The UBI already exists for the 1%

The UBI already exists for the 1%

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I’m starting to now track the idea of a basic income with its own dedicated collection: the Universal Basic Income Collection. 🙂

To kick it off, here’s a good one:

Don’t like Basic Income because pay should be tied to work? This article might change your mind.

In 2015, according to PSZ, the richest 1% of people in America received 20.2% of all the income in the nation. Ten points of that 20.2% came from equity income, net interest, housing rents, and the capital component of mixed income. Which is to say, 10% of all national income is paid out to the 1% as capital income. Let me reiterate: 1 in 10 dollars of income produced in this country is paid out to the richest 1% without them having to work for it.

Oh, and if you want to know how we generate this massive passive income for the 1%, read this:

http://www.the-vital-edge.com/stock-market-concentration-of-wealth/

#basicincome #UBI

https://medium.com/@MattBruenig/the-ubi-already-exists-for-the-1-d3a49fad0580#.1jjbm0hcq

36 comments

  1. “without them having to work…” ok, that’s where I stop taking this seriously.

  2. Are you saying someone who has a huge portfolio of securities, generating 5-8% return can’t survive very happily on that income without doing work, Brandon Petaccio?

    Because if so, I have some shares in a bridge I’d like to sell you.

  3. We won’t have a choice in a few years – it will be UBI or social disintegration.

    We have two races to win: UBI and zero/marginal cost of living.

  4. Legislation should be created that robotised industries have to provide a loss of labour tax towards paying for a UBI.

  5. Gideon Rosenblatt No, I’m saying that investment and risk management counts as work… very valuable work. The problem is that people don’t understand value, and so mistake highly valuable work for not doing work. Drives me absolutely crazy.

  6. If you work to create something that generates income, you did work for it, even if you get to relax as it continues to work for you. However, I’m not 100% opposed to the concept of a universal basic income or some variation of it. I am 99.999% opposed to it, but…

    The .0001% where I’m open to it is when A.I. does everything we’d get paid (legally) to do.

    Considering the rapid rise of A.I. , it is no longer unrealistic to consider that almost 100% of all “jobs” will be replaced with automation. We’ll have a totally differently economic situation to deal with. I’m not sure just dishing out free money is the right answer though. I think we’re facing significantly larger problems than that though. Imagine the transition from this life to one where your labor and your intellect (including your art) are better produced by machines. There’s nothing you can offer that a machine can’t provide at better quality, faster, and cheaper… other than say in-person interaction with another human being. About the only thing left to “pay” for between humans would be sex. Even on stage performances can be done by high end robotics and A.I… even the creation of new plays and songs and movies will be done by A.I. Even improving on A.I. will be done with A.I.

    I’m having a difficult time imagining what a typical life would be of someone living in that world and I think income is going to be the least of our problems.

  7. Chris Harpner 

    UBI is a transitional fix to the problem while we progress to a zero/marginal cost of living civilization.

  8. Brandon Petaccio 

    That makes sense in a world that is fair, that pays people fairly, and isn’t full of corruption and cronyism.

    Unfortunately, extractionists and rentiers – i.e., robber barons – create a world where redistribution of wealth is the only way to reclaim what they steal.

    Appropriation of stolen goods isn’t theft, it’s justice.

  9. Darius Gabriel Black If it’s even remotely considered, 100% of the give aways should come from profit of automation. I don’t want MY earnings from my human labor taken from ME to give to other humans NOT laboring. As long as we can agree to ONLY pay that from profit from automation, I’ve got a tiny window open of listening to the idea.

  10. With some 50 trillion escaping tax in tax havens, wine and art banks. Corporations are paying 5% or under, there is lots of scope to rectify the imbalance. Neoliberalism has created one big mess and now with robotisation set to bring a new meaning to inequality something will have to give. Personally as mentioned above that should start with automated industries and the largest owners of untaxed wealth.

  11. Darius Gabriel Black I don’t know what an “extractionist” is, and “rentier” is not a word, but I know what you mean (landlord). Rent is not theft, so we have no right to confiscate the money paid to landlords in a fair trade.

    People that pay rent choose to do so. There are pros and cons to renting vs. buying vs. being homeless. If you choose to rent rather than buy, you have the advantage that upkeep is not your problem and you have an expected expense month to month for housing. The owner of the property took the risk of renting it to you. They MIGHT lose money and many many do.

    And yes, there are many cases where people can’t buy because their credit sux or they don’t qualify for a loan. That’s another discussion, but the fact that rent is an option for them is a plus… but another discussion as well. The point is that rent is not theft.

  12. I understand where you’re coming from, but I don’t think that’s how it works (but maybe it could?)

    Payments come from the general fund, regardless of how you fill up the coffers. Money in, money out. The money isn’t divided by “Tom Jones said he wanted his tax money to go to this, so allocate it there, and Suzy Q. wants her taxes to go to that, so allocate it there!”) That’s not how the government budget works.

    However, if it makes you feel any better, I believe that we should also abolish the personal income tax, completely. We make up for it by closing corporate tax loopholes, offshore tax havens, aggressively prosecuting corporate tax cheats, and raising the corporate tax rates. Make business pay for the UBI.

    We could also cut military spending and aggressively punish government fraud and embezzlement and abuse.

    And then there’s other little things we could do, like investing the UBI fund smartly, so that it helps pay for itself, etc.

    Eventually (within 15 years, probably), we’ll have the technology that will make the cost of living zero, or really close to it (marginal), at which point an UBI is hardly necessary any longer, as robots and AI are providing pretty much 100% of what humans needs.

    Then, we move on to the more existential question of what the hell do we do at all with ourselves.

    But either way, we’re about to face a crisis: the robots and AI’s are going to take 100% of the jobs, and when they do, people are going to riot if they can’t make ends meet.

    They won’t care one whit about whether you want your money going to their UBI or not – when people are starving, they will kill you to eat.

    That’s a fact.

  13. Chris Harpner 

    https://en.wikipedia.org/wiki/Rent-seeking

    Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free.

  14. For example, all forms of copyright are rent seeking.

  15. “like investing the UBI fund smartly, so that it helps pay for itself, etc.”

    That’s the ONLY way I’d even remotely consider this at all. And that’s what I mean by 100% of it coming from taxing automation, not ME.

    “But either way, we’re about to face a crisis: the robots and AI’s are going to take 100% of the jobs, and when they do, people are going to riot if they can’t make ends meet.

    They won’t care one whit about whether you want your money going to their UBI or not – when people are starving, they will kill you to eat.”

    I will care where it comes from. Because if it comes from ME, I won’t tolerate it. And if they (the rioters) come at me to take MY hard earned food, they’re going to have to get past my bullets. 😉

    In short, fairness has to be done during this transition. And by fairness, I mean, “my shit is mine and I’ll kill anyone trying to come and take it.” Hear that in a calm, peaceful voice, not a violent angry voice, because I’m calm and peaceful as I state that. I’m just calmly stating a fact and not angrily shouting emotional diatribe. I know it looks like angry diatribe by only looking at the text, but trust me, I’m just reporting a true fact.

    There should be more than enough coming from automation profit to pay for the UBI.

  16. Chris Harpner 

    Years ago, I used to argue the moral superiority of UBI (clearly, caring for our fellow human beings is the superior position), but I gave up on that after several years of arguing with hard headed conservatives.

    Now, I argue a much more practical point: UBI or face societal collapse as people starve.

    AI’s and automation will take all jobs. This is a fact. As unemployment rises, the situation will get worse.

    It’s a purely strategic move at this point – in order to maintain social cohesion (so anybody can make anything at all), we will have to provide the basic necessities for people to live, one way or another.

    A non-means tested UBI is the simplest, most efficient means of doing this, and the least costly to society as a whole.

    Your blabbering about “not mah money guvnah” and “they’ll have to pry it out of my cold, dead hands” nonsense is just useless chatter on the way towards an UBI for all.

    Don’t argue with me – argue with the pitchforks and torches coming for you and your family.

  17. “rent-seeking involves seeking to increase one’s share of existing wealth”

    The article is written by someone that gives the illusion of economic education. But hat first sentence shows they have a fundamental misunderstanding of economics. The very phrase “share of existing wealth” is an incorrect phrase. It presumes that wealth is fixed and that fairness is somehow involved in how it should be divided.

    Also the phrase “income inequality” is a one-sided ideological presumption that that “inequality” is somehow unfair, which it is not, in and of itself. If you produce twice as much as I do, you deserve twice as much as I do.

    “without creating wealth”. An owner of property is entitled to receive compensation for the use of their property. Rent is a needed service by millions of consumers.

  18. I’m done arguing with simpletons. Just sit back in your easy chair, crack open a bud light, and watch the show.

  19. You see, I really don’t care about your ideological opinion – I’m merely here telling you what’s about to happen.

    There’s two sides to this coin – UBI, and zero/marginal.

    Since it’s gong to take a little more time to get to zero/marginal, we are going to need an UBI (or some kind of social safety net) to make sure people don’t starve along the way.

    If we don’t, we face total societal collapse.

    It’s that simple. Get with it, son.

  20. Darius Gabriel Black I think you’re mistakenly believing that we’re disagreeing. I’m saying, if or when we do something like that, it needs to be done fairly.

    Get with it son, right back atcha. 😉

  21. See my earlier comment about how programs are paid for (at least in the US).

    It’s not like they allocate an individuals taxes to the programs that person supports, and only that. Or that taxes actually pay for anything at all (but that’s another story…)

    The point is, there’s this thing called a General Fund. Money in, money out.

    While I personally believe in abolishing the personal income tax (and then making up for it with higher corporate taxes, but more importantly closing tax loopholes and offshore tax havens, as well as cutting military), I don’t see too many other people on board this idea yet.

    The point is, I don’t care about your selfish attitude. Your whole “not from my wallet” means nothing to me, in the larger scheme of things.

    Most likely, you WILL be taxed if you have an income, and when we institute an UBI (because we have to, most people are unemployed), then it will simply be paid out of the General Fund.

    No one’s going to earmark YOUR tax dollars and ensure that they never end up in the hands of an UBI recipient.

    Studies of UBI have shown that means testing of any kind (and what you keep trying to imply is essentially a form of means testing) is inefficient.

    For purely logistical reasons, we will simply pay everyone the same monthly check, and it will come from the country’s General Fund, regardless of how those coffers are filled. No one’s going to track your contribution on an individual level.

    So you can stop blathering about it.

  22. Oh, I almost forgot, another great source for the UBI is a transaction tax, also called a Robin Hood Tax.

    This would be a tax that largely affects banking and high speed trading, charging a very small tax on each transaction.

    Due to the high volume of transactions, it would generate hundreds of billions of dollars, which would pay for a large portion of the UBI.

  23. No, Keith Bloemendaal, I’m not saying anything about whether or not someone actually worked to build their portfolio. What I’m saying is that once you have a sufficiently large income-producing portfolio, you have a choice whether or not to continue to work. Simply that. That part should not be a controversial statement.

    Now, there is another question that is brewing in the comments above, which is the question of the fairness of passive income. This is a complex question, actually. Very complex, which is why I attached the other article, pulling Federal Reserve data to talk about the question of shareholder primacy and the massive amount of capital pulled out of corporations by investors for doing something that is essentially betting and not real investment in the sense of creating something new (like your second home).

  24. Also, for those interested in this topic, I highly recommend this post on using quantitative easing to fund a UBI:

    plus.google.com – Making Universal Basic Income Real For the past couple years, I’ve been…

  25. I don’t think that we’re talking about making all things equal, William Matthies. There are likely to be be differences that will remain in quality for most services, though even this should probably even out as automation becomes more and more thoroughly embedded throughout the economy (I get the same quality of Google search results as Bill Gates, for example).

    I highly recommend your looking at the funding scheme I point to in the comment above. It’s the most interesting approach to UBI that I’ve seen.

  26. You guys should look into the concept of the negative income tax.

  27. Chris Harpner You’re exactly right, my first clue was that the article assumes that highly valuable work, with a much larger ROI, is the same as not working. That might pass for an OWS camp-out chat by the barrel fire, but it betrays an absence of a conceptual grasp of the most basic principles that any student of economics learns in chapter one. You’ve discovered and named several other clues within the writing that also betray this fact.

  28. Only working class people are limited to the idea that income has something to do with “hard work” and should only be coupled in this way.

    Income is created by providing somebody with something he wants to pay for. There is no need for the provider to have actually to work.

    If income is decoupled from providing something useful for somebody , what would be the meaning of money anyways ?

  29. I think the issue, Philipp Kählitz is that, increasingly, the reality is going to be less about who is providing value and more about what is providing value.

    The driving factor here is automation.

  30. It looks like polititians read Gaddaffi’s Green Book

  31. In what sense is automation an “issue”?

  32. Look at how automation has impacted manufacturing.

    McDonald’s is experimenting with replacing the cashiers with automated checkout.

    Amazon now has a store with no checkouts and so no cashiers.

    Uber has replaced taxi dispatchers with an app and is now looking to replace drivers with automated cars.

    A brewery in Australia is using self-driving trucks to deliver its brew.

    Drones are beginning to replace delivery drivers.

    Its only a matter of time before your job gets replaced. What jobs will be available for your kids? Your grandchildren?

  33. #headmeetdesk  I guess we should all go back to the horse and buggy, huh?

  34. The nature of work will change dramatically in the coming decades. We won’t even recognize most of it using today’s perspectives. I do think that there is real uncertainty whether the nature of that work will be such that it will generate income in the form of the kinds of wages we do today.

    People who assume that the future is a straight line continuation of the past, where automation created new jobs for each one it has devoured, do not understand the nature of accelerating growth. To be clear, I’m not saying that technology will inevitably eliminate all jobs. I don’t know that, and neither does anyone else. Period. What I am saying is that we are going through something very different in its fundamental nature from that which we have experienced in the past. Straight line predictions are not a good bet.

    The key question, in my mind, is whether humans will be able to learn the new jobs faster than machines do. And on that bet, I have to go with machines.

    So, the question is – what kind of “work” must be done by humans? And to that, I say “work on ourselves.”

  35. The kind of work humans do more of will pertain to innovation. Production and distribution, and even market analysis, will be largely automated. The point is not whether losses in one dimension (job loss) will be offset by gains in the same dimension (job gain elsewhere), but whether the loss is offset by net gains. It may be the case that job recovery from automation is a mere 70%, let’s say, but the remainder of the offset is realized in efficiency gains that increase the buying power of consumers (for example). So we can’t think about this one-dimensionally.

    Also, I believe I read recently that businesses that move toward automation actually increase their demand for labor. It’s just a shift in the type of work. Yes, structural unemployment can be harder to bounce back from than frictional unemployment, but if we’re talking about the larger trends, then automation appears to be very good for the job market, and for consumers on the whole.

    I really don’t see how any of this is fundamentally different from the past. Our level of technology is unprecedented, for sure (and that’s an understatement), but the same basic laws of economic reality apply.

  36. Gideon Rosenblatt how did they first buy these securities?

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