tag:blogger.com,1999:blog-8764541874043694159.post7155557658292348872..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: The Basic Income Guarantee: what stands in its way?Frances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger67125tag:blogger.com,1999:blog-8764541874043694159.post-46298114955007421932016-03-10T23:09:41.915+00:002016-03-10T23:09:41.915+00:00Jatindar, I have a fair amount of savings and I...Jatindar, I have a fair amount of savings and I'm far from rich. <br /><br />I'm not inclined to spend it as I've concern about future income. <br /><br />That help?Ted Kiddhttps://www.blogger.com/profile/14283149266019846669noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-44465329158100093232016-03-10T23:07:39.542+00:002016-03-10T23:07:39.542+00:00Nice work!
Love to see you add discussion of imp...Nice work! <br /><br />Love to see you add discussion of impact on innovation, childrearing, eldercare, improving corporate culture, stopping job flight, and a little more emphasis on the fact eventually there may be lots of people and very few jobs. Ted Kiddhttps://www.blogger.com/profile/14283149266019846669noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-29109310240067071692016-02-05T19:00:56.894+00:002016-02-05T19:00:56.894+00:00Frances, so sorry to circle back on an older post,...Frances, so sorry to circle back on an older post, but two lines in the article have me furrowing my brow a bit and I was hoping for some help. "Today, we have an over-abundance of saving and a shortfall of investment and consumption", this line confuses me. I do agree that stagnation in consumption is negative. However, considering the large percentage of the working population that lives pay check to pay check, where is the abundance of saving? Is the author referring to the savings of the rich few? I'm just confused as to how a Basic Income Guarantee would have any change in their saving. Finally the line "A Basic Income Guarantee shovels money towards poor people" rings true. However, unless I've misunderstood the spirit of BIG; would it not shovel money equally at the well off as well? Thanks for any clarification you may be able to provide.Anonymoushttps://www.blogger.com/profile/11873114416175724132noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-12700922200803343292016-01-19T15:52:21.442+00:002016-01-19T15:52:21.442+00:00Dear Tom, dear Frances, thanks for this post. I di...Dear Tom, dear Frances, thanks for this post. I did not go through all the comments so my apologies if my remark has already been made and replied to. I know there is a long-standing debate between proponents of BIG and proponents of Job Guarantee (JG, ie. government provides a job to anyone willing to work for a living wage). The JG should become a buffer of available jobs to contract or expand according to cyclical conditions. JG proponents argue that BIG will reduce labour supply, hence output, therefore it will become inflationary before reaching full employment. JG, is argued, would be better than BIG because it would give actual jobs to people (there are many things that can be done but the market won't do at the moment, like environmental preservation, energy saving investments, care for elderly, etc). I am curious to know what you think about it. Thanks Mirco Tomasihttps://www.blogger.com/profile/04422757122795456350noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-53142181431046120962015-12-30T19:04:45.120+00:002015-12-30T19:04:45.120+00:00Put another way -
* Firstly wages in the private ...Put another way -<br /><br />* Firstly wages in the private sector will come down over time to compensate for the basic income received (how do we know this - people receiving state pension work for less money).<br /><br />* Secondly tax rates have to go up to compensate for the basic income - estimates for the UK are a basic tax rate of about 45%.<br /><br />So if you are working you end up with a lower salary and paying a massively higher tax rate on it. All so millionaires get their 'fair' Basic Income.<br /><br />Definitely a vote winner that one.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-71807999491283915502015-12-29T18:37:25.059+00:002015-12-29T18:37:25.059+00:00"I like the term "citizen's dividend..."I like the term "citizen's dividend", and I'm not particularly right-wing. It removes the idea of basic income being "welfare" and replaces it with "participation" - making it also easier to sell the idea that those receiving BI should be involved in society, not just through their paid work but through civic responsibility, starting with voting and continuing with participation in social ventures, volunteering etc."<br />They should be. But there is no guarantee they will be. So just create 'jobs' for these people doing these things at a Living Wage. The private sector then has to compete with that to get labour.Randomhttps://www.blogger.com/profile/04445772572707818311noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-46343628585278596452015-12-27T18:48:05.934+00:002015-12-27T18:48:05.934+00:00Thanks. My main argument is not that new jobs will...Thanks. My main argument is not that new jobs will be created. It is clear that this will not help the most vulnerable who will be least able to adapt. The main argument is that the labour force will shrink, so maybe robots will, in aggregate at least, replace those retiring. I also agree that ignoring inequality is not just morally wrong but risky for the rich too. I just don't know if basic income is a) the answer or b) will get the political buy-in (including from those who fund political parties). But I'll be watching the Finnish experiments with interest. Fiona Mullenhttp://sapientaeconomics.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-11048827197136757412015-12-27T18:06:45.446+00:002015-12-27T18:06:45.446+00:00Hi Fiona, Thanks for the link to your very intere...Hi Fiona, Thanks for the link to your very interesting article. Your argument that robots won't take our jobs, I think, is that new jobs will be created. Mechanization of agriculture sent surplus farm workers to factories. Therefore automation of factories will free assembly line workers to become massage therapists. Yes but. I may want more massages but it would be impossible for me to hire a massage therapist for the same forty hours he or she was working at the Ford plant. Technological progress seems to be accelerating. That means that we can produce more with fewer inputs of labour and capital. I think this trend will continue. As less labour is required and as capital goods continue to get cheaper, that may well overwhelm the demographic effects you noted.<br /><br />Basic income helps the poorest among us. It lessens inequality. It rationalizes Byzantine welfare systems. It helicopter drops money into individuals bank accounts and so stimulates economic growth. I think it is worth considering and not discounting out of hand.<br />Tom Streithorsthttp://www.londondop.comnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-15323658164056092742015-12-27T12:15:16.460+00:002015-12-27T12:15:16.460+00:00Hi Frances, not sure if you allow links in the com...Hi Frances, not sure if you allow links in the comments but here are my thoughts on this post. In short I remain to be convinced of the arguments http://in-cyprus.com/is-basic-income-the-answer-to-robots/ Fiona Mullenhttp://sapientaeconomics.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-14580966876806969552015-12-26T18:51:19.286+00:002015-12-26T18:51:19.286+00:00Maybe, Frances, but still the banks bet on low rat...Maybe, Frances, but still the banks bet on low rates and when LIBOR exceeded the Swaps rate, the Great Recession began. Please look at this chart: http://www.talkmarkets.com/content/us-markets/scott-sumner-and-friends-want-unbridled-growth-chicago-school-update?post=80548Gary Andersonhttp://www.talkmarkets.com/content/us-markets/scott-sumner-and-friends-want-unbridled-growth-chicago-school-update?post=80548noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-63670595011500600282015-12-23T07:14:20.978+00:002015-12-23T07:14:20.978+00:00The main problem with BIG is not affordability or ...The main problem with BIG is not affordability or reasonability. It's that the powers in charge - which is: not politicians and even lesser 'the people' - doesn't recognise the benefits of BIG or similar approaches to fit into their economical targets. They prefer more competition for jobs (cost per unit/wages), growth (more liquidity). Therefore they go for more feudalistic structures that benefit mostly the few above a system that could possibly curb growth and job-competition. Therefore I only see two options to get something like BIG realised: Take the power back from those actually having it (Corbyn sounds like a promising approach into that direction) or get a technically sound solution that provides enough liquidity and (job)competition so the powers can agree with it. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-86014545055626366152015-12-22T16:17:42.799+00:002015-12-22T16:17:42.799+00:00Tom, I enjoyed this post. In response, I have trie...Tom, I enjoyed this post. In response, I have tried to work out a feasible level for the basic income - one that gets demand to the level needed for a fully functioning economy without leading to inflation etc. It is done here http://www.notesonthenextbust.com/2015/12/how-high-could-uk-universal-basic.html and there is a spreadsheet in which you can input other assumptions.Ari Andricopouloshttps://www.blogger.com/profile/00181838814176635218noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-24580126575776406842015-12-20T22:00:01.524+00:002015-12-20T22:00:01.524+00:00Very dangerous rope; defending GLI/BI as increasin...Very dangerous rope; defending GLI/BI as increasing demand, <br />growth". Aim is to stop excess demand, cancerous growth. Haven't you heard of something called the natural environment? The limits of what we can draw from it? <br /><br />Also something called genuine democracy, requiring that people have the leisure to participate in it? <br /><br />GLI is for increasing personal leisure and freedom, ending unjustified demand and growth. That is not a threat to the "very rich" but to the very powerful. Anonymoushttps://www.blogger.com/profile/13696581166083759913noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-26153746720073200422015-12-20T14:34:36.022+00:002015-12-20T14:34:36.022+00:00Surely a sustainable world needs less consumption,...Surely a sustainable world needs less consumption, not more?Meg Howarthhttps://www.blogger.com/profile/17917057407318309710noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-59501520996444090282015-12-20T10:07:58.276+00:002015-12-20T10:07:58.276+00:00Agree. This is a crucial point to me. BIG specifi...Agree. This is a crucial point to me. BIG specifically worsens this problem in a way that currently when the rich save and don't spend (bad as it is for inequality for those without basic resources for consumption) it means they don't actually spend much on excess. Excess consumption and destruction of the plannet is a bigger problem, its redistributing poverty not wealth, wealth can't exist in a finite planet. Nor should it.Anonymoushttps://www.blogger.com/profile/07571982002463556355noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-82619198447590214842015-12-20T10:00:59.298+00:002015-12-20T10:00:59.298+00:00Doesn't BIG just accelerate infinite growth. ...Doesn't BIG just accelerate infinite growth. Its good to redistribute resources. Not money. But it encourages and depends on excess consumption too doesn't it? Which is worse for everyone on a planet with limited resources.Anonymoushttps://www.blogger.com/profile/07571982002463556355noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-11674476611232394832015-12-20T09:33:42.255+00:002015-12-20T09:33:42.255+00:00Thanks for that Cig. I think you are right. Basic...Thanks for that Cig. I think you are right. Basic Income is a better way of running the benefits system. By giving people money without making them jump through hoops it empowers individuals without increasing the size of the Nanny State.<br /> <br />And you are also right that we could have the same stimulative effects by merely increasing the size of current welfare payments. Politically, however, there is little support for raising welfare payments. The middle class generally doesn't want to shovel more money towards the poor. Basic Income, by giving money to everyone could overcome that objection.<br /><br />Basic Income is both a better way of creating a safety net and a way of stimulating the economy. I am convinced it will ultimately be the salvation of capitalism and I certainly don't want us to be so ideologically pure we lose any potential supporters.Tom Streithorsthttp://www.londondop.comnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-45117497557327423082015-12-19T14:52:42.997+00:002015-12-19T14:52:42.997+00:00A basic income implemented properly would involve ...A basic income implemented properly would involve reshuffling the tax system to compensate for that. The tax system is really part of the benefits system so it does not make sense to change benefits without adjusting tax at the same time.<br /><br />So you'd want to arrange things so that someone who earns 100k gets an increase in tax equal to the basic income so as to be net flat. Without tax tweaks it would indeed increase inequality as a lot of poorer people would be net flat (basic income replacing existing benefits) while all rich people would be (nominally) better off.<br /><br />(Also remember all that is in the short term, prices and wages will also react, possibly compensating some of the first order effects.)cighttp://commentisglee.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-28128796083310054772015-12-19T14:32:01.452+00:002015-12-19T14:32:01.452+00:00There's a problem with that kind of advocacy f...There's a problem with that kind of advocacy for the basic income. We have two distinct questions we're answering here:<br /><br />A) Is there a better way to run a benefits system, for any GIVEN welfare budget (including tax effects)?<br /><br />B) Is more redistribution beneficial to society as a whole?<br /><br />The author of this post is arguing for B as a textbook Keynesian who believes the economy has a demand problem that would be fixed by more redistributive benefits. The thing is, if redistribution has positive macro effects, really it doesn't matter much how you do it. For instance, you could just blanket increase all nominal payments (and means testing thresholds etc) in the current welfare system by 50%, and it would achieve a very similar effect.<br /><br />So I think the basic income is more essentially an answer to question A, which is why many non-Keyneysians also support the basic income idea.<br /><br />Tactically there's an issue: when I see such advocacy I see it as excluding: the author seems to say that if I'm a macro agnostic or a supply sider (I happen to be the former, but some of the latter also support the basic income idea), I'm not welcome to his ideologically pure basic income tent.cighttp://commentisglee.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-91296935870269348132015-12-19T14:11:23.254+00:002015-12-19T14:11:23.254+00:00Job guarantee type schemes have been tried many ma...Job guarantee type schemes have been tried many many times in the small in the last couple of centuries, we're way beyond pilots on this.<br /><br />Basically it's a similar result every time: it works for a few people for whom it's the right kind of help, but is generally overwhelmed by the cost and collateral damage of running what is effectively a labour camp for all those for whom it's not the right solution, which tends to be the bulk of the inmates.cighttp://commentisglee.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-28339664024586552492015-12-19T14:06:36.684+00:002015-12-19T14:06:36.684+00:00If I have misunderstood Tom, then perhaps you will...If I have misunderstood Tom, then perhaps you will explain to me how, for example, the spending power of 12.5 million state pensioners will increase with BIG. If BIG replaces welfare, then surely the people in work, and therefore least likely to need a financial lift, will benefit disproportionately?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-44390236718365579402015-12-19T11:07:08.058+00:002015-12-19T11:07:08.058+00:00I actually don't think BIG will be squashed. ...I actually don't think BIG will be squashed. It does too many things that we need. The key is getting it in the discussion. Once more people know about it, it will become inevitable.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-41394916035062889252015-12-19T08:16:10.929+00:002015-12-19T08:16:10.929+00:00Another good idea! Like transaction tax, taking mo...Another good idea! Like transaction tax, taking money creation away from commercial banks, people's QE...but will be resisted and squashed by the Establishment!devonseaglasshttps://www.blogger.com/profile/02637463423116171963noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-71540941974177791412015-12-19T01:42:45.613+00:002015-12-19T01:42:45.613+00:00Unfortunately it doesn't work like that. Creat...Unfortunately it doesn't work like that. Creating a targeted insurance (conditional benefit) programme for every risk results in a very expensive, complex and highly bureaucratic welfare system. It also removes from individuals much of their power to choose their own path. UBI does not aim to insure all risks fully. It requires individuals to bear some risk themselves. That is a feature, not a bug. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-17180590254136790032015-12-19T01:15:07.017+00:002015-12-19T01:15:07.017+00:00I have seen a presentation of the paper, I suppose...I have seen a presentation of the paper, I suppose the online version fits what I saw.<br /><br />It all about the principle: unemployment is one particular risk, and you have UBI against that. But you could add a lot of different risks correlated with each other as they are in reality, and have a sum of all the UBIs. Then you get the UBI Frances has in mind. <br /><br />For each of the risks, UBI is vastly outclassed by targeted intervention, even after accounting for moral hazard and administrative costs. Even when the risks are correlated, UBI loses when you scale all the risks together.<br /><br />Thus, UBI is a poor tool to deal with risks. It can serve other purposes, but insurance against risks is not one. Lord of the Ringsnoreply@blogger.com