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Basic Income and Socialist Economics

basic income logistics problems future economics communism welfare socialism price

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#1
David Foster

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The proposition of a basic income is interesting, although I cannot see any difference between such a system and traditional Communist economics.  I am an amateur follower of the Austrian School of economics, and I will seek to persuade any readers that basic income cannot be implemented until the following issues are resolved.  I hope that this may be a debate free from baseless speculation, and instead backed by logical argument and supplemented with historical accuracy.  I hope that I hear many arguments that counter my own, and I wish to be proven wrong. Argument #1:  Allocation of resources (Consumption) Who is to allocate the resources effectively?  Specifically, who would decide where an individual could spend his or her money?  How would you avoid the disruption in economic sectors dealing with entertainment and consumer goods?  "A computer that is guided by intelligent, human-like AI" is not an appropriate answer, as there is no evidence that this will occur at least for the next 20 years.

Argument #2:  Price signals and production (Production)

In a Communist regime, the resources are allocated by elected officials.  However, due to the large and fundamentally unpredictable nature of a large economy, with millions of transactions occurring daily between purchasing individuals, such a system fails miserably.  Without the complex price signals that are present within a capitalist economy, manufacturers fail to manufacturer what is needed, farmers fail to farm the needed crops, and millions go hungry and starve.  How do you resolve this? My acknowledgement: The capitalist system in its current state is unsustainable.  The crony capitalist system of the west is an improvement over the pseudo-Communist regimes of the east.  The military-industrial complex is just one example of the danger present within an economic system that is interwoven with a political system.  Lobbying, corruption, and old money thrive in such an environment, where the middle-class are left to provide for the poor through the modern welfare system, while simultaneously consuming the goods of the monopolies employed by the upper-classes.  Nevertheless, the solution to such a system is not more welfare and government intervention in an economy, as this only exacerbates the problems of the middle-class.  Wealth is redistributed from the middle-class, lowering their level of economic prosperity, to the poor, who are now lifted to this status of mediocre wealth.  Increased regulatory policies allow the rich to monopolize the banking, investment, and corporate management systems, increasing their status to create the massive wealth gap that is present today.



#2
caltrek

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Excellent introduction to the topic.

 

I agree concerning price signals.

 

Every "current" system is "unsustainable". It is called the "unfolding of history". At least on occassion I call it that.

 

Yes, government policies to "redistribute" wealth can by there very nature be counterproductive. More regulation tends to favor those who can both influence the course of those regulations and adopt to changes brought about.

 

My recommendation: for God's (and humanity's) sake stop reading the "Austrian" school of economics. That tends to be nothing but neo-facist propoganda dressed in "libertarian" clothing.  I actually started posting on a site dominated by one of those creatons. I lasted about two weeks before they banned me for a minor offense that essenatially was similar to a mistake their fearless leader had made. Sure, they said I could come back in two months, but I had way too much pride to put up with that extreme form of "moderation".

 

Of course, the message came through loud and clear: "we own this site so we get to say what goes on it or not."

 

Fine, then no profit for you for whatever readership I might attract.

 

Yes, price signals are important. If I start pushing readers away rather than attracting them, that is defimitely a price "signal" worth paying attention to.  So some moderation is appropriate. Still, how easy it is to act as if that moderation promotes free speach when it does quite the opposite.

 

If that doesn't convince you, then I would suggest that bane of psuedo-libertarian existence Naomi Kline to you. Specifically her book The Shock Doctrine.  That will really open your eyes to how "free" a lot of "libertarians" really want us to be. Mind you, there are sincere followers of libertarian thought. Milton Firedman is not one of them.


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#3
tornado64

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The proposition of a basic income is interesting, although I cannot see any difference between such a system and traditional Communist economics.  I am an amateur follower of the Austrian School of economics, and I will seek to persuade any readers that basic income cannot be implemented until the following issues are resolved.  I hope that this may be a debate free from baseless speculation, and instead backed by logical argument and supplemented with historical accuracy.  I hope that I hear many arguments that counter my own, and I wish to be proven wrong. Argument #1:  Allocation of resources (Consumption) Who is to allocate the resources effectively?  Specifically, who would decide where an individual could spend his or her money?  How would you avoid the disruption in economic sectors dealing with entertainment and consumer goods?  "A computer that is guided by intelligent, human-like AI" is not an appropriate answer, as there is no evidence that this will occur at least for the next 20 years.

Argument #2:  Price signals and production (Production)

In a Communist regime, the resources are allocated by elected officials.  However, due to the large and fundamentally unpredictable nature of a large economy, with millions of transactions occurring daily between purchasing individuals, such a system fails miserably.  Without the complex price signals that are present within a capitalist economy, manufacturers fail to manufacturer what is needed, farmers fail to farm the needed crops, and millions go hungry and starve.  How do you resolve this? My acknowledgement: The capitalist system in its current state is unsustainable.  The crony capitalist system of the west is an improvement over the pseudo-Communist regimes of the east.  The military-industrial complex is just one example of the danger present within an economic system that is interwoven with a political system.  Lobbying, corruption, and old money thrive in such an environment, where the middle-class are left to provide for the poor through the modern welfare system, while simultaneously consuming the goods of the monopolies employed by the upper-classes.  Nevertheless, the solution to such a system is not more welfare and government intervention in an economy, as this only exacerbates the problems of the middle-class.  Wealth is redistributed from the middle-class, lowering their level of economic prosperity, to the poor, who are now lifted to this status of mediocre wealth.  Increased regulatory policies allow the rich to monopolize the banking, investment, and corporate management systems, increasing their status to create the massive wealth gap that is present today.

 

You arguments are true regarding communist like system that we have seen in the past (and that ultimately failed).

However a basic income has nothing to do at all with communism. So your basic assumption basic income = communism is wrong. Basic Income has supporters ranging from the far left to the far right, while communism is clearly part of the left wing. That's why both of your arguments don't apply to capitalism as of now and don't apply if you add a basic income guarantee to the exact same system. With a basic income guarantee allocation of resources, price signals and production does function in the exact same way as it does now.



#4
kjaggard

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I really think the only way a basic income could be viable at all is in a system of ... for lack of a batter term, vouchers. The premise behind a basic income is to assure the needs so that nobody need fear death of themselves or a loved one from lack of basic needs being met.

 

The only way to make that viable is to separate the economies of need from the economies of everything else (desire, fashion, luxury, reward, achievments ect). A basic cost of food, water and housing, as a sort of what you'd get in a nursing home or psych ward. Based on that standard you could be kept indefinately until you die. But few people would be satisfied with that life style. They would seek something more and to gain that they would have to work to achieve it in some way.

 

But ultimately we are talking about a short term issue as we look at a transition point in human history.

 

There is enough land on earth, hell in the Americas that every person could have a quarter acre lot to themselves. Using aeroponics and artificial light you could grow all the food and cotton you needed for a family of four and the materials for clothing and towels and sheets ect. Natural dies could be produced as well as inks and paints. Materials for plastics and carbon fiber or polymers. With rainwater harvesting and and recycling systems for grey water, 300 square feet of roof space would be enough to meet all your water needs and then some. ect ect.

 

Given the level of automation capability now, setting up an automated aeroponic garden, and with 3d printing capabilities of things like a variety of plastics and carbon fiber... every person on their own quarter acre of land could literally meet all their own needs for food, shelter, clothing, water. Even more, because with these techniques designs are up to you, recipies and food choices are your choice as well, medicines and recreational drugs, art and decoration all are completely customizable. Most every single need and many of human wants could be met without ever transacting with another person.

 

But where might the power come from. wind and solar panels along with geothermal can all be used on less than quarter acre scales to achieve the levels of power needed. and most of the components for those things could be printed on the upcoming generations of 3d printers.


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#5
caltrek

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@ tornado64

 

Being of partially German descent, I can grealty appreciate the general thurst of your comments and heartily agree with the spirit in which they are presented.  However, there are some technical points that I think need some more thought.

 

Case in point: "A basic income has nothing to do at all with communisim."

 

 

Certainly not Stalinism, but "communism"?

 

Remember, one working definition of "communism" is "from each according to his ability, to each according to his need".  So how can "basic income" not equate with "meeting people's needs"?


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#6
tornado64

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I really think the only way a basic income could be viable at all is in a system of ... for lack of a batter term, vouchers. The premise behind a basic income is to assure the needs so that nobody need fear death of themselves or a loved one from lack of basic needs being met.

 

 

It wouldn't make that much of a diffeence in states with a social system like many european countries already have. I'm living in Germany and it would actually save the government money when changing to a basic income model. One of my economics professors is actually one of the most prominent supporters of a basic income in Germany and he conducted a study about the financial aspects of a basic income guarantee in Germany, proofing that with the same funding that is now used for different social systems, applied to a basic income would cover around €800 per citizen + €200 for health insurance.

 

 

@ tornado64

 

Being of partially German descent, I can grealty appreciate the general thurst of your comments and heartily agree with the spirit in which they are presented.  However, there are some technical points that I think need some more thought.

 

Case in point: "A basic income has nothing to do at all with communisim."

 

 

Certainly not Stalinism, but "communism"?

 

Remember, one working definition of "communism" is "from each according to his ability, to each according to his need".  So how can "basic income" not equate with "meeting people's needs"?

 

He obviously referred to communism in a sense of communist states and the communist system and not as "meeting people's need" where his arguments would make no sense (it's very possible to "meet people's needs", it's done in various countries through social security systems, without running into any problems with resource allocation, production or pricing). Also "communism" as a term means "shared" or "belongs to all" and not "meeting people's needs". Still, communist states and systems have nothing to do with a basic income guarantee... 



#7
caltrek

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^^ Ok, thanks for the clarification.

 

Still, I found it some what confusing.  I had to guess three times before I figured out who "he" was.  My second guess was Karl Marx. 

 

I guess one way I keep these concepts separated is to talk about "actually existing" communism versus "theoretical" communism. Then, I find it easier to, say, discuss the Soviet Union versus a Kibutz versus a utopian model concocted by an academic somewhere in a college dorm. 

 

Just a few pointers that one might consider for "how to argue with an American".

 

:mole:  :mole:  :mole:


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#8
David Foster

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Excellent introduction to the topic.

 

I agree concerning price signals.

 

Every "current" system is "unsustainable". It is called the "unfolding of history". At least on occassion I call it that.

 

Yes, government policies to "redistribute" wealth can by there very nature be counterproductive. More regulation tends to favor those who can both influence the course of those regulations and adopt to changes brought about.

 

My recommendation: for God's (and humanity's) sake stop reading the "Austrian" school of economics. That tends to be nothing but neo-facist propoganda dressed in "libertarian" clothing.  I actually started posting on a site dominated by one of those creatons. I lasted about two weeks before they banned me for a minor offense that essenatially was similar to a mistake their fearless leader had made. Sure, they said I could come back in two months, but I had way too much pride to put up with that extreme form of "moderation".

 

Of course, the message came through loud and clear: "we own this site so we get to say what goes on it or not."

 

Fine, then no profit for you for whatever readership I might attract.

 

Yes, price signals are important. If I start pushing readers away rather than attracting them, that is defimitely a price "signal" worth paying attention to.  So some moderation is appropriate. Still, how easy it is to act as if that moderation promotes free speach when it does quite the opposite.

 

If that doesn't convince you, then I would suggest that bane of psuedo-libertarian existence Naomi Kline to you. Specifically her book The Shock Doctrine.  That will really open your eyes to how "free" a lot of "libertarians" really want us to be. Mind you, there are sincere followers of libertarian thought. Milton Firedman is not one of them.

Thank you for the compliment.  Comparing the Austrian School to neo-fascism due to some of its participants is akin to comparing evolution to Nazism, as the Nazis believed in Darwin's theory.  I believe that evolution within the free market handles the pruning of that which doesn't provide fruit quite effectively.  Thank you for the book recommendation, and I will check it out.

 

 

The proposition of a basic income is interesting, although I cannot see any difference between such a system and traditional Communist economics.  I am an amateur follower of the Austrian School of economics, and I will seek to persuade any readers that basic income cannot be implemented until the following issues are resolved.  I hope that this may be a debate free from baseless speculation, and instead backed by logical argument and supplemented with historical accuracy.  I hope that I hear many arguments that counter my own, and I wish to be proven wrong. Argument #1:  Allocation of resources (Consumption) Who is to allocate the resources effectively?  Specifically, who would decide where an individual could spend his or her money?  How would you avoid the disruption in economic sectors dealing with entertainment and consumer goods?  "A computer that is guided by intelligent, human-like AI" is not an appropriate answer, as there is no evidence that this will occur at least for the next 20 years.

Argument #2:  Price signals and production (Production)

In a Communist regime, the resources are allocated by elected officials.  However, due to the large and fundamentally unpredictable nature of a large economy, with millions of transactions occurring daily between purchasing individuals, such a system fails miserably.  Without the complex price signals that are present within a capitalist economy, manufacturers fail to manufacturer what is needed, farmers fail to farm the needed crops, and millions go hungry and starve.  How do you resolve this? My acknowledgement: The capitalist system in its current state is unsustainable.  The crony capitalist system of the west is an improvement over the pseudo-Communist regimes of the east.  The military-industrial complex is just one example of the danger present within an economic system that is interwoven with a political system.  Lobbying, corruption, and old money thrive in such an environment, where the middle-class are left to provide for the poor through the modern welfare system, while simultaneously consuming the goods of the monopolies employed by the upper-classes.  Nevertheless, the solution to such a system is not more welfare and government intervention in an economy, as this only exacerbates the problems of the middle-class.  Wealth is redistributed from the middle-class, lowering their level of economic prosperity, to the poor, who are now lifted to this status of mediocre wealth.  Increased regulatory policies allow the rich to monopolize the banking, investment, and corporate management systems, increasing their status to create the massive wealth gap that is present today.

 

You arguments are true regarding communist like system that we have seen in the past (and that ultimately failed).

However a basic income has nothing to do at all with communism. So your basic assumption basic income = communism is wrong. Basic Income has supporters ranging from the far left to the far right, while communism is clearly part of the left wing. That's why both of your arguments don't apply to capitalism as of now and don't apply if you add a basic income guarantee to the exact same system. With a basic income guarantee allocation of resources, price signals and production does function in the exact same way as it does now.

 

The reality of a proposition is not dependent on the support that it receives.  As mentioned above, Nazis supported evolution, but this doesn't mean that Nazism is supported by evolution.  I also propose that redistributing money for the good of the greater number is, by definition, socialism.  Communism is an economic social order that employs the tactics of socialism on a much grander scale.

 

My main issues are the increase of taxes that follow new welfare introduction, especially something as costly as basic income, and also the artificial inflation of many sectors of the economy due to this increased surplus of allocated government debt.  I assume this is debt, as such an audacious spending mechanism cannot possibly be paid for with a massive increase in taxes at the present moment, due to the impending riots.  This would act as an unprecedented disincentive from working, which would put a large strain on the fiscal system of any involved country, and subsequently the tax payers of that nation. "Why is the distortion of economic sectors such a bad problem?" I hear you ask.  Well, this results in a reliance on the welfare system by creating an unsustainable bubble and boom in the economy, a la the U.S. housing bubble.  When the source of the distortion is retracted, this destroys the economic stability and results in massive poverty and unemployment.

 

I really think the only way a basic income could be viable at all is in a system of ... for lack of a batter term, vouchers. The premise behind a basic income is to assure the needs so that nobody need fear death of themselves or a loved one from lack of basic needs being met.

 

The only way to make that viable is to separate the economies of need from the economies of everything else (desire, fashion, luxury, reward, achievments ect). A basic cost of food, water and housing, as a sort of what you'd get in a nursing home or psych ward. Based on that standard you could be kept indefinately until you die. But few people would be satisfied with that life style. They would seek something more and to gain that they would have to work to achieve it in some way.

 

But ultimately we are talking about a short term issue as we look at a transition point in human history.

 

There is enough land on earth, hell in the Americas that every person could have a quarter acre lot to themselves. Using aeroponics and artificial light you could grow all the food and cotton you needed for a family of four and the materials for clothing and towels and sheets ect. Natural dies could be produced as well as inks and paints. Materials for plastics and carbon fiber or polymers. With rainwater harvesting and and recycling systems for grey water, 300 square feet of roof space would be enough to meet all your water needs and then some. ect ect.

 

Given the level of automation capability now, setting up an automated aeroponic garden, and with 3d printing capabilities of things like a variety of plastics and carbon fiber... every person on their own quarter acre of land could literally meet all their own needs for food, shelter, clothing, water. Even more, because with these techniques designs are up to you, recipies and food choices are your choice as well, medicines and recreational drugs, art and decoration all are completely customizable. Most every single need and many of human wants could be met without ever transacting with another person.

 

But where might the power come from. wind and solar panels along with geothermal can all be used on less than quarter acre scales to achieve the levels of power needed. and most of the components for those things could be printed on the upcoming generations of 3d printers.

First off, I admire your visionary attitude and desire to improve the world.  The main problem, as mentioned above, is the distortion this would cause to the economy.  Vouchers are free money.  Free money is okay as long as it's paid for and sustained.  To be paid for, higher taxes and debt is needed.  If it is not paid for indefinitely, the retraction of such economic stimulus would cause a recession.

 

@ tornado64

 

Being of partially German descent, I can grealty appreciate the general thurst of your comments and heartily agree with the spirit in which they are presented.  However, there are some technical points that I think need some more thought.

 

Case in point: "A basic income has nothing to do at all with communisim."

 

 

Certainly not Stalinism, but "communism"?

 

Remember, one working definition of "communism" is "from each according to his ability, to each according to his need".  So how can "basic income" not equate with "meeting people's needs"?

I agree.  The redistribution of wealth is a defining point of the system that is Communism.

 

 

I really think the only way a basic income could be viable at all is in a system of ... for lack of a batter term, vouchers. The premise behind a basic income is to assure the needs so that nobody need fear death of themselves or a loved one from lack of basic needs being met.

 

 

It wouldn't make that much of a diffeence in states with a social system like many european countries already have. I'm living in Germany and it would actually save the government money when changing to a basic income model. The professor who thaught me economics is actually one of the most prominent supporters of a basic income in Germany and he conducted a study about the financial aspects of a basic income guarantee in Germany proofing that with the same funding that is now used for different social systems applied to a basic income would cover around €800 per citizen + €200 for health insurance.

 

 

@ tornado64

 

Being of partially German descent, I can grealty appreciate the general thurst of your comments and heartily agree with the spirit in which they are presented.  However, there are some technical points that I think need some more thought.

 

Case in point: "A basic income has nothing to do at all with communisim."

 

 

Certainly not Stalinism, but "communism"?

 

Remember, one working definition of "communism" is "from each according to his ability, to each according to his need".  So how can "basic income" not equate with "meeting people's needs"?

 

He obviously referred to communism in a sense of communist states and the communist system and not as "meeting people's need" where his arguments would make no sense (it's very possible to "meet people's needs", it's done in various countries through social security systems without running into any problems with resource allocation, production or pricing). Also "communism" as a term means "shared" or "belongs to all" and not "meeting people's needs". Still, comunist states and systems have nothing to do with a basic income guarantee...

 

If I grab your wallet and remove $10, then I decide to only take $5, is that saving you money?  I don't believe so, but I could be wrong.  Again, Communism is best described as a socialist economy.  In modern socialist states, such as Germany, capitalism is employed to acquire the entirety of the country's wealth, and then socialism is employed to siphon that wealth off towards the sectors within society that elected officials deem fit.  Communism, or rather Stalinism, as it always is, removes the capitalist aspect, and instead replaces it with a centralized authority, whether an individual or small group, that decides the allocation of resources within the economy, usually to the detriment of the lower-classes, who tend to die en masse.



#9
Ru1138

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I identify as socialist and OP has some things wrong. But since Libertarian politics are a bit of a rage inducer for me I'm just going to leave this thread.


What difference does it make?


#10
caltrek

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^^Ok, see you in another thread.

 

As to "supplying a basic income is too inflationary."

 

This rests on the assumption that you are dealing with a zero-sum economy.  In a rapidly growing economy, supplying a basic income reduces the rate of inflation. Reason: increased productivity "pays" for supplying the basic income. Remove the slackers, the old and the aged from the working economy and you increase productivity. Something a purely computer based model can easily miss.


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#11
Cody930

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...

"Why is the distortion of economic sectors such a bad problem?" I hear you ask.  Well, this results in a reliance on the welfare system by creating an unsustainable bubble and boom in the economy, a la the U.S. housing bubble.  When the source of the distortion is retracted, this destroys the economic stability and results in massive poverty and unemployment.

...

I agree.  The redistribution of wealth is a defining point of the system that is Communism.

...

If I grab your wallet and remove $10, then I decide to only take $5, is that saving you money?  I don't believe so, but I could be wrong.  Again, Communism is best described as a socialist economy.  In modern socialist states, such as Germany, capitalism is employed to acquire the entirety of the country's wealth, and then socialism is employed to siphon that wealth off towards the sectors within society that elected officials deem fit.  Communism, or rather Stalinism, as it always is, removes the capitalist aspect, and instead replaces it with a centralized authority, whether an individual or small group, that decides the allocation of resources within the economy, usually to the detriment of the lower-classes, who tend to die en masse.

 

Couple of things here that make me raise an eyebrow. How did our welfare sate create the housing bubble? We've had it for over half a century now. The housing bubble was a phenomenon of the 2000's. 

 

In terms of redistribution of wealth, it's actually not the defining point of communism since in a pure state like that there would be no need to redistribute wealth. Redistribution of wealth is entirely a capitalist concept since all capitalist states, little regulation or big regulation, employ it in some way. Ask any real socialist and they'll balk at the idea of welfare programs because socialism goes beyond this concept. The IMF released an interesting report on this recently. 

 

This then brings me to your last point on Germany which is now somehow a socialist state. Since when did they become socialist? They're pretty capitalist to me just as any other European state.

 

Edit: For the record, I'm not socialist or communist although I've subscribed to socialism in the past for a period to know enough of their thinking and it certainly is not advocating just a welfare state. 

 

I wanted to add that the Nordics have comprehensive welfare states and redistribute wealth quite a bit which by your thinking it'd be pretty darn socialist but in fact Nordic societies are some of the most individualistic and economically competitive in the world. 


"Since we first emerged, a few million years ago in East Africa, we have meandered our way around the planet. There are now people on every continent and the remotest islands, from pole to pole, from Mount Everest to the Dead Sea, on the ocean bottoms and even, occasionally, in residence 200 miles up - humans, like the gods of old, living in the sky."


#12
caltrek

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Re: Cody.

 

*Applauds*

 

Darn right about that welfare crap not being very socialistic in nature.

 

:rabbi:


The principles of justice define an appropriate path between dogmatism and intolerance on the one side, and a reductionism which regards religion and morality as mere preferences on the other.   - John Rawls


#13
kjaggard

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Are you taking into consideration that money itself is an artifact of a governing system. It would not be free money for a government to differentiate types of money based on function and set up a more social low or no growth needs based system while maintaining a free market system for the remainder. None of the money is real in the first place. It's not just that we are talking about a Fiat currency, it's that the money itself cannot actually satiate hunger or keep us dry in the rain, and though theoretically we could apply it as a means of trade to get those things that doesn't even hold in many cases, as you couldn't pay me enough money to do some of the things others will gladly do for minimum wages. Add to that inflation and deflation changing the value and confidence of markets it the valueation of a given monetary system and it becomes clearer that the economy is one big game of calvin ball.

 

monetary systems are meant to be a system of exchange, and having a system set in place where food supplies and shelter and water which are communally owned (if you doubt the food systems rights to communal ownership consider that it is heavily subsidized by our government whose only source of income is our money through taxation, and much of it is supported by our national and global ecosystem, to which no one person can stake ownership.) are part of a closed recycling system which cannot be devalued or hoarded sounds like a good idea to me.

 

Right now we live in a system where people cannot get work because they have no home, they have no home because they have no income, meanwhile there are houses without occupants. and the valuation of properties is so grossly blown up that it would take the average american worker fifteen years to save enough for a property to live on, and that's before you consider things like interest in the loan and employment losses.

 

It's not that there isn't enough money to resolve it, it's that the money is not circulating. It amounts to economic atherosclerosis, which is damaging to the economy and nation as a whole.


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#14
David Foster

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^^Ok, see you in another thread.

 

As to "supplying a basic income is too inflationary."

 

This rests on the assumption that you are dealing with a zero-sum economy.  In a rapidly growing economy, supplying a basic income reduces the rate of inflation. Reason: increased productivity "pays" for supplying the basic income. Remove the slackers, the old and the aged from the working economy and you increase productivity. Something a purely computer based model can easily miss.

Interesting point, and here is my rebuttal. Supplying a universal basic income to millions of adult citizens is likely the greatest inflationary act in history.  Literally pumping money into the economy to increase aggregate demand would simply create an unsustainable bubble, as this money is simply debt.  I find it odd that you argue that supplying a full, sustainable income to the less productive members of society would result in a net gain for that society.  You would eliminate unemployment, in fact so much so that there would be a great need for jobs.  Wages would need to be artificially high to compete with the state allotted income and draw individuals to the office.  This would put employers out of business, and closed businesses do not produce very well.

 

 

 

...

"Why is the distortion of economic sectors such a bad problem?" I hear you ask.  Well, this results in a reliance on the welfare system by creating an unsustainable bubble and boom in the economy, a la the U.S. housing bubble.  When the source of the distortion is retracted, this destroys the economic stability and results in massive poverty and unemployment.

...

I agree.  The redistribution of wealth is a defining point of the system that is Communism.

...

If I grab your wallet and remove $10, then I decide to only take $5, is that saving you money?  I don't believe so, but I could be wrong.  Again, Communism is best described as a socialist economy.  In modern socialist states, such as Germany, capitalism is employed to acquire the entirety of the country's wealth, and then socialism is employed to siphon that wealth off towards the sectors within society that elected officials deem fit.  Communism, or rather Stalinism, as it always is, removes the capitalist aspect, and instead replaces it with a centralized authority, whether an individual or small group, that decides the allocation of resources within the economy, usually to the detriment of the lower-classes, who tend to die en masse.

 

Couple of things here that make me raise an eyebrow. How did our welfare sate create the housing bubble? We've had it for over half a century now. The housing bubble was a phenomena of the 2000's. 

 

In terms of redistribution of wealth, it's actually not the defining point of communism since in a pure state like that there would be no need to redistribute wealth. Redistribution of wealth is entirely a capitalist concept since all capitalist states, little regulation or big regulation, employ it in some way. Ask any real socialist and they'll balk at the idea of welfare programs because socialism goes beyond this concept. The IMF released an interesting report on this recently. 

 

This then brings me to your last point on Germany which is now somehow a socialist state. Since when did they become socialist? They're pretty capitalist to me just as any other European state.

 

Edit: For the record, I'm not socialist or communist although I've subscribed to socialism in the past for a period to know enough of their thinking and it certainly is not advocating just a welfare state. 

 

I wanted to add that the Nordics have comprehensive welfare states and redistribute wealth quite a bit which by your thinking it'd be pretty darn socialist but in fact Nordic societies are some of the most individualistic and economically competitive in the world. 

 

Thank you for your input, as I greatly enjoyed your arguments.  So, I was assuming that those who received welfare would continue working or at least pursue the opportunity for employment, which, upon reflection, is unlikely.  Nevertheless, if they did such, the addition of money to an already existing salary would increase consumption of any individual in a consumerist society, especially with an inflationary currency, where there is an incentive to spend.  

 

The housing bubble was not caused by a direct addition of income into personal bank accounts, but I would argue was rather caused by artificially low-interest rates combined with an inflationary currency as dictated by the Federal Reserve, which caused an expansion of credit, greatly disturbing the price signals that are essential to a functioning capitalist economy.  This resulted in overpriced homes, along with an increased supply of them.  When price signals are disturbed, destructive investment results.  The manipulation of price signals in the American economy has been occurring prior to the Great Depression.

Thank you for the link.  I scanned the report, bookmarked it, and will read it more thoroughly later when I have more time to spare.  My initial thoughts on this was of tribalism, which can work on the localized level quite well, but I don't believe it's an effective option for a larger economic system.

 

Germany is a capitalist state with a heavy welfare system.  Although the most economically successful European state, it is far from strict capitalism, as in laissez faire or relatively close to it.  Additionally, you bring up Nordic societies, which I am glad that you have done so.  Europe is often used as an example of how socialism can work, and work relatively well.  However, Europe has a long history of being the economic and cultural superpower of the world, and was the first to experience the fruits of the Renaissance and Industrial Revolution.  Their advances in science and modern engineering, along with their post-WWII reconstruction, which was not perfect, but this could be a separate topic, allowed them to maintain their status alongside the United States up until the present day.  It's like putting a few NBA players on a college basketball team and crediting the coach for the entirety of the team's success.

 

I searched for a source for what I am saying that goes into more detail, and here it is.

http://betterlivingt...s-cycle-theory/

 

 

 

Are you taking into consideration that money itself is an artifact of a governing system. It would not be free money for a government to differentiate types of money based on function and set up a more social low or no growth needs based system while maintaining a free market system for the remainder. None of the money is real in the first place. It's not just that we are talking about a Fiat currency, it's that the money itself cannot actually satiate hunger or keep us dry in the rain, and though theoretically we could apply it as a means of trade to get those things that doesn't even hold in many cases, as you couldn't pay me enough money to do some of the things others will gladly do for minimum wages. Add to that inflation and deflation changing the value and confidence of markets it the valueation of a given monetary system and it becomes clearer that the economy is one big game of calvin ball.

 

monetary systems are meant to be a system of exchange, and having a system set in place where food supplies and shelter and water which are communally owned (if you doubt the food systems rights to communal ownership consider that it is heavily subsidized by our government whose only source of income is our money through taxation, and much of it is supported by our national and global ecosystem, to which no one person can stake ownership.) are part of a closed recycling system which cannot be devalued or hoarded sounds like a good idea to me.

 

Right now we live in a system where people cannot get work because they have no home, they have no home because they have no income, meanwhile there are houses without occupants. and the valuation of properties is so grossly blown up that it would take the average american worker fifteen years to save enough for a property to live on, and that's before you consider things like interest in the loan and employment losses.

 

It's not that there isn't enough money to resolve it, it's that the money is not circulating. It amounts to economic atherosclerosis, which is damaging to the economy and nation as a whole.

Thank you for your extensive response.  I find your description of capitalist economics to be grossly simplified, and I believe you're suggesting a return to a barter system, which is terribly inefficient compared to a system based upon credits in the form of currency.

Are you familiar with the tragedy of the commons? http://en.wikipedia...._of_the_commons

 

I argue that such a system is perpetuated by the involvement of the Federal Reserve in the U.S. economy, which I'm assuming you're referring to.  See above for more details. Here's a link: http://betterlivingt...s-cycle-theory/

 

The Keynesian theory of the circular flow of money is about as relevant to the problems of poverty as atherosclerosis is to economics.  If the flow of money throughout an economy is what truly matters, then why is the European economy in such shambles, with its high levels of stimulus and government spending?  It seems to me that the inflexibility of the European economy has reduced its ability to compete on a global scale, which is directly caused by overtaxation and government stimulus that interferes with normal consumption.



#15
StanleyAlexander

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None of the money is real in the first place. 

This.


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#16
Bradley

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The proposition of a basic income is interesting, although I cannot see any difference between such a system and traditional Communist economics.  I am an amateur follower of the Austrian School of economics, and I will seek to persuade any readers that basic income cannot be implemented until the following issues are resolved.  I hope that this may be a debate free from baseless speculation, and instead backed by logical argument and supplemented with historical accuracy.  I hope that I hear many arguments that counter my own, and I wish to be proven wrong. Argument #1:  Allocation of resources (Consumption)

Argument #2:  Price signals and production (Production)

 

 

I don't think these are problems for a basic income applied within a capitalist system. Social security retirement is similar to a basic income that does not damage allocation of resources or price signals. 

 

Eventually, capitalism will lead to communism via abundance supplied by science and engineering. However, it will differ from communism of recent history because it will not be authoritarian and it will not fail to efficiently distribute resources. Atomically Precise Manufacturing will supply all the physical goods and health, Virtual Reality will supply unlimited real estate (physical real estate should be converted to a national park), some form of clean energy will supply unlimited energy (in terms of producing more than we require). 

 

A basic income will become more necessary as capitalism increasingly uses robotics and artificial intelligence to supply goods and services. The basic income can be supplied through taxation. I think a good year to start implementing a basic income structure would be 2018, before autonomous vehicles start replacing transportation sector jobs. We should also include free online education so that individuals can start studying to function in new careers. The basic income should be increased based on a measure tied to the level of automation within the economy. We should also start reducing the length of time for intellectual property rights and copyrights with a final ending date of 2035. The assumption is that collaboration facilitated by global communication will be a sufficient vehicle to drive innovation without IP protections no later than 2035. 


#17
David Foster

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None of the money is real in the first place. 

This.

 

A diamond is valuable for two reasons.  The first reason lies in its functional value; that it's incredibly hard and also may be used to refract light.  The second reason has nothing to do with its use or potential use, but rather with its perception by others.  A woman wears a diamond on her ear not because she wants to stretch her ear lobes with the extra weight, but because of the social approval that accompanies the acquisition of such a rarity.  In the same way, money is valuable.  Not because it has any practical use, as you cannot build a house with money, or fuel your car efficiently, but because money is scarce and only a limited number of bills are recognized by the regulating systems of humanity, inflation withstanding, of course.



#18
David Foster

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The proposition of a basic income is interesting, although I cannot see any difference between such a system and traditional Communist economics.  I am an amateur follower of the Austrian School of economics, and I will seek to persuade any readers that basic income cannot be implemented until the following issues are resolved.  I hope that this may be a debate free from baseless speculation, and instead backed by logical argument and supplemented with historical accuracy.  I hope that I hear many arguments that counter my own, and I wish to be proven wrong. Argument #1:  Allocation of resources (Consumption)

Argument #2:  Price signals and production (Production)

 

 

I don't think these are problems for a basic income applied within a capitalist system. Social security retirement security is similar to a basic income that does not damage allocation of resources or price signals. 

 

Eventually, capitalism will lead to communism via abundance supplied by science and engineering. However, it will differ from communism of recent history because it will not be authoritarian and it will not rely on distribution of resources. Atomically Precise Manufacturing will supply all the physical goods and health, Virtual Reality will supply unlimited real estate, some form of clean energy will supply unlimited energy (in terms of producing more than we require). 

 

A basic income will become more necessary as capitalism increasingly uses robotics and artificial intelligence to supply goods and services. The basic income can be supplied through taxation. I think a good year to start implementing a basic income structure would be 2018, before autonomous vehicles start replacing transportation sector jobs. We should also include free online education so that individuals can start studying to function in new careers. The basic income should be increased based on a measure tied to the level of automation within the economy. We should also start reducing the length of time for intellectual property rights and copyrights with a final ending date of 2035. The assumption is that collaboration facilitated by global communication will be a sufficient vehicle to drive innovation without IP protections no later than 2035. 

 

Thank you for your thought-provoking response, and I'm glad you brought up social security, as I didn't even think of that.  I'll address your second paragraph, and then your first.  I don't believe that Communism is necessary.  If the costs of production reach such unprecedentedly low levels as you say will happen, then a meal for the price of a penny is sufficient.  Asymptotically approaching zero is sustainable, while autonomous systems are not sustainable as they do not exist.  Free pens are given away by businesses and are incredibly cheap to buy as well, so there is no scarcity of pens in the western world.  If food production and water desalination becomes as cheap or cheaper than the manufacturing of ink pens, then I'd imagine scarcity would virtually approach zero.  There will always be a cost of production, due to reality of entropy in any given system.  Minimizing cost and maximizing efficiency will give us low-cost food, healthcare, and "virtual real-estate," but there will always be a cost.  Servers have a limit, food must be transported, and systems must be managed.

 

The damage that social security has done is under-acknowledged.  It is a scheme that transfers wealth from the hardworking to the old and unproductive.  Not only is it an economic hole in the ground that creates more and more debt, as it doesn't pay for itself due to its ponzi scheme nature, but it creates a political phenomena where it has become untouchable to even question the system.  It is a system that, when tweaked to collect a greater portion of resources from its workers for a more widespread distribution, attracts even more consumers on the receiving end of its dividends.  Social security also undermines private sector personal investment growth, effectively creating a crony investment scheme for large corporations and businesses. I disagree with your assumption.  Innovation is not driven by global communication and collaboration, but rather these are tools that allow for more efficient growth.  Growth itself results from need.  A plant grows because it needs to reach the point where it may reproduce and continue its lineage.  An office worker goes to work because he needs resources to survive.  A student goes to school because he believes that an education will secure him an advantage over the rest of society in the future.  Competition, by definition, is the desire to be superior to your neighbor in one form or another.  Without a system that provides for this possibility, it is unlikely that innovation will occur more than a stifled rate, if at all. I do not mean to sound cruel or heartless, but it is well known that self-interest drives humanity.  Abundance does promote friendliness and prosperity within society, but humans will still pursue self-interest, nonetheless.  Without incentive, such as need, humans will not innovate or change.  Personally, I do not agree with the concept of intellectual property, as it isn't physical property at all, but it nonetheless proves to be an effective incentive for economic growth.  I do agree with your proposition for its dismantlement, simply because something that results in no net loss seems permissible to me.



#19
Bradley

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Thank you for your thought-provoking response, and I'm glad you brought up social security, as I didn't even think of that.  I'll address your second paragraph, and then your first.  I don't believe that Communism is necessary.  If the costs of production reach such unprecedentedly low levels as you say will happen, then a meal for the price of a penny is sufficient.  Asymptotically approaching zero is sustainable, while autonomous systems are not sustainable as they do not exist.  Free pens are given away by businesses and are incredibly cheap to buy as well, so there is no scarcity of pens in the western world.  If food production and water desalination becomes as cheap or cheaper than the manufacturing of ink pens, then I'd imagine scarcity would virtually approach zero.  There will always be a cost of production, due to reality of entropy in any given system.  Minimizing cost and maximizing efficiency will give us low-cost food, healthcare, and "virtual real-estate," but there will always be a cost.  Servers have a limit, food must be transported, and systems must be managed.

 

 

The damage that social security has done is under-acknowledged.  It is a scheme that transfers wealth from the hardworking to the old and unproductive.  Not only is it an economic hole in the ground that creates more and more debt, as it doesn't pay for itself due to its ponzi scheme nature, but it creates a political phenomena where it has become untouchable to even question the system.  It is a system that, when tweaked to collect a greater portion of resources from its workers for a more widespread distribution, attracts even more consumers on the receiving end of its dividends.  Social security also undermines private sector personal investment growth, effectively creating a crony investment scheme for large corporations and businesses. I disagree with your assumption.  Innovation is not driven by global communication and collaboration, but rather these are tools that allow for more efficient growth.  Growth itself results from need.  A plant grows because it needs to reach the point where it may reproduce and continue its lineage.  An office worker goes to work because he needs resources to survive.  A student goes to school because he believes that an education will secure him an advantage over the rest of society in the future.  Competition, by definition, is the desire to be superior to your neighbor in one form or another.  Without a system that provides for this possibility, it is unlikely that innovation will occur more than a stifled rate, if at all. I do not mean to sound cruel or heartless, but it is well known that self-interest drives humanity.  Abundance does promote friendliness and prosperity within society, but humans will still pursue self-interest, nonetheless.  Without incentive, such as need, humans will not innovate or change.  Personally, I do not agree with the concept of intellectual property, as it isn't physical property at all, but it nonetheless proves to be an effective incentive for economic growth.  I do agree with your proposition for its dismantlement, simply because something that results in no net loss seems permissible to me.

 

 

As costs decrease gifting begins to overcome purchase. YouTube created an environment of reduced information distribution costs (effectively zero). Consequently, we see many DIY videos available for free made by people willing to gift their knowledge. 

 

Food will not require transport. Nanobots will metabolize solar energy (or magnetism, heat, etc). Taste and perceptions of texture can be mimicked through virtual reality (which will be a hybrid reality). 

 

Social security creates benefits in terms of stabilization. Younger people can work in jobs rather than stay home to take care of elderly parents. 

 

Open source software is an example of collaboration facilitated through communication. Open source spontaneously erupted at the very start of the internet. Therefore, it is reasonable to believe that as barriers to entry of manufacture recede and education is freely available (perhaps even downloadable), people will begin to open source physical innovation. 

 

Self interest drives humanity as long as labor is required to acquire goods and services. Robotics and artificial intelligence replace labor. People are more likely to gift when given the opportunity if it does not reduce personal consumption below basic satisfaction levels. 



#20
kjaggard

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 I find your description of capitalist economics to be grossly simplified,

 

because it is. We are not actually writing economic policy here you know. We are simply contrasting the premise of a basic income with the existing models of economics, and trying to avoid idealized concepts that have never been achieved because of real world complications that happen off the paper plan. To do that we must come to some basic understandings: What is money, what function does it serve for a person, and what function does it serve a society as a whole.

 

The establishment of those premises is not an economic policy it is a means of making sure all parties are having the same conversation without using the same words for different meanings. Money is a means of exchange, the person can use money as a means of acquiring goods or services in the exchange for a like value of goods and services and the unit of exchange allows for saving without spoilage or forced third party transaction to gain things you don't want in order to trade what you have a to another who wants what you have but hasn't got what you want so that you can exchange what you don't want to somebody who does want it and has what you want.

 

As a society the means of exchange allows for the free flow and exchange of resources from supply to demand and to allow for saving up toward future need be gaining more now. This is adventageous especially in the ability of young and able bodies laboring now to gain surplusses toward times when their abilities to labor are insufficient to meet needs.

 

That is money. The foundations upon which economics are built. and if that was all there was to it there wouldn't be nearly as much strife in the world.

 

Instead we have leveraging other peoples labor to gain profits for yourself and restricted access to Capital. Whereby individual have the ability to gain more 'goods and services' than their own ability to generate labor to earn it. The Likes of Warren Buffet could never have performed enough joules of labor to justify the assets he has gained during his life and the amount he has is in excess of anything he could reasonably need to meet his needs for living the rest of his life without knowing want or preventable suffering.

 

I'm pretty sure that if bill gates spent on nothing more then property tax, upkeep of the land and house, food, water, clothing and medical needs for his entire family that he could not in seven lifetimes spend a fraction of his 'goods and services'.

 

So it's clear that money is not being sought or primarily used as a means of those needs being met alone. so despite you assumption of

 

and I believe your suggesting a return to a barter system, which is terribly inefficient compared to a system based upon credits in the form of currency.

 

 

I do not advocate trade economies as a primary economic model, though I do support local trade groups in voluntary systems.

 

See one of the problems it economies got too big to handle local level economic activity while maintaining a one size fits all system to all aspects. It's why I advocate diversification of economic approaches. Local scrips to meet free moving currency to allow for exchanges in local communities even when demand or supply from outside or the nation as a whole passes a community by. So instead of having to inject national currency into local markets to prop them up and allow development and minimum community maintainance the communities could stand on their own with internal supports for local exchanges of goods and services. It make for a more resilient system and prevents more prosperous local economies experiencing booms from diverting economic energy from lesser communities and strangling them off.

 

Are you familiar with the tragedy of the commons? http://en.wikipedia...._of_the_commons

 

 

I'm not only aware of it I've worked in depth on the topic on a university level exploration of the topic and it's role in a sustainable development and management of the economies and the environment.

 

putting aside the evidence that it doesn't have the examples to back it up and several to disprove it : http://climateandcap...of-the-commons/

 

http://www.edf.org/o...mising-solution

 

but it wholey forgets the implication that if a resources is commons and one maximizes personal gain and shares the burden that the same can be applied to resources held as personal property. I can ride into a town and buy up all of a resource in the community and sell it all for the profits to myself and hold no stake in the communities collapse when I can just ride on into the next town.

 

The tragedy isn't due to a commons, it's due to the persute of unrestricted personal gain while avoiding the consequences of it, in the quest for infinite growth. In fact a system whereby I have the monetary resources to pay to tap a resource dry and profit from doing so, allows me to use the profits from draining a resource to buy out other holders of competition in the providing of that resource and thus gain a greater ability to strip mine all of a resource from an area who will never see the return of the lost resource or the potential funds to the community it could have represented.

 

 

 

I argue that such a system is perpetuated by the involvement of the Federal Reserve in the U.S. economy, which I'm assuming you're referring to.  See above for more details. Here's a link: http://betterlivingt...s-cycle-theory/

 

no. actually I'm referring to a very simple fact that money, even gold does not itself feed the hungry. Only when they are used in a representative system of exchange do they then become something that allow the hungry to resolve their hunger through extended systems of change. And those are dependant on agreed upon values and willingness to take them as means of trade. I could convince you that all those leaves on your lawn are a horrible clutter and waste problem and charge you for removing them from your property where once they are mine I can then shred them and sell them as mulching for gardeners. That is simply because you saw no value in something and in fact saw negative value in it, where I saw actual value in it. The discrepency in perception of value in this case is a bit more benign but in the case of say gold standard or dollars it's a means of funneling economic worth in one direction. And in a system where that same economic worth dictates control levels over laws that pertain to economic policy...

 

Every monetary system whereby the value of the standard can vary according to location or time is subject to essentially the reverse of 'trickle down economics'. Usually when that hits a certain point it restricts the resource pool access to the majority to a degree where there is not enough to allow for adequate exchange of goods and services to maintain the populations ability to function.

 

That's when you get cultural 'hard resets'.

 

In the case of most of the discussions on this forum the scenario is painted as such: Company A is making record profits, it uses those to buy a lobbyist to tweak a law by adding a rider in an unrelated law that allows conditions for company A to buy out it's primary competitor company B. With the combined assets company Ab can now rest relatively secure in monopoly where they shift focus over to automating as much of their processes as possible to change the equation of income and costs to maximize holdings for the ceo and shareholders. With increased automation is cut labor, cut labor means more people with lost income.

 

So far that is little more than a brutal truth of capitalism in it's current form. But where it becomes pertinant here on this forum is the level of automation is increasing faster than those with eyes on past and present see. and worse it's more wide spread. The consequence isn't a shift in labor pools, it's the drying up of labor pools.

 

For the laborers the loss of those options means no income. No income means they cannot afford homes and food to survive... and they cannot afford the companies products.

 

A basic income allows that people could see to the homes and food they need to sustain themselves and beyond that a person who can't find work, but is secure in what they need to survive may opt to do nothing, but more often than not you will find people starting their own businesses, or selling hobby crafts for a little money on the side, or gardenings and trading organic vegetables from their gardens. The income from these is surplus to their survival needs and thus can be invested or exchanged for the companies goods and services.


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