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The Almighty Buck United States

VC, Entrepreneur Says Basic Income Would Work Even If 90% People 'Smoked Pot' and Didn't Work (techinsider.io) 1116

An anonymous reader cites a story on TI: The chief complaint people lodge at universal basic income -- a form of income distribution that gives people money to cover basic needs regardless of whether they work or not -- is that it'll make them lazy. Sam Altman doesn't buy it. In a recent episode of the Freakonomics podcast, entitled "Is the World Ready for a Guaranteed Basic Income?" Altman argued basic income could support huge amounts of productivity loss and still carry the economy on its shoulders. "Maybe 90% of people will go smoke pot and play video games, but if 10% of the people go create incredible new products and services and new wealth, that's still a huge net-win," Altman says. "And the American puritanical ideal that hard work for its own sake is valuable -- period -- and that you can't question that, I think that's just wrong." [...] The complaint Altman addressed on the Freakonomics podcast is a common one. Study after study, however, has shown that giving people extra money makes them feel financially secure. That security ends up leading to empowerment, not de-motivation.
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VC, Entrepreneur Says Basic Income Would Work Even If 90% People 'Smoked Pot' and Didn't Work

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  • by Anonymous Coward on Thursday April 21, 2016 @03:34PM (#51958247)

    This is the capitalist version of "let them eat cake." Because god help them if the proles feel like they deserve some of the money they're making capitalists.

  • by sexconker ( 1179573 ) on Thursday April 21, 2016 @03:36PM (#51958255)

    That security ends up leading to empowerment, not de-motivation.

    The powers that be don't want us plebes being empowered.

  • by mpercy ( 1085347 ) on Thursday April 21, 2016 @03:36PM (#51958259)

    I strongly suspect that my level of "basic needs" I'm willing to "give" to someone who smokes pot and plays video games all day is much lower than they will demand.

    • by alvinrod ( 889928 ) on Thursday April 21, 2016 @04:11PM (#51958723)
      Most people overlook the other side of the equation which is "what is the cost to me for society to contain individuals who don't have basic needs met?" which is not zero. No city is happy with homeless people pissing in the streets, criminals who burgle or engage in other crimes, and a perpetual cycle of poverty which can be difficult to escape.

      I'd rather eat a bit of an extra tax hit to have someone smoking weed and playing video games in some dumpy apartment in a place where the rent is dirt cheap enough for the bums to live than in my neighborhood breaking into my apartment so they can sell my stuff in order to buy food. In the later case people naturally end up paying for security (police forces) and detention for criminals that are every bit as expensive as giving people enough to subsist on their own.

      The biggest obstacle to a basic income plan is that immigration needs to be strictly enforced and a lot of the country has some wild hair up their ass that makes them think borders are just a suggestion. Otherwise if you're absolutely opposed to complete freeloading, just add community service requirements for anyone who's not working to earn their basic income. It doesn't require much aptitude to pick up trash in a park or some other simple chores that typically need doing. If they want more than subsistence, they can get part time work for extra spending money,
      • by lgw ( 121541 )

        Most people overlook the other side of the equation which is "what is the cost to me for society to contain individuals who don't have basic needs met?" which is not zero. No city is happy with homeless people pissing in the streets, criminals who burgle or engage in other crimes, and a perpetual cycle of poverty which can be difficult to escape.

        True, but you have to balance that against "Chav riots". Meeting someone's basic needs without giving them economic mobility only delays violence and unrest. Without a good outlet for people with drive to make their own lives better, it finds a bad outlet, through riot and looting and organized crime.

        A basic income is not itself the problem, but it also doesn't solve the problem: the problem is economic mobility.

      • by Tailhook ( 98486 )

        what is the cost to me for society to contain individuals who don't have basic needs met? ...... No city is happy with homeless people pissing in the streets, criminals who burgle or engage in other crimes

        Right there you're implying outcomes that rational people have every reason to dismiss as nonsense. The most violent nation in the world today that isn't actually fighting a war is post revolution socialist Venezuela. It is a criminal hellhole, festooned with blood spattered signs declaring guns illegal. To date the only solution we've found for the criminality and general corruption that emerges in these nightmare societies is extreme coercion. Thus North Korea; no commercial billboards, few cars, obes

  • by Bruce66423 ( 1678196 ) on Thursday April 21, 2016 @03:37PM (#51958265)
    Simply doesn't work at the moment http://www.economist.com/news/... [economist.com]
  • by NotDrWho ( 3543773 ) on Thursday April 21, 2016 @03:39PM (#51958309)

    The entire American capitalist system is predicated on the idea that workers don't have the freedom to just leave their jobs, no matter how bad the conditions. This is maintained by a careful system of salary collusion, artificial means of keeping wages stagnant and low (using H1B's and outsourcing, among other methods), and union busting.

    A guaranteed income is a guarantee that your workers will no longer have to take whatever shit you sling at them.

    • by PCM2 ( 4486 ) on Thursday April 21, 2016 @03:44PM (#51958371) Homepage

      The entire American capitalist system is predicated on the idea that workers don't have the freedom to just leave their jobs, no matter how bad the conditions.

      And yet I see plenty of people quitting their jobs. I quit my last job and spent four months deciding what I'd like to do next. My local economy didn't collapse.

      • And you are planning to get another job, or you have enough to quit for the rest of your life. Because as long as you need a job at some point you're not proving anything with that statement.
    • by sycodon ( 149926 ) on Thursday April 21, 2016 @03:47PM (#51958403)

      The Capitalist system has created more jobs, more wealth, more prosperity, and higher income mobility than any other system in the history of mankind.

  • by jjn1056 ( 85209 ) <jjn1056 @ y a h oo.com> on Thursday April 21, 2016 @03:39PM (#51958315) Homepage Journal

    just not with my money. We could end crime by embedding a chip into everyone so we could track everyone's movements and know exactly were everyone is at every second. I don't see anyone jumping at that idea.

  • by TerraFrost ( 611855 ) on Thursday April 21, 2016 @03:40PM (#51958325)
    Quoting The UBI ignores human nature [slashdot.org],

    The problem with a UBI is that it is (in theory) supposed to replace the multitude of payments through various government social programs with a single check or debit card given to every recipient every month, at which point the various government agencies that administer housing, food stamps, etc., can be shut down. Government bureaucracies never shutter themselves voluntarily, and it won't happen with a UBI, either.

    The UBI operates under the assumption that everyone manages money in a rational manner, which is completely at odds with actual experience. Many people will take their UBI and immediately spend it on drugs, alcohol, gambling, or bling, while ignoring the monthly rent, the electric bill, buying groceries for the children, etc. Others will be cheated out of their money by criminals or even other family members. So do we let those families starve or get evicted because the heads of household are incapable of managing money for themselves or their dependents?

    Of course not. Those people will need to be helped (sarcasm intended). So the various government agencies will continue to expand and spend even more money on housing, food, medical care, etc. The UBI won't even make a dent in entitlement budgets. Instead, it will become "free money" to be squandered on a thousand other things besides basic human needs.

    Anyone who doesn't think it won't happen need only look at inner city schools in the U.S. In theory, every child should be getting meals at home thanks to government SNAP benefits to their parents or guardians. In practice, schools give many kids a free breakfast and lunch every school day, and even give them food bags to take home for the weekend, because Mom or Dad can't be bothered to buy food for the kids with the SNAP money. Where does the money go? No one knows or even attempts to find out. They just give the kids free food and cross their fingers.

    The UBI will not change human nature. It will instead become one of the biggest entitlement boondoggles in the history of civilization.

    • by Bob the Super Hamste ( 1152367 ) on Thursday April 21, 2016 @04:05PM (#51958633) Homepage
      Several months ago I heard the BBC World Service's in depth discussion about the Scandinavian country that was going to be rolling out a trial of it. The supporters of it in that already socialized Scandinavian country realized that you would have to stop all other assistance programs for it to be effective. They also realized that it really would have to be universal since we do have an ingrained sense of fairness so it goes to all who would be of the age of majority who are citizens. Another point that was brought up is that in such a situation since everyone gets some basic income that the minimum wage should also be eliminated as the amount that was begin proposed was enough to subsist on. Keep in mind that programs like k-12 education and those European socialized medicine programs would be untouched but things like housing, food, transport, and some others I am forgetting assistance would all be ended.
      • The supporters of it in that already socialized Scandinavian country realized that you would have to stop all other assistance programs for it to be effective.

        Well, yeah, simplifying the welfare system is one of the major points to a UBI. It reduces overhead and ends up saving money without reducing the amount of assistance that people receive.

        Another point that was brought up is that in such a situation since everyone gets some basic income that the minimum wage should also be eliminated as the amount that was begin proposed was enough to subsist on.

        I think you'll find a lot of people will agree to this. It might even lead to higher total income for people that have what are currently minimum-wage jobs. If the UBI is close to equal to a full-time job that pays minimum wage, and you reduce everyone's salary/wages by that amount (making the start of the UBI program incom

    • by alvinrod ( 889928 ) on Thursday April 21, 2016 @04:25PM (#51958905)
      At that point, I think we need to let them starve or die. As harsh as that may sound, if someone is so much of a fuck up that they can't survive when given the resources to get by with no requirements on your end other than being alive, it's time to let nature run its course. If someone's too mentally diminished to make decisions like that for themselves, they already belong in a separate care facility, not out in society.

      However, the argument also ignores another facet of human nature: man is a creature of infinite want. A UBI is about satisfying human needs, but people are still going to want things. What you'd likely see is a lot of people working part time jobs (10 hours / week) or joining the so-called gig economy to generate a small amount of supplemental income to cover those wants.
  • by John Allsup ( 987 ) <doctor.inna.house @ a l lsup.co> on Thursday April 21, 2016 @03:45PM (#51958387) Homepage Journal

    In the war between facts and dogma, facts have a habit of coming second. Facts are hard to think through and analyse properly, and proper analyses are detailed and tough to understand. Dogma doesn't have any of these drawbacks.

  • I'd still work (Score:5, Interesting)

    by fluffernutter ( 1411889 ) on Thursday April 21, 2016 @03:56PM (#51958511)
    Under guaranteed income, I would still work. I wouldn't be happy with the minimum. I'd be fine knowing a person that could make do with the minimum didn't really have to work.
  • by steveha ( 103154 ) on Thursday April 21, 2016 @03:57PM (#51958529) Homepage

    Right now, when the government wants to expand the money supply, the Federal Reserve just sort of dumps money on the biggest financial institutions. Then it pays them a small interest fee for their service of having use of the money (0.25% according to this Investopedia article [investopedia.com]).

    If the government really must inflate the money supply, then it seems to me that the best way to do it would be to spread the new money evenly among the citizens. It's just part of reality that when you have lots of money, it's easier to get more money, so almost all the time when we are talking about the economy, everything benefits the rich more than the poor. Here would be a direct payment that would definitely benefit the poor more than the rich.

    Inflation effectively steals part of the value of the money. This is hardest on the poor, and people trying to live on a fixed income. Directly paying the inflation to the people would offset the harm, at least partially.

    P.S. I'm a minarchist libertarian, so I don't really like seeing the government messing with the money supply at all. I'd rather just see prices deflate, so that maybe a hamburger would go back to costing a dime, and even a small income would be enough to live on. However, I'm not a trained economist, and apparently Milton Friedman believed we need to inflate the money supply as the economy expands. If you have to bet on whether Milton Friedman was right or I am right, you should bet on Milton Friedman. And if we accept that we need to inflate the money supply, I'd just as soon do it by paying the new money out to all the citizens.

  • by kheldan ( 1460303 ) on Thursday April 21, 2016 @04:02PM (#51958595) Journal
    There's nothing 'puritanical' about that idea, either. People wither away when they don't have a purpose in life. Sadly most people aren't too driven to find a purpose, they would just sit around, get fat, and do nothing -- except maybe get into some sort of trouble or other, or worse, keep reproducing out of sheer boredom. Work is good for people whether they themselves believe it or not, and that's my totally unscientific opinion on the subject, based on 50+ years of observations of people in general -- and note that this is also coming from someone who would benefit greatly from not having to work, yet be provided for the rest of his life. I'd just as soon not have to bother with some stupid job or other, and I'd spend my time going back to school, and riding my bikes, which is much more than I think the average person would end up doing.
    • You're not wrong that work has virtue. The distinguishing argument is that not all PAID work has inherent virtue, and not all work that you can't be paid for is worthless.

      People will find direction on their own--we have a tendency to find the meaning in our lives if we're given an opportunity. Minimum income plans are just a different way to provide *mobility*. If you can eat and pay rent without working a shitty retail job, you can set your sights higher. You can go to school, you can volunteer at animal shelters, or to work with people that have disabilities. There are so many things to do that have so much more value than scraping by, working at a McDonalds for less than it takes to stay alive.

  • by tylersoze ( 789256 ) on Thursday April 21, 2016 @04:03PM (#51958601)

    You people categorically against this do realize we are rapidly approaching a point where large parts of the population don't really have to work to support our basic societal infrastructure? So what happens then? Do we actually reevaluate our economic system or just proceed as we've been going with increasing economic inequality and subsequent societal unrest? Are you people so selfish that you would deny basic support for all if our society could afford it? There will always be an incentive for work because you'll be able to make more money and have more things.

  • by Scottingham ( 2036128 ) on Thursday April 21, 2016 @04:06PM (#51958647)

    If you have lots of money, but have trouble with the idea of a basic income think of it as guillotine insurance!

    -Some meme I saw somewhere

  • Lots of bullshit (Score:5, Interesting)

    by gurps_npc ( 621217 ) on Thursday April 21, 2016 @04:12PM (#51958735) Homepage

    Let's clear up a bit of garbage that some idiots don't understand

    1) Basic = to what we give them in prison, minus the security. Food, housing, cheap clothing. In fact, it's CHEAPER to give people a Basic Income than it is to put them in prison (guards are not cheap)

    2) No one, and I mean NO ONE, that's willing to live at that level of crap (and it is crap) is ever going to amount to much of anything. If you are stupid enough to live like this, you were never smart enough to significantly contribute to society. People that know how to write, dance, invent, discover, repair, etc. should and will continue to work and earn more.

    3) The main areas where we would (and currently do) give more money is not for the people on Basic Income, but instead is for their children, which would need education etc. so that they don't get stuck at the Basic Income.

    4) We already do this for many people already. It's called Social Security and Disability. Not to mention Prison and Institionalized - though those last two are a lot more expensive, they basically do the same thing.

    5) The people we currently provide a basic income for (old, disabled, criminals and insane) are not considered free loading, lazy shmucks because we recognize that for various reasons, they can't meaningfully contribute.

    6) All we are really talking about is adding "below average intelligence" to the category of disabled.

  • No other choice (Score:5, Interesting)

    by lorinc ( 2470890 ) on Thursday April 21, 2016 @04:13PM (#51958745) Homepage Journal

    Well, to be honest, there is no other human choice.

    What is the percentage of people that are useless? 30%, 40%? It has to be higher than the unemployment rate, given the amount of bullshit jobs that exist nowadays. This percentage is increasing thanks to the machine intelligence going on. One guy with modern tools can do the same work as many guys that hadn't those tools back then. Most of the population cannot become PhDs (lack of capabilities, money, lust, whatever), and even if they could, we just don't need 10^9 PhDs. What will be that percentage in 30 years? 80% 90%?

    What do we do of these people? Let them starve and have social unrest? Give them what it takes to smoke pot and play video games and have most of the population happy?

    We built all our previous civilizations on the value of human work. You have to realize that the value human work is very rapidly plunging towards zero. This is unprecedented in history. Do you really think we can continue business as usual and it will be fine?

    • Re: (Score:3, Insightful)

      by green1 ( 322787 )

      "This is unprecedented in history."
      Only if you disregard all of history. Every invention that increased productivity got rid of jobs, but it hasn't ended humanity. The industrial revolution especially was supposed to have a massive unemployment problem as machines did all the work. Yet unemployment actually went DOWN. Difference is that the average standard of living went up.

      Today, we all have many gadgets that nobody had a decade or two ago. we're incredibly more productive by letting machines do some of t

  • by superdave80 ( 1226592 ) on Thursday April 21, 2016 @04:34PM (#51959023)

    And if you give everyone in America a check for something like $20,000 every year,

    The federal and state budgets of the US totaled around 5.5 trillion dollars. There are around 210 million US citizens over the age of 18. This comes out to around $26k per person. This is if you spend EVERY SINGLE DOLLAR ON THIS PROGRAM. But let's say we settle on something smaller (like $13k). You are still going to have to roughly take in 50% more tax just to cover this program. And if the overall economy shrinks because of a drop in worker participation, won't that make it even more difficult to fund this?

    • by cogeek ( 2425448 )
      $13k a year? haven't you been paying attention? Even McDonald's workers need $15/hr ($30k/year) to survive! A living wage!
    • by Solandri ( 704621 ) on Friday April 22, 2016 @03:17AM (#51962563)
      It gets worse. The problem with all the basic income, living minimum wage, and most welfare proposals I've seen is that the person who thought it up doesn't understand why a dollar is worth a dollar. They assume a dollar's value will remain the same after their proposal is implemented.

      U.S. GDP is about $17 trillion. Total tax revenue is about 33% of that, or just under $5.6 trillion. So far so good.

      What is GDP? It's gross domestic productivity. In order to generate GDP, people have to do productive things. If you implement a basic income and 90% of people decide to become pot heads and video game bums, well now your GDP is about 10% what it originally was. So your $17 trillion GDP has shrunk to $1.7 trillion. And it is impossible to reach the $5.6 trillion tax revenue needed to cover basic income even at a 100% tax rate.

      See, the value of money comes from productivity. When people stop being productive, money becomes worth less. Prices rise to balance out this drop in productivity, and now your basic income isn't enough to live on anymore. If you panic and try to freeze prices because you believe the price increases are due to sellers gouging instead of your own bumbling economic policies, you're effectively forcing sellers to sell their goods at a loss, and you break the economy. The sellers end up selling their goods on the black market instead, and now not only have you broken your economy, you've broken your currency as well.

      Money is just a representation of productivity so its value is not fixed, and it's folly to make economic policies under the assumption that $3 will continue to buy a gallon of milk (with a small constant allowance for inflation). The true fundamental currency is productivity. The average standard of living of a country = sum(every person's productivity) / (number of people). If people stop doing productive work, the numerator in that equation starts to decrease, and the average standard of living drops. And (assuming people's income and the money supply stays the same) the amount of milk (productivity) you can buy for $3 decreases.

      For example: Imagine a vastly simplified economy of 100 people where the only good produced and consumed is milk. Average income is $30k/yr and each person on average produces 10,000 gallons of milk. Total productivity for this country is thus 1 million gallons of milk/yr, and total income is $3 million/yr.. The price of milk is thus $3/gal. And each person buys (consumes) 10,000 gallons of milk/yr.

      You decide each person needs a minimum 5,000 gallons/yr of milk to live, so you implement a basic income of $15k/yr. 90 of the people become bums. Total income drops to 90*$15k + 10*$30k = $1.65 million/yr. Total milk production drops to 100,000 gallons/yr. The price of milk is now $16.50/gal - enough for your basic income to buy only 909 gallons/yr of milk.

      If you resist the urge to break the economy by implementing price controls, milk producing companies are now making more money per gallon sold. Consequently they can pay their employees more (each employee is still producing 10,000 gallons/yr). The wage of a worker thus increases from $30k/yr to $165k/yr. Total income is now 90*$15k + 10*$165k = $3 million/yr, while milk production says at 100,000 gallons/yr. The price of milk is now $30/gal, reducing the purchasing power of your basic income to 500 gallons/yr of milk

      And so on. By the 10th iteration a working person's income is $975k and the basic income buys only 65 gallons/yr. By the 100th iteration a working person's income is $13.1 million, and the basic income only buys 11 gallons/yr. The series tries to equalize at a point where each person's income matches their productivity. In other words a basic income doesn't work - the value of the basic income tends towards the productivity of the people receiving it. If their average productivity is zero, the value of the basic income trends towards zero (the series is divergent). If their average productivity is 10% that of a worker, the value of the basic income tends towards 10% that of the worker. The value of a basic income (or minimum wage) doesn't stay at the value you originally assigned it.
  • by werepants ( 1912634 ) on Thursday April 21, 2016 @04:44PM (#51959131)

    Everybody who likes to point out the fact that humans "need" to work (let's call them the Idle Hands contingent) doesn't realize the fact that motivation is multifaceted, and only for the most menial types of labor does more money = more motivation. (See Daniel Pink's "Drive" for lots of discussion of this)

    Honestly, welfare, disability, and social security pay already exist - if someone really wants to be a bum, they can, and either end up sleeping on a girlfriend's couch, living in Mom's basement, or going to prison if they have no other options and want 3 solid meals and a bed to stay in.

    The truth of the matter is that people do work far more for social and personal reasons than just pure monetary gain. They want freedom, they want to learn, they want prestige and recognition from their peers, they want to see the world, they want to express themselves... look at stuff like Stack Exchange and all sorts of other "gamified" systems online. People will work their asses off for a virtual merit badge or to increase a progress bar on a screen.

    Corey Doctorow's "Down and Out in the Magic Kingdom" is an interesting look at how a post-scarcity economy based on prestige might work. We're going to have to figure out what to do with the majority of the human race when AI and robots are better and cheaper than the average untrained human. It's only a matter of time.

  • by MetricT ( 128876 ) on Thursday April 21, 2016 @04:46PM (#51959163) Homepage

    Today, doing nothing really isn't an option. You *have* to work somehow. By offering a basic income, you are, in effect, creating competition for those jobs. If I have the leverage to say "no", if some people find "nothing" a competitive alternative, then supply-and-demand for workers says that prices (ie, salary) will have to go up to match.

    It's a double-whammy against the wealthy, in that they will have to pay a large chunk of *both* the basic income and the delta in salaries. On the other hand, they have benefited the most from income/wealth inequality over the last 3 decades, and increased automation will only make a basic income more necessary.

    I'm not sure *anyone* has fully thought through the action-and-reaction of basic income, so I can't honestly say that it's "good", but one way or another its time may be coming.

  • by FoolishBluntman ( 880780 ) on Thursday April 21, 2016 @04:46PM (#51959167)
    I write software and smoke Pot, I make over $200K/year, maybe this view that if you smoke Pot, then you're a a slacker should be thrown out. Also, I live in Southern California, I don't think of myself as "Rich". I kinda of laugh when I see people get upset over $15/hour basic wage since you're definitely way below the poverty line in Southern California at $30K/year.
  • by petes_PoV ( 912422 ) on Thursday April 21, 2016 @04:48PM (#51959193)

    but if 10% of the people go create incredible new products and services and new wealth

    And what happens when that "90%" includes all the teachers, law enforcement, hospital workers and fire crews? Basically the people who do the shitty, but necessary, jobs that keep societies running?

    It's fine for the aspirational people to assume that everyone is like them - but they aren't. Most people do the least-worst job that allows them to keep a roof, feed their kids and keep the lights on. Remove the need for them to work to do that and the food stops coming, the lights go out and the roof doesn't get repaired. If you will rely on those with some sort of moral imperative to earn, or those for whom work is a joy rather than an inconvenient necessity, then your society won't last a month.

    Would you do a dangerous, unpleasant, stressful or demeaning job if you didn't need to? I don't see those sectors having many volunteer workers.

  • by PPH ( 736903 ) on Thursday April 21, 2016 @05:38PM (#51959725)

    We just finance this with a tax on venture capitalists. Right, Mr. Altman?

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