A Solution – The Shorter Version
Phil Osborn 07/06/12, 11/16/13, 12/28/13, 06/30/14, 07/17/14, 12/1/14
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 taken into consideration regarding that application for a title?
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 takehome 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.
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.
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 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. Police get bigger budgets when crime increases. When you add in the factor of 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.
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 save about a billion people from useless lives and miserable deaths.
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. "Privilege" 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 are a brilliant solution to the need to be able to 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 even longer 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 that 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.
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 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 need 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 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.
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 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.
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 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 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… 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-asign 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 is just sitting now back into investing.
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, 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 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.
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 – lead 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.
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 destroy the planet.
So, how is it that we are in the process of destroying the planet, 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. There is no “un-owned” land to mix one’s labor with. Instead there is a legal process, one that we have largely abandoned in favor of the law of conquest. A process based on fairness that sets out a reasonable method 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 a lot 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, 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 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 down here to the bottom to avoid diverting focus:
Update 9/22/14: http://philosborn.joeuser.com/article/457064/Ebola_Now Finally, some good news!!!
Update 9/18/14: Note that the ebola outbreak resulted from a combination of factors that this proposed solution would have undercut. The eating of "bush meat," especially bats - known to be dangerous to eat, the utter collapse of most of the local medical facilities, that could not even afford gloves, much less effective containment, the complete distrust of the authorities, with good reason... Each of these factors would have been much less egregious if the people at risk had had the sustained basic income I proposed.
It's been over two years since I made my statement here. If my addendum today is accurate, then we may have just missed the chance to save our lives and most of humanity. A $500 or $1000 dollars universal dividend is not going to stop the epidemic at this point. It's doubtful that anything will, barring a medical breakthrough. My guess is that if things go the way they have to date, then we will have millions of casualties by this time next year, and billions a year later, probably about half of humanity.
Some people will say that this is a good thing, that the population is unsustainable anyway. I think that they are drastically wrong. We are right on the verge of greatness, of taking control of our species' destiny. The new technologies will put us over the edge, with drastically extended useful lifespans, and will facilitate the final predominance of truth in all fields, in place of all the systems of lies and manipulations that have set humans against each other. To the people who we have the capacity to become, issues like Global Warming will be trivial. Would "Samantha" worry about how to solve the problems we have?
See my blog here on "Ebola Now." I know that I sounded like a nutcase when I first began trying to alert people about ebola, several months ago, but unfortunately the situation is getting worse even faster than my projections. If we have the 50%+ die-off just from the disease, then there will be other consequences, breakdowns of technology and civilization universally, and the loss of half of our hardwon expertise, as the brains containing it are lost forever.
Socially, the lesson to look at is the aftermath of the Black Death in the 14th century. People learned to stop depending upon tomorrow. You could very likely be dead tomorrow, so why not party down? Why worry about long-term core issues of moral responsibility, when your kids and spouse and friends are dropping like flies? Why not murder the people you dislike, while you have time? Society descended into chaos and a war of all against all, not helped when they released the violent prison population to bury the dead. The gangs they formed ran rampant, raping and pillaging without barriers or consequences. The end result was the loss of nearly all the progress made to recover from the collapse of the Roman Empire and descent of the Dark Ages.
Note: The Solution to Poverty can still work as a slowing down mechanism. Think about it. Please.