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A Basic Income:-- In The Age Of Automation, The Time Has Come.


bludog
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Automation in industry is proceeding at lightning speed, the world over. It is replacing both menial and skilled labor on a large scale and reducing the value of human work. With the help of automation, a handful of farmers can feed millions, compared to labor-intensive methods of the past. With so many people out of work, the remaining jobs get increasing devalued, leaving more workers in poverty and concentrating wealth in the hands of a few.

 

But what would people do if their incomes were taken care of? Many might languish in front of a TV screen but it has already been demonstrated that many more would take part in a rich panoply of social activities, volunteerism, community improvement and creative pursuits and self-improvement, including ongoing education.

 

Today, the old ethic of pay for work, as a practical matter, is fading from the scene.

 

Which begs the question of how to pay for a universal basic income. In the US, the answer lies not only on higher taxes on the ultra rich but enforcing laws already on the books like the ones prohibiting the exportation of earnings to offshore banks, to avoid income taxes. In addition, targeted, creative taxes like, for instance, a tiny financial transaction tax, on Wall Street, could raise most of the necessary funds all by itself.

 

Undoubtedly, there will be resistance to a basic income from many quarters. But it is the ONLY way to insure prosperity and prevent the uprising of the desperate.

 

https://www.thenation.com/article/a-basic-income-would-upend-americas-work-ethic-and-thats-a-good-thing/

A Basic Income Would Upend America’s Work Ethic—and That’s a Good Thing
Freedom to control our time should lie at the heart of any struggle.
By Fred Block and Frances Fox Piven 8/23/2016 11:43 am

 

We have been ruled for years by archaic economic ideas, particularly the claim that a healthy dose of economic austerity is the best way to get the economy’s engines firing again. It is a zombie idea, discredited almost nine decades ago when Herbert Hoover insisted on balancing the budget during a crisis, and sent the economy into a tailspin. If bad ideas are not allowed to die, good ideas slip into obscurity. Today, one of those buried ideas is enjoying a well-deserved revival: basic income—the idea that every citizen is entitled to an income sufficient to cover basic needs.

 

New assessments of basic income have cropped up in The New York Times, The New Yorker, The Wall Street Journal. It seems to be one of the few radical reform ideas that appeal to people on both ends of the political spectrum: The Koch brothers’ favorite think tank, the Cato Institute, has revisited the idea, and former SEIU head, Andy Stern, has written a book about it. Historically, market luminaries such as Friedrich Hayek, Milton Friedman, and Charles Murray have given rhetorical support to the idea because of their hostility to welfare-state programs (they hope to replace them with a basic income, though a punitively small one). Tech entrepreneurs have embraced basic income in anticipation of new waves of technological unemployment from robots and artificial intelligence. Those of us on the left, however, have a different vision of what basic income might achieve.

A group of European intellectuals and activists created the Basic Income European Network-BIEN (later to become the Basic Income Earth Network) in 1986, dedicated to promoting universal guaranteed-income policies. Working tirelessly over 30 years, they have won endorsements for the basic income idea by trade unions, community groups, and political parties. Since the 2008 Global Financial Crisis, support has exploded in Europe. Recently, 64 percent of respondents in a European wide poll said they would vote in favor of creating a basic income. One unexpected result of BIEN’s efforts was that political leaders in many middle-income countries such as Brazil, India, Mexico, and South Africa embraced the idea of basic income as a way of dealing with popular unrest. Across the globe, governments began to enact direct income supports to their poorest citizens. While none of these schemes amounts to a full basic-income system, cash transfers to the poor have proven to be a powerful weapon in reducing poverty. Perhaps as many as a billion people in the developing world are now receiving these cash transfers and the idea has been endorsed by the World Bank and powerful global charities. Studies have definitively shown that there is no truth to the right wing claims that giving poor people money demoralizes them; it does the opposite. Moreover, providing everyone with a basic income is an obvious way to make societies more resilient in the face of global climate change and it would slow the flow of refugees from economic hardship.

- snip -

 

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Another point: something like this can only happen in a country that's very rich, and can only happen by taxing the rich and the middle class to pay for it.

 

How in the world would anyone ever convince typical Americans that this is a good idea? Remember, this country was founded on the rebellion against taxes. The great majority of this country hates taxes more than it likes the good that taxes can do for the country.

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You are correct laripu. The concept of a basic income can only be done in the first world. In fact, some of the Democratic Socialist nations are coming close to it already.

 

What seems to be set in stone now, can change in relatively short order. The rich hated FDR like death and called him "a traitor to his class". And yet, he accomplished much, despite their opposition. But there was no American precedent, up to that point and although FDR's tenure lasted fifteen years, the ascendance of his policies was a flash in the historical pan. FDR's influence, however, resulted in unprecedented prosperity, later on and lasted up until around 1980. After that, started the great unraveling.

 

Unlike the 1930s, there is now a precedent for taxation and reward. You still don't hear about it much because of the right wing controlled MSM. But Bernie did far better than many expected on a policy of taxation and public welfare which demonstrates a public appetite for it.

 

If policies take hold, and last long enough, they become traditional, and as such, gradually become Conservative values. This has already happened in countries like New Zealand, Sweden and Finland. After an initial letdown, I am greatly heartened by Bernie's strong showing in the primaries and I think our Nation could be turning a corner.

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I'll also note this. What the colonists were really upset about wasn't taxation per se. It was taxation without representation. Therefore, if we can pair this taxation with election and other reform, getting rid of Citizens' United and related laws, AND getting rid of corporate lobbyists, then people would once more feel that they were being represented by the government.

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Excellent points EvilFerret. As of now, the majority of the Nation are forced to pay taxes without being represented. The mega-rich and the corporations they own are getting away with either little or no taxes to actually being subsidized .... While they control of almost all legislation. And what's left of the middle class. increasingly unable to afford it, pays the bulk of the taxes .... Which is diverted to the plutocracy who buy legislation-for-sale, from the majority of our corrupt lawmakers.

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If things go on as they have been going, then even without foreign outsourcing ...

 

... an increasing number of menial jobs will be done by machines coupled with artificial intelligence. Even the entertainment industry will be hit by this ...

... jobs which used to take intelligence will be made easier, so that lower-paid employees can be hired to fill them ...

... jobs which do require intelligence and can't be done by machine will continue to pay relatively well (but the numbers will diminish) ...

... resulting in a huge low-wage, no-benefit service sector of maids, landscapers, etc, serving (mostly) the shrinking middle class ....

... add illegal immigrants, which will cause great unhappiness in the service sector ...

... and an increase in availability traditional comforts: prostitution and dangerous drugs ...

... and a huge increase in theft and violence ...

... resulting in second service sector, doing security for the rich, and an increase in shootings of the poor by the shrinking middle class ...

 

And then we're a third world country.

 

Foreign outsourcing means that this trend becomes international, at different rates. And then we get a third world ... world.

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Good projection-in-detail of probable job loss and degradation, and resultant social decay, due to automation. Which bring us straight back to the solution .... A guaranteed basic income. At least in countries that can afford it.

 

When the decimation of the middle class is complete and poverty becomes the norm, industry will shrink, as the great mass of its formerly reliable customers cut back on purchases. Even the food industry will be adversely affected when demand changes mostly to cheap staples, for the hungry and the starving.

 

A robust but tiny demand for luxury products, prestige items and expensive toys (jets, helicopters and the like) will not make up for the dying-off of the mass market.

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Good projection-in-detail of probable job loss and degradation, and resultant social decay, due to automation. Which bring us straight back to the solution .... A guaranteed basic income. At least in countries that can afford it.

 

Yes, that was my point. I wasn't explicit, but that's why I posted that.

 

One caveat: if this is done in one country and not in others, expect mass migration to the country with guaranteed minimum income. Which is why it would be ideal if guaranteed minimum income happens in most of the world and almost the same time.

 

Which brings us to globalism and trade deals and why I favor these things. In an era in which anything can be done anywhere and easily moved about, the distributions of standards of living in various countries will tend to equalize. Not that everyone will have the same standard of living, but that the distribution will be similar in the developed countries. (Modulo things like corruption, which is a kind of parasitism; waste.)

 

If the distributions are close enough, there is little financial incentive for migration. People will then possibly move for other reasons: language, climate, culture, centers of excellence etc, but will not need to move to make a better life for their children. Same thing with a guaranteed minimum income.

 

 

When the decimation of the middle class is complete and poverty becomes the norm, industry will shrink, as the great mass of its formerly reliable customers cut back on purchases. Even the food industry will be adversely affected when demand changes mostly to cheap staples, for the hungry and the starving.

 

A robust but tiny demand for luxury products, prestige items and expensive toys (jets, helicopters and the like) will not make up for the dying-off of the mass market.

 

Exactly right. The extreme logical conclusion to laissez-faire competition is that all the wealth s concentrated in the hands of one family. Then most economic activity stops. When the group that controls most of the wealth is too small, economies slow. Economies work best when there's a mix: some concentration of capital to allow big things to be built, but also lots of spare money around, circulating among people who are doing things for money and spending money on their well-being.

 

The weird thing is that the ideal economies would be better for rich people too, even if they have less money. There's no point to having billions if there's nothing to buy because nothing is being made. Better to have only millions and a diverse and interesting market-place.

 

The only way having billions is interesting is if you're a hyper-creative person like Elon Musk, who needs capital to do good things for the world.

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One caveat: if this is done in one country and not in others, expect mass migration to the country with guaranteed minimum income. Which is why it would be ideal if guaranteed minimum income happens in most of the world and almost the same time.

 

Which brings us to globalism and trade deals and why I favor these things. In an era in which anything can be done anywhere and easily moved about, the distributions of standards of living in various countries will tend to equalize. Not that everyone will have the same standard of living, but that the distribution will be similar in the developed countries. (Modulo things like corruption, which is a kind of parasitism; waste.)

 

If the distributions are close enough, there is little financial incentive for migration. People will then possibly move for other reasons: language, climate, culture, centers of excellence etc, but will not need to move to make a better life for their children. Same thing with a guaranteed minimum income.

 

IMO, there's hardly any chance of guaranteed basic income happening in most of the world, at the same time. And I have mixed feelings about immigration. Only time will tell if the Democratic Socialist countries of northern Europe are committing cultural and economic suicide, or not, by allowing immigration on such a large scale, from the cauldron of the Mid-East. Neo-Nazi takeovers will only do more harm to immigrants and kill the goose that laid the golden egg.

 

From a practical standpoint, what is the use allowing so much social upheaval that it destroys the system, altogether? And from a moral standpoint, where is the good in self-sacrifice, if it kills the ability to be of further help?

 

Exactly right. The extreme logical conclusion to laissez-faire competition is that all the wealth s concentrated in the hands of one family. Then most economic activity stops. When the group that controls most of the wealth is too small, economies slow. Economies work best when there's a mix: some concentration of capital to allow big things to be built, but also lots of spare money around, circulating among people who are doing things for money and spending money on their well-being.

 

To most, all other issues take a back seat behind the acquisition of more wealth. It's almost as if (and many might) have an acquisitive gene that cannot be turned off, even after it has been rendered useless by hoards too vast to ever be of more benefit.

 

The weird thing is that the ideal economies would be better for rich people too, even if they have less money. There's no point to having billions if there's nothing to buy because nothing is being made. Better to have only millions and a diverse and interesting market-place.

 

 

It is obviously hard for many rich people to see this. The obsession for most of the working rich, is to make more. And, of course, the market place is just one aspect. Power is the other. And power is intoxicating. As with drug addiction, not everyone is susceptible. But those who are, become insatiable.

 

The only way having billions is interesting is if you're a hyper-creative person like Elon Musk, who needs capital to do good things for the world.

 

Unfortunately, Musk is a rarity among the super wealthy.

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Libtard. No Conservatives allowed in the Liberals Only Room. This is a warning.

 

 

Rules for LO

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Post respectfully, personal attacks will not be tolerated
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Libtard. No Conservatives allowed in the Liberals Only Room. This is a warning.

bludog,

 

You are being very non tolerant and I am offended by that. I will require a safe place away from your attacks. You are offensive, mean, non tolerant of others, racist, xenophobic and overly aggressive. I am a Constitution Party Member, I don't identify with your made up term. Please apologize immediately.

 

Your new friend,

 

Libtard

 

Thanks and God Bless This Once Great Republic!

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Libtard. No Conservatives allowed in the Liberals Only Room. This is a warning.

bludog,

 

 

 

You are being very non tolerant and I am offended by that. I will require a safe place away from your attacks. You are offensive, mean, non tolerant of others, racist, xenophobic and overly aggressive. I am a Constitution Party Member, I don't identify with your made up term. Please apologize immediately.

 

 

 

Your new friend,

 

 

 

Libtard

 

 

 

Thanks and God Bless This Once Great Republic!

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Libtard: One more time and you're getting banned for awhile.

Banned for what? I broke no rules. Your ad hominem attacks are non tolerant and offensive. Why do you attack people like that? Racism is rampant and I would like a personal safe space.

 

 

Thanks

 

God Save This Once Great Republic

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Libtard: One more time and you're getting banned for awhile.

bludog, on 24 Aug 2016 - 7:32 PM, said:snapback.png

Libtard: One more time and you're getting banned for awhile.

Banned for what? I broke no rules. Your ad hominem attacks are non tolerant and offensive. Why do you attack people like that? Racism is rampant and I would like a personal safe space.

 

 

Thanks

 

God Save This Once Great Republic

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I remember the oft repeated meme from the GOP that a rising tide lifts all boats in reference to our economy. The idea is that as our economy improves everyone benefits.

 

When I look at the economy and labor, I often hear that people get paid what they are worth in the workplace. What they mean is that they get paid some amount that the corporation can find to do the job. If you won't take it, someone else will at that wage. If you have no experience or skills, you get min wage. If you have the additional responsibility of managing min wage workers, you get a bit more. The people over them get more again and so on up the economic ladder. The more skills and experience and training, the higher your salary, but it's all based upon the minimum wage.

 

So I took a look at the economy and min wage to see if the GOP meme is correct. I looked at the min wage in 1974 being $2.00 per hour (I had just entered the labor pool). I considered government stats to obtain inflation rates from 1974 to 2014. While I suspect those numbers are grossly under stating inflation, that is what I used. Similarly I used government numbers for how much the economy has grown on a per capita basis from 1974 to 2014. Using round numbers inflation during that time is about 5X so if min wage had been adjusted for inflation and nothing additional the min wage in 2014 should have been about $10, but instead it was $7.25. The growth of the economy in round numbers for that time was about 7X so accounting for both inflation and a rising tide lifts all boats, the min wage would be about $70 per hour.

 

Since min wage did not even keep up with inflation the growth of the economy had no positive effect on the poor nor the middle class.

 

So when one considered a basic income, the money is there. We worked for it and got shafted. More than all the gains went to the rich (as everyone else lost ground), and now they are so rich, that even a modest taxation would be enough to provide for a livable basic wage for all US citizens.

 

How to convince the rich? Extrapolate that money in the marketplace, and sales of products goes sky high, the economy will do much better than ever before. The rich while paying a bit more in taxes could easily make way more.

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I remember the oft repeated meme from the GOP that a rising tide lifts all boats in reference to our economy. The idea is that as our economy improves everyone benefits.

 

I wish tide i.e. water level, was rally an apt metaphor. When water level rises, all boats are lifted by the same amount.

 

If we were all lifted by the same percentage, that would be better than what we've seen. The minimum wage has gone up a certain percentage over the last 40 years, but the wealth of society has gone up by a much higher percentage.

 

So the rising tide metaphor is not a valid description of societal economic change. A better description might be "earthquake": An earthquake may elevate a very few houses, leave others untouched, and completely destroy most.

 

 

So I took a look at the economy and min wage to see if the GOP meme is correct. I looked at the min wage in 1974 being $2.00 per hour (I had just entered the labor pool). I considered government stats to obtain inflation rates from 1974 to 2014. While I suspect those numbers are grossly under stating inflation, that is what I used. Similarly I used government numbers for how much the economy has grown on a per capita basis from 1974 to 2014. Using round numbers inflation during that time is about 5X so if min wage had been adjusted for inflation and nothing additional the min wage in 2014 should have been about $10, but instead it was $7.25. The growth of the economy in round numbers for that time was about 7X so accounting for both inflation and a rising tide lifts all boats, the min wage would be about $70 per hour.

 

I don't think it's valid to apply both multiples, because the growth of the economy includes inflation.

 

In August of 1974, the Dow Jones Industrial Average was about 3,000 (and falling). In August of 2016, the Dow Jones Industrial Average is about 18,448 (and climbing... thanks Pres. Obama). The ratio is around 6. But I'll accept your 7x figure, so the minimum wage now should be (by that calculation) around $14/hour. I'm not sure I'd use that calculation though.

 

This web site has a different analysis. It says that the mimimum wage is about where it's always been in inflation adjusted (2014) dollars. The problem with that analysis is that many many things in society have improved, including productivity. The general wealth of society has improved. Maybe that should be reflected in the minimum wage.

 

This web site gives $18.42/hour, as what the minimum wage ought to be as a function of the growth rate of productivity. The problem with tying it to productivity is that a new untrained employee is not terribly productive, and training costs money.

 

See also this Department of Labor site on the minimum wage and what it should be.

 

How about this: a low minimum wage for trainees / apprentices (say $8/hour), followed by a much higher minimum wage (say $20/hour) for people who have successfully completed an apprenticeship.... and make apprenticeship mandatory in any job not requiring university. Anyone interested in that idea?

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How about this: a low minimum wage for trainees / apprentices (say $8/hour), followed by a much higher minimum wage (say $20/hour) for people who have successfully completed an apprenticeship.... and make apprenticeship mandatory in any job not requiring university. Anyone interested in that idea?

 

If the definition of a successfully completed apprenticeship was specified, and mandatory, by law, I could support this arrangement. Especially if the $8/hr followed by $20/hr did not get reduced during the writing. But if it was left up to employers, I would expect wide industry variation in time of apprenticeship, not linked to accomplishment. The law would need to specify the time in apprenticeship for each trade; Some requiring longer to learn than others. There would also be a very large number of details to be worked out, which would read similar to a union contract.

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If the definition of a successfully completed apprenticeship was specified, and mandatory, by law, I could support this arrangement. Especially if the $8/hr followed by $20/hr did not get reduced during the writing. But if it was left up to employers, I would expect wide industry variation in time of apprenticeship, not linked to accomplishment. The law would need to specify the time in apprenticeship for each trade; Some requiring longer to learn than others. There would also be a very large number of details to be worked out, which would read similar to a union contract.

 

Yes, it would all have to be worked out in advance. A good model is Germany which has been doing this for centuries. i know about it because my wife (who was from Germany) did an apprenticeship in her father's business, a hair-dressing salon. Her father forced her into it, and she hated it and ended up leaving the country and not working in that area, but nonetheless, she knows how apprenticeships work. She sees the value in them.

 

For example, when you go to buy a shirt in the clothing department of a department store in Germany, the clerk is exceptionally well-trained in all aspects of what is being sold. The clerk knows the fabrics, where the fabric comes from , where the shirt is assembled, and what allergies there might be to that fabric, or whether it's hypo-allergenic. They understand the store's pricing procedures. They know the warranty and return policies. They can explain all of it, and often have to. They make a good living; and the shirts are expensive as a result. but the whole society is well trained, makes more, and knows their jobs well.

 

If you check out the web page in the link above, you'll see that apprentices work three to four days a week during which they're trained, and go to school for one or two days a week during which they get theoretical education in the area of training. They make 650 Euros/month i.e. 7,800 euros/year, = $8758 US / year, a little over half the US minimum wage for a 40 hour week. (But they work around 30 hours, and study the remaining 10, roughly.) This lasts for between 2 and 3.5 years, depending on the trade.

 

It's not a lot of money, but the employer is providing the student with training at the employer's expense. At the end of apprenticeship, the salary increases steeply. These kinds of jobs in Germany will support a family.

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Germany's apprentice system sound like a plan for excellence, despite your wife's unfortunate experience. (But if it weren't for that, she may never have met you?) It is surely one of the reason's Germany has a reputation for making some of the world's finest products; In tools, optics and elsewhere. Workers successfully completing an apprenticeship not only benefit society, but probably have high, professional self-esteem, as well.

 

Craftsmen and MASTER craftsmen; Sounds very Germanic; In a good way. The labor union with which I was associated, here in the US, was always pressuring the company to provide more and better training. And sometimes, they succeeded. But mostly it was an uphill battle with the company placing far more importance on getting maximum work for wages, than investing in a future goal of excellence.

 

That seems to be the way most US corporations mostly operate: Quarterly measured profits are not be sabotaged by any long-term preparation for the future ... Not while the revenue is rolling in. Most big corporations are unwilling to sacrifice a penny to stave off an eventual erosion of demand, due to automation and increasing poverty. But by investing heavily in automation, immediate profit is achieved by laying off salaried workers. And that can go on for a long time before disappearing markets render further automation unprofitable. In the US profit NOW is king and damned be the consequences.

 

Nothing holds a candle to profits. Not the environment, societal well-being or the death, destruction and misery of war. There has to be a better way. Democratic Socialism is the foremost candidate.

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Germany's apprentice system sound like a plan for excellence, despite your wife's unfortunate experience. (But if it weren't for that, she may never have met you?)

True, and that made me think of unintended consequences.

 

Here I am, a Jew married to a German Catholic. My parents were holocaust refugees who left Europe for Canada in search of a place where they could be safe as Jews. The consequence was that my brother and I are completely secular and both have German wives.

 

In fact here's another bit of weirdness. Hitler's campaign to exterminate all Jews everywhere resulted in the murder of my father's first wife and daughters in a concentration camp. Were it not for Hitler, my father would never have met my mother, and I would never have been born. In part, I owe my life to ...

 

Geez Louise. What a weird world.

 

The centuries-long campaign to make life better for most people will have successes, will stall, and may succeed more through technology than through politics ... or the reverse. What I'm sure of is that there will be million and millions of unintended consequences in every direction. There will be chaos, and as usual people will try to extract order and meaning from the chaos.

 

Good luck to us all. :D

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read about this idea a few years back, it's interesting and intersects with a whole lot of possible but untried ideas. generally speaking folks do not understand economics in a large sense.

not me, not me, i am not speaking as though i fully do understand economics, no one does. But / we are misaligned, most of us, by the general garbage that is thrown at us almost on a daily basis.

 

I enjoyed this rebuttal of a WAPO article on the subject.

 

http://cepr.net/blogs/beat-the-press/universal-basic-income-job-killing-robots-and-the-washington-post

 

Peace!

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