Basic income
I picked this book wanting to understand basic income; what is it, why do we need it etc. While it does answer my questions, it’s very difficult book to read. I don’t know if it’s because it aims at academia or it’s not originally written in English. Either ways, I was annoyed at times. Sentences structures are far more complicated than really necessary. I have read somewhere that simple and plain English is the key principle of writing. If there’s one word that’d capture the meaning of five, use one. The whole point of writing is about communication-to make people understand your message. Complex sentence structures and big long words are an antithesis of effective communication. Why do we need to say ‘highly remunerative’ when ‘pay more’ will do?? I can only finish about half of the book because of writing style. The content, however, is illuminating. It provides strong, valid and comprehensive arguments for basic income.
“The money that one possesses is the instrument of freedom; that which one strives to obtain is the instrument of slavery. ”
What is basic income?
It is a regular income paid in cash to every individual member of a society, irrespective of income from other sources and with no strings attached i.e. without means tests or work requirement.
Arguments for basic income: why do we need it?
Increased automation: improved robotics replaces jobs people do. Robots do repetitive jobs more effectively and more cheaply driving people out of factory floors.
Increased computer processing power facilitates advancement in AI. Human interactions that are strongly scripted e.g. customer service reps in call centres, book keepers etc. are being replaced by computer algorithms. A massive replacement of human-brain workers by computers is happening.
Self-driving vehicles are coming. Human drivers are being driven out of employment.
Walmart employs 1.2m people and makes $130b profit; Facebook employs 45k people and makes 18b profit. It makes 7.2times less profit with 26.7 time fewer people. Modern businesses no longer need as many people to function well, if the weak and the poor’s income are well protected by unions or legislation such as minimum wage and such like, there will be mass layoff. If they are not well protected, there will be increase in the numbers of people having to scrape by, doing precarious jobs that pay miserable wages.
Development such as outlined above will enable the wealth and earning power of some—those who design, control, and are in the best position to exploit the new technologies—to reach new heights, while that of many more plummets. It is a polarization of earning power. Income and wealth inequality will be all the rage and increasingly sharpened.
We have already seen wage stagnation for a number of years. Wages aren’t going up because businesses don’t need that many workers. It’s an early sign that things are not working the way it should be.
“If we do not find a way to provide a basic income for people who have no work, or no meaningful work, we’re going to have social unrest that could get people killed. ”
Arguments against basic income
Ethics income granted without some work requirement amounts to rewarding a vice: idleness. Every one is entitled to their idea of good life. Idleness may be bad for some but good for others.
Fairness it is unfair for able bodied people to live off the labor of others.
Yes, but…
Interesting analogy
It is presumably no accident that a morality that strongly stigmatizes premarital, extramarital, and homosexual sex and thereby tries to restrict sexual gratification to those willing to contribute to society’s reproduction has been gradually abandoned as the progress of hygiene and medicine has led to overabundant procreators. Similarly, should a morality that stigmatizes an access to an income without work and thereby tries to restrict material gratification to those willing to contribute to society’s production not be abandoned when technological progress is leading to overabundant workers? As a result of a long history of technical progress, division of labor, and capital accumulation—of which the trends mentioned are only the most recent episode—we have moved from a situation in which, say, 90 percent of the population were required to satisfy everyone’s basic needs in food, housing, and clothing, to one in which, say, 10 percent suffice.
Leisure is very good for the rich, quite good for Harvard professors—and very bad for the poor. The wealthier you are, the more you are thought to be entitled to leisure. For anyone on welfare, leisure is a bad thing. Isn’t this double standard? On the other hand, before they become rich, wouldn’t they work their asses off so don’t they deserve leisure later in life? Then again what about rich from inheritance, just because they happen to be born in the wealthy family, they deserve leisure? The issue of fairness is more complicated than I thought.
Experiments with basic-income-type schemes suggest that even when freedom from obligation causes a fall in the labor supply, this does not translate into an expansion of leisure as idleness, but rather into an upsurge of productive activities in a broader sense such as education, childcare, and engagement in the community.
Administrative, practical and financial issues
Distinguishing those unable to work, owing to physical or mental disabilities from an unwillingness to work can often be tricky. When information is not readily available or is unreliable, trying to enforce this criterion of justice as strictly as possible can do more harm than good on its own terms, and might moreover prove very expensive. In order to avoid penalizing unfairly people who are sick, and wrongly assumed to be lazy, a modest unconditional income can be justified as the least bad measure.
Interesting point
Countless people who do a lot of essential work end up with no income of their own. A huge amount of essential, productive work currently goes unpaid, as it is performed at home. Is it fair that people doing housework go unpaid for huge social and economic contributions they make?
A different point of view on fairness
A basic income, being obligation-free, would strengthen the bargaining power of the most vulnerable participants in the labor market and would therefore mean that the irksomeness of a job, its lack of intrinsic attractiveness, would be better reflected in the pay it commands. With irksomeness better compensated for, unfair free riding will not expand but shrink.
It is part of the purpose of a basic income to enable people to reduce or interrupt their paid work, or to opt for less remunerative but more gratifying employment. Meaningful work, meaningful life, can our society afford it? The authors tackled this issue later on in the book.
Case against basic income details
Pay to all is a waste of limited resources on the rich. True, but pay to all is easy and cheap administratively leading to higher take up rate and there’s no stigma and shame attached to it as everyone receives the same supports. How do we value human dignity? Don’t the weak and the poor deserve it?
Means tests lead to unemployment trap
As working for a few months might make the poor lose the benefit of the minimum-income scheme for several terms at the end of this work, then why take such a risk?
Unintended consequences
Clawing back one unit of benefit for each unit earned by the poor through their own efforts. Thus, the concern not to waste any money on the non-poor amounts to imposing an implicit marginal tax rate of 100 percent on any income the poor earn through labor. It’s a travesty.
Conditioned supports e.g. pay only if work etc. lead to employment trap
These regulations “ensure that the meanest employer, paying the worst wages for the filthiest jobs, is not kept out of a worker while there is one able-bodied unemployed man available.”
Only the workers themselves are able to compare alternative jobs’ intrinsic qualities—far better than any expert, legislator, or bureaucrat—as they take into full account what they like to do, what they need to learn, whom they get on with, and where they wish to live.
Conclusions
Universality of basic income addresses the unemployment trap, freedom from obligation addresses the employment trap.