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A New Approach to Aid
August 20, 2009 7:55 AM   Subscribe

" Under the plan, every citizen, rich or poor, would be entitled to it starting at birth. There would be no poverty test, no conditions and, therefore, no social bureaucracy. And no one would be told what he or she is permitted to do with the money." Promising news from Spiegel Online about a Guaranteed minimum income project in Otjivero, Namibia. (via)
posted by The Whelk (51 comments total) 6 users marked this as a favorite

 
Isn't this a basic income scheme, where everyone gets the money unconditionally, rather than a guaranteed minimum income scheme? The article says "...for each citizen. There are no conditions".

Disclaimer: I'm very keen on the Citizen's Basic Income, and not just for the developing world.
posted by TheophileEscargot at 8:03 AM on August 20, 2009


I've already read this somewhere, and albeit a good idea for (really) developing nations, I can't see it really working out unless said nation was an island.
posted by jsavimbi at 8:04 AM on August 20, 2009


I wasn't clear on the distinction, so I went with the one that mentioned the village in the Wikipedia article. I could be wrong, they sound very similar.
posted by The Whelk at 8:04 AM on August 20, 2009


Interesting how the article basically introduces the "villain" in the beginning of the article, and portrays him as a character from a dickens novel or something, but at the same time, rich people like that have always existed, who think the problem is that the poor just don't work hard enough (for them, of course).

Of course, we know the standard argument, if people make money without working, then they won't work. (Unless it's something enjoyable)
posted by delmoi at 8:11 AM on August 20, 2009


I've already read this somewhere, and albeit a good idea for (really) developing nations, I can't see it really working out unless said nation was an island.

?

Would you care to elucidate that a bit more, I don't think the connection between between not being an island and this program not working is as obvious as you seem to think.
posted by delmoi at 8:12 AM on August 20, 2009


There is so much wealth in this world, and so much of it spent on well intentioned relief efforts. But there are always conditions attached. And layers and layers of bureaucracy deciding how those conditions should be met. It is the same story with health care in America, if we just let go of all that crap, the same amount of money could really start to help people. And yes, if you are born, you have rights. The world is bountiful. Let's stop acting like it isn't.
posted by bitslayer at 8:13 AM on August 20, 2009 [4 favorites]


Of course, we know the standard argument, if people make money without working, then they won't work. (Unless it's something enjoyable)
The beauty of the basic income scheme is everybody gets the money, so there's no "benefit trap."

If you have a conventional benefit scheme that gives you $10 if you're unemployed, then there's no incentive for you to get a $10 job, and little incentive for you to get an $11 job.

Under a basic income scheme, if you get the $10 job, you still keep the money, so you've now got $20 instead of $10. Take the $11 job and you've got $21. So everybody has an incentive to work.
posted by TheophileEscargot at 8:16 AM on August 20, 2009 [11 favorites]


Main site for Basic Income Grant Coalition in Namibia.

Church-driven, but funded by taxes?

(I'm wondering how much cultural context matters, in terms of organization / administration, especially vis a vis church influence --- anyone have a sense of how this has worked in other countries?)
posted by puckish at 8:31 AM on August 20, 2009


By the time I reached the third page and was reading about how the baker had purchased a stove and was thinking about hiring her first employee, I had a huge smile on my face. It is astounding how much difference a small income can make. And bravo to these enterprising individuals who are working to make this tiny amount of money into something which grows and grows.
posted by hippybear at 8:34 AM on August 20, 2009


This is quite inspiring. Honestly I would not have expected it to work, but in retrospect it kind of makes sense that giving people responsibility for their own well-being and the means to act on that responsibility can be quite empowering. Maybe it's because of the capitalist/Western viewpoint I grew up with, but if this hadn't worked I don't think I would've believed it possible.

This is really something great.
posted by scrutiny at 8:35 AM on August 20, 2009


I struggled with some of the economics in that article:

On the first page, the following statements are presented to us:

"This country is a time bomb," says Dirk Haarmann, reaching for his black laptop. "There is no time to lose," he says...."Here," he says, scrolling through his statistics, "more than two-thirds of the population live on less than $1 a day."

However, just a few paragraphs down:

"For a woman with seven children, this translates into 800 Namibian dollars a month, which is considered a moderate income."

So a family of eight enjoys "a moderate income" on $0.43/day/person, but the fact that two-thirds of people are living on less than a dollar a day is a signal of impending doom?

(I'm not trying to be glib here, I'm really trying to understand the dynamics of the situation.)
posted by brandman at 8:42 AM on August 20, 2009


If you have a conventional benefit scheme that gives you $10 if you're unemployed, then there's no incentive for you to get a $10 job, and little incentive for you to get an $11 job.

Under a basic income scheme, if you get the $10 job, you still keep the money, so you've now got $20 instead of $10. Take the $11 job and you've got $21. So everybody has an incentive to work.


Why would an employer offer a $10 or $11 job if all the employees are already getting $10 from the government?
posted by Pollomacho at 8:43 AM on August 20, 2009


Why would an employer offer a $10 or $11 job if all the employees are already getting $10 from the government?

Huh? Why wouldn't they? The employer would offer such a job if the work the employee did was worth $10/$11 to the employer, which is what the employer would be paying. Why would the employer care about any other income of the employee?
posted by Perplexity at 8:45 AM on August 20, 2009 [5 favorites]


I'm actually heartened by the thought of this model being tested in the real world.
This is actually something that I originally saw in a Heinlein novel (For Us, The Living), but it involved a future America that was a completely isolated economy, with no foreign trade. Namibia though, appears to be such an isolated economy, at least for a majority of it's population, that it just might work, as a local currency type of experiment goes. An interesting idea. Let's hope it will continue long enough to get enough data from the long term effects, i.e. wealth accumulation by individuals versus monetary flow across the whole scheme.
posted by daq at 8:48 AM on August 20, 2009


brandman: I don't understand your math. If a family of 8 gets $800/month, that comes to $100/month per person, which by my math is something like $3/day per person for each month.
posted by hippybear at 8:56 AM on August 20, 2009


It's interesting to compare to microloans - another scheme that gets small amounts of money into the hands of people who otherwise wouldn't have it. The effects here run deeper - for a microloan, one needs the wherewithal to have a business plan to repay the loan. Here everyone gets basic nourishment, and a chance at gaining some of that wherewithal. It's hard to start a business when you're starving, after all.
posted by kaibutsu at 8:58 AM on August 20, 2009


I think I figured it out...they used the $ sign in the "$1 a day" quote I used, which made me think he was making the conversion from Namibian dollars to US dollars (it's one of only two places in the article where a "$" sign is used. So I was busy doing conversions, not thinking that the "$1 a day" he was referencing was one Namibian dollar.

/oops
posted by brandman at 9:01 AM on August 20, 2009


Until recently, the unemployment rate was over 70 percent, 42 percent of children were malnourished, and few children attended school.

Statistics like this make me sad, wondering how it is that, at the very least, people can't get together, and form a farming collective. It's not a glamorous existence, but at least they'd have food, shelter, and the community.

Otjivero is surrounded on all four sides by the electric fences of rich, white farmers like Lüttwitz.

Then I read shit like this. I'm not usually one for extreme Marxism, the elimination of property rights and such, but stories like this sway me. The notion that a few can hold the rights to so much land, it seems criminal. How the hell can the poor "pull themselves up by their bootstraps" if they're not even legally allowed to raise cattle to make the leather that would go into those bootstraps?

It's kind of fucked up, the world we live in. It used to be that if you were dissatisfied with your culture, or otherwise needed a change, you could go somewhere and just claim some land. Yeah, the best land was already claimed, but now there isn't a single bit of even wilderness that isn't someone's property.
posted by explosion at 9:04 AM on August 20, 2009 [2 favorites]


Maybe if we stopped paying people NOT to do things (subsidies, protectionism, "local produce") then more people would have jobs in other countries and we wouldn't need something like this.
posted by blue_beetle at 9:05 AM on August 20, 2009


Blue Beetle, it's not that simple. Even if the Namibian farmers (for instance) were able to better compete for space in American supermarkets, it doesn't guarantee for a second that they'd share their profits with the poor, or provide better working conditions.

The problem is weak government and weak unions that essentially allow the robber barons to reap the rewards without concern. Any employer deigning to provide better conditions and pay to the workers may well get squeezed out by market pressures.
posted by explosion at 9:10 AM on August 20, 2009


I must be missing part of the economics. If every man, woman and child has $10 in his (or her) pocket, then wouldn't the cheapest bauble or most meagre bite of food cost ... $10?
posted by spacewrench at 9:12 AM on August 20, 2009 [3 favorites]


we know the standard argument, if people make money without working, then they won't work. (Unless it's something enjoyable

It makes perfect sense until you realize that even if you don't give people money, they still won't work, because there will be no jobs available:

Until recently, the unemployment rate was over 70 percent, 42 percent of children were malnourished, and few children attended school.

I doubt you have 70% unemployment because people are lazy.

This strikes me as a program that works well when the population has no access to capital: no land that could be used for farming or animal raising or small businesses, no livestock, nothing that microloans could help. So instead, you make their existence a form of capital that provides a small income which can be used to feed yourself and/or support investment in other ventures.
posted by deanc at 9:18 AM on August 20, 2009


Maybe they should just give every citizen a million dollars, then they would all be millionaires!
posted by incomple at 9:21 AM on August 20, 2009


Macroeconomics is not my forte, but as others mentioned, wouldn't this just cause massive inflation?
posted by pravit at 9:27 AM on August 20, 2009 [1 favorite]


I must be missing part of the economics. If every man, woman and child has $10 in his (or her) pocket, then wouldn't the cheapest bauble or most meagre bite of food cost ... $10?
If you just print the money, or introduce it from outside the local economy, it would cause inflation.

However, if you take it out of taxes, or existing aid budgets, or existing welfare, or local donations, it's not doing anything to cause inflation: you're not increasing the total amount of money around.
posted by TheophileEscargot at 9:30 AM on August 20, 2009


Under a basic income scheme, if you get the $10 job, you still keep the money, so you've now got $20 instead of $10. Take the $11 job and you've got $21. So everybody has an incentive to work.

Except those that think $10 will get them along just fine and they can enjoy their entire day free from someone nagging them about showing up on time and doing what the boss says.

Adjusting for living in the States, if you gave me $100 a day, unconditionally, I'd find new and exciting ways to work on my tan, rather than scramble to make a second $100.
posted by Cool Papa Bell at 9:31 AM on August 20, 2009


Cool Papa Bell, sure some people would laze around and do it indefinitely and that would be OK, because they would be consumers. On the other hand, some people would produce, because, God love 'em, some people just have to work.
posted by BeReasonable at 9:35 AM on August 20, 2009 [2 favorites]


Macroeconomics is not my forte, but as others mentioned, wouldn't this just cause massive inflation?

I think that would depend on where the money is coming from. If they're just magicking the money into existence via their central bank and paying it out, then yes that would probably cause inflation. If they are getting it in from taxes and paying it back out in a redistribution scheme, it might not be quite as bad, although I would expect a certain amount of inflation as demand for goods by consumers who now have money compete for limited supplies.

My suspicion is that the devil is in the details.
posted by Kadin2048 at 9:35 AM on August 20, 2009


However, if you take it out of taxes, or existing aid budgets, or existing welfare, or local donations, it's not doing anything to cause inflation: you're not increasing the total amount of money around.

However, given that the government and average citizens spend money on different things, I'd still expect to see some inflation in the price of consumer goods. If the government gives the money it would have spent on buying tanks to its citizens who want to buy bread, surely local bakers would jack up their prices in response to the sudden increase in demand?
posted by pravit at 9:48 AM on August 20, 2009


Yeah, sure, they can provide dignity for all, end poverty and starvation, and save children's lives… but what about the increase of a few percent in the value-added tax?
posted by designbot at 9:50 AM on August 20, 2009 [1 favorite]


It's also worth comparing this to the kind of conventional aid scheme where food is given out rather than money.

That sounds good in theory. But the practical effect can be that local food prices drop, which puts local farmers out of business, and farmland falls into disuse.

If you give out new money, and bring it in from outside the local economy, that could indeed cause local food prices to rise. But that's not necessarily an entirely bad thing. If local farmers can make more money, which means they can afford better tools, seeds, fertilizer, to bring unused land back into production, to hire more labourers; and therefore produce more food.

We generally think "high food prices bad" because we associate high prices with shortages of food. But in the case I described, the high food prices are associated with an increased supply of food. The causality is going the other way: the change in price is causing a change in supply, so we need to think differently to the more familiar situation where a change in supply is causing a change in price.
posted by TheophileEscargot at 9:55 AM on August 20, 2009 [3 favorites]


Cool Papa Bell, sure some people would laze around and do it indefinitely and that would be OK, because they would be consumers.

No, this is the opposite of OK. These consumers-that-are-not-producers are known as "drags on the economy." They're making life difficult for everyone. In many cases, this is completely understandable -- children, the elderly, the sick, the infirm, care-givers, etc. Everyone else, you want working and doing good. You need to give people the tools, the health care, the education, etc, to encourage them to get out there and make stuff.

On the other hand, some people would produce, because, God love 'em, some people just have to work.

Not if you're giving them a hand out, they don't ... like I said, seriously, if you gave me $100 a day, unconditionally, I'd happily quit my job and get my 8-10 hours per day back. I'd totally get into killer shape. Six pack abs. Shining white teeth. But, otherwise, I'd try not to pick up anything heavier than a beer.

We can dicker over the amount of support ... but I'm surprised it's even a question that too much support can be a bad thing ...
posted by Cool Papa Bell at 10:32 AM on August 20, 2009


Not if you're giving them a hand out, they don't ... like I said, seriously, if you gave me $100 a day, unconditionally, I'd happily quit my job and get my 8-10 hours per day back. I'd totally get into killer shape. Six pack abs. Shining white teeth. But, otherwise, I'd try not to pick up anything heavier than a beer.

We can dicker over the amount of support ... but I'm surprised it's even a question that too much support can be a bad thing ...


This is a valid point, I think, but it seems to me the amount involved is a critical factor. If you give people just enough to bump them up a notch on Maslow's hierarchy, then there is more likely motivation for them to go out and work or invest to improve their lot further than if you bump them all the way up to comfortable.

If you gave me $100 a day, unconditionally, I'd still be coming to work, putting in my 8 hours or so, 5 days a week. I'd be a lot more likely to actually go to the doctor and the dentist and to take a proper vacation, but I wouldn't surrender my job.

A question for those who are better-versed in economics than I: how does the origin of the money make a difference in whether this would lead to inflation? Doesn't increased wealth lead to increased demand which leads to price increases*?

*Except, as I understand it, when increased demand leads to considerable reduction in production costs, in which case equal or greater profit can be achieved without increasing prices, such as we often see in electronics.
posted by notashroom at 10:50 AM on August 20, 2009


It's a good idea, but it'd be wrong for it to replace other benefits like health care and social security. The problem is that when citizens have to pay for things out of pocket, like their retirement funds or preventative care, they'll often be stingy until it is too late. This is why health savings accounts and Bush's "privatized social security" plan did not catch on.

However, for addressing the pressing needs of abject poverty (hunger, lack of shelter, etc), this is a great plan, and not losing the benefits does mean that people would still be motivated to work. The real issue is finding the right amount, and the right way to tax people to get the revenue.

Granted, this would have a tough time showing up in America, where even an employer mandate on health care gets derided as "socialism."
posted by mccarty.tim at 10:57 AM on August 20, 2009


Privilege is not conserved. fail
posted by mouthnoize at 11:04 AM on August 20, 2009


I think the $100/day notion is a red herring, because that's a lot more than a minimal lifestyle. Find the cost of living for a truly minimal lifestyle, compile a government pamphlet on how to live on that cost, give everyone that subsidy, and watch as most people would still work.

This minimum lifestyle would include a tiny apartment akin to a freshman dorm, with kitchen and bathroom. Food would consist of store brands only, and certainly not enough for beer, tobacco, sodas, etc. Clothes are boring, plain shirts and pants. Let's assume there's health care (not insurance, but actual care!) in there as well.

Why would people work? For a larger house or apartment, for air conditioning in the summer, for the granite countertop and stainless steel fridge. For food that was more appealing and more delicious than merely getting by. For vices like beer or cigarettes. For fashionable clothes that looked nice rather than just keeping one warm. Or, for the sheer love of money or the satisfaction of a job well done.

Meanwhile, this minimum lifestyle payment would be a huge step up for those too poor or disabled to do anything. It would sidestep the nightmarish bureaucracy of welfare and unemployment. With everyone entitled, no one would go without. There would be precious little homelessness (you can't force someone to live inside, I suppose), and over all public health would be increased as illnesses wouldn't go undiagnosed, epidemics would be stifled.

Your average person would get about as much out of it as they put in, but it would be a huge reduction of stress. You'd know that you'd always have a minimum. Rather than being tied to a job that one didn't like, or having to take the first job offered due to impending bills and poverty, a person could wait, and take the better job instead. Happier workers are more productive.

As has been said, a society is judged on how it treats the least of its members. By providing even the indigent with food, clothing, shelter, and health care, without question or process, we greatly improve our society as a whole.
posted by explosion at 11:50 AM on August 20, 2009 [6 favorites]


Why would an employer offer a $10 or $11 job if all the employees are already getting $10 from the government?

To produce goods and/or services that would lead to increased wealth for the employer, would be my guess. If you're asking why an employee would take such a job, the answer is, "To double their income."

The obvious problem others have pointed to is inflation. If you give everyone a dollar a day, then soon that dollar buys nothing. This problem is solved here because the area doesn't exist in a vacuum. That dollar may be worth the same as air in Otjivero, Namibia, but it's still worth a dollar in neighboring areas, and so retains purchasing power.
posted by coolguymichael at 11:54 AM on August 20, 2009


Would you care to elucidate that a bit more, I don't think the connection between between not being an island and this program not working is as obvious as you seem to think.

I took the implication to be that if you are giving away free money without condition, you better keep your damn borders air tight or every person in a 3,000 mile radius is going to flood your nation for the dough and overwhelm your entire system.
posted by spicynuts at 12:35 PM on August 20, 2009


Why would an employer offer a $10 or $11 job if all the employees are already getting $10 from the government?

To produce goods and/or services that would lead to increased wealth for the employer, would be my guess. If you're asking why an employee would take such a job, the answer is, "To double their income."


Seems like a recipe for a race to the bottom for labor. If I know I get ten bucks free, and I'm competing for a 10 dollar job, I might say, I'll take 9 dollars, in order to win the job, because I know that all things considered, 19 bucks a day is still better than 10. Well, management may then say, ok market for this job is 9. Next candidate might be willing to take 8. So on and so forth.
posted by spicynuts at 12:38 PM on August 20, 2009 [1 favorite]


Spicynuts, that is a disadvantage to any kind of social safety net. I'm sure the same thing happens in the US with food stamps (assuming food stamps are actually available. They pretty much aren't in Indiana). Once you are getting $100/month in food stamps you can afford to work for $100/month less. I believe there was a campaign several years ago saying that Wal-Mart was essentially using government social aid programs as a substitute for paying their employees better or providing health insurance.

As a society we just have to weigh the disadvantages of having a social safety net with the advantages and find the happy medium. I suspect that the happy medium we might eventually be able to attain in the US will look very different from the happy medium the Namibians decide on.
posted by ChrisHartley at 4:04 PM on August 20, 2009


Spiceynuts, that's exactly backwards. Wages don't fall because with $10 already in your pocket, you will stop competing for the job if the wage falls below what your time is worth in other pursuits such as study, leisure, or starting your own business.

explosion, Don't worry, you are not becoming a Marxist. Marx confused land, with which your statement (and incidentally, the Namibian government) is concerned, with capital goods such as tools. You are becoming a Georgist, which is where most of the Left was at before Marx was unfortunately translated into English.
posted by Canard de Vasco at 4:38 PM on August 20, 2009


I've lived in a country where you're guaranteed benefit income to live off until you find work (or indefinitely if you are unable to work, or unable to find work).

A lot of tax-payers get really hot under the collar at the people Cool Papa Bell talks about - those who decide that a life at that baseline income is worth not having to work, and so make joblessness a lifestyle choice. And they're right to be angry, but the alternative (removing that income) is worse:

It really changes your tune to come to a country like (in my case) the USA and see how squalid life is without the basic life security provided by these benefits, and where the taxes are higher despite having no security. For example:

- The streets here are littered with beggars, like it's the third world, or a movie about the dark ages. You are constantly accosted with pleas for money as you go about your business.
- Working people are trapped in shitty jobs, unable to take time out to upskill themselves and apply for something better, because looking for work is unpredictable, which means an unpredictable gap in income, which poses potentially catastrophic risks to rent/mortgage/bills etc.
- Entrepreneurs, similarly, face such great personal risk, that far more are forced to remain trapped in their jobs, dreaming about starting a business instead of having the security to get out and do it.
- people are stressed-out - they live in deep fear of what happens if they get laid off, because when you have no security, this trivial event is suddenly life-threatening. So many people here live fitfully in the shadow of a sword of Damocles hanging over them.
- You're more likely to end up working with some layabout that costs the business more than s/he produces, which makes everyone's life harder, rather than working with people who are there because they are motivated to be there.
- These unemployable people who get forced into employment (then fired, then find another job at another sucker of a business until they get fired from that one too, and so on) often could do more good to the community if they were unemployed but had a basic income. Certainly, some of them might just work on their tan, but some of them get bored of lying down all day and put their time into community, sports, or arts, which raises the quality of life per dollar for others in the community. Similar to how a housewife doesn't get paid, but still contributes value to the household, it is a mistake to think that at the society-wide level, all those not employed for a business are not contributing value to society)

Given what I've observed and experienced over the years in the different countries and their different approaches to this, a nation that gives its citizens some basic security is noticeably better to live in than one that doesn't, and I am sold on the value of the concept. I think the USA would be so much better to live in if it had this. But that's [gasp] socialism... or something.
posted by -harlequin- at 4:41 PM on August 20, 2009 [2 favorites]


Oh, for what it's worth, the level of basic income I'm talking about, adjusted for life in the USA, would be about $120 a week if you're on your own. Ie about enough to rent a small bedroom, buy nutritious food, maintain presentable clothing, etc. (Healthcare is also covered)
posted by -harlequin- at 4:53 PM on August 20, 2009


I don't see why there would be downward wage pressure. Employers already pay as little as they can. If a potential employee already has a source of income, he can afford to be pickier. Most people would work at a dangerous, unpleasant job for a pittance if the alternative was to have no or next-to-no income (for example, an undocumented immigrant who works at a slaughterhouse for minimum wage, or even less). If a person can sustain a reasonable minimum standard of living, then they can refuse to take that slaughterhouse job until the income is enough to justify the risks/unpleasantness/etc.

On the other hand, if the government gave me $10 a day, I would buy nicer kitchen appliances/countertops/whatever, and so would my neighbors, and the value of our houses would go up by the amount of a mortgage that $10/day can support. California is not Namibia, though...
posted by jewzilla at 4:53 PM on August 20, 2009


These consumers-that-are-not-producers are known as "drags on the economy."

I believe the term is "housewife."

Seriously, there are lots of ways to contribute to society for no pay or very low pay. The volunteers at the hospital where I work contribute enormous amounts of time and labor. They are not "drags on the economy."

This kind of scheme could really benefit people who work at lower incomes in crucial jobs - day care workers, nursing assistants, etc. It is shameful to have working poor in a rich country - basic income could give people a hand up.
posted by jeoc at 7:09 PM on August 20, 2009


cf. transfers :P
Americans may need to change the mix of our consumption, but overall I think our standard of living is not only supportable, but improvable, and that our goal should be to get the rest of the world to live as well as we do, rather than to reconcile ourselves with some pseudomoral poverty. The world is full of human want, which we should strive to meet by working to increase our capacity to produce. Problems arise when want and purchasing power are misaligned. We can improve that by redistributing some of the purchasing power from those with lesser to those with greater use for current consumption. If that sounds Commie to you, note that is precisely the function that consumer credit traditionally serves, just without all the residual claims, a large fraction of which will prove to be illusory (at least in real terms). That is, transfers are just a more honest way of doing precisely what a credit expansion does, except without the trauma that comes from learning that much of the money lent to fund current consumption will never be repaid...

One might argue that bank lending is "smarter" than public transfers would be, that the patterns of consumption and investment that result from private sector credit allocation will lead to superior productive capacity and more sustainable patterns of consumption than direct transfers. Given the awful quality of aggregate investment this decade and the volatility now faced by consumers who were recently credit flush but who under any reasonable lending standard must now be credit constrained, it is hard to be enthusiastic about the special wisdom of bank-mediated credit allocation.

Of course, once we start redistributing purchasing power, there's the thorny question of who gets what. I have an answer to that, it is my new mantra. Transfer flat. Cut checks to every adult in the economy of interest, regardless of whether they pay taxes or have a job. Flat transfers are easy to understand and they pass the smell test for "fair". As an income source unrelated to work, flat transfers increase workers' bargaining power with employers by reducing the cost of refusing a raw deal. (Supplementary income is a better means of enhancing labor bargaining power than unionization, which serves the same purpose but may limit the flexibility and efficiency of production.) Finally, flat transfers align purchasing power in the economy with the problem that we want markets to solve — We want an economy that serves some people dramatically more than others, in order to preserve incentives to produce and excel. But we also want an economy that meets every person's basic needs, even those of people who are unable or unwilling to offer marketable goods or services. We won't let people starve, so why not fund a basic income, however miserly, rather than relying on an inefficient social services bureaucracy or taxing the virtuous by relying on charity?
cheers!
posted by kliuless at 9:54 PM on August 20, 2009


oh and speaking of "fair"
posted by kliuless at 10:01 PM on August 20, 2009


$120 a week works out to a really rough 1.87 trillion per year to support the US's 300 million citizens. We could do it with large restructuring. Part of what would be needed to make this successful would be access to places you could live at $480 a month and still have the cash for basic food. Projects in essence.

I support this, national medical care, flat tax, nominal fee education, and high taxes on any nongov income (50% should do it.) I would certainly work if we had something like this, but I wouldn't feel the need to frequently put in ten hours days, I'd probably end up working from five to seven hours a day so I could feel productive, improve my standard of living a bit, and have some money for good times. When I want to go on vacation I would work more and save up. Sounds reasonable to me.
posted by jellywerker at 10:25 PM on August 20, 2009


Why would an employer offer a $10 or $11 job if all the employees are already getting $10 from the government?

Huh? Why wouldn't they? The employer would offer such a job if the work the employee did was worth $10/$11 to the employer, which is what the employer would be paying. Why would the employer care about any other income of the employee?

To produce goods and/or services that would lead to increased wealth for the employer, would be my guess. If you're asking why an employee would take such a job, the answer is, "To double their income."


I must be missing something. People seem to be assuming that employers are not trying to have as much revenue with as little expense as possible, which I thought was a basic capitalist concept. Also people seem to be assuming that there is a surplus of employment as opposed to a surplus of employees. When there are more workers than jobs the employer gets to decide what work is worth.

If everyone is handed the same amount, then everyone's position remains exactly the same, except now an employer knows that the employees already have a base sum of money and he/she will not need to pay a minimum wage to cover the basic standard of living of employees any longer. Instead of pay being the actual value to the employer or the basic minimum amount to live - whichever is less - the pay becomes only the value to the employer and that is going to be as close to zero as the market will allow.
posted by Pollomacho at 7:16 AM on August 21, 2009 [1 favorite]


No, this is the opposite of OK. These consumers-that-are-not-producers are known as "drags on the economy." They're making life difficult for everyone.

Don't worry Cool Papa Bell; once the Republicans get back in power, they'll sponsor an invasion of Namibia to put in a less^H^H^H^H more democratic government that will put that money back where it belongs- lining the pockets of the rich.
posted by happyroach at 8:43 AM on August 21, 2009


oh and re: "smarter" deficit spending
We could see an offsetting positive wealth outcome if the borrowed money were all spent on productivity-enhancing societal improvements. Sadly, it is mostly spent on current consumption...
optimistically, i'd argue if (say) $1 trillion was *productively* spent on improving (among other things, e.g. education/energy/environment) health care -- a big if, sure -- then the 'ROI' of gov't deficit spending would be a net positive :P realistically, of course, you'd be all "well that's never gonna happen" BUT (fatalistically) WHAT IS THE ALTERNATIVE? to (mis)quote interfluidity, i laugh in the maw of your liquidity trap special-interest-infested coordination problem(s); there _could still be_ a stable equilibrium 'outside the box', so to speak...

cheers!

[i.e. however improbable, the neolithic revolution _happened_, the industrial revolution _happened_; i'm not saying some post-scarcity world or whatever is necessarily around the corner, just that 'the rules' can and have changed, the game changes, often not without (some) massive upheaval to be sure, but when all else fails (or stagnates) the only thing left is to http://createyourowneconomy.org/ ;]
posted by kliuless at 11:50 AM on August 23, 2009


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