I can be wrong, but

You’ve heard it before: the robots are going to take your jobs – from truck drivers, through store and restaurant staff all the way to journalists and beyond as the tech gets better. The economy is getting worse, the profits from capital are raising while the profits from work are in decline, if trends continue as they do we are all doomed! People need to live, bloody capitalism demanding that everybody has to have a job in order to be self sustainable doesn’t cut it anymore, things have to change, and they have to change now!

I don’t want to discredit people that raise an alarm, most of them are correct in spotting the symptoms, I am not quite sure if they are correct in spotting the causes of those symptoms, but whether they are correct or not, one thing is for sure: if there ever has been a growing socio-political knee jerk reaction, it is calling for Universal Basic Income.

If implemented today, Basic Income will kill a lot of people

Here is just one reason why. There is a lot of boring jobs on the job market, one of them is garbage disposal and all other sorts of jobs related to keeping a city (any city) clean. Those are the potentially the most boring and unsatisfying  jobs out there, but they are very much necessary for our survival. Drowning in trash not only isn’t pretty, it’s snowballing bio-hazard. Should Basic Income be implemented today, I can’t imagine anyone but maybe very few public workers responsible for garbage disposal to stay on their tolls, and the few madmen that will stay certainly won’t be enough.

Solutions? Volunteers! Phew! Now I don’t have to worry about throwing out all the trash I produce, since some volunteers will come and take care of it for me without a blink of an eye, isn’t that what altruism is about? Well… let’s get real. While perfectly capable of taking care of the trash in their own living spaces, people simply won’t be so eager to do it where public space is involved – you throw your trash into the container and now what? This is an age old problem – if something is public, owned by the government, or by the collective if you wish, it is in fact owned by no one, and thus nobody has any incentive to take care of it. You might think that “deal with it or die under tones of old leftovers and plastic” is a good enough incentive to act, but social diffusion goes much deeper than that.

The real problem with economy

It feels like Zeitgeist and Occupy Wall Street was just yesterday, and yet when I look around and listen to what people say, it seems like nobody has learned the lesson. Technological progress increases productivity, that is a fact, it’s axiomatic for the advocates of Basic Income, and if technological progress is exponential, so should be the overall wealth produced. Why then do we have inflation and raising prices? If everything goes so well, why do we have a chronic economical crisis in the first place?

Gimme an F! / Gimme an E! / Gimme a D! *crowd goes crazy*

How to lend someone money you don’t have? If you try to do it as an individual, you either won’t be able to do it at all because you don’t have the money, you lend someone else’s money and go to jail for fraud/theft, or – if you have some nice hardware – print the money and go to jail for counterfeiting. Those rules apply to you, the individual, but they don’t apply to governments, nor do they apply to government backed banks (read: all of them – I’ll continue labeling FED’s influence as government’s influence, since it is the government that gives FED the monopoly to print money). When Murray Rothbard wrote his For a New Liberty: The Libertarian Manifesto, he pointed out that not only do governments have monopoly on printing money, but they extend the money creation power to banks which can lend out 6 times the money they have in reserves. The reason why we have inflation, is because governments increase money supply – taxation in a disguise – and they do so at a rate faster than wealth is produced on the market, thus prices continue to go up despite production costs going down. It seems governments really don’t like to stay behind, as the ratio is now 10 to 1 in US, but this shouldn’t be news to anyone who watched Zeitgeist movies – as much as I dislike their magical solutions, they got that part right.

The problem with the economy is not capitalism, the problem is that we have a mixed economy. Big business is not getting shafted by government and taxation, contrary, big business loves government, that love relationship has nothing to do with capitalism and everything to do with corruption, corruption made possible by the power to intervene in economy that government holds. How many car brands do you know? How many car companies came into existence in the last year? 2 years? 5 years? 10? I might not have the most accurate information, but my guess is that there weren’t many. Why? Because making a new car company is expensive, you can’t just build a car and sell it, that’s so last century! You need permissions, certificates, you need to build a test model and then do a crash test with it, possibly more than one, if you want to start a new car company there is a huge financial and paperwork cliff that you have to jump through first, a cliff that established brands don’t have to worry about – that’s government enforced unfair advantage, this is not capitalism. Every regulation, every subsidizing plan, every intervention into economy that government commits creates asymmetry and betrays the ideals of capitalism. A company employing a lot of people going bankrupt? Quick! Subsidize it with tax payer’s dollars (or just freshly printed ones)! We can’t afford losing the jobs after all, can we? And while we try so hard to keep the jobs, nobody is there to protest in the name of all the companies that could have risen and given jobs in places of the inefficient, subsidized zombie behemoths. Granted, a factory providing vast majority of the jobs for a local community closing is a local tragedy, but it’s the consequence of community building around the factory in the first place – these things will happen, and even more so as we decentralize production with 3d printing.

One thing I see often when it comes to advocating Basic Income is this: “In its heyday, Kodak employed 140,000 people. Today, Kodak’s replacement Instagram employs under 30.” While the data is true, it does not mean that Instagram has replaced Kodak, if anything – Apple did. Instagram produces software, and not amazingly robust software to that, they have done the right thing at the right time and came out as a success, the story is amazing but there is a catch – Instagram still needs a camera to work, a camera that the company does not produce. Anyone who have given more than 20 seconds of thought to that one example can see why it’s fallacious, which makes the fact that it’s brought up again and again and again as if it had some merit absolutely stunning. Yes, it is true that more and more wealth is produced by less and less people, but it’s not a ratio of 140,000 to 13, not just yet. Somebody, somewhere, still has to assemble your iPhone so you can take a picture of your lunch (where that iPhone gets assembled is another issue). You can take your tinfoil hats off now.

This is all just scratching the surface, but the bottom line to all of this is – we can’t afford Basic Income yet. Not in the monetary sense of finding the money to pay for it, but rather in the sense that we can’t afford rendering the jobs that still do exist on the market obsolete by making them unwanted due to Basic Income. The welfare state, the regulations and the corruption – all consequences of big government – is the main problem here, not technological progress. The solution to being sick is not taking a full glass of poison that’s making you sick in the first place.

The “best” case scenario

The future has arrived, advances in cognitive computing, robotics and nanotech made all blue collar jobs obsolete. Concentration of wealth eventually lead to very few individuals owning and maintaining all the life necessity providing industries with armies of robots at their command, those few individuals where getting progressively more and more taxed and at some point the Global Government stepped in and collectivized their companies altogether. Every month as a citizen of the Earth you get 3,000,000 credits (we had to go through some form of hyperinflation sooner or later), which you can then spend on anything you desire or trade it with fellow citizens for their services such as performing art or writing custom software. Those credits do not come from taxation, there is no need for taxation anymore as the global government owns all the material assets and all the critical services and owned by the Global Government itself, instead credits used to purchase food, electricity so on – being just arbitrary numbers in the network they are – disappear in /dev/null, while new credits are issued to citizens from thin air. Welcome to paradise!

Well, not exactly. You can fine tune details as much as you want, but the consequences of pumping government issued currency into the economy for the basic needs of anyone’s survival (the level of that existence can vary, too), means that in order to avoid inflation the Global Government has to steer the prices for it’s services so that the more or less same amount of credits gets removed from and added to the system. Additionally, the government issued credits have to compete with other currencies, most notably Bitcoin or it’s descendant in one shape or another, a competition where the government money is fighting a lost fight, thus the government issued currency will be reduced only to the means of acquiring the government provided services and nothing more. It doesn’t matter whether government gives you 30,000,000 credits or 100,000,000,000 credits, it will never buy you a luxury item, not even if you save that money through your whole life, simply because luxury items are not going to be sold for government credits.

Here is the embarrassment of Basic Income as a principle, while money in the free market economy represent a claim on a portion of wealth on said market, money issued by government and given away for nothing represent no value other than the claim on whatever wealth the government can acquire. That means if you want this utopia to work, the government has to – directly by producing it with it’s army of robots, or indirectly by claiming ownership of every product ever made with 100% taxation – distribute wealth and collect payment for it, the former I doubt can be efficient, the latter I doubt can be executed. By each according to his ability, to each according to his credits. All while putting even more power into even less hands, are you are concerned about inequality? You have seen nothing yet.

Trying to fix economy with one sweeping change is a noble idea, but with every radical change you have to be very careful about consequences as well as issues of feasibility and implementation. Fixing economy by giving everybody money for free makes about as much sense to me at this point as trying to get rid of AIDS by making it illegal. I’m sorry, but you can’t bend reality to your wishful thinking.

Comments on: "Why Universal Basic Income will almost certainly fail" (2)

  1. hoverhell said:

    Certainly would be nice if it fails because something more appropriate is implemented (or anything remotely equivalent at all). Certainly one of the problematic parts is that it might fail causing all the production resources be in control of much less than 100% of humans causing unrest and existential risks.

    Remotely similarly, there are no much better ideas regarding the money emission problem than government-controlled emission (and no *much* better ideas regarding particular governmental decisions, although I might remotely suspect that optimization for higher GDP is, inappropriately, among those goals).

    Would certainly be nice to decouple politics from ego (and even social signalling) and look only on the practical side of any particular policies and structures; but, alas, we can only hope.

    (also, Zeitgeist only looks sane if you interpret all the media materials as popularization tools — with only the most base ideas being stable and valid and everything else about any particular solutions being “possible examples” and/or attention-grabbers; otherwise it certainly looks like some form of lunatism)

  2. All the movies an shows, past an present, have led up to this very Idea government is pushing. THE new Alien show(forgot name) seen few.. In it they pushed the RID chip on people.. Through it giving credit like a atm give you money,but hey NO money. IN reality for this to be, You just pay everything through it.. They track you through it. The poorer classes go through this, while the upper classes probebly don’t.. THE upper classes will have the good stuff,as you stated. Sound familiar? HITLER? HE gathered all the fine arts for Himself.. BEst of Foods, etc.. Sounds like PRes, kings, Queens to huh? An Who paid for all of it !? THE TAxpayers ! THE little PEOns they pushing aside ! THE government is setting themselves up a mess though.. WHAt movie have we not seen, where the poor classes struggle through, to be on top in the end ? THE people will fight back, no way around that point.. Why MArshal law wants to go in effect.. THing is when people try to rule, they forget, the poor classes are the experienced classes, that worked hard. HAs most the muscle, an the brains that ran all their companies, etc.. An the HAckers on most part, come from the poor classes.. PEople who struggle to get better than they have. PEople will over run government in the end.. An then Christ Steps In in latter days.. I hope you believe, not all do.. to each his own. I Ran across this by accident.. Good article !

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Get every new post delivered to your Inbox.

%d bloggers like this: