All posts by Jeremy

More on a Guaranteed Minimum Income

To follow-up on my previous post on the GMI, here are a few more links to other thought pieces about them.

Here’s a piece about an interesting thought experiment from Warren Buffet:

My political views were formed by this process.  Just imagine that it is 24 hours before you are born. A genie comes and says to you in the womb, “You look like an extraordinarily responsible, intelligent, potential human being. [You’re] going to emerge in 24 hours and it is an enormous responsibility I am going to assign to you — determination of the political, economic and social system into which you are going to emerge. You set the rules, any political system, democracy, parliamentary, anything you wish — you can set the economic structure, communistic, capitalistic, set anything in motion and I guarantee you that when you emerge this world will exist for you, your children and grandchildren.

What’s the catch? One catch — just before you emerge you have to go through a huge bucket with 7 billion slips, one for each human. Dip your hand in and that is what you get — you could be born intelligent or not intelligent, born healthy or disabled, born black or white, born in the US or in Bangladesh, etc. You have no idea which slip you will get. Not knowing which slip you are going to get, how would you design the world?

It really highlights the role of luck in people’s lives. There are simply many things that are out of your control, starting with who your parents are and where you’re born. Nobody gets to choose those.

That’s not to say that those obstacles are insurmountable, but that they play a part, sometimes a very large part, in our lives.

And the welfare state deals with specific instances of this. We have programs so children have health insurance (much of Medicaid), programs to reduce poverty among senior citizens (Social Security, Medicare), and programs to help low-income families (EITC, TANF).

These programs came up in a piecemeal fashion, in response to specific problems which were prominent at the time.

With rising income inequality, I’m not surprised that something like a GMI is now being discussed.

The second pair of articles discuss the guaranteed minimum income from a libertarian perspective.  The first attempts to find libertarian arguments in favor of a GMI.

1) A Basic Income Guarantee would be much better than the current welfare state.

 …

2) A Basic Income Guarantee might be required on libertarian grounds as reparation for past injustice.

 …

3. A Basic Income Guarantee might be required to meet the basic needs of the poor.

 It’s interesting reading, even though I’m not one of the intended audience, for its attempt to reconcile what, if implemented, could be one of the largest parts of the welfare state with a view that seeks to reduce the size of government.

The second is a response to that, and doesn’t agree that there can a be a case made on libertarian grounds for a GMI.

Concluding, so while I have a lot of sympathy for Matt’s suggestion for a Basic Income Guarantee I have major problems with his arguments for income redistribution. Hence, I continue to think a Basic Income Guarantee or a Negative Income Tax is a good idea as adenationalization strategy that could bring us (a little) closer to the ideal of a non-paternalitic classical liberal society.

The last article is the liberal case against the GMI (Universal Basic Income, or UBI in this article’s parlance).

Like good fiction, the way to read the UBI is not as a real proposal, but as a message about something else: our existing system. But the implicit critique of the existing system underlying UBI advocacy is not well-founded.

The alternative put forth in the article is to work with, and improve, the existing system.

I’m of the mind that the GMI is a proposal worth at least thinking about. As the author of the last piece says, GMI proposals are proposals, with none of the details worked out yet. But I can see the attraction in implementing one.

Turning the Page

While the view of the Harper government is understandable, it still seems unsatisfying to me. Perhaps it’s just my view of Guantanamo Bay coloring my thoughts.

The Harper government holds to the view Khadr is a dangerous, unrepentant terrorist, brought up in the notorious Khadr family that had close ties to terrorist leader Osama bin Laden.

That is not the view of teachers at King’s, nor of Khadr’s his psychiatrist from Guantanamo, retired U.S. military officer Stephen Xenakis, who visited the prisoner this fall. They see him as a thoughtful, committed student who wants to resume a productive life in the community.

If he’s not allowed to turn the page, what else can he ever be? I believe everybody deserves a second chance, but I can see why it can be very difficult to give people one.

For less extreme cases, it seems like second chances can actually help. This RSA animate video is about honesty and dishonesty, and they reduced cheating in an interesting way:

If you’re cheating lot, maybe you need to be able to open a new page.

So we did this experiment, so we do a non-Catholic kind of confession. People cheat a little bit, they cheat a lot, we give them a chance to say what they have done badly, we give them a chance to ask for forgiveness, from whatever spirits they believe in. What happens after those two actions together? Cheating goes down. Opening a new page does seem to be very successful.

There seems to be a built in assumption that you can’t eliminate cheating entirely. People will cheat, but you can reduce the amount of cheating by allowing them to confess, and giving them a second chance.

While it seems second best, any reduction in cheating would be good.

Gov. Walker Wants to Eliminate the Income Tax

Quote:

“There are many states that do very well, better than most states in the country, that have no income taxes,” Walker told reporters during a stop at his Northern Economic Development Summit. “That’s one thing for us to look at. Is that feasible? What would that mean in terms of an economic boost? That’s not only for individuals, but small businesses in this state.”

My issue with this is that states have to balance the budget, so services will have to get cut in concert. I doubt he’s going to finance the tax cut with debt…

Productivity and Leisure

Amid this article about the harms of the cult of productivity,  this stood out:

The proletariat, Lafargue cries, “must proclaim the Rights of Laziness, a thousand times more noble and more sacred than the anaemic Rights of Man concocted by the metaphysical lawyers of the bourgeois revolution. It must accustom itself to working but three hours a day, reserving the rest of the day and night for leisure and feasting.”

That sounds nice but why exactly should we do it? It is because: “To force the capitalists to improve their machines of wood and iron, it is necessary to raise wages and diminish the working hours of the machines of flesh and blood.” (emphasis mine) Workers should refuse to work so that new gadgets get invented that will do the work for them. Similarly, Bert­rand Russell, in his 1932 essay “In Praise of Idleness”, argued that technology should make existing work patterns redundant: “Modern methods of production have given us the possibility of ease and security for all,” he wrote. Somewhere, he is still waiting for that possibility to be realised.

It’s sort of happened in the opposite way, with wages stagnating/falling and hours being lost, and it hasn’t exactly been great. People want (or need) more work (money).

The path we’re on isn’t going to change either. Technological progress will continue to produce machines (and robots and computers) that can do tasks that were formerly something only humans could do, and I doubt that a leisure filled future is what that means for us.

The Conservative Approach to Recessions

Related to my last post, but on the other side of the aisle, Republicans have no policies to help:

[C]onservatives favor the same set of economic policies when the economy is weak and when it is strong; when unemployment is high and when it is low; when few homeowners are facing foreclosure and when many are. The implication is that conservatives believe there is nothing in particular the government should do about economic cycles.

This is a big problem. Recessions are terrible. They create enormous misery by throwing people out of work and out of their homes. How can a political ideology have nothing to say about how to address recessions?

I’d actually go farther than this. The austerity policies that conservatives champion are not neutral toward unemployment and economic cycles. Europe’s experience with austerity is a large piece of evidence that austerity doesn’t help.

If there is a bright side for Greece, Spain and the like, it’s going to come with a huge amount of suffering attached. Let’s not copy the mistakes they’ve made.

Neat Yellen profile

A good profile on Janet Yellen, and how her journal could change Washington. The most important part, I think, lies here:

By a number of accounts, no one feels this more intensely than Yellen, who understands not just the human cost to individual lives and families but also the damage that a demoralized workforce can do to the economy as a whole. One of her most important papers, written with her husband, Nobel Prize winner George Akerlof, showed that workers who feel underpaid will be less productive. “She does see long-term unemployment, massive unemployment, as not only an economic problem or in terms of wasted resources but also as a human being,” says John Williams, president of the San Francisco Fed, who was Yellen’s research chief when she ran it. “It is very destructive to families.… This is passionate with her. Among economists, you don’t often see that human side. With her, it’s not just an abstraction, and if you try to treat it too much as an abstraction, she’ll react.”

There is a human cost to policy. What the Fed does affects the lives of millions of people, and the fact that five years after the financial crisis we’re still not near full employment is a huge loss of well-being.

I know there are downsides to pushing too hard, but I can’t believe that it outweighs the suffering that 5 years of a terrible labor market have created.