlined above. It won’t solve many of the problems facing us, but it should substantially improve things, and it is the fair thing to do. It doesn’t suffer from the problems endemic to “need-based” give-aways. It makes no claim that mere “need” can constitute a moral claim on the lives of other people. It is simply based on an approximation of rightful claims for how things should be done. And, supplying the bottom 15% or so of the global population with the means to survive means reducing the power and the struggles for the power of all the brokers who use extreme need as a stepping stone and support for their predations. People whose daily bread is assured are much less likely to join some warlord's army just to eat - and much more likely to oppose such a person and act to reduce and eliminate that position of power.
We don’t have the capability practically to charge each individual for his or her use of the common resources. That would be an enormous effort fraught with enormous resistance. It could never fly in today’s world. But by simply printing the money and giving everyone an equal share, we can offset the worst results of not doing things better to begin with, and, by and large the beneficiaries and those who are net losers will probably roughly approximate what would have been the results of a complete overhaul under the Law of the Commons. We have higher priorities today – such as survival. In some far tomorrow perhaps we will have the luxury of a more precise accounting.
12/29/13 Recent commentary and developments:
1) Still trying to locate that NPR site that interviewed or reported on an NGO or business called something like "Pays," or "Paze," or something similar - shareholder investments in young people, as I understood it. Nicely synergistic to what I proposed and in-line with a similar idea that I tried to market several decades ago, running head on into the NIH syndrome. The typical response was of the form, "If it's any good, the market will decide." Imagine a prospective investor saying that to Henry Ford. Imagine if Ford had listened and given up. Anyone have a connection for us?
2) Also in the news in the past few days a story about a stone age tribe that had been studied to assess the relative level of support for "sharing" vs. personal property. The language used by the researcher was so close to my own in this blog as well as my piece "On Property" here at JU, that I seriously wonder if my work that might not have been an incidental input. Gist was to the effect that someone who didn't share with the group would soon find himself an outcast and be unable to share with the successful hunter of tomorrrow. Thus, personal property was nearly non-existent.
3) A clip from Bucky Fuller on one of the Occupy FB sites that I responded to: Fuller was arguing that only sheer ignorance kept people from realizing their birthright - that we are all effectively billionaires. Instead we are maintained in a state of artificial scarcity via that ignorance... Posted by Ryan Firebrand.
My comment: "Except for sheer ignorance part. That's not the only factor. Sheer ignorance doesn't explain wars and pogroms very well. Most wars are not fought for food or any tangible objective physical asset, but rather because war is the natural state when people are hypnotized and sociopaths are running society via neurotic memes.
People are taught in virtually every existing society that everything they naturally want is suspect or downright sinful and that God or the State or some similar abstraction is their highest value. And only we of the "In group" who know the Truth are worth listening to or treating well anyway, so make sure to prevent others from speaking out or defying the natural order of things - as defined by the sociopaths. So kids starve while we pay thousands of dollars for an SUV with a V8 because it sounds louder and meaner than our neighbor's, never challenging the memes that tell us how to measure ourselves and our tribe."
4> The recent robotics challenge from DARPA, which Google won, the idea being to create a roughly humanoid robot with human level sensory/motor skills and the functional intelligence of a two year old child - able to take simple instructions in natural language and implement them naturally as a child might. Let's see, using Moore's Law... (year/age equivalent) 2013/2, 2015/4, 2017/8, 2019/16, 2021/32, 2023/64, 2025/128... I.e., by about 2029, we unaugmented humans are history. And that 1 billion who I targetted with my proposal above will be 2 billion and then 3 billion.
We can let them starve while the robots take over all the jobs, or we can do something to bootstrap ourselves as a species to the next level of evolution. If we choose the former, then what kind of treatment can we expect from someone with an effective IQ of 1,000? Can you say "Termination?" As in, "These fools aren't worth preserving AND they don't deserve the help to do it." Or, we could start planning to provide real equity, with a planetary commons and a common dividend that brings the majority of that present 1~2 billion on the edge up to the point of positive productivity and contribution.
As I pointed out in my other blog here "On Morals," we are nearing the tipping point on this, while at the same time, the tech that threatens us also allows for a way out. As the Boomers age, we will be needing replacements of various bio-systems - artificial retinas, hearing, augmented muscles, etc. Once we have successful systems that barely make the grade, the door is open to major improvement. If you are using an electronic retina, then why NOT have a playback function. Why NOT use your memory chips in the head to access the cloud continuously, spawning search processes as fluidly as we move our biological eyes' focus? I.e., we can integrate ourselves into the next stage. Or, we can blow it.
01/04/14 And on that note:
If you haven't yet seen "Her," then time's a wastin. I came out of the theater to find that a group of perhaps 25 people had apparently spontaneously formed a circle, some holding hands, some quiet conversation, but mostly just looking at each other and peacefully, calmly smiling. Never seen anything quite like it - or re the movie itself, either. I was thinking, "This is the best film ever." One of my co-workers who is a Huge movie buff gave it at least best pic for 2013. The underlying message... but I'll leave that for the next commenters.
Addendum: In response to a talk by Ray Kurzweil on the subject:
See my popular (16k hits) blog on the subject: http://philosborn.joeuser.com/...
Altho it was written with a focus on other matters, it is equally applicable to the issue under discussion here. Think Henry George melded with August Comp mixed with Ayn Rand. George's position - which almost took over the U.S. in the late 19th century - was basically that the value of any particular piece of land is primarilly due to the value of the surrounding lands - the community, not as a product of the landowner's contribution.
Since that value was created by the community, then it should go back to the community as a tax - or "land rent," which accrues to the community then as the finance of infrastructure and of a universal and equal dividend, which is only fair, as privatization removes what was privatized from common use and availability. George argued that the boom/bust cycle as well as stagnent wages - even while those already wealthy became more so (sound familiar?), both reflected a basic inequality in which the wealthy individuals and corporations benefited from a hidden transfer of wealth, in the increase in value of their land holdings - wealth that rightfully belonged to the community as a whole and was partially taken out of the pockets of the less wealthy.
However, while George's idea makes sense, he didn't carry it far enough. In fact, reflecting the ideas of Comt, the "Father of Socialism," ALL wealth has a substantial portion that must be attributed to the people providing those "shoulders" that Newton said he stood upon. Everything of value has both an individual component and a societal.
In my blog, I suggested treating this as a planetary dividend - not socialism but a system in which everyone has a vested interest in productivity and in productive people rightfully earning their wealth as well. You go, free markets! As the robots take over, the increased productivity will simply - under my model - result in a bigger dividend to the humans and their evolved offspring, meaning that there will be less and less reason to do any form of drudgery, while the really creative work will still generate individual wealth in proportion to its value.
The problem with many prior analyses has been a failure to frame the argument for redistribution morally. Rand is right and so was Comt, up to a point. The synthesis comes with the insight that Henry George provided, that there is an objective measure of what is fair. The producers deserve the value added that they create. The species as a whole has a rightful claim on the value that came from their collective efforts, past and present - the capital that made the creation feasible. Thus, a planetary dividend is fair from both perspectives.
Addendum: I've moved my commentary re ebola to avoid diverting focus:
Update 9/22/14: http://philosborn.joeuser.com/article/457064/Ebola_Now Finally, some good news!!!
The Comment function is not working for me.
In reply to Starkers - 10/12/2016
Actually, if Gates or Buffet were serious, they could just burn their money, thereby reducing the bid against goods and services that money constitutes and reducing overall pricing for the rest of us.
Giving money away doesn't in and of itself create any new value. It just shifts the purchasing power in the direction of the recipients. In general, if someone has a lot of money, then most economists assume they must have done something productive to earn it, and they would usually be more beneficial for the rest of us by continuing what worked for them and their customers.
Real value is created when people do things productive. I would call upon Gates to use his $billions to make Windows work properly for once.
There's no way that even he could undo all the damage done to humanity by Microsoft over the past several decades. I estimate that Microsoft cost humanity on the order of $15trillion, maybe more.
I.e., if you want to help the world, then you should invest in the people who are most productive, not in the "needy." The needy of the world - those who require assistance from others to survive - are on average the least likely to use their meager resources effectively.
However, that position, while it seems economically sound, leaves us with a lot of poor people.
The reality is that our world economy is not a perfect market-driven system - not by a long shot. Vast resources are managed and held by state entities with agendas that do not reflect how private parties would behave in a free market.
Dictators in 3rd and 2nd world countries use resources to purchase the military means to maintain their power, not to help anyone apart from themselves and their cronies. Corporations ("Children of the State") use their limited liability status to ignore risks, future costs and general externalities or use their political/legal clout via the patent process or via tariffs to eliminate or marginalize competition.
Often, the result is that the mixed-market rewards the players most willing and able to work the political/legal system and assume risks, not the most innovative or productive. These players rely upon a system that keeps a certain significant portion of the population utterly dependent upon the state and the bureaucrats who make the life and death decisions as to whether someone gets the medical help or approval for a specialty drug, just to mention a few of the avenues by which power instantiates itself and defeats any real opposition. Don't believe me. Just look up the scandel about the highway shutdown: https://en.wikipedia.org/wiki/Fort_Lee_lane_closure_scandal
The beauty of the Basic Income or Universal Dividend is that it undercuts power at its base. When everyone gets the same, there's no room for turning everything into a political contest. When people have options, they are hard to bully and selective about their associations - who they work for and under what terms.
My stating these kinds of heresies makes many so-called libertarians crazy. But who is more free - a person who has to watch everything he or she does or says, lest he lose that precious and rare job or someone who can walk away from the would-be bullies, the sociopaths who would like nothing better than a Hobbesian war of all against all?
I try to look at the realities of power and freedom, and the fictions that sustain the standard libertarian mythology, such as a holy reliance upon a non-existent market dollar. If only we could get back to the gold standard - right? But a currency, like anything else in the market is only worth what it can be traded for. The dollar is backed by the taxes due - along with the mortgage payments and all the other goods and services payable in dollars. There's nothing wrong with this. What is wrong is the political control over that dollar and its use worldwide to finance slavery.