What is the right way to tax a robot?

What is the right way to tax a robot?

Reading Time: 1 minute

What is the right way to tax a robot?

Automation raises important questions about the prospect of widespread technological unemployment. How will people make a living? What will happen to people’s self esteem? What will happen to income equality? And now, a new question: how will we fund government?

#technologicalunemployment #taxes #automation

http://www.the-vital-edge.com/robot-tax/

55 comments

  1. My comment on the site is awaiting moderation…

    “How is this not the simplest question in economics? Tax transactions, all of them. We’ve given banks a pass on taxes until now and it has caused a tremendous drain on society so why continue?

    With a transaction tax, across the board, no loopholes, we capture labor (taxed once), capital (taxed once), the value of automation (as determined by the exact state of their advancement) and also capture the banks’ profits (taxed once per money movement – how it should have been all along).

    Doing this, the rate for this one single tax would only need be 1% for it to raise the total of a basic income AND to fund all of government (sans maybe a bit on military spending but that would greatly decrease with a basic income and the coming renewables push).”

  2. I think this argument is nonsensical . If it was relevant it would have been a problem as soon as the industrial revolution.

    Every production line in a factory is a robot by definition and they have removed a lot of employees.

    Imagine a simple cold drink bottling factory. How many employees would it require if it was all done manually.

    People move on and they will be always required, only difference being that they become specialised.

    Software Robots are same as automated machines, unless they become conscious and can work without any intervention.

  3. Vijay Raj What portion of total then-current jobs has automation (in all the forms you refer to) eliminated in the past, present and in your decade-out future?

  4. Thanks Todd McKissick​. Will approve when I get back to my desk. Do you have a pointer to more details on the idea?

  5. Vijay Raj , you’re basically just disagreeing with the possibility of technological unemployment.

  6. Gideon Rosenblatt Here’s a write-up from a while back. I also have a hangout group where it was discussed very deeply but that’s lots of unnecessary reading. Still, you’re welcome if interested.

    usbig.net – usbig.net/papers/McKissick_Bitcoin%20Basic%20Income%20proposal%20copy.pdf

  7. It’s a dumb idea.

    Just close tax loopholes, off shore tax havens, and pursue big ticket (read: corporate) tax evaders aggressively.

    Then, cut the military budget.

    Form a transactions tax (Robin Hood Tax).

    Reform all government to be more efficient using technology (especially blockchain).

    Institute an UBI and universal healthcare.

    Invest heavily in all technologies which lead to zero/marginal cost of living (solar, 3D printing, vertical farming, in-vitro meat, water desalination, etc.)

    Utopia in under ten years.

  8. If technological unemployment was a thing we all would have been unemployed, including our forefathers. To the contrary technology creates more jobs.

    Because of technology we have jobs, which can be done in an air conditioned room, sitting on a desk. Our father were breaking their backs handing paper work. Before that they were working in factories.

    If automation was to rob jobs, then what we see is a lye, we wouldnt all be employed.

  9. Darius Gabriel Black​ exactly instead of solving the root cause people are trying to fix the holes..

    Monetary based system is the problem.

    https://www.thevenusproject.com

    Abolish the money and embrace the technology so that we don’t need to earn.

  10. Counterpoint to transaction tax: land tax.

    Where “land” is “rentable factors of production”.

    https://en.m.wikipedia.org/wiki/Land_value_tax

    https://en.m.wikipedia.org/wiki/Economic_rent

    There are some further elements of this I’m thinking through, and which don’t appear to be part of extant orthdox (or any relevant heterodox) economic theory to the best of my knowledge.

    Much of this devolves to the possibility that a “rentable factor of production” largely equates to “control over a network or major network gateway”. Apologies if that’s somewhat vaguely constructed and ambiguous, but it’s the best formulation I’ve yet got, though it ties up a lot of ideas I’ve been playing with over the past few years.

    I’d appreciate questions on any part of this that’s not particularly clear.

    Possibly further clarification (or muddying) here:

    https://www.reddit.com/r/AskEconomics/comments/5uvc2b/why_is_energy_given_such_little_importance_as_a/dihngth/

    en.m.wikipedia.org – Land value tax – Wikipedia

  11. The group Hangout Todd referred to is not worth the time to sift through, as much of its text goes off into related subjects and redundancies. Let’s see if I can boil it down…

    What Todd has proposed is a simple 1% fee on all transactions. This is complicated by the need for a networked protocol combined with reliable and secure methods of positive identification, but the hardware and software for that is already under development by a number of different companies. As I see it, basically you’ll have a mobile device with a near-infrared camera and the capability for foolproof facial recognition (failing that, a camera at point of sale can do the same). Todd advocates DNA verification once a year as a safeguard.

    Darius keeps saying ” #blockchainallthethings “, but my personal opinion is that blockchain will be insufficient; holochain is called for in this application (ceptr.org/projects/holochain)...

    …Application? Yes it appears an app can change the world, if it is an app that allows you to consolidate all your financial information in one place, and if you can use that app to pay for everything, and if revenue from all those 1% transaction fees comes back to you in the form of a non-governmental UBI.

    Again, my personal opinion here, but I think such a system should be able to operate using existing currencies until such a time as a new holochain cryptocurrency (or “metacurrency”) can be introduced, one non-physical currency to eventually be adopted on a global basis.

    Startup? Such a project requires extreme caution concerning possible venture capital. Someone would have to be willing to pay to get things going with the expectation of a limited, one-time return. It can pay for itself, but once up and running should only need to pay for its own maintenance and growth. We can think of the system as having its own account that it can draw from for expenditures, but payouts go to individuals equally, without exception. No bonuses for executives, certainly no perpetual kickback to a VC.

    There are certainly questions about eligibility and the availability of UBI for minors. It would seem fair to withhold payments to children until they reach a certain age (TBD), if only to prevent parents from appropriating their funds (and worse, having more and more kids in order to receive more and more income).

    Yet again, personal opinion: While many seem to think we’ll eventually be able to do without a monetary system, what I see happening instead is that paying for things and managing our accounts will become so effortless that we’ll start to forget money exists. Rather than disappear, it will fade into the background and continue on indefinitely as a useful system of accounting.

    Some continue to doubt the impact of technological displacement and the need for UBI. Make no mistake, there isn’t a single job out there that can’t potentially be automated. And, technological acceleration moves along an exponential curve. We’re already in a time where advancements are nearly impossible to keep up with, and they will just keep coming faster and faster. So instead of trying to find things to pay people to do (when those things can be done more efficiently by machines), we really ought to be devising a system that will give everybody enough to comfortably live on. Then if you can manage to find a way to earn more on top of that, cool.

    Governments will have to rely more on corporate taxes. Taxing a corporation any more or less based on its level of automation will soon make very little sense — or, even less sense than it does today.ceptr.org – Holochains for Distributed Data Integrity

  12. We also need to abolish rent.

  13. Yep, more taxes on land would seem to lead to higher rent as well as a higher cost of land ownership. While many of us might choose to become nomadic, living in autonomous RVs, that’s not a lifestyle we should be forced into.

  14. Darius Gabriel Black Rent isn’t a thing that can be abolished like that.

    It’s a characteristic of a class of goods.

    Unless you’ve got some knowledge / ideas you’re not sharing.

  15. fil smyth You’re neglecting to consider some consequential implications of higher rents.

    A low rent (on land, factors of production) means that it’s possible to utilise that that factor below its net capabilities. Or, alternatively, in the case of land, to allocate large tracts of land to applications far smaller (or denser) ones might provide.

    Economically, the definition of rent is “a payment received in excess of a that required to bring a factor of production into a market”. That minimum amount is defined by the provisioning costs of the factor: building and maintaining structures, infrastructure (roads, water, sewerage, gas, electricity, comms), etc. Economic “rent” is then “unearned income”.

    Put another way, if the use value of rent-bearing asset increases, the supplier captures the benefits of that increased use-value. For most commodity goods, the surplus use-value accrues to user of that good.

    Contrast the Law of Rent to the Iron Law of Wages: wages tend to subsistence levels.

    If the land tax is applied based on some fraction of the potential use value of a property, then not making full-use of that property creates an ongoing financial drag. (Or so the theory goes.) Issues such as development moratoria, NIMBYism, zoning and density restrictions, all reduce the ability to make full use of land.

    (I’m not arguing for no zoning or regulation, but as with any regulation, management, or governance, it must be very carefully considered.)

    Another element of this is that if price is defined by the marginal demand over the marginal supply, then the holders of rent-bearing assets have an incentive to ensure that the supply is constrained. This seems to be generally the case across a number of classes of assets. In particular, it creates problems where those assets are also productive, or more critically, Maslovian goods. That is: an asset that is a necessity of life: air, water, food, clothing, shelter.

    Robotics and automation as such are essential factors of production. There may be a strong return to scale, network effects, or other elements, which replicate many of the dynamics seen for land.

    Treating automation and capital as land for the purposes of taxation and equity may then make sense.

    (Again: I’m still working out these ideas, apologies if it’s fuzzy.)

  16. By “abolish rent”, I refer to a universal rent-free alternative.

    Just as an illustrative example, one could imagine every city and town maintaining a building of rent free studio apartments, available to all without means testing.

    Alternatively, I could come up with even cheaper options, like Tent Cities, or outdoor shelters with rows of stalls where you can hang a hammock and store a small amount of gear in a locker.

    I think ny preferred way of accomplishing this is simply through 3D printing low cost housing with basic amenities (plumbing, solar power, internet) so that there’s always a rent-free alternative for anyone who wants it.

    Think of it as the housing equivalent of UBI – Universal Basic Housing (UBH).

  17. Darius Gabriel Black Some basis for resource allocation makes sense.

    But understanding market failures is a significant issue.

    When was the last time a significant portion of the population did live rent-free, and what were the prevailing economic and political systems?

    (One line I’m pursuing: that feudalism and/or warlord / gang-kingpin systems are a principle alternative to property-based rentierism. This strikes me as troubling.)

  18. Seems to me, a municipality could easily provide rent-free living spaces paid for through taxes on corporations operating locally. However it also seems to me that such places could easily get overrun and unmanageable. Apartments with low maintenance fees as the only cost (residents being held responsible for excess damage) might be a better solution.

  19. So what happens when land also becomes abundant (supply outstrips demand)? With cheap housing, nomadic capabilities, less need to flock to cities for a survival job or supplies, self/local sufficiency, seasteads, ‘floating cities’, space travel (??), redirecting cropland to open pastures, abundant transportation, sharing economy, and other changes coming, survival will be possible in many non-traditional forms of basic shelter.

    As the land becomes cheaper, or un-demanded, a tax on it becomes a hindrance to these opportunities. It also reduces the tax revenue as those changes occur.

    The one single thing that remains constant in proportion with all the future changes discussed here, is transactions. And it’s the sole method of profit for the banks which had remained untaxed forever. Why is it taboo to discuss this? I would think that anyone looking into the volume of transactions performed by the banks and those doing business with them, and finding out that this single industry robs up to 80% of the profits on other productive industries, would demand a tax on them.

  20. Abolishing rent would not only end homelessness, but it would also provide poor working people with 50% or more additional disposable income which would stimulate the economy.

    fil smyth​ – I think the maintenance issues can – mostly – be solved with automation/tech.

  21. Todd McKissick An interesting suggestion, but also strongly counterfactual.

    The first modern economist to look at rent, David Ricardo, noted that at the margin, rents are zero where the next most undesireable land is free for the taking. Thing is … you have to get pretty far out to reach that level, the more so as population increases.

    Another issue is that it’s not just land that people need to live on, but other factors, some of which can be imported, some of which travel relatively poorly.

    If you look at a maps of the US by population density — and road maps correspond well to this — you’ll notice a very strikingly different pattern of development along the Eastern and Western US. In particular, from the Rocky Mountains on westward, urbanisations resemble scattered islands more than they do the grid of the midwest or the coast-hugging mass of the Eastern Seaboard. A principle driver of this is water, and specifically, the ability of various urban regions to lay claim to water rights, often from far distant (including out-of-state) sources.

    So you end up with the Front Range, Phoenix, Tuscon, Salt Lake, Las Vegas, Los Angeles-San Diego, San Franciso. To the Pacific Northwest the pattern starts to fade at least along the Willamette and Columbia River valleys, but you’ll find eastern Oregon and Washington continue to be sparsely settled.

    There are other benefits of densification as well — commerce, services, physical activities, etc., are better served by some level of urbanisation. A factor which another early economist, Adam Smith, observed.

    Space still matters.

    (Warning, very large and detailed PNG.)

    web.archive.org

  22. Darius Gabriel Black There are some assumptions you should probably start checking about now.

  23. Rule Number One: People suck.

    Obviously that doesn’t apply to everyone, but enough people do to make it worth remembering. Charging a minimal fee for the use of a living space would allow the municipality to keep track of who’s living where and hold residents accountable for any damage beyond usual wear and tear. A certain amount of oversight is necessary to ensure the continuation of the service (and the serviceability of the spaces).

  24. Edward Morbius​

    Technology is rapidly changing that.

    Combining the following technologies:

    EV’s

    Solar power

    Water reclamation

    Indoor farming and in-vitro meat

    3D printing

    Global WiFi

    One can easily imagine fully sustainable, self-sufficient caravans and/or lone wolves wandering the land with no need to settle anywhere.

    Micronizing food production will be the most difficult, but before full food production can be integrated into an EV/tiny house, we could create strategically located food depots where otherwise self-sufficient EV ‘homes’ could redupply. These depot’s would use solar power and watervreclamation to grow food aeroponically, as well as process it (using 3D printing) into food products people want.

  25. fil smyth​

    Technology can minimize the cost of repair to the point it’s negligble.

    If we can 3D print an entire house for $10,000, then doing repairs on the same house us going to be a fraction of that.

    Most people don’t want to seriously damage their homes anyway.

    I don’t see maintenance/repair as beingva major issue. It coukd even provide some short term jobs (until we automate that too).

  26. Darius Gabriel Black, I was speaking of a very minimal fee. Perhaps as low as $1/month. Would that be unreasonable?

  27. It’s not the amount that’s unreasonable, but rather the principle.

    If it can be maintained for $1/mo, then it could be easily subsidized too.

    Free simply removes any obligation from the tenant, which I prefer. I really, truly want people to feel “free” to live. No means testing, no minimal fees.

  28. If needed, I suppose your $1/mo could be deducted from some kind of social safety net, like Social Security, but the point is to make it 100% hassle free for the tenant.

    Everyone should have, at minimum, shelter that they don’t have to “do” anything for.

  29. Darius Gabriel Black Who fixes that?

    How do they get there?

    How long does it take?

    What is their profit in trade?

    Distance matters.

  30. Darius Gabriel Black, in my musings on this I was imagining a facial recognition camera at the door that would only (normally) allow residents to open it from the outside. For that to work, the building has to “know” who its residents are. This kind of thing isn’t necessary, but there at least needs to be some kind of record as to which units are available. Would it be too much of a hassle to show your face, and to let the building know when you decide to move? The fee is, as you say, only necessary if the housing in question isn’t fully subsidized. And I guess one dollar a month won’t pay for much, so that amount is kinda silly…

  31. Vijay Raj, I’ve heard that argument over and over. Essentially it boils down to a kind of same-as-it-ever-was view of the world. That quantitative shifts never ever amount to qualitative shifts once and that there isn’t such a thing as thresholds where the nature of the system itself fundamentally changes. I just don’t buy that.

    You are right that up to this point, humans have always found new employment. But the difference now is that our technology itself is learning to learn. So the question is: will humans be able to outlearn machines in preparing themselves for the new jobs that are created?

    A universal machine is also a universal learning machine. Sure, there will be many problems where humans will still have the learning edge, but as the innovation accelerates, so does the learning gap.

    The reality is that none of us know what is actually going to happen. I don’t and neither do you.

    The questions that emerge, it seems to me, are:

    1) What is the governance of these systems – the “code behind the code”?

    2) Will we be able to redefine the nature of work so that humans are still integral to the system?

  32. Dammit. I’m not going to be able to respond to all these great insights, fil smyth, Edward Morbius, Darius Gabriel Black and Todd McKissick. My son’s graduating today and then I’m swamped with family stuff until the weekend. But I will be back to dive in. I love the fact that I can share stuff like this and get all this great feedback – much of it on new ideas. Thanks.

  33. 1) What is the governance of these systems – the “code behind the code”?

    2) Will we be able to redefine the nature of work so that humans are still integral to the system?

    Renaud Janson posted an interesting article reminding us of a strange problem we’re currently facing. AIs need to learn how to explain themselves. But even if they do, how can we know they’re not just telling us what we want to hear?

    As for the second question… Why would we want to? If your work is important to you, you’ll do it regardless of whether it pays or not. And if you don’t have to do something else for money, you’ll have more time for what’s important to you.plus.google.com – Renaud Janson – Google+

  34. You know, I’ve seen a dozen or more great ideas over the years that would fix our issues or at least be an improvement over what we’re doing.

    But the real underlying issue is the corrupt and the stupid who support them, so then the resl question is how do we neutralize or wrest control from the corrupt and stupid?

  35. Steal a river? I won’t even take a fence.

  36. Edward Morbius while I do appreciate that many people thought and still think that cities will continue to grow ‘indefinitely’, I’m just not convinced this time won’t be different.

    Today’s entire Midwest ‘go-to’ crop make-up is based on three crops that aren’t needed in the future – those being corn, wheat and soy. These have all become tools of oppression, poverty and profit. Replacing them with managed pastures (matching herding of days long gone) would not only become an abundant source of meat but would go a long way towards helping the climate change issue.

    The result for this discussion is that it now offers lots of newly homesteaded land.

    For water, I wouldn’t worry about that much. From the Rockies East, excluding maybe only the Badlands, there’s plenty of water. But it gets better. Indoor growing, including fodder feeding, take as little as 5% as much water. Plus, water will soon be ‘produced’ more than one way that hasn’t hit the water cooler gossip circles yet.

    Lastly, when people retire, many of them actually want to move to a bit more secluded acreage, and earlier retirements mean that will happen for more of the population. And with the approaching new types of travel they can still get things delivered or go visit a distant place easier than today.

    What this all means to me is that the last item of scarcity will eventually become abundant as well. This should allow us the final phase in the transition away from money and that means we don’t need to worry about eliminating rent because, imho, communities will provide ‘courtesy housing’ for visitors, nomads and those in transition between locations.

  37. Gideon Rosenblatt while I do agree with your statement that automation will eventually out-learn humans to take their jobs, this misses a major point in why it hasn’t happened before and why it might still not completely happen this time.

    The reason is that if it takes money to survive, people will create any justification to compromise more and more to earn a living. In other words, jobs won’t completely go away until there’s another way to survive. After all, if it meant the difference between eating and starving, most would eventually become Charman Application Engineers.

    The better way to go about this debate is to remove the need to work. Then automation needs to compete on price with the real value of human labor, not the lowest value it takes to survive.

  38. Darius Gabriel Black​ you ask how to make these changes with all the stupid people in charge or voting for them. I see them as simply being distracted from the root solutions so why not take a page from the energy transition? The solar guys didn’t ask the fossil guys permission. They made a more attractive product for a better price and people just came off their own free will.

    For me, the root problem is Fiat money that’s debt based and unregulated against manipulation so my solution to that is to make a better money that performs all the same benefits better for less cost. By making a crypto use the most fair ‘tax’ possible to find a zero strings UBI, it would become so attractive that it could even attract governments.

    But to your point, this works in any industry.

  39. Gideon Rosenblatt​​​ since the ai revolution and destruction of jobs will be unprecedented, solving with year 2000 bc solution of taxation I have problems with. You first must look at taxes as a construct. Centralized power decides who and how much to tax, that is political. By supporting a robot tax, you in effect support the worst politicians to go after the most promising businesses if they don’t pay off the politicians. Not only that, I have never read a paper that models that economics as a sound policy for the next 100 years in a laborless marketplace.

    Instead I am with Todd McKissick​​​ on crypto currency. Decentralized the power and lower the money cost. For those without a job, we could modify crypto currency to generate a new coin a day for every person based on dna, a living pay. (Not work pay). Then instead of banks creating trillions out of thin air to benefit the centralized power, the people benefit from the new money. If not this idea, along these lines. Let’s move past 4000 year old tradition of the few going after the market place to benefit themselves and what’s left goes to the people….maybe.

  40. Todd McKissick I’m not quite sure how a different (and less-intensive) farming culture solves the land problem. You’re ignoring a huge set of literature (which I’ve studied, in school and out), on how human activity tends to cluster: urban geography, urban economics, economic geography.

    Water most certainly is a problem in much of the region you’re disucssing. There’s a little thing called the Dust Bowl you might want to look up some time. Or the Ogalala Aquifer. Or West Texas.

    The Wet Zone is mostly from the Missouri River east, though in parts you can extend another 100 or so miles to the west.

    The other thing is that much of that region isn’t where people naturally want to live: Hot, humid summers, cold winters, and poor natural transport.

    People tend to cluster to coasts, rivers, lakes, and in cases, near (though not, generally, on top of) mountains. Transport is far less expensive (and transport will, in future, likely be more expensive than today, something your calculus might want to include).

    Hot/cold barren plains, not quite so much, unless cheap land is the only draw.

  41. Edward Morbius I understand you’ve done your research and you may be mostly correct about how it has been and still is, but instead of studying the past, I focus on studying the future. As I said, ” Plus, water will soon be ‘produced’ more than one way”. That’s a future which is not written yet.

    However, the vast majority of Midwest is mono-crop farming which uses up insane amounts of water in the least efficient manner possible. Freeing that up would go a long way toward solving the current water crisis even before adding in the self-supplied and other water solutions.

    Consider a couple anecdotes for how badly we now treat water to grasp how it’s not really scarce but wasted.

    In the Boundary Channel Islands where Canada meets the US, the US side (where gas engines are permitted) has such water pollution that no one would even bathe in it. However, just North on the Canada side, the water is so inviting you can’t drink enough. Cool, refreshing and clear enough to watch your fish attack your hook 30+ feet below your boat.

    Then lower into the states, in Stromsburg, Nebraska, where the Big Blue River begins, the water is so clean and a bluish/green tint, it compares well with that of the Caribbean. It really is gorgeous. Then if you follow that river a mere hundred miles to Beatrice, Nebraska, passing farms and numerous industry sites, you’ll find it a muddy, nearly toxic mess. No good fish are left besides carp and big ole blue cat, no beavers, few mountain lions, less of all wildlife. This is because so much irrigation is being taken out for the corn/wheat/soy fields that it actually washes the pesticides and herbicides back into the river. It’s literally this way all over the Midwest. No one drinks river water because it has the stigma of “toilet water in the movie Idiocracy”.

    Even worse is that even though you can drill a well and get abundant water nearly everywhere (not just over an aquifer), this too has become infiltrated with a ‘mineral imbalance’. (Yes, I’m being polite here.) Even in West Texas, you’re never that far from a smallish lake, river or stream.

    Returning this to a source for living would yield tens of millions of acre-feet to each state each year.

    It would also return genuine meaning to the origin of mottoes that these areas acquired when they were first settled. Things like ‘the good life’ and ‘god’s country’ and paradise/heaven/best place on Earth would return to having meaning. And this is the draw that you’re missing.

    You’re kind of brash in your assumption that no one wants to live in these places when offered coasts, cities and commerce. These people (myself included) want to live a much simpler life, farther away from “the hustle and bustle of the big city”. And I think you’re wrong that it’s not growing. It is attracting people by the U-Haul loads. To date though, it has been as you suggest, to the cities and small towns. But they mostly state that they want an acreage off-grid if only they could get off-grid in every way. And that’s what I’m suggesting is coming very soon.

    I would recommend that you don’t dismiss the water changes that are coming because between the existing and the new methods of getting it, it will soon be abundant.

    Regarding transportation, there’s two side to that as well. There’s an increase in self sufficiency which will necessitate less interaction with other places but there will also be better transportation methods making it very cheap or free to get to either coast from the center. Picture a Hyperloop with the last mile integrated directly into it. And that’s before we add in rigid blimps, autonomous drone shipping and ‘free’ electric car methods.

    Now, if we take just the Midwest region and sprinkled more people across these newly restored plains (taking population density from 24 to 200 – still extremely low), that gives each family 14 acres which is a pretty large acreage to settle down on. The result is an increase of about 190 million people. It would be very difficult to detract that many people from living a better life if they could get it rather cheap and still have all their creature comforts.

  42. Mike Murphy Regarding your proposal that a crypto basic income might be funded by simply printing new money and handing it out to the people… I don’t completely disagree but I want to clarify why I don’t publicly advocate that.

    Printing new money at the rate that new people are born (net), isn’t a terrible problem but it does leave the door open to printing in excess which causes inflation. And by now, most people should know that inflation is touted as good only because it helps banks, governments and publicly traded corporations – basically, those making their income from lending or leverage. It actually hurts the masses of people trying to simply survive because wages and the current crop of investments available to them (via bank regulations) don’t keep up.

    The other side of this is that deflation should be the norm. As technology advances and makes individual products and services cheaper, the people should benefit from this. This would happen by their savings increasing in purchasing power beyond what their wages fell (which will happen).

    The whole game is a race between wages and savings changing and prices changing. When wages win, so do the people.

    Now for the big reason. By not promoting printing, I can enlighten people to the massive size of theft that banks now take from the economy. This is money gaming that pulls from productivity by a thousand cuts. But since it is taken from everyone, we get distracted from it and think we’re in a battle with the government or some big corporation. No. We’re both being robbed and they just have the means to pass their losses down to us.

    By promoting a transaction tax, I can show that the this theft is going untaxed. Compare this:

    When the flat tax is suggested, most times it is suggested that around 17-28% would be the needed rate. The basis for this is that government costs are about that portion of the economy. But if we include banks as part of the economy, that rate falls to way below 1%. In fact, a full 1% tax charged on every transaction today would not only fund a full guaranteed income (not basic), but the entire government AND military and possibly have enough left over to increase many of those. It really is that bad.

    However, there’s a nuance that’s often missed in this. By taxing every single transaction even at that low rate, it would kill off much of the financial gaming that is used to rob from us. No one could profit from high frequency trading at 0.9% profit per transaction if it was offset by a full 1% tax. Same goes for other much harder to explain games.

    And this all leads to the obvious question of how to get something like this implemented if the banks basically write the rules and they stand to lose their monopoly on money. Well, that’s where the crypto comes in. By creating such a system, that system would be self supporting financially, based only on productive commerce and so inexpensive to manage that it would simply attract commerce to it from all others. After all, who wouldn’t sign up for free basic income if all that was required of you was to spend it?

  43. Another possibility I’ve been following is that as online retailers like Amazon continue to decimate brick and mortar stores, a lot of these buildings can be free’d up for redidential, bringing rents down overall as more housing becomes available, and many may become squatters habitats.

  44. Todd McKissick If new money isnt created we cannot do new work. meaning, if I do work today, say build a house, and you want to owe me, and I get paid today, that is what banks do. They create money out of nothing for the work I do to pay for the work today with ‘full faith and credit’ the creditor pays off the money they created out of nothing. I actually think it works, hence the society today. The perversion is the banks control this, and in essence get all the revenue (interest) for free for this service. Now, there is some cost, and they deseve some profit, but our government cannot create a single dollar (public money) without interest for life. The process is skewed heavily to the central banking system. I agree with new money with no cost, at an appropriate rate to minimize inflation. But inflation in general is not bad also. What if, I loan you $100 bucks for digging a ditch and in 50 years you pay it back. for $100 bucks. On the surface this seems fair (as the Greenback did for 100 years!) But in reality should the work done 50 years ago ditch digging REALLY be still worth 100 bucks given now you may have power tools and a shovel? Point is slight inflation puts a tax on those who have money to not sit idle and count their cash, they must invest into the public sphere or lose their purchasing power. When Gold was the standard massive deflationary attacks hit with those with shiny rocks horded to the horror of the masses who starved. And they got RICHER due to the scarcity of shiny rocks. (more work for same shiny rock). This perverts to the top 1% to the most extreme. Please don’t let ideology propel the top 1% to be top 0.00001% out of fear of inflation.

  45. Todd McKissick BTW, i did several blog posts on this. in 2006 when i realize the entire banking was a ponzi scheme going to implode, i have been mildly obsessed ever since on these macro economic issues. websurfinmurf.blogspot.com – Ideal form of money – empower the people

  46. Mike Murphy not sure what resurrected this thread but I notice that I missed your last. Also, Gideon Rosenblatt is likely done with graduation services. 😉

    With a currency stabilized to the population, and technology lowering prices, deflation would reign perpetually. Knowing this is key for people’s decisions.

    When you know your money will buy more tomorrow, a few changes happen in behavior. First, you don’t charge interest on loans (or not as much, so it trends toward no one charging it via competition). Second, you don’t feel forced to spend today but rather to save for cash purchases. This further reduces the interest charges on society’s operation. Without these charges, productivity will soar because the real cost of labor plus the cost of the underlying resources plus a transparent profit will become the retail price. Gone will be a dozen accounts, each manipulated to perform a different financial function just to make a business run. Businesses will concentrate on profiting by making goods and services, not hiring better CPAs.

    Resources needed to support those businesses will be bought just in time by default because buying them tomorrow costs less than today. Waste is minimized this way and society benefits even more. It also increases velocity of money which feeds directly into the dividend

    The same goes for capital expenses. And land falls into this category. As I made the case for above, land will become less of an investment and more of a cost. And again, gone will be playing games of depreciation schedules to support profit.

    To your point about money being hoarded in this scenario, that is valid. However with a tax on every transaction, and if the money value rose from artificial scarcity, the basic income dividend given to each human then rises. This exactly equals the loss to those hoarders.

    Then, when they decided to spend that money, the tax hits that transaction at the same nominal rate but a higher real value, again instantly giving the benefit back to the masses.

    In the end, society could run equally well on credit with tons of interest calculations and formulas for the value of time… Or it can run on pure cash with deflation changing values by the market hand. One is complicated and very easy to manipulate. The other is neither.

  47. My point from this piece was not about endorsing a robot tax or about not endorsing one. It’s that it’s sort of a fool’s errand. Really, taxes should focus on the container of the automation, which is the corporation.

    As for crypto, Mike Murphy, I’m with you. The thing I’ve been investigating is more how to generate tokens as a result of service and product usage. I did an interview a few months back with the founder of Colony (on the Ethereum stack) and I think there are very interesting and powerful possibilities there.

  48. Gideon Rosenblatt The heart of my assertion is we need to decide as a species, if there are basic human services that raises the bar on what each person is entitled to. This could be simply food, shelter, and basic to moderate medical. (over time medical maybe cheap enough to be truly universal). Once these basics are agreed (doesnt need to be a democratic vote, the principle agreed by the crypto-currency architect) then we could simply make a crypto-coin be created each day using your DNA. “That IS the new money creator, YOU”. Then everyone vyes for hoarding the currency to become wealthy over the “coin a day” masses. Think of all the $$$ being poured in to race to be the first to resolve a hard equation’s next value. All of that investment gone, and for what? To dig a gold bar? There IS no intrinsic value in this work. It’s sole purpose is to create scarcity in a controlled manner. Well, if we can’t create any more coins than 1 person gets, that is the control, now provide the services to get people to trade you that currency. Granted, there are many human-made issues that prevent adoption of what I wrote here, but in principle, I’d like to hear any economic flaws in it. It also would wipe out taxes from companies, people would need to elect to pay taxes from the coin-a-day mechanism for what they need.

  49. fil smyth I watched the video, thanks! Once you take away the power of the governments to create money to spend on what they don’t have, the services they provide will become a challenge to fund. Even if the currency has a value stabilizing mechanism, the “new world” would need mechanisms to fund social services. What is at risk is a crypto that becomes adopted then a old model (governments, banks, etc) sweep in and force draconian ways to fund themselves.

  50. Mike Murphy not necessarily true. There are $5,000T worth of transactions each year. Taxing that at 1% yields $50T in revenue – enough for UBI and gov.

    But that’s not possible when the major profiteers are in control of what gets taxed.

    So create a new currency that does this and attracts members by being more profitable than any other. By doing this with a crypto, it’s possible to create one where not even the creator could change it retroactively.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Sign up here for the latest articles. You can opt out at any time.


Subscribe by email:



Or subscribe by RSS:

Subscribe-by-RSS---Orange-Background
%d bloggers like this: