Even if not implemented through monetary inflation, BI will cause price inflation. Housing asset prices are primarily constrained by the affordability of rent - either to a landlord or directly to the bank. If everybody can spend twice as much on rent then rent just doubles, and if interest rates remain the same then paper appraisals double.
BI seems desirable because it addresses a glaring symptom of the inflationary treadmill. But if the treadmill remains the explicit national policy ("full employment"), BI will really just give us even more rope to hang ourselves. The sustainable answer is higher interest rates, so that frugal people can be rewarded for channeling discretionary spending towards paying off principle. But this would diminish our "service economy", which is all we have left after gutting domestic manufacturing.
I think what we're really witnessing is an erosion of money as a decentralized store of value, part of the general centralization of power enabled by digital communication networks.
False presumption, BI will not enable everyone to spend twice as much on rent.
> BI will cause price inflation.
Unfounded.
> The sustainable answer is higher interest rates, so that frugal people can be rewarded for channeling discretionary spending towards paying off principle.
That doesn't remotely address the issue that BI attempts to solve, lack of available jobs for people due to the effects of automation.
It wasn't a presumption about BI, but a hypothetical framing of an example situation. Please give opposing viewpoints their due interpretation rather than looking for phrases to pick on out of context.
> Unfounded
Once again, this is what we're arguing about. You can't simply quote my conclusion without my supporting arguments and say it's unfounded.
> That doesn't remotely address the issue that BI attempts to solve, lack of available jobs for people due to the effects of automation.
I didn't expand on it, but my view actually does address this. If working people had been able to save money, then they would have had more economic bargaining power to demand higher wages and fewer working hours, gradually over the past few decades. As it stands, we could fix much of the employment issue by redefining "full time" to be 15 hours per week, getting rid of the exempt loophole, and changing overtime to double or triple pay. But this is such a drastic change (because the issue has been building so long), it seems quite ridiculous. But it's important to understand how we got to this point in order to know how to proceed, lest we choose another "quick fix" that actually just makes the situation even worse.
I don't think redefining full time to be so few hours would work in this country, nor actually solve the problem, it'd just make most people broke and forced to seek out multiple jobs to survive. Yes, money distribution can affect particular markets where the redistribution increases spending but that's not inflation, inflation is a general rise is all prices, not a rise in a particular sector and BI is a far better longer term solution to the real issue, that life doesn't need to be and long term cannot be dependent on the selling of labor in an age of automation. We need to move beyond the puritan work ethic to something more appropriate for the world that's coming.
> it'd just make most people broke and forced to seek out multiple jobs to survive
So then change the full time number to be summed over all jobs. It's a cooperation problem where it is in nobody's individual interest to work less (since the marginal utility of surplus over your peer group is extreme), but yet everybody competing for this results in all the surplus thrown onto the bonfire of financialization.
And yes as I said, 15 hours is a drastic change from 40. Because the point is that this should have been happening gradually the whole time. I personally would have preferred it to happen through sane monetary policy rather than government diktat, but either way we should all be working much less.
> We need to move beyond the puritan work ethic to something more appropriate for the world that's coming.
I wholeheartedly agree on this point. But the implementation we're looking for is not BI.
The idea of BI deprecates the idea of having an economy (ie p2p transactions), and replaces it with widespread monthly funding from the government. This will necessarily come with strings attached, inevitably becoming a highly politicized way of dictating individuals' life choices. We already have something quite similar to BI, called welfare/medicaid, which brings no end to hassling its recipients. I believe that BI proponents would say that the aim of BI is to simplify these systems, but this is not a stable state. It is trying to reverse up the gradient of why politicians generate complexity (finding divisive bikeshed issues so people can be led).
You're missing something, it doesn't matter how you split the remaining work, the gains from the productivity increases of automation aren't going to the workers regardless of how you muck with their hours; those gains go to the business owners. Splitting up the remaining work to make sure everyone has work only makes sure everyone is poor, they still don't get to keep wealth created by the automation so it's a pointless thing to try and spread the work around.
The goal is not to keep everyone working, the goal is to share the benefits of automation with everyone, not just the capitalist class. BI does this, your solution does not.
Unless you tax automation heavily and redistribute it, workers lose no matter how you slice and dice the hours. It's not enough to work less, you have to work less while not making less and that's simply not in the cards.
> The idea of BI deprecates the idea of having an economy (ie p2p transactions), and replaces it with widespread monthly funding from the government.
Simply not remotely true. Spending money you get from the government is still spending money. Redistributing money from the top to the bottom via BI in no way deprecates the idea of having an economy, it simply depreciates the idea the the economy is based entirely on wage slavery.
> This will necessarily come with strings attached, inevitably becoming a highly politicized way of dictating individuals' life choices.
Also not true, anything with strings isn't BI; the whole point of BI is that everyone gets it without restriction in order to eliminate bureaucracy and thus strings. If it has strings, it isn't BI.
> We already have something quite similar to BI, called welfare/medicaid
Neither of those are remotely similar to BI.
> which brings no end to hassling its recipients
Precisely because they aren't remotely similar to BI and force people to qualify for them; they're exactly what BI is intended to fix, all the hassles and stigma that come with those programs and the shit you have to go through to get them.
Frankly, you leave me thinking you really don't know what BI is, or don't understand it.
I'm not missing this, and in fact it ties right in to my core point. Wages are due to an equilibrium. The supply side of that equilibrium is dependent on how much the workers need the money. Any individual has a rough idea of how long they can comfortably go without income ("runway"). While this is modulated with how in-demand their industry is (especially apparent today in our hollowed-out hand-to-mouth society), the core of their power is how much of a buffer they have saved.
If a person has no runway, they are forced to be constantly worried about losing their current job, whereas if they have a large enough runway they have the ability to quit on the spot and worry about their next job later. This power relation effects every single negotiation, from salary to benefits to day-to-day working conditions.
Thus my assertion is that the real problem is that people have no savings. This gives them no economic power, and thus terrible negotiating power. This is due to an economic policy that prevents savings by the lower classes, especially liquid savings, and turns their life's accounting into one of debt and monthly rents. This further destroys their negotiating power (they don't have $0 to their name, but actually -$10k), and channels any of their surplus upwards to the parasitic banking industry through monetary rent.
> it simply depreciates the idea the the economy is based entirely on wage slavery.
Sure it gets rid of that specific slavery, but it does not get rid of the wage nor the reliance on it. The real mass frustration is due to a lack of opportunity and self-determination, for which signing up for low-paperwork welfare will increase. Reliance on the continued existence of a government program is going to make many people (rightfully) uneasy, because...
> If it has strings, it isn't BI.
This is like saying that we've never achieved true capitalism or true communism. In the real world, individuals have their own incentives. The incentives of politicians and "news" media is to play on people's prejudices to divide them into groups so they can be led, creating power for the leaders.
Even if we were to start off with a perfect BI program on day 0, it is only a matter of time until some group demands preferential treatment for themselves, or protests what they see as preferential treatment for others. The subject of having kids is fertile ground for this - if BI is truly uniform, this means that having a kid gets you immediately double the BI, and if it only starts at 18 that means you now have more to support. Either way (or even with a "ramp" compromise), this is but one of the clear contention points that will be endlessly politicized.
People aren't lacking savings because economic policies prevent it, they lack savings because they're poor and don't have excess income to save. They use all of their income simply to survive. So no, lack of savings is not the problem, it's merely a side effect of the problem which is the dwindling value of labor in an ever more automated world. So yes, imho you are missing the point, terribly.
And no this isn't a no true Scottsman thing, the entire point of BI is that everyone gets it to avoid the need to administer the program with qualification red tape. Yes there would be some initial fighting about how to implement BI with regards to kids and what incentives that creates, that doesn't mean it'll be endlessly politicized nor does it make the whole policy fertile ground for politics. Fertile ground for that is what we have now, with endless programs and rules about who qualifies and who doesn't and BI would vastly simplify that system while also addressing the long term social problem of the coming end of wage labor. Nothing you've said addresses the problem at all.
Your argument technique seems to be to state disagreement with my point, and then just assert that I don't understand your point.
> they lack savings because they're poor and don't have excess income to save
And yet we're witnessing the creation of even more poor people (ie hand-to-mouth), in educated industries which have not been automated away yet. Salaries in those industries are keeping rough pace with the official CPI, so what gives?
> the problem which is the dwindling value of labor in an ever more automated world
Yes, we agree this is one of the fundamental problems here - I'm not "missing the point" as you keep insisting. I'm also saying that another fundamental problem is that fiscal discipline went out the window when USD disconnected from the gold standard, a slow acting moral hazard which is only being felt decades later. With technological and market progress, we would expect prices to be continually dropping (which would mean people would have to work less to survive), so any diagnosis must address this as well.
What you seem to be doing is taking the logical induction that led to the idea of BI for granted. And then refusing to follow the logical induction around other ideas. Of course BI is going to look like the solution if you refuse to consider that there could be other approaches.
> the entire point of BI is that everyone gets it to avoid the need to administer the program
As I said, this is an anti-feature to those who derive power from controlling such programs. This includes voters.
It's a bit frustrating to have entire points responded to with only an assertion to the contrary. You questioned the honesty of my argument ("you really don't know what BI is"), so it seemed reasonable to point out what I perceived as a fundamental problem with our conversation. I can't particularly see what I would have said differently to keep our thread from slowly going off the rails, but I apologize for my part.
I'm done beating this dead horse if you are. But perhaps you'd view my argument in a different way if I said that I don't have a philosophical problem with BI, and that I'd support the idea iff interest rates were back up to say 10% ? The main point I've been trying to get across is that in the current monetary environment, BI seems akin to adding a second garden hose to fill a bucket with a hole in the bottom.
It's equally frustrating to watch you continually setup straw-men version of BI to then knock down while accusing me of arguing poorly all the while ignoring what BI is actually attempting to solve, while continually introducing non-sequiturs like the gold standard which further derail any attempt to stay on point. As you said, dead horse, I have no interest in talking with you any further, it's pointless. Someone who thinks poor people are poor because interest rates are too low has no connection to what it means to be poor and no place discussing solutions to problems he clearly has no understanding of.
IMHO BI has gained such interest, not because it would help the poor, but primarily because everybody that would describe themselves as "middle class" is frustrated at seeing the largest part of their paycheck simply go towards rent.
Perhaps my characterization is the root of why you're seeing me arguing a strawman? But if my assessment isn't correct, then why do mainstream articles present it as such a society-changing idea? Or is this judgment incorrect as well?
The reason I keep beating this dead horse is because your nick is one I see associated with more insightful comments. That we're in such obtuse disagreement here seems odd.
Yes, my critique here "comes from the right" [0]. But please just try to give me a benefit of the doubt that my aim is actually to reduce the wealth extraction by "the capitalist class", and analyze my point on its own merit. My goal is certainly not to perpetuate the status quo.
[0] The way I see it, "left" and "right" are really just two different approaches to characterizing a problem and they generally both give some insight.
It depends on what you mean by "rent". BI is about eliminating the need to work just to survive. In a more automated world, human labor has little value and in a labor based economy there's no way to prevent the capital class from extracting the wealth, it's the nature of the beast. I'm glad to hear you're at least in agreement about the aim of reducing that extraction however, BI aims to do more than that. It aims to eliminate wage slavery which is what allows the capital class to oppress the working class to begin with.
The gold standard has no bearing on this problem. Interest rates have no bearing on this problem. People aren't poor because we don't use gold, they aren't poor because interest rates are low; they're poor because they were born into it and few can clime out because living on the edge is psychologically harmful and interferes with long term planning and thinking. Being poor is a catch 22 in many ways, like a bucket of crabs, getting out is impossible for most. This is a systemic problem, not an issue of people not working hard enough: the need for work is dwindling reducing the supply of low skill jobs which are all many are capable of in the first place.
Your attempts to drag the conversation to these other things are red-herrings, your attempts to conflate BI with the problems of existing welfare, and then say it'll suffer the downsides are straw-men.
We're in disagreement because as far as I'm concerned, you don't want to talk about the real problem, you're just finding ways to inject the standard conservative fiscal talking points into a conversation about an issue those things don't address.
So if you actually want to talk about it, I'll frame it this way; unemployment is suddenly 50% due to the sudden rise of automation. Now what do we do when half the population can't find work? People who don't have an income don't want to hear about gold standards and interest rates. They don't want to hear about welfare programs that make them jump through hoops to find jobs that don't exist. What they want, is food, water, shelter, and medical care and if you tell them to pull themselves up by their boot straps they're going to kill you and take your shit. That's the problem BI is attempting to solve. And yes, the death of wage slavery would be a huge change in the structure of society.
> they're poor because they were born into it and few can [climb] out because living on the edge is psychologically harmful and interferes with long term planning and thinking. Being poor is a catch 22 in many ways, like a bucket of crabs, getting out is impossible for most. This is a systemic problem, not an issue of people not working hard enough
See, the thing is, I understand this. I'm certainly not sitting here saying "let them eat cake", or "they need to work harder". As I said, I'm not categorically against the idea of BI. Which is why I tried to steer the subject back to middle class people - if, as you say, the effects of automation are so severe (and I agree they are), then the middle class is of concern as well. While they are better off materially, their situation exists closer to the margin (rather than already having fallen victim to the poverty trap "event horizon"). As such, it is middle class economics we should be looking at to understand the changes brought by automation.
> People who don't have an income don't want to hear about gold standards and interest rates.
Sure, but this a reflection of their stressed state and immediate needs, not proper analysis. Interest rates act on the timescale of multiple years, which is obviously too long to wait for food or shelter. We've persisted with the fundamental problem so long that direct triage is sorely needed. I'm not arguing against helping out poor people - I'm arguing against using help for poor people as the solution to the problem that we're all becoming poor!
> you don't want to talk about the real problem ... unemployment is suddenly 50% due to the sudden rise of automation
> monetary policy to support three specific goals: maximum sustainable employment, stable prices, and moderate long-term interest rates.
"Maximum stable employment" directly contradicts automation putting half of everybody out of work! And "stable prices" also does, as automation makes things less expensive. So either the Federal Reserve is utterly wrong about the actual capabilities of monetary policy, or their mandate clashes with technology. What is the result of this clash?
I believe that. And of course the middle class is of concern as well, however the middle class is dying, we're becoming only the rich and the poor and the poor make up the largest part of society in that sense, so that's where the focus belongs, in helping to recreate a middle class we haven't had in a long time.
> Sure, but this a reflection of their stressed state and immediate needs, not proper analysis.
No, it's a reflection of their lack of capital; interest rates matter in terms of savings to those who have enough money that the interest rate actually matters. It takes quite a lot of money before you need to care about savings interest rates. To most people, it only matters in terms of what they're paying for debt and those people want low interest rates, not high ones. To most of the population, low interest rates are far better because it decreases their debts and most of the population is in debt.
> or their mandate clashes with technology. What is the result of this clash?
Agreed, and that's where i'm going as well, we need to get past this notion of trying to attain full employment, employment can no longer be the goal in an automated world. As we move forward, what the Fed does will have to adapt to the new world where it's no longer about employment, but about how to effectively share the benefits of productivity created by technology with everyone, not just the capital class.
As to stable prices, that doesn't mean preventing things from getting cheaper, it means fighting inflation. Nothing wrong with things getting cheaper, everything wrong with them getting more expensive across the board. So they aren't in conflict with tech there, tech does make things cheaper, unfortunately, it also tends to make workers poorer as it makes them unnecessary which will eventually destroy the market for said products when no one has money to buy them.
Automation at the end of the day, is a poison pill to an economy based on low skilled physical wage labor. And an economy based on high skilled mental wage labor simply doesn't align with the realities of the human condition. Half the population has an IQ below 100, they will never be capable of high skilled thinking jobs. So the very foundation of our economy must change in order to continue down this path of automation. For the basics of living, we need more socialism and less capitalism. We need a more social democracy that takes back enough from the capital class to ensure the lower classes don't revolt take what they require through violence because they won't be able to take it through working before long.
> Housing asset prices are primarily constrained by the affordability of rent
In a low interest rate environment this is not really true. Speculative booms can and do occur (see Australia). During such booms the ratio of house prices to rents diverges significantly. It is rents that are constrained by wages - not house prices (people don't take out loans to pay rent like they do to buy houses).
Sure, there are transient booms and busts. But as you imply, those are exceptions. Long term, apartment rents are constrained by wages and likewise monthly payments on mortgages are constrained by wages. Those monthly payments are directly related to interest rate and total asset price.
BI seems desirable because it addresses a glaring symptom of the inflationary treadmill. But if the treadmill remains the explicit national policy ("full employment"), BI will really just give us even more rope to hang ourselves. The sustainable answer is higher interest rates, so that frugal people can be rewarded for channeling discretionary spending towards paying off principle. But this would diminish our "service economy", which is all we have left after gutting domestic manufacturing.
I think what we're really witnessing is an erosion of money as a decentralized store of value, part of the general centralization of power enabled by digital communication networks.