Those are "cute" things for AI to do. I'd rather see the following:
Elimination of business cycles, instead ensuring monotonically increasing standard of living for all individuals (instead of a cyclically increasing average, even though some individuals never experience an increase).
Figure out better education programs to help eliminate violent prejudices from society.
Figure out how to placate various despots, etc. so that we can start pulling people out of oppression.
Some of the medical things. Faster, more accurate diagnoses. Let the AI develop pharmaceuticals, so we can abolish pharma patents and make existing treatments available to everyone for material cost of production instead of "what a market can bear."
I don't really care about stupid things like schedules, ETA, better organization of whatever. I want things that reduce the cost of my standard of living and/or improve standard of living at constant cost - for each individual, not in aggregate.
This raises an interesting question: would such an AI be given the power to implement "the best way", or would it just be a suggestion that some people have to carry out? Would these AIs 'just know' they have come up with the best way, or would they have to perform experiments? Would the AIs have to come up with some kind of economic system to allocate limited physical resources among all the tasks they are trying to accomplish?
We currently have lots of "best ways" to do things, like don't over drink, overeat, over-smoke, under-exercise, don't spend more than you make; people don't heed that advice. Would the AIs have enough 'free will' to know the best course of action but not take it?
The game programs aren't "strong AI" though, they are "specialized problem solving machines".
I would go so far as saying all the things that we call AI today are simply "specialized problem solving machines." We will have AI when we have a generalized problem-solving machine. That is - when we have a machine for which you can put in any problem and get a reasonable answer - that is the "AI" that people think of.
That said - we don't really need the generalized problem-solver to change the world. Once we have enough sufficiently-capable specialized problem-solving machines, the results are probably about the same anyway.
"Turbo" might be made up sometimes, but not always: "turbocharged" means "charged by a turbine". You know, as in, "turbomachinery."
I'll give you "supercharger" though - I've not looked into the history of it, but as it isn't powered by a turbine it rightly doesn't have the "turbo-" prefix. I guess they just wanted something to put in front of "charged," and "super" makes sense because it gets a charge greater than it would get without the machine, and "super" is a prefix that means "higher" or "greater". So you could say a turbocharger is a type of supercharger and be correct (but not all superchargers are turbochargers).
But other things that have "turbo" settings - yes, that is pure marketing; computers don't usually have turbines that make them go faster.
Remember, I said directly. You have to have a supply chain in order to automate it. The Internet cannot automate anything anyway - you have to have machines to automate. So while the 'net can connect existing machines, it cannot create new ones. That's what I meant by direct.
...countries with internet access have done much better than those without at reforming property ownership laws, and establishing clear title to land.
Property ownership is ultimately enforced by people - the internet, again, cannot directly improve this. It requires people cooperating. Now, maybe the internet helps people talk to cooperate, but if you have people with guns or bulldozers taking your land/structures, the internet isn't going to help you unless it notifies other people with guns to come help. So, again, an indirect effect.
Actually, the internet helps a lot here too. Many localities have moved licenses for various wealth-producing activities online...
Ok,
I'll concede that point - the net can give people much more easy contact with people who have capital. But I think your example is flawed in that automated licenses only work when there are licenses to be had in the first place. Again, the internet cannot change or enforce laws; only people can do that.
Yes, this. And it's not even a question of "where's the revenue stream supposed to come" - it's more a question of "from where is the actual real wealth (e.g., food, material, new manufactured items, etc.) supposed to come?"
Internet access can only facilitate information transfer. It doesn't directly increase manufacturing output, it doesn't fix broken property ownership laws, and doesn't really remove barriers to entry to wealth-producing activities. (It does reduce barriers to entry to many service activities, but you can't eat, live in, wear, or use services to power your machines.)
I think it's more a case of where on the spectrum of private vs public ownership of property you want to be.
All taxes (including and especially UBI) are basically saying that, no, you can't really have 100% private ownership, some of it has to be owned by the public. The recent advances of technology and increasing calls for UBI are basically saying that we should be moving to a higher percentage of public ownership of capital than we currently have.
But it's slightly worse than that; things like taxes and UBI try to give the benefit of capital ownership to the public, but they don't put any of the responsibility of capital ownership on the public. This is why you hear people talk about "freeloaders"; it's about the public not sharing in any of the responsibility. True, technology and automation makes that responsibility easier, but the argument is about removing the responsibility entirely.
So if you replace the word "work" with the phrase "responsibility for ensuring production occurs", I think you'll get closer to the heart of why there is so much controversy over concepts like UBI.
Last, how are these cars going to navigate through a rural dirt road with 2 feet of fresh snow on it.
Forget about the rural dirt roads with snow - those are easy.
What I want to know is how they will handle my urban dirt (and paved) roads (yay Michigan!) whose pothole topology changes daily. And these are not small holes, but knock-your-fillings-out-destroy-your-suspension holes.
Yes, this exactly. I don't need an "assistant helping me through the day."
I don't even know what "assistance" I could get - unless it's doing chores I hate like laundry or washing dishes (but not lawn work; I enjoy that and want to be able to do it myself). But that's not just AI - that is AI coupled to a device that can interact with physical reality. So I think they've missed a beat there - AI doesn't really do anything unless you can do something with the information / capabilities it provides.
Information itself also doesn't do anything if it's restricted by intellectual property laws - that's the big shame of 'modern' society - "yeah, have that information, but you're not allowed to use it.
I'm with the AC above - $500/ month? That's a lot of cash. Now I realize that, amortized, that's probably about the monthly cost of buying a [gas] car outright plus fuel and maintenance over a 10-year span. But there's a big difference between a one-time cost and recurring monthly payments: recurring financial obligation.
Personally I prefer larger one-time payments and then having no recurring obligation. (Incidentally, this is why I also dislike the idea of software subscriptions - those pesky recurring obligations...)
Increasing the minimum wage is the best thing you can do for an economy, as long as it isn't taken to ridiculous lengths where wages exceed production.
I think you've answered your own question: in some industries, minimum wage is already at the cost of production, so artificially increasing wages past that cost is going to increase costs, reduce demand, and then eliminate those industries, at least in the short term until roughly the same demand comes back but at a higher price level.
Put another way: I would wager that in the long run minimum wage increases never result in an improved demand per capita of any product or service, and only improvements in productivity in competitive markets allow society to maintain "livable wage" price levels.
I would argue the problem with minimum wage being too low for a living wage now is not just a wage problem but also a supply problem - what is limiting the supply of things people need that is causing their prices to rise faster than the value of their (minimum) wage? You have to address those factors, or changing the minimum wage will have no meaningful long-term effect.
I reckon if your panels can't save 100$ a month on your electricity bill, you're doing something wrong.
Not necessarily - if you are doing enough right by having low consumption, you can't save $100 a month. My household (family of four) doesn't even run $1200 a year in electric costs, and I'm not the type of person that "spends more to save more".
On the face of it that sounds like a system that will put the bulk of the tax burden on the middle classes and serves neither the conservative "taxes fund expenditure" nor modern "taxes are for controlling inflation, wealth distribution and behaviour" objectives. It appears to be aimed at serving "elites" - either those who have inherited large amounts of wealth (so do not need high incomes to live in luxury), or who are able to easily hide their wealth outside the system (ie: highly-mobile, highly-paid expatriate types) while leaving the average grunt to pay all the tax.
I suppose one would have to look at the actual typical incomes of the "rich" relative to their wealth compared to the middle class and perform the integrations to see where the bulk of the tax burden would actually lie, but I don't think it will be as skewed toward the middle class as one might think. How would this proposal benefit 'elites', who right now have huge gains (not counted as income, but should be) on their huge capital? I would treat all capital gains as income, the same as any other income from any sale of any asset or any wage. Income is income is income. This proposed scheme also avoids the madness that allows depreciation to offset income; depreciation in this proposal would just reduce the tax rate based on wealth percentile, rather than reducing the taxable income. So if you've got a billion dollars in capital that depreciates 5%, you can't write it off against $50M of what would otherwise be profit; you'd still get taxed (at a slightly lower rate) on that $50M rather than on $0. I'd wager that would make a huge difference, especially for corporate taxes.
Also remember that for a rich person to enjoy wealth, assets must be liquidated (because most rich people don't live the high life off their cash, but off their assets) and if you count that liquidation as income (which you should), it would be taxed. You also don't really have to worry about the rich taking out loans backed against their assets, again, because to repay the loan they'd have to liquidate an asset.
As for expatriating wealth...I suppose in the limit there might be some person who has no "recorded" wealth and continuously funnels all their income overseas; I grant that's a flaw. After thinking about it, a simple (if anything can be "simple") export tariff could be established based on the ratio of accumulated exported funds to accounted-for-wealth. So if your exported funds are extremely high compared to recorded wealth, they are tariffed at a huge rate (90%+ I'd say; you could make it a form like tax rate = amount you want to expat / (10/9 * amount to expat + recorded wealth) to put it at 90% if you declare zero wealth). So if you have underreported your wealth and are exporting funds, this wouldn't be a huge benefit. So that would work from a tax standpoint, and would keep funds local, and help people store wealth overseas (by limiting how much they can send out), but I don't know what other ill effects would result because of it; the most obvious ill effect is penalizing the relatively poor sending large amounts of their income to poor international relatives.
Only one minor point of clarification I think here:
But you previously suggested wealth taxes ?
My personal go-to proposal on a "wealth tax" is to tax income at a rate determined by owned wealth. So if you have lots of wealth but no income, no tax. If you have lots of income but no wealth, no tax. And if you make the tax rate progressive not on nominal value of wealth, but on wealth percentile, there's never any need to constantly mess around with inflation multipliers; the only tunable parameters are the overall tax rate and the shape of the tax curve. (My thought is that a curve of the form tax rate = (wealth percentile)^power where power is something greater than 1 is the desired shape; this gives low wealth percentiles a very very low rate, but nonzero, while the closer you get to the top, the tax rates get larger faster.)
This has the advantages of avoiding windfall penalties on the poor, since increasing their incomes briefly won't really change their owned wealth, so their tax rates remain very low. It discourages wealth concentration because taxes go up as wealth is concentrated, but doesn't discourage overall increases in wealth because if everyone increases in wealth, percentiles don't change. If you are infirm or retired, you are shielded from losing your assets explicitly because you no longer have any income.
I'm still confused by a few things... I'm trying to clarify.
The problem is on the demand side. People don't have any surplus because that surplus has been systemically taken away from them in the form of suppressed incomes and increasing debt burden.
This is one of the points of confusion for me. Mostly because I don't count "surplus" as being related to demand at all. Is this just saying that the lack of disposable income for the non-wealthy is preventing them from ever-increasing their spending?
Minimum wage puts more money in people's pockets, which should allow them to save and not live desperate paycheque-to-paycheque lives.
I agree with the first part of this statement, but only partially with the second. While minimum wage does increase income, most people in those income brackets don't save the excess, they simply increase spending. There are many reports out there on the multiplier effect of minimum wage increase versus, say, quantitative easing.
Also, if all you're doing with your excess is paying off debt, you are improving your situation, but paying off debt is not really a productive (in the sense of "it doesn't actually produce any goods or services) use of money. In fact in most fractional reserve systems, paying off debt reduces money supply.
We'll have to disagree on land-value taxes and mortgages though. I have problems with any tax system that will force people to relinquish their property if they don't pay that tax (that's one thing I like about income tax over property tax). For mortgages - the problem with them is large fixed payments for such a long period of time, which means any shock to income (illness, market changes, weather disasters, etc.) and the fact that usually a single missed payment can put you at risk of losing your property, means that mortgages are a lurking burden. Some of this is intertwined, yes, because if a medical event wouldn't bankrupt you, and if wages never went down or you didn't ever get laid off, then 30 year (or even 15 year) mortgages wouldn't be an issue. But those other parts aren't solved, so it would be far easier to say "mortgages can be no longer than 10 years", eat the short-term reset in property values (maybe give some kind of amnesty where the government just writes off the difference somehow), then you get to a place where people actually own their homes quickly rather than over the course of a generation.
The "problem" of excess supply and inadequate demand is only going to continue increasing as more jobs are automated, wages are driven further and further down, and wealth continues to concentrate.
I just had a realization: are you talking about excess supply and inadequate demand for labor?
Ah, well... that drifted quite far from a basic economics discussion. I wasn't quite expecting that.
We are suffering from a demand deficit, not a supply deficit.
From a certain point of view I can see why it might appear this way. A more accurate statement is that there is decreasing demand for the goods and services on which most people have depended there being demand for trading for the things they need.
All the excess that should be âoebuyingâ these things is being funnelled into the top percent, and even more so into the top fractions of a percent. Hence the massive increase in their incomes and wealth. Hence the increase wealth gaps. Hence the massive shift of GDP share from labour to capital.
Ok, I think I see what you are trying to say. The demand (and actual goods) isn't being funneled to the richest, but ownership of capital is being concentrated with the richest. And I agree with that observation. What I don't agree with is the terminology that is a "demand problem". I still say it is a supply problem, and from the rest of your post I think you agree: the people that own the capital aren't producing things (and selling it) to the people that need the things that capital can produce "at affordable prices" or any other.
I agree that things like rent seeking and simply choosing to let capital run idle, or only using capital to obtain more capital are getting out of control.
Fundamentally we need to return bargaining power to workers. The minimum wage is but one aspect of this. Some others are strengthening wrongful dismissal laws, strong publicly funded healthcare so workers are not bound to employers, strong publicly funded education to give people opportunities at highly productive labour, high income taxes to soak up all the excess money that inevitably bubbles to the top and is hoarded or used to pump up asset prices, reduced immigration to decrease unemployment, etc, etc.
I agree with what I think is the proposed goal here - to prevent the concentration of ownership of capital. Where I am skeptical is the means proposed. I don't see how minimum wage does this, because it doesn't change the system. The rest of your proposals I think kind of hint at some solutions - breaking some of the bonds that tie health care to employment for instance. Changing the tax scheme is also good, but I'd say that income taxes aren't the solution; in order to address the wealth concentration effect, we have to tax the concentration of wealth, not income or consumption. I'd also say getting rid of things like mortgages would help, even though that would be painful; putting people in debt for 30 years (!) feels like there is a lot of room for improvement (especially because homes aren't generally productive assets). Zoning laws could also use some work, though you've got to be careful there because it's still wise to consider environmental impacts. Residential property tax is also another opportunity (e.g., you could probably do good things by eliminating owner-occupied property taxes entirely, as this would help stop people from losing their homes. Maybe a compromise is to do that only if people are retired or on disability or something; I dunno.)
When billions of people want stuff, and we have the capability to make it for them, how is it moral or ethical to not do so because of some absurd idea based in religios belief about them not deserving something they haven't worked for ?
In essence I agree that we are going to have to, as a society, really rethink the concepts of ownership if we do start approaching the point where "robots" do displace too many workers. I don't know how this transition is going to work, but it's going to be interesting, and I hope we do it without use of force.
As for religious aspects - well, it's very interesting that you mentioned the idea of only deserving things because you work
As a fellow Michigan resident, I'd rather fix whatever policy or lack of oversight that allows our roads to be so bad (when they are paved) and the madness that is refusing to pave roads in major metro areas in the first place. I almost feel ashamed to live in this area - why are people so against making first-class infrastructure? (Cue theories about the mob, wanting to encourage more new car sales, and similar here.)
And I second the comment on the terrible lane paint they use here; any time the roads get the slightest bit damp the markings vanish. It's like they never heard of reflective paint or something.
I disagree with the statement that "we have enough stuff for people but they can't afford it". If there is enough stuff out there and people aren't buying it, prices would drop so it is all sold and/or producers would stop producing so much (unsold goods are expensive!) so there would no longer be any excess.
So this means that there isn't enough stuff for everyone, so an examination of why this the case should be made. Even without that - simply giving people more money (increasing demand) is not going to magically increase supply, although in the short term it might allow people to purchase existing inventory before the prices inevitably rise.
I will be clear - I'm all for making things more affordable for everyone but I strongly believe that simply mandating people be paid more isn't sufficient to provide sustainable affordability - and I think history proves this out.
In any case value is all people really care about; goods, or the ability to provide services, are only a means to an end. I suppose the underlying point I really should have been responding to was the implication in the original comment that "buy low, sell high" trading just shuffles goods around and provides no benefit to anyone else...
Ah, ok. Although I disagree that people only care about value; I think people only really care about the goods and services. After all, I want food to eat, I want to be entertained, etc. But perhaps we mean the same thing and "merely" have a terminology difference.
Regarding the second part of that - I think you might be right and I my wording could have been better. Rather than buy-low sell-high providing no benefit, I could have said that type provides no direct increase in productivity. I agree that because of trade in general, productivity can increase, but it tends to be an indirect and inefficient (in my observation) effect.
The side-effect of buying low and selling high is that the traded goods are put to more economically valuable uses...
I don't think that's a side effect of buying low and selling high - I think that's an effect of efficient trade. The buying low/selling high isn't a direct part of that, and if traders are only buying low and selling high, but not interested in the actual use of the things they are trading, they are introducing trade friction by demanding a higher price. This is why I put in my example that if the traders' markups are too high, absent some kind of legal restriction, consumers will start going directly to the producers and bypassing the traders to avoid that inefficiency.
Or because the refiner didn't know that this particular restaurant had oil they were prepared to throw away, and the restaurant owner didn't know that the refinery would be happy to buy their used oil. It's a trader's job...
I think my only dispute here is that I use a much narrower definition for 'trader'. What you've described is something I wouldn't call a trader, but rather someone who is providing a service of finding potential opportunities. This role often involves trade (because all transactions are a "trade"). Again the distinction is that, absent legal restriction, once the producing and consuming parties know about each other, in an efficient economy they would no longer be obligated to involve the person who put them in touch with each other to continue trade.
The law of supply and demand...
Interesting - I don't think I'v ever linked price equilibrium to surplus/shortage. But I don't think it's a clean relationship because someone who can store a good affects both the supply and demand curves (by being a demander when prices are low and a supplier when prices are high). This "storage effect" is something that has interested me a lot recently. I think this type of "savings" is great for dealing with supply disruptions (e.g., if someone bought a bunch of a good when prices were low, and then supply drops they can sell that storage to replace lost supply), but is counterproductive when there are sudden demand disruptions because storage exacerbates the short-term surplus and those holding storage may dump it to minimize their loss, accelerating the losses to the actual producers of the good (possibly putting them out of business) and then when the storage is exhausted, supply is low so prices tend to spike, further reducing quantity demanded. There is definitely a potential for interesting effects there...
While I do agree that western societies do have kind of messed up food distribution issues, I'm not sure I understand how that applies to the assertion that increasing minimum wage affects only the demand curve.
What you are suggesting would require a shift in the supply curve (it would have to shift, because supply curves generally don't have negative slope!). Shifts in supply curves are due only to productivity, competition, or legal changes. Minimum wage changes only affect demand curves, yes?
You are correct in that trading provides value, but it doesn't create wealth. But this goes back to what you mean by 'wealth'. I do admit - and perhaps I need to clarify more - that I use a very narrow definition of wealth: goods or the ability to provide services. It's very important not to confuse wealth and value. Value is how much wealth you're willing to trade for something, but you can't have value without wealth. Also: value is relative, wealth isn't. Consider a house that appreciates in price 50% in one year, even if no changes were made to the house. The wealth of that house didn't change, but its value did. That's how you can tell the difference between wealth and value: wealth is the thing that doesn't change even if the price does. It can be a house, the knowledge and skill to give a hair cut, a barrel of oil. This is why I kind of actually don't like that people talk about having "wealth" in the stock market, or even "in their homes", because they don't - they have "value" there. But if the value of the stock market or your home drops 10% in a day, that doesn't mean 10% of all real estate, factories, and workers vanished overnight. It doesn't mean you have 10% less utility out of your house.
I think your example of the guy that buys waste oil and then sells it to a refiner is a good one. A "trader" buying used cooking oil and selling it to a refiner is less efficient in the strictest sense, all else equal, than the refiner just buying it directly from the restaurant because the refiner has to pay more for that oil than it would if it just purchased it directly from the restaurant.
But perhaps the "trader" provides value even with the extra markup because the refiner doesn't want to deal with the logistics. That's probably closer to a real-world scenario, and in this case I'd call the "trader" not a trader but a logistics company.
Consider traders today only very minimally provide value in terms of logistics management though - most "traders" don't ever actually touch any of the "products" they trade!
As an aside - I'm not sure I understand the claim about "the law of supply and demand which... prevents painful shortages and wasteful surpluses", because supply and demand says nothing about shortages and surpluses - and given the fact that we have both shortages and surpluses, I'd say that indicates something is missing from that model. Would you care to elaborate? (I actually really enjoy this kind of reasoned discussion... even if the conclusions aren't the same as I would currently make.)
Consumption taxes don't solve any wealth-distribution problems though, and they require built-in loopholes because they are so regressive. Not to mention that the 'exemption' level and exempted items (for "necessities") is completely arbitrary and has to be constantly updated, and so will be political and easily abused. My opinion on the "Fair Tax" is that the only thing fair about it is its name.
I'd also argue consumption taxes don't make any philosophical sense because they are taxing a fundamental part of being alive (consumption) as opposed to taxing inefficiencies, which is what taxing only non-production transactions would do, or taxing inequality which is what the wealth-based income tax would do.
Slashdot Mirror
Those are "cute" things for AI to do. I'd rather see the following:
Elimination of business cycles, instead ensuring monotonically increasing standard of living for all individuals (instead of a cyclically increasing average, even though some individuals never experience an increase).
Figure out better education programs to help eliminate violent prejudices from society.
Figure out how to placate various despots, etc. so that we can start pulling people out of oppression.
Some of the medical things. Faster, more accurate diagnoses. Let the AI develop pharmaceuticals, so we can abolish pharma patents and make existing treatments available to everyone for material cost of production instead of "what a market can bear."
I don't really care about stupid things like schedules, ETA, better organization of whatever. I want things that reduce the cost of my standard of living and/or improve standard of living at constant cost - for each individual, not in aggregate.
Fun fact: what we today call 'turbochargers' were once/are still alternatively called 'turbosuperchargers,' highlighting the etymology.
This raises an interesting question: would such an AI be given the power to implement "the best way", or would it just be a suggestion that some people have to carry out? Would these AIs 'just know' they have come up with the best way, or would they have to perform experiments? Would the AIs have to come up with some kind of economic system to allocate limited physical resources among all the tasks they are trying to accomplish?
We currently have lots of "best ways" to do things, like don't over drink, overeat, over-smoke, under-exercise, don't spend more than you make; people don't heed that advice. Would the AIs have enough 'free will' to know the best course of action but not take it?
The game programs aren't "strong AI" though, they are "specialized problem solving machines".
I would go so far as saying all the things that we call AI today are simply "specialized problem solving machines." We will have AI when we have a generalized problem-solving machine. That is - when we have a machine for which you can put in any problem and get a reasonable answer - that is the "AI" that people think of.
That said - we don't really need the generalized problem-solver to change the world. Once we have enough sufficiently-capable specialized problem-solving machines, the results are probably about the same anyway.
"Turbo" might be made up sometimes, but not always: "turbocharged" means "charged by a turbine". You know, as in, "turbomachinery."
I'll give you "supercharger" though - I've not looked into the history of it, but as it isn't powered by a turbine it rightly doesn't have the "turbo-" prefix. I guess they just wanted something to put in front of "charged," and "super" makes sense because it gets a charge greater than it would get without the machine, and "super" is a prefix that means "higher" or "greater". So you could say a turbocharger is a type of supercharger and be correct (but not all superchargers are turbochargers).
But other things that have "turbo" settings - yes, that is pure marketing; computers don't usually have turbines that make them go faster.
Remember, I said directly. You have to have a supply chain in order to automate it. The Internet cannot automate anything anyway - you have to have machines to automate. So while the 'net can connect existing machines, it cannot create new ones. That's what I meant by direct.
Property ownership is ultimately enforced by people - the internet, again, cannot directly improve this. It requires people cooperating. Now, maybe the internet helps people talk to cooperate, but if you have people with guns or bulldozers taking your land/structures, the internet isn't going to help you unless it notifies other people with guns to come help. So, again, an indirect effect.
Ok, I'll concede that point - the net can give people much more easy contact with people who have capital. But I think your example is flawed in that automated licenses only work when there are licenses to be had in the first place. Again, the internet cannot change or enforce laws; only people can do that.
Yes, this. And it's not even a question of "where's the revenue stream supposed to come" - it's more a question of "from where is the actual real wealth (e.g., food, material, new manufactured items, etc.) supposed to come?"
Internet access can only facilitate information transfer. It doesn't directly increase manufacturing output, it doesn't fix broken property ownership laws, and doesn't really remove barriers to entry to wealth-producing activities. (It does reduce barriers to entry to many service activities, but you can't eat, live in, wear, or use services to power your machines.)
I think it's more a case of where on the spectrum of private vs public ownership of property you want to be.
All taxes (including and especially UBI) are basically saying that, no, you can't really have 100% private ownership, some of it has to be owned by the public. The recent advances of technology and increasing calls for UBI are basically saying that we should be moving to a higher percentage of public ownership of capital than we currently have.
But it's slightly worse than that; things like taxes and UBI try to give the benefit of capital ownership to the public, but they don't put any of the responsibility of capital ownership on the public. This is why you hear people talk about "freeloaders"; it's about the public not sharing in any of the responsibility. True, technology and automation makes that responsibility easier, but the argument is about removing the responsibility entirely.
So if you replace the word "work" with the phrase "responsibility for ensuring production occurs", I think you'll get closer to the heart of why there is so much controversy over concepts like UBI .
Forget about the rural dirt roads with snow - those are easy.
What I want to know is how they will handle my urban dirt (and paved) roads (yay Michigan!) whose pothole topology changes daily. And these are not small holes, but knock-your-fillings-out-destroy-your-suspension holes.
Yes, this exactly. I don't need an "assistant helping me through the day."
I don't even know what "assistance" I could get - unless it's doing chores I hate like laundry or washing dishes (but not lawn work; I enjoy that and want to be able to do it myself). But that's not just AI - that is AI coupled to a device that can interact with physical reality. So I think they've missed a beat there - AI doesn't really do anything unless you can do something with the information / capabilities it provides.
Information itself also doesn't do anything if it's restricted by intellectual property laws - that's the big shame of 'modern' society - "yeah, have that information, but you're not allowed to use it.
I'm with the AC above - $500/ month? That's a lot of cash. Now I realize that, amortized, that's probably about the monthly cost of buying a [gas] car outright plus fuel and maintenance over a 10-year span. But there's a big difference between a one-time cost and recurring monthly payments: recurring financial obligation.
Personally I prefer larger one-time payments and then having no recurring obligation. (Incidentally, this is why I also dislike the idea of software subscriptions - those pesky recurring obligations...)
I don't think UBI can really work across a large geographic are, because "basic costs" are too different from place to place.
It's the same conundrum revealed by minimum wage mandates across too large a geographic area.
I don't think it's possible to find accurate info, but I'm guessing he weighed somewhere in the 150-200 lbf range, so something like 500-667 Newtons?
I think you've answered your own question: in some industries, minimum wage is already at the cost of production, so artificially increasing wages past that cost is going to increase costs, reduce demand, and then eliminate those industries, at least in the short term until roughly the same demand comes back but at a higher price level.
Put another way: I would wager that in the long run minimum wage increases never result in an improved demand per capita of any product or service, and only improvements in productivity in competitive markets allow society to maintain "livable wage" price levels.
I would argue the problem with minimum wage being too low for a living wage now is not just a wage problem but also a supply problem - what is limiting the supply of things people need that is causing their prices to rise faster than the value of their (minimum) wage? You have to address those factors, or changing the minimum wage will have no meaningful long-term effect.
Not necessarily - if you are doing enough right by having low consumption, you can't save $100 a month. My household (family of four) doesn't even run $1200 a year in electric costs, and I'm not the type of person that "spends more to save more".
I suppose one would have to look at the actual typical incomes of the "rich" relative to their wealth compared to the middle class and perform the integrations to see where the bulk of the tax burden would actually lie, but I don't think it will be as skewed toward the middle class as one might think. How would this proposal benefit 'elites', who right now have huge gains (not counted as income, but should be) on their huge capital? I would treat all capital gains as income, the same as any other income from any sale of any asset or any wage. Income is income is income. This proposed scheme also avoids the madness that allows depreciation to offset income; depreciation in this proposal would just reduce the tax rate based on wealth percentile, rather than reducing the taxable income. So if you've got a billion dollars in capital that depreciates 5%, you can't write it off against $50M of what would otherwise be profit; you'd still get taxed (at a slightly lower rate) on that $50M rather than on $0. I'd wager that would make a huge difference, especially for corporate taxes.
Also remember that for a rich person to enjoy wealth, assets must be liquidated (because most rich people don't live the high life off their cash, but off their assets) and if you count that liquidation as income (which you should), it would be taxed. You also don't really have to worry about the rich taking out loans backed against their assets, again, because to repay the loan they'd have to liquidate an asset.
As for expatriating wealth...I suppose in the limit there might be some person who has no "recorded" wealth and continuously funnels all their income overseas; I grant that's a flaw. After thinking about it, a simple (if anything can be "simple") export tariff could be established based on the ratio of accumulated exported funds to accounted-for-wealth. So if your exported funds are extremely high compared to recorded wealth, they are tariffed at a huge rate (90%+ I'd say; you could make it a form like tax rate = amount you want to expat / (10/9 * amount to expat + recorded wealth) to put it at 90% if you declare zero wealth). So if you have underreported your wealth and are exporting funds, this wouldn't be a huge benefit. So that would work from a tax standpoint, and would keep funds local, and help people store wealth overseas (by limiting how much they can send out), but I don't know what other ill effects would result because of it; the most obvious ill effect is penalizing the relatively poor sending large amounts of their income to poor international relatives.
Only one minor point of clarification I think here:
My personal go-to proposal on a "wealth tax" is to tax income at a rate determined by owned wealth. So if you have lots of wealth but no income, no tax. If you have lots of income but no wealth, no tax. And if you make the tax rate progressive not on nominal value of wealth, but on wealth percentile, there's never any need to constantly mess around with inflation multipliers; the only tunable parameters are the overall tax rate and the shape of the tax curve. (My thought is that a curve of the form tax rate = (wealth percentile)^power where power is something greater than 1 is the desired shape; this gives low wealth percentiles a very very low rate, but nonzero, while the closer you get to the top, the tax rates get larger faster.)
This has the advantages of avoiding windfall penalties on the poor, since increasing their incomes briefly won't really change their owned wealth, so their tax rates remain very low. It discourages wealth concentration because taxes go up as wealth is concentrated, but doesn't discourage overall increases in wealth because if everyone increases in wealth, percentiles don't change. If you are infirm or retired, you are shielded from losing your assets explicitly because you no longer have any income.
I'm still confused by a few things... I'm trying to clarify.
This is one of the points of confusion for me. Mostly because I don't count "surplus" as being related to demand at all. Is this just saying that the lack of disposable income for the non-wealthy is preventing them from ever-increasing their spending?
I agree with the first part of this statement, but only partially with the second. While minimum wage does increase income, most people in those income brackets don't save the excess, they simply increase spending. There are many reports out there on the multiplier effect of minimum wage increase versus, say, quantitative easing.
Also, if all you're doing with your excess is paying off debt, you are improving your situation, but paying off debt is not really a productive (in the sense of "it doesn't actually produce any goods or services) use of money. In fact in most fractional reserve systems, paying off debt reduces money supply.
We'll have to disagree on land-value taxes and mortgages though. I have problems with any tax system that will force people to relinquish their property if they don't pay that tax (that's one thing I like about income tax over property tax). For mortgages - the problem with them is large fixed payments for such a long period of time, which means any shock to income (illness, market changes, weather disasters, etc.) and the fact that usually a single missed payment can put you at risk of losing your property, means that mortgages are a lurking burden. Some of this is intertwined, yes, because if a medical event wouldn't bankrupt you, and if wages never went down or you didn't ever get laid off, then 30 year (or even 15 year) mortgages wouldn't be an issue. But those other parts aren't solved, so it would be far easier to say "mortgages can be no longer than 10 years", eat the short-term reset in property values (maybe give some kind of amnesty where the government just writes off the difference somehow), then you get to a place where people actually own their homes quickly rather than over the course of a generation.
I just had a realization: are you talking about excess supply and inadequate demand for labor?
Ah, well... that drifted quite far from a basic economics discussion. I wasn't quite expecting that.
From a certain point of view I can see why it might appear this way. A more accurate statement is that there is decreasing demand for the goods and services on which most people have depended there being demand for trading for the things they need.
Ok, I think I see what you are trying to say. The demand (and actual goods) isn't being funneled to the richest, but ownership of capital is being concentrated with the richest. And I agree with that observation. What I don't agree with is the terminology that is a "demand problem". I still say it is a supply problem, and from the rest of your post I think you agree: the people that own the capital aren't producing things (and selling it) to the people that need the things that capital can produce "at affordable prices" or any other.
I agree that things like rent seeking and simply choosing to let capital run idle, or only using capital to obtain more capital are getting out of control.
I agree with what I think is the proposed goal here - to prevent the concentration of ownership of capital. Where I am skeptical is the means proposed. I don't see how minimum wage does this, because it doesn't change the system. The rest of your proposals I think kind of hint at some solutions - breaking some of the bonds that tie health care to employment for instance. Changing the tax scheme is also good, but I'd say that income taxes aren't the solution; in order to address the wealth concentration effect, we have to tax the concentration of wealth, not income or consumption. I'd also say getting rid of things like mortgages would help, even though that would be painful; putting people in debt for 30 years (!) feels like there is a lot of room for improvement (especially because homes aren't generally productive assets). Zoning laws could also use some work, though you've got to be careful there because it's still wise to consider environmental impacts. Residential property tax is also another opportunity (e.g., you could probably do good things by eliminating owner-occupied property taxes entirely, as this would help stop people from losing their homes. Maybe a compromise is to do that only if people are retired or on disability or something; I dunno.)
In essence I agree that we are going to have to, as a society, really rethink the concepts of ownership if we do start approaching the point where "robots" do displace too many workers. I don't know how this transition is going to work, but it's going to be interesting, and I hope we do it without use of force.
As for religious aspects - well, it's very interesting that you mentioned the idea of only deserving things because you work
As a fellow Michigan resident, I'd rather fix whatever policy or lack of oversight that allows our roads to be so bad (when they are paved) and the madness that is refusing to pave roads in major metro areas in the first place. I almost feel ashamed to live in this area - why are people so against making first-class infrastructure? (Cue theories about the mob, wanting to encourage more new car sales, and similar here.)
And I second the comment on the terrible lane paint they use here; any time the roads get the slightest bit damp the markings vanish. It's like they never heard of reflective paint or something.
I disagree with the statement that "we have enough stuff for people but they can't afford it". If there is enough stuff out there and people aren't buying it, prices would drop so it is all sold and/or producers would stop producing so much (unsold goods are expensive!) so there would no longer be any excess.
So this means that there isn't enough stuff for everyone, so an examination of why this the case should be made. Even without that - simply giving people more money (increasing demand) is not going to magically increase supply, although in the short term it might allow people to purchase existing inventory before the prices inevitably rise.
I will be clear - I'm all for making things more affordable for everyone but I strongly believe that simply mandating people be paid more isn't sufficient to provide sustainable affordability - and I think history proves this out.
Ah, ok. Although I disagree that people only care about value; I think people only really care about the goods and services. After all, I want food to eat, I want to be entertained, etc. But perhaps we mean the same thing and "merely" have a terminology difference.
Regarding the second part of that - I think you might be right and I my wording could have been better. Rather than buy-low sell-high providing no benefit, I could have said that type provides no direct increase in productivity. I agree that because of trade in general, productivity can increase, but it tends to be an indirect and inefficient (in my observation) effect.
I don't think that's a side effect of buying low and selling high - I think that's an effect of efficient trade. The buying low/selling high isn't a direct part of that, and if traders are only buying low and selling high, but not interested in the actual use of the things they are trading, they are introducing trade friction by demanding a higher price. This is why I put in my example that if the traders' markups are too high, absent some kind of legal restriction, consumers will start going directly to the producers and bypassing the traders to avoid that inefficiency.
I think my only dispute here is that I use a much narrower definition for 'trader'. What you've described is something I wouldn't call a trader, but rather someone who is providing a service of finding potential opportunities. This role often involves trade (because all transactions are a "trade"). Again the distinction is that, absent legal restriction, once the producing and consuming parties know about each other, in an efficient economy they would no longer be obligated to involve the person who put them in touch with each other to continue trade.
Interesting - I don't think I'v ever linked price equilibrium to surplus/shortage. But I don't think it's a clean relationship because someone who can store a good affects both the supply and demand curves (by being a demander when prices are low and a supplier when prices are high). This "storage effect" is something that has interested me a lot recently. I think this type of "savings" is great for dealing with supply disruptions (e.g., if someone bought a bunch of a good when prices were low, and then supply drops they can sell that storage to replace lost supply), but is counterproductive when there are sudden demand disruptions because storage exacerbates the short-term surplus and those holding storage may dump it to minimize their loss, accelerating the losses to the actual producers of the good (possibly putting them out of business) and then when the storage is exhausted, supply is low so prices tend to spike, further reducing quantity demanded. There is definitely a potential for interesting effects there...
While I do agree that western societies do have kind of messed up food distribution issues, I'm not sure I understand how that applies to the assertion that increasing minimum wage affects only the demand curve.
What you are suggesting would require a shift in the supply curve (it would have to shift, because supply curves generally don't have negative slope!). Shifts in supply curves are due only to productivity, competition, or legal changes. Minimum wage changes only affect demand curves, yes?
You are correct in that trading provides value, but it doesn't create wealth. But this goes back to what you mean by 'wealth'. I do admit - and perhaps I need to clarify more - that I use a very narrow definition of wealth: goods or the ability to provide services. It's very important not to confuse wealth and value. Value is how much wealth you're willing to trade for something, but you can't have value without wealth. Also: value is relative, wealth isn't. Consider a house that appreciates in price 50% in one year, even if no changes were made to the house. The wealth of that house didn't change, but its value did. That's how you can tell the difference between wealth and value: wealth is the thing that doesn't change even if the price does. It can be a house, the knowledge and skill to give a hair cut, a barrel of oil. This is why I kind of actually don't like that people talk about having "wealth" in the stock market, or even "in their homes", because they don't - they have "value" there. But if the value of the stock market or your home drops 10% in a day, that doesn't mean 10% of all real estate, factories, and workers vanished overnight. It doesn't mean you have 10% less utility out of your house.
I think your example of the guy that buys waste oil and then sells it to a refiner is a good one. A "trader" buying used cooking oil and selling it to a refiner is less efficient in the strictest sense, all else equal, than the refiner just buying it directly from the restaurant because the refiner has to pay more for that oil than it would if it just purchased it directly from the restaurant.
But perhaps the "trader" provides value even with the extra markup because the refiner doesn't want to deal with the logistics. That's probably closer to a real-world scenario, and in this case I'd call the "trader" not a trader but a logistics company.
Consider traders today only very minimally provide value in terms of logistics management though - most "traders" don't ever actually touch any of the "products" they trade!
As an aside - I'm not sure I understand the claim about "the law of supply and demand which ... prevents painful shortages and wasteful surpluses", because supply and demand says nothing about shortages and surpluses - and given the fact that we have both shortages and surpluses, I'd say that indicates something is missing from that model. Would you care to elaborate? (I actually really enjoy this kind of reasoned discussion... even if the conclusions aren't the same as I would currently make.)
Consumption taxes don't solve any wealth-distribution problems though, and they require built-in loopholes because they are so regressive. Not to mention that the 'exemption' level and exempted items (for "necessities") is completely arbitrary and has to be constantly updated, and so will be political and easily abused. My opinion on the "Fair Tax" is that the only thing fair about it is its name.
I'd also argue consumption taxes don't make any philosophical sense because they are taxing a fundamental part of being alive (consumption) as opposed to taxing inefficiencies, which is what taxing only non-production transactions would do, or taxing inequality which is what the wealth-based income tax would do.