Faced with gaping moral and economic holes in society
November 11, 2015 2:34 AM   Subscribe

Rewrite the rules to benefit everyone, not just the wealthy - "If there's one thing Joseph Stiglitz wants to say about inequality, it's that it has been a choice, not an unexpected, unfortunate economic outcome. That's unnerving, but it also means that citizens and politicians have the opportunity to fix the problem before it gets worse." (via)
Actually implementing all of these changes would require a complete shift in American policy and practice. The world that Stiglitz envisions in his book, one where all citizens can enjoy the promise of education, employment, housing, and a secure retirement seems at once like the realization of the American dream and an unattainable utopia.
also btw...
posted by kliuless (112 comments total) 97 users marked this as a favorite
 
Rand Paul’s right that liberal cities have the worst inequality, but it doesn’t mean what he thinks

This article seems like it belongs in this mix somehow
posted by hippybear at 2:58 AM on November 11, 2015 [12 favorites]


it also means that citizens and politicians have the opportunity to fix the problem before it gets worse

Of course, politicians and a wealthy and influential minority of citizens were the ones making the choices that imposed this inequality in the first place.
posted by Gelatin at 5:38 AM on November 11, 2015 [3 favorites]


Yes, this seems to be the sticking point for many. The thought that current local and global imbalances are primarily about deliberately ba policy intended to create imbalance to benefit the few.

Sure there's ignorance, stupidity, and unintended consequences. But much of so-called western global imbalance is about imbalance policies. Whether driven or excused by moralistic paternalism or not.
posted by clvrmnky at 5:41 AM on November 11, 2015 [2 favorites]


Wow that's a lot to review prior to posting. My pre-read cynical opinion is that the one-percent have developed such a cadre of talented economic shock troops (money managers, MBA's) that any change in policy can be manipulated to their advantage.
posted by sammyo at 5:43 AM on November 11, 2015 [5 favorites]


I haven't read the other links yet, but that "Does housing dysfunction explain, well, almost everything?" link text intrigued me, and after clicking I would have say I'm fairly convinced. Yeah, maybe it doeS. Worthy of an FPP all on its own, I would say.
posted by OnceUponATime at 6:00 AM on November 11, 2015 [10 favorites]


I really do love it when science backs up the bloody obvious.
posted by The Underpants Monster at 6:10 AM on November 11, 2015


Welsh town moves 'offshore' to avoid tax on local business. It's nice to see the tables turned for once.
posted by pipeski at 6:24 AM on November 11, 2015 [10 favorites]






I haven't read the other links yet, but that "Does housing dysfunction explain, well, almost everything?" link text intrigued me, and after clicking I would have say I'm fairly convinced.

Yeah, Kevin Erdman is definitely worth reading. He's basically convinced me that there was no housing bubble, just an interest rate slump.
posted by PMdixon at 7:12 AM on November 11, 2015 [2 favorites]


I wish I had found out about Erdman's housing series earlier so I wouldn't have an 80-part hole to dig out of.
posted by ghharr at 7:15 AM on November 11, 2015 [2 favorites]


One thing I've argued about with people a few times is that there are no Inevitable Market Forces. It's not just governments making choices; it's also individual investors, pension funds, wealthy people, consumers, etc. Yes, people are more likely to choose the option that makes them personally richer, but that is not inevitable. Every cut wage and lost job is a choice made by someone.

The best illustration is the post-WWII western economy. It wasn't just high taxes and government decisions that made the couple of decades after WWII a high point for labour and wealth redistribution; it was also the fact that many, many business owners, banks and investors were content to make less than maximum profit because they believed that "the boys" who had won the war deserved stable, well-paying jobs. Investors and owners made choices to preserve those jobs.

And now, people with the choice to make are choosing not to preserve those jobs. There's nothing inevitable about it.
posted by clawsoon at 7:17 AM on November 11, 2015 [33 favorites]


That housing dysfunction link is so thought-provoking! Thanks for that and all these other links to sink my teeth into. But my favorite is to that idosyncraticwhisk housing dysfunction link - it explains so so much and really resonates with me as a former resident of San Francisco.
posted by Rosie M. Banks at 7:46 AM on November 11, 2015 [2 favorites]


[Couple comments removed; let's not go down a "I remember a comment that I can't find that supports my criticism" road, that's just asking for a mess.]
posted by cortex (staff) at 7:56 AM on November 11, 2015


Some days, I think about what life was like for my father and it's hard to believe I'm living in the same country. We really are living in a dystopia.
posted by entropicamericana at 9:08 AM on November 11, 2015 [1 favorite]


The Decline of Labour piece immediately reminds me of this theory from a Thatcher economic adviser, who hesitates to suggest that maybe the high interest rates of the early 1980s were deployed on purpose to kill labour-heavy industries and recreate Marx's "reserve army of labour".

A lot of labour-intense manufacturing is still happening. More than ever. Technology hasn't killed it. Corporations have simply moved it to places where the workers are better kept in line by autocratic governments and the lack of social safety nets.
posted by clawsoon at 9:12 AM on November 11, 2015 [1 favorite]


re: individual capital holders being able to make benevolent decisions, one useful concept from Marx is the idea of "tendential laws." This term describes effects that, all else being equal, tend to emerge in systems of capitalist exchange. This doesn't mean that they necessarily must emerge, as countervailing tendencies (or over the short term, even just dumb chance) can keep them from manifesting. Because I am psychologically kind of a kid, and understand dialectical materialism as being more or less like metagame analysis, my go-to analogies are to board games and video games.

Consider the game Settlers of Catan. In this game, among experienced players, the player who placed first tends to lose. This is because, all else being equal, it is easier for the other players to box them in than it is to not box them in — in many cases, it's actually kind of hard for the later players to find a place to put settlements that doesn't deny the first player space to expand. This isn't an iron law of Catan; if there are a bunch of good resources on the other side of the board, players might place away from the first player, or they might assess the first player as less of a threat than other players, and so try to box those players in instead. Later in the game the players also have incentive to establish a meta where all players tend to cut nicer deals when trading with boxed-in players, again because they are less of a threat than the players with room to expand.

As workers we are boxed in; we have no capital, we have nothing to sell on the market but our own sorry skins, and so we're stuck selling our labor for the money we need to buy the commodities we use to prepare ourselves for more days spent selling our labor for... and so on, until we die and have to tell St. Peter that we can't go because we've sold our soul to the company store.

The question of whether we have any tools available to change the meta — any way to nerf the power of capital — is open. Unfortunately capitalism is unlike Catan in that there do not appear to be inherent reasons for the stronger players to help the weaker; maybe occasionally reasons external to the system may arise (capital holders may pay us more because they want to support the American boys who fought in the war, or because they're afraid of workers being seduced by the ideology of the Bolshevik boys who won the war, or whatever), but on the whole capitalism tends (this is a tendential law, mind, less an iron law and more of a fluffy sheep law), um, on the whole capitalism, unlike Catan, tends to punish players who prop up the weaker players rather than reward them.
posted by You Can't Tip a Buick at 9:22 AM on November 11, 2015 [10 favorites]


Of course, politicians and a wealthy and influential minority of citizens were the ones making the choices that imposed this inequality in the first place.

Not really. Other countries with far less inequality have wealthy and influential minority of citizens in the political process too.

The choice in the USA has been made by the people, for example by a broad public adoption of the culture of Got Mine Fuck You.
The modern Republican platform of the last 20 years would be, elsewhere, the crazy nutter party that should it ever break into two digits and get 11% support would causes a national freakout about whether the country is becoming hateful. Yet here, it is considered a respectable party allegiance that people are not ashamed to admit they support.

There really a profound cultural difference with respect to what society is and should be, and what role government should play in that. It shifts the political overton window. It's a role played by everyone.
posted by anonymisc at 10:22 AM on November 11, 2015 [9 favorites]


Debt Serfdom in America
posted by bukvich at 10:46 AM on November 11, 2015 [1 favorite]


The modern Republican platform of the last 20 years would be, elsewhere, the crazy nutter party that should it ever break into two digits and get 11% support would causes a national freakout about whether the country is becoming hateful. Yet here, it is considered a respectable party allegiance that people are not ashamed to admit they support.

To be fair, it's not as though we're playing with a fair deck here. In addition to a Senate that strongly favors sparsely populated states, we're still reeling from the results of the 2010 census and the partisan redistricting that followed. That 2010 election was itself a backlash of terrified old white people (Tea Party) to the election of a black president in 2008. Their electoral victories are a temporary mirage caused by gerrymandering, voter disenfranchisement, and low voter turn out.

This is only postponing the inevitable for the Republican Party. Despite the horse race bullshit from our political media, Hillary is an incredible favorite to win the 2016 election. RNC attempts to mitigate their coming demographic apocalypse by reaching out to rising demographic groups like Latinos have been utterly devastated by Trump's surge and focus on illegal immigration.

The next national census is in 2020, which (unlike the last census) falls on a Presidential election year. Presidential elections mean turn-out, turn-out generally means an advantage to the Democrats.

The Republicans are a crazy nutter party. A significant majority of the American people do not support their policies. American adults are far more likely to identify with or lean toward the Democratic Party than the Republican Party, by a margin of 48 to 39 percent. The GOP will not win a national election in the foreseeable future absent a complete disaster by President Hillary or an utter revamping of their party.
posted by leotrotsky at 10:54 AM on November 11, 2015 [7 favorites]


"Does housing dysfunction explain, well, almost everything?" link text intrigued me, and after clicking I would have say I'm fairly convinced. Yeah, maybe it doeS. Worthy of an FPP all on its own, I would say

Somebody wrote a book about it, 100-odd years ago:

https://en.wikipedia.org/wiki/Progress_and_Poverty
posted by Heywood Mogroot III at 10:55 AM on November 11, 2015 [1 favorite]


He's basically convinced me that there was no housing bubble, just an interest rate slump.

Oh, there was both, the falling interest rates 2002-2003 (along with the Bush tax cuts) prompted a housing boom, and monkey-see monkey-do trend chasing got the classical bubble mentality going 2004-2007 as more and more -- millions of people -- cashed out their real estate winnings via taking on higher debt.

What enabled the bubble and dialed us in for the crash was the actual "suicide lending" going, loans that were destined to default if appreciation did not continue. The suicide lending took the form of qualifying borrowers on their initial "teaser rate" interest rates, the availability of even "negative amortization" loans to borrowers, liberalization of "stated income / stated asset" borrowing, and misrating of the bonds and other financial products ("CDOs") that were funding these loans by the major ratings agencies, and the "Global Saving Glut" of the time that was seeking yield and thus flowing into housing loans.

https://research.stlouisfed.org/fred2/graph/?g=2wTf is what the bubble looked like -- between the 2001 and 2007 recessions, households took out SIX TRILLION in new debt, almost all of it mortgage debt.

That was the tide that floated all the boats, until the suicide loans started defaulting in 2007-2008 and the financial system failed its saving throw vs. panic.
posted by Heywood Mogroot III at 11:03 AM on November 11, 2015 [9 favorites]


Stiglitz is one of the few people in economics who actually gets the housing issue, which is odd, since at $2T/yr+, it's right up there with health care in terms of private spending. Delong, Krugman, they seem to avoid it. Michael Hudson is with Stiglitz, and takes a more Georgist-friendly approach from what I've seen.

The rest of economics has evolved to BS people to obfuscate how the world really works. Hint: it's a Monopoly board -- own or be owned in the end.
posted by Heywood Mogroot III at 11:16 AM on November 11, 2015 [1 favorite]


Somebody wrote a book about it, 100-odd years ago.

I am embarrassed to admit I have never heard of "Progress and Poverty" before, so thank you for that link. It's interesting that Henry George's solution seems to have been high real estate taxes, but the blog post's solution is to increase the supply of housing by encouraging the development of high rises. Pretty different solutions to the same problem, though I suppose not mutually incompatible.

This stuff is rubbing up in my brain against the the question about how to run an economy which doesn't need labor. Once robots can do everyone's job, how is anyone to earn a living except the robot-owners? (I know this has been discussed on MeFi before.) It ought to be a utopia, a world where everyone has their needs met with no need to work unless they want to, but actually in our present economic system, it seems like it would lead to massive poverty, since no one could get a job.

I guess "robots" and "land" are both just types of capital, and this is an older question than I thought. Abundant resources which ought to be enough to meet the needs of a whole community will tend to end up concentrated in the hands of a few...

I'm not a fan of a centrally planned economy as a solution to this, because I don't believe it's possible for humans to plan well enough, not to mention that whoever ends up with the responsibility for allocating resources will, in effect, own those resources, so that you still get the concentration of resources into a small set of hands.

High property taxes and more housing development aren't enough to solve the general problem either. Land isn't really the only kind of capital.

It makes me think about employee-owned stores and co-ops. Is there a model like that, which "crowdfunds" capital investments, so that the workers and the owners of capital are not such disjoint groups? I know I can't be the first person to think along those lines -- who else is there?
posted by OnceUponATime at 11:22 AM on November 11, 2015 [1 favorite]


RNC attempts to mitigate their coming demographic apocalypse by reaching out to rising demographic groups like Latinos have been utterly devastated by Trump's surge and focus on illegal immigration.

But should the RNC succeed in winning the hearts of those voters, their votes have been significantly gerrymandered and voter-suppressed out of the picture anyway. By the RNC.
posted by anonymisc at 11:28 AM on November 11, 2015 [1 favorite]


I guess "robots" and "land" are both just types of capital
Bingo, and the concentrated power in the hands of robot-owners will mirror the power of the Lords and Landowners of the Feudal Era. Ultimately, the choice will not be between Capitalism and Socialism, it'll be between Modern Democracy and Post-Modern Feudalism. Get used to calling your CEO "My lord".
posted by oneswellfoop at 11:28 AM on November 11, 2015 [4 favorites]


Concentrated power in the hands of robot-owners will mirror the power of the Lords and Landowners of the Feudal Era.

I agree that's the steady-state condition of capitalism if unchecked. "Robber barons" and company towns are basically forms of feudalism too.

It's just that I worry it's also the steady-state condition of socialism as practiced in the USSR. The politicians with the most political capital end up allocating all the resources they need to themselves and their friends, and people without connections can't get the resources they need...

I keep hoping the two can hold each other in check -- government limiting the ability of corporations to hoard resources, and the free market offering a way for people who don't have any powerful friends to potentially make money anyway, by building a better mousetrap or whatever.

But I don't think it's quite working. I'm in favor of higher taxes/more redistribution than we've got now, but I also am wondering if there's a way to fix capitalism. Like can we make earning stock in companies through labor much easier (even require it?) so that workers and owners are the same people? Or make all housing rent-to-own, so that if you've been paying rent on the same place for twenty years you have at least some equity in it, and the landlord owes you at least part of the profit if he sells, or rents it to someone else for more money? Some way to spread capital around without government as a middle-man, collecting taxes and handing the money back out?
posted by OnceUponATime at 11:43 AM on November 11, 2015 [1 favorite]


It's just that I worry it's also the steady-state condition of socialism as practiced in the USSR

I think you're confusing socialism with communism. For hardcore socialism you might want to think more in the direction of "basic income" - it ensures people have at least some power in the free market, not less. It doesn't try to shape the market.
posted by anonymisc at 11:51 AM on November 11, 2015 [5 favorites]


Basic income isn't particularly socialist. Right-libertarian saint Hayek advocated a basic income, at for a while. Along with state provision of a bundle of insurances, like health insurance.
posted by ROU_Xenophobe at 12:02 PM on November 11, 2015 [2 favorites]


the steady-state condition of socialism as practiced in the USSR
Well, ever since college, I have personally defined Communism as "Fascism with a Socialist face". That's my definition and I'm sticking with it.

wondering if there's a way to fix capitalism
Not without eliminating a lot of "the free market". But there's a thing about a Pure Free Market... it ultimately leads to a Monopoly the same way a Perfect Democracy ultimately leads to a Dictatorship.
posted by oneswellfoop at 12:04 PM on November 11, 2015


although I too am skeptical of arguments predicated on the idea that "actually existing socialism" as practiced in the USSR has nothing to do with socialism in theory, and although I have a much lower opinion of Lenin and Trotsky than most people who make this argument, I believe it is relatively safe to say that Stalin's ascent to leadership marks the clear victory of the Russian intelligence agencies over socialism — or at least, the victory of the Cheka/KGB over the Bolshevik Party. it's noteworthy, in fact, that there were longstanding rumors about Stalin having been been an agent for Czar's security agency before the revolution — this is one reason why Stalin didn't participate in the 1907 Bolshevik bank robbery, even though he was one of the planners.

This is also a way to understand the control that Putin has achieved in capitalist Russia — although the economic system has shifted, the KGB has maintained almost uninterrupted control over the governance of the country.
posted by You Can't Tip a Buick at 12:09 PM on November 11, 2015 [7 favorites]


Full disclosure: by temperament, I'm a "bad chekist" who is with the Kronstadt sailors against Lenin and Trotsky, and in favor of schemes like Allende's Cybersyn that attempt to use non-transferable votes (rather than transferable money) to establish a more democratically managed economic system.

And now I have alienated the Trotskyists in the audience. Who, to be fair, probably dismissed me as an "infantile disorder" long ago...
posted by You Can't Tip a Buick at 12:13 PM on November 11, 2015 [1 favorite]


Boo.
posted by leotrotsky at 12:16 PM on November 11, 2015 [12 favorites]


hey man don't make me bring up your ridiculous and anti-democratic use of the Military Revolutionary Committee (a Bolshevik front) to call the Revolution instead of waiting for the Soviets themselves to call it. cause I still haven't let you off the hook for that.
posted by You Can't Tip a Buick at 12:18 PM on November 11, 2015 [2 favorites]


The way this discussion turned reminds me of one of the most often declared reasons for opposition to any serious 'revolution' in the U.S.ofA. (like Occupy Wall Street, whatever happened to them?) That anything like that will just end as badly as it did in Old Russia a century ago (and hey, it's getting close to exactly a century, isn't it?)
posted by oneswellfoop at 12:23 PM on November 11, 2015


I've no objection to universal basic income in principle. In practice, though, it's not so simple. It costs more to live in San Francisco than in Idaho. So should people in San Francisco get more money? Do kids get basic income (and if so, is that an incentive to have lots of kids)? Do disabled people get bigger basic incomes than people who could work if they wanted to? I could go on. What about caregivers? Criminals? People living overseas? And when do we raise the basic income? And can we ever cut it? No matter how big the deficit? Who do we tax to pay for it? Who can get out of paying those taxes?

There are still distribution decisions to be made.

And as long as it's human being making those decisions, "pork" will happen, just as it does with tax deductions and gov't contracts and every other kind of distribution decision that needs to be made... People with access to powerful politicians will get more money.
posted by OnceUponATime at 12:38 PM on November 11, 2015 [1 favorite]


well, the reason I bring up Kronstadt (other than that of course I'd be that dude who always brings up Kronstadt. right?) is that Kronstadt marks the point where the Bolsheviks switched from calling for more democracy and more revolution to calling for less democracy and more central control. Basically the sailors of Kronstadt (which is outside Petrograd; the Kronstadters were known as the reddest of the reds, the most devoted revolutionaries) uh basically the sailors of Kronstadt tried to recall their (Bolshevik) delegates to the Central Soviet and send left-of-Bolshevik delegates instead. The ability for workers to recall and re-elect their delegates to the Soviets at any time was a key part of Soviet democracy up to that point (it's how the Bolsheviks got in, since as conditions at the front deteriorated, more and more Soviets recalled right-of-Bolshevik delegates and replaced them with Bolsheviks). Arguing that wartime conditions made democracy unfeasible, the Bolsheviks rejected the Kronstadters' attempt
to send left-of-Bolshevik delegates and sent the Red Army in to crush the Kronstadters instead.

So basically my position on the Russian Revolution isn't that the crimes against humanity commited by the USSR was a result of too much revolution. Instead, it was the result of not enough revolution.
posted by You Can't Tip a Buick at 12:40 PM on November 11, 2015


OnceUponATime: Do kids get basic income (and if so, is that an incentive to have lots of kids)?

This is where the discussion always gets... intense. There's always some them who's having too many kids while on welfare. (The Metafilter choice would probably be the Quiverfull people. Do you really want a massive demographic increase of the Duggars, paid for by liberal coastal-state money?)
posted by clawsoon at 12:47 PM on November 11, 2015 [2 favorites]


basically I think that if we are obsessive about suppressing feedback loops that concentrate power, we might have a decent socioeconomic system, and that the way to do that is through privileging bottom-up control via non-transferable votes and also encouraging a healthy contempt for anyone with the misfortune to find themselves temporarily in a position of leadership.

(my favorite way of preventing feedback effects is to assign goods and power randomly, but there's very few situations where that system has been used.)
posted by You Can't Tip a Buick at 12:48 PM on November 11, 2015 [3 favorites]


clawsoon: yes. Everyone must be free to have as many children as they wish, no more. no less, and to be able to do so without experiencing economic punishment for it. The way to cut off the Duggars is to end the pervasive patriarchal culture that presents women as objects to be fought over rather than people. When the people who do most of the physical work of reproduction are free, birth rates will tend to fall.
posted by You Can't Tip a Buick at 12:51 PM on November 11, 2015 [4 favorites]


we are obsessive about suppressing feedback loops that concentrate power

Sure, but some of those feedback loops are things like "good parenting" and "valuing education and hard work".
posted by esprit de l'escalier at 1:07 PM on November 11, 2015 [2 favorites]


It's interesting that Henry George's solution seems to have been high real estate taxes, but the blog post's solution is to increase the supply of housing by encouraging the development of high rises.

Actually, the "single tax" of Georgism proposes to tax the location i.e. parcel entirely and not the building at all.

Perfectly harmonious with high-rises, in fact in the land value tax system lower-density housing is penalized until it becomes high-rises . . .
posted by Heywood Mogroot III at 1:10 PM on November 11, 2015 [3 favorites]


the "good parenting and valuing education and hard work" analogy would work if and only if the feedback loop involved concentrated good parenting and a love of education and hard work in a few hands, denying it to others.

Also hard work is a curse. No one should value it. Rather than instilling a love of hard work, parents should instill an eager willingness to just completely fuck up the rate-busters who wreck it for everyone by working harder than they have to.
posted by You Can't Tip a Buick at 1:13 PM on November 11, 2015 [7 favorites]


It's interesting that Henry George seems to use similar justification for his land tax that C. H. Douglas used for his national dividend: The ___ is the common inheritance of us all, and the wealth generated by it should be shared by all. For George, ___ was land; for Douglas, ___ was the technological base that all new technology builds on.
posted by clawsoon at 1:16 PM on November 11, 2015 [1 favorite]


the "good parenting and valuing education and hard work" analogy would work if and only if the feedback loop involved concentrated good parenting and a love of education and hard work in a few hands, denying it to others.

The point is that parents tend to transmit their values to their children. Values that made the parents successful tend to also make their children successful. That explains some of the concentration of wealth generation after generation.

However, I do agree with you that some kind of affirmative action would be nice for the children who are less fortunate.

Also hard work is a curse. No one should value it.

When people talk about "valuing hard work" they mean in pursuit of their goals. If you don't think hard work in pursuit of your goals is something to value, then you really don't value your goals. I guess that's a philosophy, but it's not everyone's philosophy.
posted by esprit de l'escalier at 1:18 PM on November 11, 2015 [1 favorite]


But if your goals are "sign up more Gap customers for credit cards" or "be the top middle manager in my field," that's quite a different thing. In terms of value to society, most jobs are a net negative. Particularly in the financial sector.

If your goals are to teach children, heal the sick, grow and/or sell nutritious food, and things like that, then good for you. But most of us have been conditioned to think of selling our labor as a virtue. The more sacrifices, the better a person you are. But it's not moral to deny yourself a good night's sleep, or to miss your kid's recital, so that you can meet the 3rd quarter sales goal (or whatever the hell arbitrary goal that benefits nobody but yourself and your manager).
posted by witchen at 1:26 PM on November 11, 2015 [5 favorites]


Everyone must be free to have as many children as they wish, no more. no less, and to be able to do so without experiencing economic punishment for it. [...] When the people who do most of the physical work of reproduction are free, birth rates will tend to fall.

We know the second sentence is a hopeful assumption, because the first sentence has never been tried.
posted by clew at 1:29 PM on November 11, 2015


> The point is that parents tend to transmit their values to their children. Values that made the parents successful tend to also make their children successful. That explains some of the concentration of wealth generation after generation.


See, I don't think that's true. Skills and values may explain why the middle classes make middle class children — they raise their children to be appropriately docile toward the upper classes, making them qualified for managing their affairs.

However, when you're talking about real money, the chief predictor is the simple fact of whether or not you started with money, without regard for whether or not you are particularly good at managing that money. This is because the people with real money have employees to manage that money for them. Skills and talent can get you a middle-class income. Sometimes they can get you to the bottom of the 1%. But they can't get you real wealth. to get real wealth, you have to start with real wealth.

Part of the ideology of capitalism is the idea that the people who hold wealth under capitalism hold that wealth because of what they do. This was meant to distinguish the new powerful people from the old aristocratic powerful people, who were powerful not because of what they did but instead of because who they were. As the process by which money of more or less its own volition flows toward the people who already have it, we've switched back to a pseudo-aristocratic system where who you are (a Hilton, a Walton, a Koch) determines how powerful you are, regardless of what you do.

And you're right — most things aren't worth working hard for. And absolutely nothing is worth working against your will for. So yeah, you've got me — I'm less of a Marxist and more of a Bartleby.
posted by You Can't Tip a Buick at 1:33 PM on November 11, 2015 [4 favorites]


Yeah, inheritance taxes are another Necessary Thing.
posted by clawsoon at 1:36 PM on November 11, 2015


And there's a BIG difference between a 'goal' that is what you do in your job everyday ("teach children, heal the sick, grow and/or sell nutritious food", as witchen said) and a 'goal' like "win a Nobel Prize" or "make a company I founded into one of the world's biggest" or "reunify the Soviet Union"... or "father more children than Sultan Moulay Ismael of Morocco" (some goals ARE most worthy than others... usually the daily ones).
posted by oneswellfoop at 1:37 PM on November 11, 2015 [1 favorite]


But if your goals are "sign up more Gap customers for credit cards" or "be the top middle manager in my field…most jobs are a net negative. Particularly in the financial sector. "

What's wrong with wanting to be a good manager? Honestly, have you never had a bad manager? —or a good one? I think it's a fine goal to want to do the job of manager better.

And I have no idea what you mean by the financial sector being "a net negative". Who do you think manages your pension fund? Who funds companies in their infancy? Who lends you money when you want to buy a house?
posted by esprit de l'escalier at 1:41 PM on November 11, 2015 [2 favorites]


yeah -- I think Ursula K. Le Guin has a saying about how the real work of history is day to day ordinary living, and that the big things that we think of as history (war, domination, economic intrigue, etc.) are better understood as interruptions of history.
posted by You Can't Tip a Buick at 1:42 PM on November 11, 2015 [5 favorites]


The GOP will not win a national election in the foreseeable future absent a complete disaster by President Hillary or an utter revamping of their party.

When Bernie met Hillary: Long before challenging Clinton, Sanders reached out to her on health care. He got nowhere [Politico]

In February [1993], Sanders requested a meeting with Hillary, “to bring in two Harvard Medical School physicians who have written on the Canadian system,” according to the records of the administration’s task force. Those physicians were Stephanie Woolhandler and David Himmelstein, leading advocates for single-payer health care.

They got their meeting at the White House that month, and the two doctors laid out the case for single-payer to the first lady. “She said, ‘You make a convincing case, but is there any force on the face of the earth that could counter the hundreds of millions of the dollars the insurance industry would spend fighting that?’” recalled Himmelstein. “And I said, “How about the president of the United States actually leading the American people?’ and she said, ‘Tell me something real.’ ”


TLDR - if you expect Clinton to pursue economic policies that benefit anyone other than the 1%, you're living in a fool's paradise. She made up her mind about what side she was on decades ago.
posted by ryanshepard at 1:43 PM on November 11, 2015 [5 favorites]


Who funds companies in their infancy? Who lends you money when you want to buy a house?

♫ we do! we do! ♫
posted by Rustic Etruscan at 1:46 PM on November 11, 2015 [13 favorites]


And as long as it's human being making those decisions, "pork" will happen, just as it does with tax deductions and gov't contracts and every other kind of distribution decision that needs to be made... People with access to powerful politicians will get more money.

No, in my experience of socialism, that's just not an issue. People with access to powerful politicians tend to be influential and wealthy. The amount of extra that could come their way from something like adjusting their own basic income literally isn't worth a few minutes of their time. The corruption you worry about is a problem if you do bullshit USA-style politically-motivated strings-attached welfare like foodstamps, but when you give people freedom and income instead, there isn't opportunity for pork, you just end up with a society functioning better.

The bigger risk from socialism is to socialism itself; for people growing up in it, it is empowering yet invisible like the air we breath, and so when people grow up they start giving themselves more credit for their success than is due, get complacent, and start dismantling the social systems for the next generations, because they're large budgetary items.
posted by anonymisc at 1:47 PM on November 11, 2015 [7 favorites]


Who do you think manages your pension fund? Who funds companies in their infancy? Who lends you money when you want to buy a house?

♬ We do! We do! ♫

Sorry.
posted by zarq at 1:48 PM on November 11, 2015 [5 favorites]


if i can't prefer not to it's not my revolution.
posted by You Can't Tip a Buick at 1:49 PM on November 11, 2015 [1 favorite]


DOH!
posted by zarq at 1:50 PM on November 11, 2015 [3 favorites]


We know the second sentence is a hopeful assumption, because the first sentence has never been tried.

No, the second sentence is supported by evidence. You don't need to achieve the utopia of the first sentence to notice that the closer or further from that utopia our real-world societies become, the truer or less true the second sentence becomes, and the causality of the connection is also clear.
posted by anonymisc at 2:09 PM on November 11, 2015 [1 favorite]


[Comment removed; this whole back-and-forth about managers etc. is getting further and further afield, please drop it all around at his point.]
posted by cortex (staff) at 2:13 PM on November 11, 2015


We need a gradual transition to basin income achieved by progressively shortening the work week over years. Do you want (a) a world where 90% struggle on welfare with no further prospects, while 10% do all the work, or (b) do you want everyone to have the opportunity to work if and when they want?

We should not give children basic income, nor even give parents tax breaks, as the world already has too many people. Any money targeted towards children should focus on education, health care, and nutrition. Ideally schools should offer breakfast, lunch, and a take-away dinner, but that requires purging unhealthy staples like sugar, wheat, etc.

A priori, all citizens over 18 years should receive similar basic income irregardless of where they live. We'd have much more mobility due to the basic income anyways. I'd expect even rarefied professions like say ballet dancers could earn an enhanced living in places like Detroit as opposed to being forced to scrounge in rich cities.

And If costs of living are really so disparate then maybe the nation should break up or establish different local currencies or something.
posted by jeffburdges at 3:19 PM on November 11, 2015 [4 favorites]


And If costs of living are really so disparate then maybe...

IMO it doesn't even matter how disparate the costs of living are. Basic income means everyone can have a roof over their head, etc. It doesn't mean you can have a jobless existence yet still live wherever you want, in a spacious home. That said, it's money, no strings attached. If it is important to you to be in a certain area, and it is important to you to not be working (studying instead for example), you can make it work by sacrificing in other areas. This was pretty common with students - they might be in an expensive part of a nice town (near the university), but by choosing to live together in cramped space with 2nd-hand clothes and cheap food, they were free to work full-time towards their degree without accumulating debt.
Other people use the security (of knowing even in the worst case scenario they'll never be homeless or without another chance) to take a risk on starting their own business. etc.
Everyone makes use of it in the way that works best for them. That's part of what's so bad about the foodstamps approach.
It's the freedom and security that matters. It's ok if some areas are much more expensive to live in. A good thing even.
posted by anonymisc at 3:57 PM on November 11, 2015 [2 favorites]


Where do you claim that having children isn't an economic burden, anonymisc, etc.? Certainly WEIRD middle-class families mostly restrict their child-bearing, but WEIRD middle-class families who hope to raise middle-class children face serious economic constraints, even in the more generous social democracies.

When we ameliorate the economic risks, people have more children. E.g.: comparing the countries in Europe, it's the ones with *more* social support and *more* career freedom for women that have higher birth rates. In the US, wealth is correlated with more above-replacement families (libertarians, but the dataset and question look sensible to me).

In the social democracies, much of the political support for family support is explicitly intended to achieve those high birth rates, so it's calibrated to get there, not to support women in any choice they make. It would be amazingly convenient if humans just naturally had children at replacement when they could have as many as they wanted. Like, seductively convenient to assume, which is risky.

The risk I'm thinking of is that we're above a sustainable population now, of course. I hope not, but I've been hoping we were wrong about climate change for decades, and that and short showers got me +1°C.

(What would I do if I were inexplicably in charge? Basic income from measuring all mining, CO2- and methane- production, and polluting freshwater: cap them, auction them, divide the proceeds among all adults on earth as our common unearned heritage. I hope the engineers and farmers and general thrift could clever out a way in which we all live on this while our ecosystems stabilize. If they can't, we really couldn't afford more anyway.)
posted by clew at 4:33 PM on November 11, 2015 [2 favorites]


Clew - From your link "Since the early 2000s France has consistently topped European rankings. After two decades of decline, in the 1970s-80s, the fertility rate started picking up again in the late 1990s. Since then the country has registered scores just short of the mythical threshold of 2.1 children per woman, which would secure a steady population."

In other words, even the most fertile country in Europe is having too few children to maintain population... yet global population has boomed in that time. There are countries that have very very high fertility - far above replacement rate, and these are places without welfare, where costs and risks of having kids are much higher, but for the same reason the only kind of economic security many people can attain is building a very large family, and women usually have reduced freedom to decide their own lives. And there are countries in between. Stronger welfare systems don't merely reduce the burden of having children (a mild incentive), they also remove a lot of the necessity of having children (a strong removal of incentive). Children are stressful and time-consuming enough to be their own disincentive to having a large number of them.

I like your plan if you were in charge. It has my vote.
posted by anonymisc at 5:35 PM on November 11, 2015 [1 favorite]


On the topic of fertility, reproductive choice doesn't explain varying fertility. Here's an excellent Ted talk about fertility: https://www.ted.com/talks/hans_rosling_religions_and_babies

We need a gradual transition to basin income achieved by progressively shortening the work week over years. Do you want (a) a world where 90% struggle on welfare with no further prospects, while 10% do all the work, or (b) do you want everyone to have the opportunity to work if and when they want?

I don't agree that preventing other people from working is the best way to create jobs. This kind of plan is inefficient for two reasons: it forces ineffective people to do jobs they're less capable of, and it encourages huge redundancy. It would be more efficient to have everyone on basic income, and recognize that some people will unfortunately often be unemployed.

And If costs of living are really so disparate then maybe the nation should break up or establish different local currencies or something.

The motivation for splitting currencies is that you can control the money supply of each currency independently to respond to differing levels of inflation. It has nothing to do with standard of living.
posted by esprit de l'escalier at 5:55 PM on November 11, 2015 [2 favorites]


In other words, even the most fertile country in Europe is having too few children to maintain population... yet global population has boomed in that time.

According to the Ted talk I linked, the reason global population is booming is that people are living longer.
posted by esprit de l'escalier at 6:00 PM on November 11, 2015


According to the Ted talk I linked, the reason global population is booming is that people are living longer.

That's more of a statistical one-off that affects my rhetoric rather than my point - it's replacement rate that determines the outcome.
posted by anonymisc at 6:09 PM on November 11, 2015


According to the Ted talk I linked, the reason global population is booming is that people are living longer.

That's more of a statistical one-off that affects my rhetoric rather than my point - it's replacement rate that determines the outcome.


Did you watch the ted talk? The point is that the fertility rate roughly equals the replacement rate right now. The reason for increasing population is that we live longer. In thirty years or so, the population stabilizes and then it is expected to fall.
posted by esprit de l'escalier at 6:20 PM on November 11, 2015


Did you watch the ted talk? The point is that the fertility rate roughly equals the replacement rate right now.

I watched it and he confirms what I've been arguing - that high fertility results from lack of security, from economic necessity, from lack of freedom (access to contraception), and that this occurs in places like I describe, and that fertility drops when you take care of those things - something that strong social security systems does very effectively.

My point is that welfare creates security and freedom, and that this in turn lowers birth rates, and really, I don't think that's controversial.
posted by anonymisc at 6:33 PM on November 11, 2015 [2 favorites]


Not sure if it's controversial, but I agree with everything you said.
posted by esprit de l'escalier at 8:12 PM on November 11, 2015


Money is freedom
Poverty is prison
Run, rabbit, run.
posted by yesster at 11:08 PM on November 11, 2015


We cannot eliminate the human streak of social competitiveness, esprit de l'escalier, entrenching a class system is not in anyone's interest. Read A Darwinian Left by Peter Singer, btw. If people cannot work legally, then some will invent illegal work they can do, like petty crime. It'd never be as bad as the survival oriented crime that exists in America today, but still socially problematic. There was a crime problem in the U.K. even before Thatcher destroyed their welfare state.

We should prevent people from doing work for hire for more than say 16 hours per week, meaning work their employer directs and takes ownership of, not doing useful "play". We'd adapt by doing less bureaucratic make-work, automating more tasks, gamifying many tasks, being better at teaching necessary skills, and requiring greater transparency inside companies to simplify compliance with regulations.

There are many classes of white collar workers like system administrators, designers, accountants, managers, etc. who could volunteer similar services for non-profit organizations during their free time. There would be nothing that prevents a software developer from spending 80 hours per week on their personal open source projects, but charging clients $1k per hour for advice, customization, etc. I'd expect Google would simply keep their offices a nice place to hang out and bump their 20% time to 60% time while making it more flexible. Academics would still do research and write in their personal time, but they could not legally be asked to spend more than 16 hours per week in meetings or teaching. And tech start ups might find ways to leave the intellectual property in the hands of their employees so that not all their hours were work for hire.
posted by jeffburdges at 6:02 AM on November 12, 2015


The motivation for splitting currencies is that you can control the money supply of each currency independently to respond to differing levels of inflation. It has nothing to do with standard of living.

I cocked an eyebrow at that . . . currency exchange rates control balance of trade (wealth in vs. wealth out), and balance of trade controls standard of living.

all economies are local -- atomic at the individual actor -- in the end.

so little of the economy is actually modeled on a cash basis. Keen tried, but only got so far . . .
posted by Heywood Mogroot III at 6:53 AM on November 12, 2015


The motivation for splitting currencies is that you can control the money supply of each currency independently to respond to differing levels of inflation. It has nothing to do with standard of living.

I cocked an eyebrow at that . . . currency exchange rates control balance of trade (wealth in vs. wealth out), and balance of trade controls standard of living.


Yeah, but you won't be able to control the exchange rates. They arise spontaneously from the balance of trade.

We should prevent people from doing work for hire for more than say 16 hours per week, meaning work their employer directs and takes ownership of…

How would this work? Every ambitious person would quit their 9–5 and start a business so that they can legally work as much as they want. What about people who make minimum wage? They are forced to get by on 40 hours of minimum wage even if they need more money? This all sounds unnecessarily restrictive — like you want to force people to live how you think they should.
posted by esprit de l'escalier at 8:36 AM on November 12, 2015 [1 favorite]


Every ambitious person would quit their 9–5 and start a business so that they can legally work as much as they want.

Yeah, if you think Uber et al are making a mockery of the concept of "independent contractors" imagine what would happen in this scenario. Nobody would be an employee (or just an employee). Everyone would be a small business owner, contracted to some other business owner...
posted by OnceUponATime at 2:20 PM on November 12, 2015 [1 favorite]


I'm in favor of higher taxes/more redistribution than we've got now, but I also am wondering if there's a way to fix capitalism...

yes! i think the UK green party platform is a great place to start as well as georgist conceptions of 'ownership' and land/wealth taxation (there are also a number of proposals here ;) for the sake of simplicity tho, i like the goals of accelerationism (similar to paul mason's) so in that light i've been thinking about what might be the demands of a 'humanist' manifesto, not in the secular sense per se, vis-à-vis religion, but as an (evolutionary?) alternative from capitalism, that is policies that prioritize people and not capital.
  1. monetary policy: helicopter money ('people's QE') & negative interest rates
    1. allow anyone access to an ATM at the fed (postal savings?)
    2. targeting NGDP (macroeconomic stabilization)
    3. fedcoin
  2. fiscal policy (automatic stabilizer): basic income
    1. graduated for immigrants
    2. held in escrow for children under 18?
  3. regulatory policy: right to an API key
    1. online (gov't?) identity services
    2. legal distinctions for code/data control (and liability)
  4. financial reform: end banking
    1. "Bank assets would be classified either as real, in other words claims on physical or distinct immaterial objects; or as financial, assets which appear as liabilities on the balance sheet of some other institution.
    2. "Next, regulators would ensure that financial assets were 100 percent-backed by common equity.
    3. "And lastly, in a combined regulatory and accounting change, the value of a company’s real assets would have to be greater or equal to the value of the total of its liabilities."
  5. misc. financial/regulatory reform, etc.
    1. 'plain vanilla' products/services/securities (note that the concept could be extended to 'public options' in healthcare, education, transport, communication, housing, etc.)
    2. modified HFT tobin tax?
  6. accounting reform: extend GDP (NIPA)
    1. don't just look at (and implicitly valorize) monetary transactions
    2. also look at long-term environmental, social and governance (ESG) impacts -- 'triple bottom line' -- on various measures of well-being
  7. more acct. reform: abolish LLCs - 'end the legal fiction that corporations are citizens'

  8. tax reform: tax carbon - "give all the money back to tax payers..."

  9. tax reform: aforementioned wealth and land-value taxation; progressive consumption taxation?

  10. civic tech? an entrepreneurial state?
so there's my ten-point plan to make postcapitalism humanist and not neo-feudal :P maybe it gets too into the weeds in some places? anyway feel free to modify, add, delete!
posted by kliuless at 11:56 PM on November 12, 2015 [10 favorites]


So basically my position on the Russian Revolution isn't that the crimes against humanity commited by the USSR was a result of too much revolution. Instead, it was the result of not enough revolution.

fwiw (to continue our _red star_ derail discussion ;) mason characterizes 'where the revolution went wrong' thusly:
After 1909, Bogdanov retired from activism and spent ten years writing a pioneering book on systems theory. In the early years of the Soviet Union he formed a mass workers' cultural organization – the Proletkult – which was shut down after it became allied with an opposition group advocating workers' control. He returned to medicine and died in 1928 after subjecting himself to an experimental blood transfusion.

When they began to construct socialism by diktat in the 1930s, Soviet planners were fond of citing Red Star as their inspiration. But by then the facts and the utopia had diverged...

[following kronstadt and new economic policy (1921)]

Against the rich peasants [kulaks] and the bureaucrats, the Russian working class pressed for more democracy, for rapid industrialization through central planning and for a crackdown on speculators. Soon this three-way struggle in society was reflected within the Communist Party itself.

A factional dispute broke out, between a left opposition led by Trotsky, arguing for more democracy and more planning; a pro-market wing led by Bukharin, who wanted to delay industrialization, telling the peasants 'enrich yourselves'; and in the centre Stalin himself, defending the interests of the bureaucracy...

[socialist calculation debate]

But as Mises had already pointed out, if the labour theory of value is correct, there is no calculation problem at all. The problems of allocating goods, deciding priorities and rewarding people who innovate can all be captured within a system based on labour values... Socialism was possible, Mises admitted, but only if there was a 'recognizable unit of value, which would permit of economic calculation in an economy where neither money nor exchange were present. And only labor can conceivably be considered as such.' Yet Mises dismissed the labour-theory [even though] Marx clearly explained how high-skilled work can be measured as a multiple of low-skilled work – and that the labour value embodied in raw materials was simply the work it took to extract and transport them... if we want a postcapitalist economy, not only do we need something better than the market for distributing goods, we also need something better than the finance system for allocating capital.

It was only the Russian left opposition – above all its leading economist Evgeny Preobrazhensky – which understood the centrality of the labour-theory to the transition. For them, the goal of the transition was quite simply a rising supply of free, abundant things and the erosion of 'necessary labour' as the yardstick of exchange... In a memorable passage, whose relevance to the twenty-first century will be clear, Trotsky wrote:
If a universal mind existed... that could register simultaneously all the processes of nature and society, that could measure the dynamics of their motion, that could forecast the results of their inter-actions – such a mind, of course, could a priori draw up a faultless and exhaustive economics plan, beginning with the number of acres of wheat down to the last button for a vest.
The absence of such a 'universal mind', he said, requires instead the promotion of workers' democracy – which had been abolished. Only if human beings, with freedom of speech, became the sensors and feedback mechanisms for the planning system could this crude calculating machine work...
so (to swing this back around!) fast forward and just continue on a bit further:
[interesting digressions on cockshott & cottrell's attempt at socialist calculation thru 'labour tokens' and shakespeare as chronicler of feudalism's breakdown and the rise of capitalism, then on to the digital revolution (and the havoc it's wreaking on traditional modes of production and the financial system) and the challenges of demographics and the environment... so what might a 'large-scale postcapitalist project' involve?]

A zero-carbon energy system; the production of machines, products and services with zero marginal costs; and the reduction of necessary labour time as close as possible to zero... for a new spirit of postcapitalism to take take off, we need to focus on where the externalities are being generated and distributed... We need to answer: what is happening to the social benefit that network interactions produce, and which capitalist accounting can't usually see... what social good is being produced and who will benefit from it... to reshape markets to favour sustainable, collaborative and socially just outcomes...

If true public provision of water, energy, housing, transport, healthcare, telecoms infrastructure and education was introduced into a neoliberal economy, it would feel like a revolution. Privatizing these sectors over the past thirty years was the means by which the neoliberals pumped profitability back into the private sector... providing these services at cost price, socially, would be a strategic act of redistribution... to send clear signals to the private sector [that] profit derives from entrepreneurship, not rent.
posted by kliuless at 4:26 AM on November 13, 2015 [1 favorite]


There is nothing you can do about small business owners choosing to work themselves to death, but if the transition happens gradually, then most people will discover they value their free time more.

We cannot prevent people from spending their every waking hour trying to gambol on the outcomes of elections, sports games, etc., optimize their airline miles, grocery coupons, etc., etc. either, but such financial activities are merely obsessions for fanatics. We could discuss making airline miles and grocery store discount coupons illegal as a public mental health concern, but imho that's premature optimization here.

We'd need to adjust the notion of to cover more contractors in some countries, maybe even anyone who can be told to be at a particular place at a particular time. I donno enough about how say European countries handle that now however.

Actually, you've changed my thinking slightly though, esprit de l'escalier : Initially I thought we wanted a reduced work week before basic income as a transition into basic income. In fact, we want a reduced work week instituted gradually along side a gradually increasing basic income.

In short, we want to create conditions under which most people can and do choose to earn less and consequentially do less busy work. As a result there will be more people who find the time to do unpaid or poorly paid work that actually matters, we'll waste fewer resources on stupid crap, etc.
posted by jeffburdges at 10:29 AM on November 13, 2015




There is nothing you can do about small business owners choosing to work themselves to death, but if the transition happens gradually, then most people will discover they value their free time more.

This is incredibly paternalistic. Not everyone will "discover they value their free time". I've met parents who work themselves to death to sacrifice for their children. I met twenty-year-old irish guys who worked 16 hour days in factories so that they could go to south america for two years at a time.

Why is it so important for you to force people to work less? You think you know better than them what makes them happy? Or is that if they worked less, you think there would be more employment for other people? The first idea is paternalistic, the second is economically ridiculous: The people working so hard constitute more than just labor supply; they also take home commensurate paychecks, which constitutes labor demand — if they stop working, the people who were meeting that demand lose their job.

If anything eliminates busy-work, it's capitalism since someone is paying you and it's in their best interest to find out if all you're doing is looking busy.
posted by esprit de l'escalier at 1:10 PM on November 16, 2015 [1 favorite]


If anything eliminates busy-work, it's capitalism since someone is paying you and it's in their best interest to find out if all you're doing is looking busy.

Someone's never worked at a large corporation. The amount of energy that goes into PowerPoint decks that will be ignored while middle managers play with their phones...
posted by PMdixon at 1:30 PM on November 16, 2015 [1 favorite]


Also NB capitalism and competition are very very different things.
posted by PMdixon at 1:31 PM on November 16, 2015 [1 favorite]


Worse, capitalism is specifically anti-competition in the sense that only a handful of capitalists control the means of production.

We've always benefited as a society from shortening the work week before, esprit de l'escalier. Those were usually mild reductions to 6 days, then 5 days, and recently 35 hours in France, or partial adoption of 70% time in many European countries. There are good arguments that France's 35 hour work week created roughly 300k jobs and helped them weather the rescission better than Italy, Spain, etc., btw.

There are several reason why I'm advocating for gradual but ultimately larger reductions :
- At the poorly educated end, we must produce work that anyone can do because we cannot eliminate the human streak of social competitiveness. Would you prefer (a) 10 underworked waiters who mostly live on their basic income or (b) 2 overworked waiters, 5 video game addicts, 2 depressed guys, and 1 thief?
- Above that level, there is no shortage of useless work that capitalism finances for dumb reasons, like say real estate agents, and no shortage of useful work that capitalism cannot seem to fund properly, like say education or science, but a significant portion of society actually contributes to that useful work for fun if they're not wasting their time doing corporate bullshit.

We invent machines mostly to improve our standard of living, frequently by saving people's time. What is the point if we spend that time doing corporate busy work instead?
posted by jeffburdges at 5:09 PM on November 16, 2015 [1 favorite]


10 underworked waiters who mostly live on their basic income or (b) 2 overworked waiters, 5 video game addicts, 2 depressed guys, and 1 thief?

I think what you're not taking into account is that those 2 overworked waiters are also making a lot of money, which they spend hiring the other 8 people (say, drinking on Sundays and Mondays because they're working so hard). Your theory that people working hard steals the limited supply of work from others has no foundation in reality. From an economic standpoint, it is always better to keep less employable people on basic income rather than try to force companies to hire them by limiting how much the companies can employ more productive people. I can understand how this might be inhuman, but if we're only talking about economics, that's the truth of it. Like I said:

The people working so hard constitute more than just labor supply; they also take home commensurate paychecks, which constitutes labor demand — if they stop working, the people who were meeting that demand lose their job.

Also, I don't understand why you think real estate agents and managers do useless work. The people hiring them seem to think they are useful. When it's your money, you can decide which of your employees are doing useful work and stop paying the rest.
posted by esprit de l'escalier at 5:22 PM on November 16, 2015


We've always benefited as a society from shortening the work week before.

"Shortening the work week" is totally different from "We should prevent people from doing work for hire for more than say 16 hours per week."

1) Overtime is completely legal. You just have to pay people extra. Unless 2) they are exempt, which a huge fraction of the workforce is. And either way 3) they are completely allowed to work a second (and third!) job to pick up extra hours if they want to.

Nobody's prevented from working as many hours as they want, nor have they ever been.

And the distinction between "work for hire" and "working for yourself" is paper thin, even today. For example, were the people cleaning houses for Homejoy employees?
posted by OnceUponATime at 6:06 PM on November 16, 2015 [1 favorite]


I think what you're not taking into account is that those 2 overworked waiters are also making a lot of money, which they spend hiring the other 8 people

No, they do not. I selected waiter carefully as a job that might hold out longer against automation. We should assume almost all the jobs those remaining 8 people might do were automated. At minimum, all the service people use daily would be gone, like truck drivers, cashiers, tellers, etc.

From an economic standpoint, it is always better to keep less employable people on basic income rather than try to force companies to hire them by limiting how much the companies can employ more productive people.

We're talking about jobs that basically anyone can learn in this case, so people are pretty much fungible. As an aside, a waiter is slightly more skilled than this historically, due to the memory requirements, but I'd expect computer assistants can address that, making it no harder than cleaning toilets.

"Shortening the work week" is totally different from "We should prevent people from doing work for hire for more than say 16 hours per week."

Yeah sure. We're only talking about restrictions on employers here, not individuals, as I made clear up thread. It's fine if individuals wish to circumvent the work week by starting a company or whatever, work extra for more temporary reasons, etc. We dropped from a 6 day to a 5 day work week just fine without afaik telling anyone not to work more. And a basic income would make this easier.
posted by jeffburdges at 7:40 PM on November 16, 2015


The people hiring them seem to think they are useful.

I prefer the more traditional phrasing of "If you're so smart why aren't you rich?"
posted by PMdixon at 8:41 PM on November 16, 2015 [2 favorites]


I think what you're not taking into account is that those 2 overworked waiters are also making a lot of money, which they spend hiring the other 8 people

No, they do not. I selected waiter carefully as a job that might hold out longer against automation. We should assume almost all the jobs those remaining 8 people might do were automated. At minimum, all the service people use daily would be gone, like truck drivers, cashiers, tellers, etc.

So your theory is that automation will eliminate almost everyone's job so we need to divide up the remaining work by forcing people to work fewer hours? People said the same things at the start of the industrial revolution and people found new jobs. The waiters in your example will have money, and maybe they'll hire more psychologists or go see more movies or hire private tutors for their children, or whatever they want to do with their money. People whose jobs disappeared will find new work essentially serving people who kept their jobs.

It should be clear that production has increased because everything that used to be produced is still produced (some by machines), and the people whose jobs disappeared were freed up to do new jobs, which is new production. In your world, you force people to give up their full time jobs —people who are theoretically better at them and more productive — to other people who lost their jobs.

In your system, productivity drops, but free time increases. This is called "underemployment". It's a nasty cycle because these less productive people have less to spend, and so demand falls, and jobs disappear, which reduces the amount that people have to spend… and so on. I've been told stories by people who lived under communism of living under this kind of system — five people doing the job of one person. Nothing will rot the mind faster.
posted by esprit de l'escalier at 8:52 PM on November 16, 2015 [1 favorite]


I've been told stories by people who lived under communism of living under this kind of system — five people doing the job of one person. Nothing will rot the mind faster.

How lucky we are that the 40 hr work week hasn't driven us into Stalinism already.
posted by PMdixon at 8:56 PM on November 16, 2015 [3 favorites]


The people hiring them seem to think they are useful.

I prefer the more traditional phrasing of "If you're so smart why aren't you rich?"


No. It's that the two people who understand your job best are you and your manager. You need to do it, and your manager wouldn't pay you otherwise. If someone says to a therapist: "I think therapy is a load of crap". She doesn't have to argue about the value of therapy. Her clients find enough value in it that they're willing to pay her. That's all that matters.

If you don't know what a good real estate agent does or a good manager does, I can't convince you. The proof that these are valuable jobs is that they are valuable to the person paying for them to be done.
posted by esprit de l'escalier at 8:57 PM on November 16, 2015


PMdixon: It would be more productive if you didn't only communicate with snide one-liners…
posted by esprit de l'escalier at 9:01 PM on November 16, 2015


Okay: You assume a high degree of competency on the part of the central planners of the capitalist system. My experience is that this competence is largely absent at the level of allocating tasks (the people they hire to do busy work are really very often quite good at that busy work), and a much more useful description of how organizations work and how energy gets allocated has to account for empire building, custom, and personal connections.

A large part of our society's resources goes into soothing the egos of those who own them. The reason so much effort gets spent on stupid powerpoints, for examples, is because executive VPs get their jollies pointing out subtle formatting issues, let alone typos, on a schedule update. People feel shamed by this, so spend large amounts of effort avoiding it. Because there is very rarely any fine grained accounting of effort, this waste is untracked by any of the decision makers. Further, most of the decision makers have very little personal risk involved, as once you get to a certain point it's very hard to lower your consumable income without actually going to jail.

Your analysis is fundamentally Panglossian and facile. Actually existing human beings do tons of wasteful things, especially if it doesn't cost them anything. They will not stop being wasteful, generally, unless it is made costly.
posted by PMdixon at 9:20 PM on November 16, 2015 [3 favorites]


Do kids get basic income (and if so, is that an incentive to have lots of kids)?

FWIW - I think kids should get basic income, but I think at least some of it should be kept in escrow until the child reaches 18 and wants their own apartment, college education, or what have you. Having a larger lump sum saved up would be a great start for a young person - especially, might I add, a young woman in a large family who is being used for free childcare. Having a basic income available might just as well liberate children from exploitative families as enable those families to have more children. (I also think that some of the UBI can be made available starting in the teen years so that kids can provide themselves with Internet access or take an exchange program or pay for musical instruments or whatever.)

From what I understand - correct me if I'm wrong - in places like Australia with its child payments or the Scandinavian countries with their generous child care and social safety nets, people might have three children instead of two but they aren't having large (five or more kids) families very much. Kids take more than just money - they take emotional resources, time, and energy, and while a UBI might free that up for one more kid, it's not going to magically make enough time for a mega-family.

And some people, like me, still won't want kids even if those kids earn a UBI right from birth. If I were told that I could have more money coming in because my kids got a UBI, the answer would still be "N to the O P E."
posted by Rosie M. Banks at 10:52 AM on November 17, 2015 [1 favorite]


Okay: You assume a high degree of competency on the part of the central planners of the capitalist system. My experience is that this competence is largely absent at the level of allocating tasks (the people they hire to do busy work are really very often quite good at that busy work), and a much more useful description of how organizations work and how energy gets allocated has to account for empire building, custom, and personal connections.

Busywork means "work assigned for the sake of looking or keeping busy." No one hires someone "to do busy work". Anyway, there are no "central planners of the capitalist system". There's just regular people spending their money. If your manager asks you to do something for his own ego, that might be a waste, but he's paying you, so what do you care? As you wanted, it does "cost someone something": it costs your manager real money — economists call that a moral hazard. Anyway, this whole back-and-forth started with the ridiculous theory that we should try to share a "diminishing supply of work".

Also, of course children get basic income since basic income replaces welfare. You can't just let people starve.
posted by esprit de l'escalier at 2:30 PM on November 17, 2015 [1 favorite]


esprit de l'escalier, you've pretty much persuaded me that the supply of work will never diminish, but do you have an opinion on the idea most of that work will end up being personal services performed by poorly paid and disempowered people with no capital, for people who have lots of capital (like land and/or robots)?

I mean everyone being psychologists or movie makers or private tutors doesn't sound so bad, but what if it's a few of those, plus a lot low-paid Porche-waxers, body hair groomers, and pool cleaners?

I am picturing a kind of feudalism where, the need for serfs in agriculture having be obviated, they all end up in service at the manor house, and the lord of the manor ends up collecting more and more silverware now that there are so many servants available to keep it polished. And its true that the lord does value their efforts in shining his silver (shiny silver is very pleasing to look at after all). And that's why he is willing to pay for it.

But it's of relatively small value to him compared with the value that his maid would get out of, say, having some of those people building a house for her so that she could live in it with her husband, instead of sharing a room with the other maids in the manor. The maid would be willing to pay for someone to build her a house, but since she doesn't have money to do so, her need doesn't get met, while the lord's relatively trivial need for shiny silver does get met, because he does have money.

I am not sure that's all that much better of an outcome than "we ran out of work to do" since so much of the work that is getting done is going to provide very trivial benefits to the very few people who have the resources to pay for it. Were those resources more evenly divided, the people who have more vital needs might be able to get them met, and that labor would be more valuable to society over all.

I am disappointed that this thread got sidetracked into a discussion of the silly-on-its-face solution of "only let people work 16 hours a week." I do appreciate some of the thoughts people have shared on how to make basic income work in practice (since that really is a solution to this problem at least in theory.) But I am interested in hearing other solutions, and in particular I'm interested in hearing yours... Or why you don't think this is a possible or likely outcome, if you don't think it is.
posted by OnceUponATime at 2:59 PM on November 17, 2015


Anyway, this whole back-and-forth started with the ridiculous theory that we should try to share a "diminishing supply of work".

I think trying to stabilize demand through wage labor is fundamentally misguided, but I hardly think the idea that technology is rapidly increasing the elasticity of substitution between labor and capital is ridiculous in itself.

The only real thing that machines can't do and probably won't be able to do better than people by mid century is pay attention to us in a way that hits base level, mirror neuron type, responses. This leads to OnceUponATime's point that yeah, eventually they'll be doing work, but it's pointless and shitty work that I'm happy to say fails any reasonable cost/benefit analysis.

All you actually seem to be saying is that the currently existing system is Pareto optimal (yes, the manager gets some sliver of satisfaction knowing that the deck for the biweekly milestone meeting has had 4 hour-long meetings to make sure it's formatted exactly so, and that would be indeed be a reduction of wellbeing if we made him pay for the cost of that powerpoint deck). But Pareto optimality is practically the most trivial criterion possible, and has been pointed out, the system in which one person controls all the resources is as Pareto optimal as anything else.

Here is the claim that I am making: The current distribution of control over resources results in relatively immense expenditures of energy that more or less amount to making powerful people (mostly white men) feel special. As soon as you have relative preferences in your utility function (ie it is good that I be ranked above the other guy, regardless of absolute wealth levels), it can be entirely rational to maintain control of a larger fraction of a smaller pie. Diminishing marginal utility of consumption is a bitch.
posted by PMdixon at 3:15 PM on November 17, 2015 [2 favorites]


(ooooh, and if we have diminishing marginal utility of consumption, and a non/much-slower diminishing marginal utility of power/control/importance, then we can get super duper pathological results.)
posted by PMdixon at 3:17 PM on November 17, 2015


…you have an opinion on the idea most of that work will end up being personal services performed by poorly paid and disempowered people with no capital, for people who have lots of capital (like land and/or robots)?



But I am interested in hearing other solutions, and in particular I'm interested in hearing yours... Or why you don't think this is a possible or likely outcome, if you don't think it is.


I think you're absolutely right and everything you said is exactly what will happen. (Although the maid has some money, but maybe not enough to buy a house.) This is one reason you need strong redistributive policies including progressive taxes and inheritance taxes, and significant investment in social services like education, health care, and public transportation.

All you actually seem to be saying is that the currently existing system is Pareto optimal (yes, the manager gets some sliver of satisfaction knowing that the deck for the biweekly milestone meeting has had 4 hour-long meetings to make sure it's formatted exactly so, and that would be indeed be a reduction of wellbeing if we made him pay for the cost of that powerpoint deck). But Pareto optimality is practically the most trivial criterion possible, and has been pointed out, the system in which one person controls all the resources is as Pareto optimal as anything else.

Right.

Here is the claim that I am making: The current distribution of control over resources results in relatively immense expenditures of energy that more or less amount to making powerful people (mostly white men) feel special. As soon as you have relative preferences in your utility function (ie it is good that I be ranked above the other guy, regardless of absolute wealth levels), it can be entirely rational to maintain control of a larger fraction of a smaller pie. Diminishing marginal utility of consumption is a bitch.

Right, that is bad. This irrational need to hold other people down at your own expense is often cited by the rich as something done to them by insecurities of the poor. Your example makes me think of people in authority like prison guards and police officers who sometimes abuse their power for the sake of feeling powerful. It's sad for and inefficient for everyone involved. My guess is that being raised in a good environment mitigates a lot of the personal insecurity that motivates this behavior. What do you think?
posted by esprit de l'escalier at 3:56 PM on November 17, 2015 [1 favorite]


Well, okay, we're on the same page, I guess. And I agree that "progressive taxes and inheritance taxes, and significant investment in social services like education, health care, and public transportation" plus maybe something like basic income, or at least a robust welfare system, goes a long way toward solving the problem.

I'm just now getting into wonky policy arguments like the ones in the links, though, and I was hoping there were some wonky policy solutions that I hadn't heard of, beyond those well-established ideas. Maybe as long as I'm asking questions I'll just fish for feedback on the ideas I sort of half-floated up-thread. What about the notion of writing into labor law that working at a company for X years earns you Y share of equity in the company? (I used to work for HyVee, which is an employee owned grocery store that worked like this.) I understand that's not really compatible with the idea of a privately held company so maybe no one would want to start a business, so maybe as an incentive let the company founder retain 51% of the shares for his or her lifetime? Would this just lead to no company outliving its owner? Maybe there's some way of adjusting the details of this to give the right balance, the right incentives..?

Similarly, what about rent-to-own? What if every renter got some percentage of equity in the building after five years of renting, and an increased percentage after 10 years? So that they get some of the money back in their pockets when the rent goes up, and the landlord can't sell their homes out from under them without paying some of the profit to them? Of course, the landlord eventually wouldn't own the building anymore, but maybe we could make that take long enough that it would still be worth investing in properties initially?

What do you guys think of those ideas? In addition to redistributive policies like we've already discussed, I think.
posted by OnceUponATime at 4:32 PM on November 17, 2015


What about the notion of writing into labor law that working at a company for X years earns you Y share of equity in the company?

You already have massive exposure to the well-being of your employer in the sense that if they go under you lose your job - you don't want to, in essence, be locked into company stock. Being able to sell it (easily) only happens at publicly traded companies.

Something similar though I think in practice weaker applies to mandatory rent-to-own. Substituting "geographic area" for employer of course. Different though because a house is more like a perpetual bond than an equity stake. (Value of the house, to first order, should be the NPV of rents net of depreciation/upkeep costs out to large but probably not actually infinite time horizon , discounted by the relevant interest rate, plus whatever option value there is in being able to put something else on the parcel). But, say 20 years after we start our renters accruing fairly illiquid equity stake in our bond-like physical asset, their city undergoes a Katrina or a removal of capital. Then what do we do for those people? Either we replace their lost assets in some degree immediately, or we don't, because the length of time it would take to build up equity that represents any kind of meaningful income stream is a pretty large fraction of a human life span. Whether we replace their stuff/income stream or not I tend to think there's problems either way.

Instead, KISS. If not enough money is being spent, make more and give it to the people who want some to spend. If you have a meaningfully sized guaranteed [25-35% of NGDP/capita] basic income, it should come out preferable to an equally societally costly system of in-kind entitlements - both for local knowledge reasons and efficient risk allocation reasons. And this has the benefit that if you are unlucky and lose all your assets [or job] , you're still getting a coupon payment from your citizen's bond next week, so you won't starve. So we don't have to do anything special for you, most likely.

This is completely separate from the question of whether any given service should be provided by the government. But if it's better for the government to do something directly for lower income folk (rather than giving them cash), it's very hard to believe that it's not also better at higher income levels. This also dovetails with the pretty clear fact that public services that are For Poor People are political losers, but universal entitlements are big winners. The point, though, is that distribution of access to resources (money) is a different question than distribution of provision of resources between public/private sector.

(Further benefits of universal basic income: matching of workers to jobs should be a better one from the workers' perspective since they now have a much reduced opportunity cost to saying no. And losing your job goes from this existential terror to a crappy thing that's a PITA.)

(in terms of kids, I always envisioned a curve starting at like 30%(?) payment rate at birth rising to 100% at majority, but I like Rosie's income-spike-for-household-formation. Also note that the argument for reducing kids' basic income because they're cheaper to feed has the countervailing piece that unlike adults, they can't supplement that income through wage labor, so not sure which of those dominates. The welfare baby argument is gross and unfounded and based on a pretty horrible view of humanity or at least a terribly misinformed view on what pregnancy is like.)

It's sad for and inefficient for everyone involved. My guess is that being raised in a good environment mitigates a lot of the personal insecurity that motivates this behavior. What do you think?

I.... don't know. I'm with Thucydides: "right, as the world goes, is only in question between equals in power, while the strong do what they can and the weak suffer what they must," On good days, I can believe that maybe there's a slow, incremental, but achievable path to widening the pools of 'equals in power'. On bad days, I don't see a path to that that doesn't run with rivers of blood. I do think that focusing on issues of personal character is misplaced; yes, at the margin, idiosyncrasies matter (and ironically as power becomes concentrated in fewer and fewer people). but by and large, I'm opposed to "let's persuade rich people to be nicer" as a place to put energy. I mean, there's nothing wrong, per se, with wanting your slide deck to look shiny and pretty and consistently formatted. And in lots of organizations, no one from on high is explicitly telling anyone to put lots of energy into these things. It's much more an emergent set of incentives from the material substructure. I think you'll get a lot further changing those incentives by attacking the substructure than self-actualizing middle managers.
posted by PMdixon at 9:46 PM on November 17, 2015


We invent machines mostly to improve our standard of living, frequently by saving people's time. What is the point if we spend that time doing corporate busy work instead?

status :P how else would we know where everyone is in the pecking order? cf. positional goods, which is one reason to tax them, viz. progressive consumption taxation

What do you guys think of those ideas?

Robots Won't Own You. You'll Own the Robot.
In other words, the end of labor, combined with the rise of winner-take-all markets, could cause a huge runup in inequality.

Many people argue that since there will always be demand for more products, there will always be more work for humans to do. Weinersmith’s cartoon depicts a world in which humans are pushed into ever more absurd, esoteric jobs. The problem is that such jobs will not necessarily pay a living wage. There is no iron law of economics that says that wages always go up. If capital-labor substitutability increases dramatically, wages may fall a lot.

Humans, like machines, cost resources to create and maintain. Raising kids is expensive -- food, shelter, medicine, education and much more. Adults consume even more. If wages ever fall below the level needed to maintain human existence, then either humans will survive via redistribution, or they won't survive at all.

Would income redistribution be the answer? With a society of robot-provided abundance, wouldn’t it be easy to simply provide all the low-earning masses with a basic income? Unfortunately, redistribution depends on politics, and in an age of robots, the masses may have very little power to compel the wealthy to give up even a small sliver of their wealth. “Once the military became robotic,” Weinersmith writes, “revolution became impossible.” It’s an extreme scenario, but not out of the realm of possibility.

Since there is no guarantee that humans would have any power in a robot future, income redistribution is a shaky solution. A better idea might be redistribution of corporate ownership itself. If everyone in the country owned index funds, it would provide people with a second income -- an income from capital, not labor. That would act as an insurance policy against the economy-wide replacement of labor with capital.

Interestingly, the biggest proponent of this type of policy was former President George W. Bush. Although Bush’s idea of an “ownership society” didn’t get much traction, it might one day become the only way to maintain any semblance of equality. His idea of replacing Social Security with individual investment accounts was a form of mass stock ownership. Although that plan would have dramatically increased risk for American retirees, we may someday want to have the government create individual stock accounts in addition to Social Security.
previously...

also btw:* "To lessen income inequality, Mr Kaplan gets even more inventive. Companies would get tax breaks if their shares are broadly owned, using a measure he bases on the Gini coefficient. The American government would let people choose the firms where some of their Social Security (national pension) funds would be invested. Spreading stock ownership, Mr Kaplan reckons, will diffuse the gains from companies that, using AI, make oodles of money but employ few."

but again, this gets back into georgism and 'national equity' as a basis for a citizen's dividend/basic income (not to mention currency as tax credits: "Note that a government's 'political capacity to levy and enforce payment of taxes' depends first and foremost on the quality of the real economy it superintends," which puts the 'safe' in safe assets, so it's not the size of gov't per se, but its effectiveness, and for who? see CivicTech and the Entrepreneurial State above...)

oh and...
  • Will Humans Go the Way of Horses? - "Having valuable labor to offer is not the only way to remain economically important; having capital to invest or spend also ensures continued relevance. A critical difference between people and horses is that humans can own capital, whereas horses cannot... The challenge here is that capital ownership appears to have always been highly uneven and has become increasingly skewed recently.... People, unlike horses, can choose to prevent themselves from becoming economically irrelevant... It’s not unreasonable to expect people to vote for policies that will help them avoid the economic fate of the horse..."
  • Are We Approaching Peak Human? - "There are two roads: First is the road in which we genuinely have Turing-class machines and software assistants that can do for us everything that a human can do... That road is very much that of the science-fiction novels of the alas!, late genius Iain M. Banks. In his 'Culture' universe, every person has a robotic artificially-intelligent personal drone that follows them around and makes sure that their life doesn't crash into chaos... Second is the road that is well-marked not by science-fiction novels but rather by Regency Romance novels... a social class in a condition of material comfort that had absolutely no productive economic role to perform whatsoever... This is a society of material abundance for the upper class."
My most unfavorite line from a nineteenth-century economist comes from Alexis de Tocqueville’s friend Nassau Senior, the first Professor of Political Economy at Oxford... Senior was well-known for taking the position that the government of the United Kingdom should not spend any money relieving the distress of Andrew Carnegie’s father and the other handloom weavers whose livelihoods had collapsed out from underneath them with the invention of the power loom. Why not? Because the spur of material privation was necessary to induce them to shift occupations and find other jobs. And if you fed them in idleness to keep them from dire material deprivation and possible death, they wouldn’t search so hard for work. It would take them longer to find other jobs. And in the end the government would waste a great deal of money on outdoor relief without diminishing the total sum of misery created by technological displacement. Misery was the spur needed to induce people to get on their bikes and look for jobs...

Senior says: “We need another million to die to get Ireland down to a comfortably-sustainable population of four million.” What you should say is: We should give them an income—Britain is rich enough to pay. Or: We should move them to Britain, where there are plenty of jobs. Or: We should pay to ship them to Australia, Argentina, Canada, the United States—where there is a great deal of land that can be farmed, of trees that can be cut to build houses, a great deal of work in general to be done productively. People are useful and ingenious. You should give them the power and ability to be so—rather than concluding that they are social waste.

[Milton] Friedman thought it was profoundly undignified and unfree for people to have to justify to the welfare office or the IRS why they qualified for their benefit check. The overwhelming proportion of what we produce, he thought, was the joint collective product of everyone who has come before us and handed us our knowledge. That is our collective inheritance. That has all been given us for free by our predecessors, starting even before the people of Catal Huyuk noticed that the plant that was to become wheat had a really big and tasty seed, continuing with the guy named Ish-Baal or whatever in Phoenecia in 1200 BC who saw that a stylized picture of an ox could represent the phoneme “b” and thus invented the alphabet, on down to here and now. A good society, Friedman thought, would be a relatively unequal society, but it would not have a bottom extreme of dire poverty and people who were unfree because of the harsh spur of absolute material necessity.

But that was an earlier generation of conservatives. That [idea of a basic income guarantee] is vanishing from the right. That is, especially, vanishing from the right if the people who are kept out of poverty by social insurance are the wrong kind of people.

Consider what I saw crossing my desk last week. I was in Kansas City, MO, just across State Line Road from Samuel Brownback’s Kansas. Governor Brownback denounced the liberal churches of Kansas and the meager and powerless Democratic Party of Kansas for pushing for Kansas to expand Medicaid... the only argument Brownback could think to make sotto voce was that Medicaid expansion gives free stuff to urban people who carry ghetto blasters. They are the ones who are going to benefit. And, Brownback hints to his audience of supporters: “We really don’t like that, do we?” It is scary out on the prairie.

[what to do?]
  • First: higher taxes on the rich; more benefits for the poor...
  • Second: Back at the start of the 1970s, I think we made a large collective mistake in deciding that we should charge for public colleges...
  • Third: We have an enormous problem with figuring out how to work our technology.
[re: 'kodak vs. instagram', on that last point]
but just to pick at the last two points a bit more; what is a 'public education' for? is it to 'reproduce the working class by training future workers according to the changing needs of capital'? some elaborate signaling mechanism to establish hierarchy in status competition?* for me, to remain relevant, it's the creation and wide dissemination of knowledge ['outside the walls of the city'] that is the 'true' source of (common) wealth...

but if that's the case, re: the third point -- on 'how to work our technology' -- we only have a system that measures exchange value well, not so much social or 'use' value. as kaminska says, "we've made a major accounting error:"
Which is why I suspect the economic problem can’t be solved until technology combines with societal morality, and we begin to respect and honour every human person, whomever they may be, rather than treat them as commoditised entries in a spreadsheet which can be streamlined, disrespected or gamed for the sake of oneupmanship, cheap labour and profit.

You can’t synthesise trust in a system that has no underlying morality by simply removing humans from the process. The humans are the process. They’re also the point of the process.
or as mason puts it, given formally incommensurable values, "if we want a postcapitalist economy, not only do we need something better than the market for distributing goods, we also need something better than the finance system for allocating capital... we need to focus on where the externalities are being generated and distributed... [if only] human beings, with freedom of speech [and movement], became the sensors and feedback mechanisms for the planning system could this crude calculating machine work..." so maybe we're back to 'upgrading humans'?
posted by kliuless at 11:11 PM on November 17, 2015 [3 favorites]


What about the notion of writing into labor law that working at a company for X years earns you Y share of equity in the company?

Won't most minimum wage workers immediately sell their shares upon receiving them? So why not just save them the brokerage fees and give them all cash? If it's a publicly-traded company, they can always just buy shares. If anything, any extra money should probably go towards paying off high-interest rate debts rather than trying to take an equity stake in their employer, especially if if they have little control over the success of their employer. Startups pay stock options because they need their cash for other things, and they want to motivate their main employees.

Private companies don't want to be forced to pay options because there is usually a big gap between what they think they're worth and what the market thinks. So either you as a worker would find your equity payment too small to make up for the smaller wage, or they would find your asking price too high. They would rather just pay you cash in most cases. Most workers don't have the necessary investment background.

Similarly, what about rent-to-own? What if every renter got some percentage of equity in the building after five years of renting, and an increased percentage after 10 years? So that they get some of the money back in their pockets when the rent goes up, and the landlord can't sell their homes out from under them without paying some of the profit to them?

Then that would be taken into account in the rental prices, and so rents would go up by at least the transferred capital. Rent is about 5% of the property value per year. If you transfer 1% of the property every year, then rent would go up by at least 20% (5% to 5+1%). It would also go up because most people don't want to deal with shared property ownership (people want the freedom to sell their house when they want, the freedom to move in when they want), and so rental housing supply would fall drastically. That would be really bad for renters, but great for buyers.
posted by esprit de l'escalier at 3:29 PM on November 18, 2015


Hmm. I guess if the point is to distribute ownership land and company stock rather than just cash, you do have to take into account that land and company stock can be sold for cash... and that many people would rather have that. (Come to think of it, my current pension plan is all based on stock in my employer, and I don't totally love that.)

I could either try to make this plan more elaborate by restricting people's ability to sell this kind of equity (as my pension plan prevents me from selling!), or I could just accept that redistribution of cash is a more practical solution.

Plus the connection to Bush's "ownership society" does rather give me chills. If George W. Bush endorses it, it must be a bad idea.

Okay, I guess I can't come up with anything better than basic income. Is still have reservations about the government's role as a middleman there, but I have more serious reservations about everything else.
posted by OnceUponATime at 3:44 PM on November 18, 2015


I think the bigger problem from sifting through kliuless' links is that capital is worth so much more than labor that it can feel almost impossible for people without capital to save anything meaningful. I think capital appreciates something like 8% on average, which far outstrips inflation.

Part of tackling that would be making capital less lucrative (for example by raising corporate taxes, or removing tax deductions having to do with capital appreciation).

This is basically impossible because of the perpetual war between young people who have labor and no capital and old people who have capital and are retired. The old tend to vote to maintain the value of their capital while the young want to maximize the value of their labor. Nothing immoral about that: if labor goes too far, then it confiscates the hard work of retirees; if capital goes too far, then it exploits the young have-nots.

Another reason why it's hard for labor to win this vote is that if you do make capital less lucrative in one country, it just moves to another. You would need an internationally coordinated "strangulation of capital profits" (taxes). That seems almost impossible to me to happen soon.

Your best bet is to do what you're doing and try to keep some of your assets in growth stocks like you're doing. (If you can't beat 'em, join 'em). I'm surprised your employer doesn't let you sell after a few years, or at least self-direct the investments.
posted by esprit de l'escalier at 4:01 PM on November 18, 2015 [1 favorite]


Another reason why it's hard for labor to win this vote is that if you do make capital less lucrative in one country, it just moves to another. You would need an internationally coordinated "strangulation of capital profits" (taxes). That seems almost impossible to me to happen soon.

Piketty meets Malthus: capital attracts capital, so control thereof becomes more and more concentrated. Simultaneously, in the absence of a frontier (A literal one - land is just capital that we didn't make, unless we're Dutch) the wage level gets driven down to subsistence.

The only things in recent history that have disrupted this dynamic and increased the relative power of labor, basically, are the black death and the widespread destruction of capital in the wars-The one by a downwards supply shock to labor, leading to reduced value of preexisting capital, the other by an upward demand shock, to replace that lost capital. It may seem counterintuitive that shocks to the marginal productivity of labor in opposite directions could have the same impact, but I think it makes sense if fraction of surplus captured by labor is driven by something like the ratio of individual buyers to sellers. Destruction of preexisting capital will necessarily fragment the buy-side of the market, if for no other reason than that people who formerly couldn't compete in that side of the market (because they didn't have enough capital to make the labor productive enough to pay the market rate) are now able to meaningfully enter bids.

So basically it seems like labor should ignore Bastiat.
posted by PMdixon at 4:51 PM on November 18, 2015


Almost all western economic activity serves no real function beyond providing status indicators, kliuless. It's just obnoxious that most business activity serves no real function beyond either providing status indicators within the company or maintaining harmful information asymmetries.

There is no foreseeable "peak human" though, at least outside pathological economics speak, because (a) properly trained human minds can do astounding and useful things, while (b) strong AI shall remain quite far off for economic reasons.1 We could train much of society to be scientists, engineers, etc.2 or at least allow them to find activities more useful than stroking their boss' ego.

We should distinguish the different types of capital :

It appears the predominant "means of production" like computers, small robots, micro chemical plants, etc. could become quite inexpensive, if not "too cheap to meeter". It's only heavy equipment like cars, digging equipment, etc. that necessarily remains expensive, but these make poor capital investments too.

Land is a sensible kind of capital, but approaches for partially socializing it exist. Inventory is another sensible form of capital, but maybe not that critical here. Intellectual property does not make sense, and should simply be eliminated, or at least reduced to a only a few years.

We next have financial entities like companies whose value actually comes from a particular set of human relationships, possibly paired with another type of capital. Isn't it odd that ownership of the relationships amongst the labor is the capital here? I donno if many companies would fair well as people gained more time and built alternative organizations.

And finally we've the derivative financial instruments that usually just shuffle around risk to other forms of capital. It's quite bizarre these occupy so much of the the total pie.

1 We require many unforeseeable AI discoveries before anything like strong AI becomes realistic. If labor remains cheap, then we'll invest only in a narrower range of AI discoveries, making it take many decades or even centuries longer to develop strong AI.
2 "When reared in low socioeconomic status environments, genes accounted for only about 8% of variance in intelligence within the twin pairs."

posted by jeffburdges at 5:48 PM on November 18, 2015


properly trained human minds can do astounding and useful things

Who's paying to train them? Who captures the surplus? Why is the fraction of a human lifetime that needs to be spent in education/training before being net productive bounded below 1?

strong AI shall remain quite far off for economic reasons.

Accepting ad arguendo that that's true, we haven't finished domesticating the computer technology we have. There's still a lot of boring "do a normal thing on a mobile computing device" room left out there. Also keep in mind automation doesn't need to be better than people to be competitive in the market, it just needs to be good enough. Think TV dinners.
posted by PMdixon at 6:11 PM on November 18, 2015 [1 favorite]


PMdixon: Some of the things you say are very interesting, but I have to admit that the last couple comments I find myself completely lost reading your comments.
posted by esprit de l'escalier at 8:02 PM on November 18, 2015


I have to admit that the last couple comments I find myself completely lost reading your comments.

That's fair. I have a bad habit of terseness to the point of obscurity. Will circle back around and unpack those points (hopefully) better when I have some more energy.
posted by PMdixon at 8:39 PM on November 18, 2015 [1 favorite]


That's fair. I have a bad habit of terseness to the point of obscurity.

Yeah, I can sometimes decode what you're saying, but it takes me a few minutes.
posted by esprit de l'escalier at 10:26 PM on November 18, 2015


Another reason why it's hard for labor to win this vote is that if you do make capital less lucrative in one country, it just moves to another. You would need an internationally coordinated "strangulation of capital profits" (taxes). That seems almost impossible to me to happen soon.

In retrospect I'm a little unclear as to why I quoted this as my jumping off point, but I think I meant to say that it's much deeper than mobility of capital, and even if you could have effective, non immiserating capital controls (you can't) to get around the need for a global wealth tax, labor is still screwed.

Piketty meets Malthus:
Reference to two pessimistic economists, the Thomas' Piketty (contemporary French economist) and Malthus (18th century British Anglican minister/economist). The latter's model I'm somewhat mangling from one around a subsistence rural economy macro model to a wage model, but I think it's defensible.


capital attracts capital, so control thereof becomes more and more concentrated.


This is the Piketty thesis: That there is no (theoretical) reason that the return on capital cannot persistently be above the growth rate of the economy. Further, empirically this seems to be true more often than not. This means even in an overall growing economy (even from productivity growth!) we should expect to see ownership of capital become more and more concentrated; the Gini curve of capital ownership should approach a right angle.


Simultaneously, in the absence of a frontier (A literal one - land is just capital that we didn't make, unless we're Dutch) the wage level gets driven down to subsistence.


This is a neo-Malthusian argument. Basically, assume the population is growing exponentially in the absence of constraints. Suppose we have a Cobbs-Douglas production function (which of course we all know looks like Y=L^a*K^b, where Y is output, L is labor input, K is capital input (land is capital that god made/preexisting capital is land that past people made), and a and b < 1 are the responsiveness of output to changes in input by factor. This is a terribly oversimplifed one, but it's strong enough for this.).

Let's be nice to capitalism and assume that wage level = the marginal product of labor, that is, the average wage is exactly equal to the additional output added by the next worker, not the worker being paid. This is just the marginal cost = marginal price/MC=MP equilibrium. The marginal product of labor is just a*L^(a-1) *K^b. Note that the exponent on labor is negative, and also that if a+b=1 then this is simply a*(K/L)^b. Unless capital is growing as-fast as labor, which can really only happen by expansion to new land, practically speaking, this quantity will be driven down as L increases. Note as well that in practice the wage is less than the marginal product due to concentration of bargaining power on one side, as Adam Smith mentioned in Wealth of Nations.

NB: This is NOT a claim that standard of living cannot improve over time. That would be silly. It is quite possible for (parts of) the price level to drop faster than the wage level (food, electronic media, in the first and second halves of the twen cen). The argument is that population growth causes to fraction of output claimed by labor to fall to a minimal subsistence level.

The only things in recent history that have disrupted this dynamic and increased the relative power of labor, basically, are the black death and the widespread destruction of capital in the wars-The one by a downwards supply shock to labor, leading to reduced value of preexisting capital, the other by an upward demand shock, to replace that lost capital.

This is a slightly but not especially hyperbolic combination of the standard economic argument about the effects of the black death on economic power, and Piketty's argument about the effects of the wars and why the post-war period is weird.

It may seem counterintuitive that shocks to the marginal productivity of labor in opposite directions could have the same impact, but I think it makes sense if fraction of surplus captured by labor is driven by something like the ratio of individual buyers to sellers. Destruction of preexisting capital will necessarily fragment the buy-side of the market, if for no other reason than that people who formerly couldn't compete in that side of the market (because they didn't have enough capital to make the labor productive enough to pay the market rate) are now able to meaningfully enter bids.


Most standard production models bake in that the capital/labor shares of income can't change. I'm trying to reason out why destruction of capital and destruction of labor would both result in an increase in fraction of output captured by labor. The 14th century example doesn't need any special explanation. The standard explanation for the 20th cen example is simply that you have a demand shock upwards because of the need to replace all the shit that got blown up, but that seems like a US-centric answer to me, and my understanding of the time series' is that we tend to see similar rises in the labor share of output on the other side of the North Atlantic, so I think we need an explanation in terms of bargaining power. This is the most idiosyncratic bit and also the least essential to my argument.

So basically it seems like labor should ignore Bastiat.


Oh, yeah, that's hella terse. This is sort of a remnant from an earlier version of the post and doesn't mesh incredibly well with the points above. I'm referencing the end of the Parable of the Broken Window, in which Bastiat attacks the idea that we can improve the welfare by destroying capital, forcing expenditures to replace it, which expenditures will be spent, etc etc. Anti-Keynes before Keynes, mostly. I'll quote the close from wiki:
It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way, which this accident has prevented.
So there is a key assumption here: That the other way he would have employed his six francs is, on average, at least as good or better than the chain of production started by the glazier. As much as economics likes to pretend that they don't do interpersonal comparisons of utility, here is one right here. As soon as we think about different marginal utilities of consumption, and/or the fact that any chain of purchases has to eventually terminate in food, this moral breaks down.

Here's how it breaks: We don't have shopkeepers any more spending money on glaziers, we have, mostly, giga corporations whose ownership is itself concentrated in a tiny fraction of individuals and families. Nor are the corporations, for the most part, doing any kind of modern day Bell Labs thing. Hell, these days they're hardly even spending money on debauchery. Their marginal product, that the six francs would have gone to, is a better powerpoint deck, or possibly a slightly glossier floor in the corporate lobby. Maybe a consultant to goose EPS. Maybe just one of the few remaining old school debauched orgies. There is a much shorter chain of production (company->laborer->standardized basket of consumer goods; company->recruiting firm->consultant->standardized basket of consumer goods, company->banquet of chestnuts), with most of the steps but the last one resulting in lower marginal utility increases than something like company->contracting company->laborers/suppliers->standardized basket of consumer goods/laborers->... The point is not that people should go around breaking windows, the point is that it is entirely possible to set up a pathological system in which it is utility increasing for most of the population to do so, and further that for some definitions of windows, for most of the population we live in one now.

As I said, that line didn't really go with the rest of the post as well as I hoped it did, but the points are.
a) Many economists claim they don't do interpersonal comparisons of utility. (Midway down the page.)
b) They're full of shit when they do. In practice, they take the naive approach to comparing utility, by saying that I don't have to because all dollar spending is equivalent from the perspective of someone outside the transaction and any externalities regardless of by who and what on.
c) As soon as you start thinking about even a very weakly decreasing marginal utility of consumption, at current levels of inequality, very high levels of deadweight loss of redistribution are required in order for it not to be the case that large quantities of redistribution would be hugely welfare increasing.

Other post:

properly trained human minds can do astounding and useful things


Who's paying to train them? Who captures the surplus?
Education/training are costly, time intensive processes that at current levels of intensity result in a high surplus for the educated/trained over their (resource) cost. Who is putting in the initial cost? Obviously not the student based on current resources, because most 18 year olds don't have any. The student based on future resources, ie debt? Then prices rise until some combination of the creditor and the trainer capture all the expected future surplus. Oh well, you might say, the student might not be better off but at least society as a whole is -- but at that point a rational student should be indifferent between education and !education. The public fisc is probably the least bad option, but even then you've basically got a subsidy from those who don't go to higher ed to those who do, which basically means you're taxing the poor to give to the (future) rich..

Why is the fraction of a human lifetime that needs to be spent in education/training before being net productive bounded below 1?

Let's say that with enough training, any given human mind can be better than the best automated system at at least one task. Always. (I doubt this) Presumably, as the state of the art of automated systems goes up, it will require more and more training to reach 'enough'. At the point that you need to spend your entire lifetime in training to be competitive, well, whatever astounding and useful things you can do that can't be done cheaper than a computer, you got about five minutes to do them. Humans may have infinite potential but they have finite heartbeats.

strong AI shall remain quite far off for economic reasons.

Accepting ad arguendo that that's true, we haven't finished domesticating the computer technology we have. There's still a lot of boring "do a normal thing on a mobile computing device" room left out there. Also keep in mind automation doesn't need to be better than people to be competitive in the market, it just needs to be good enough. Think TV dinners.

This is just saying that even if we stopped making new kinds of chips tomorrow, and our software capabilities never got significantly better, there's still a lot of impact from computers on productive technologies to come, and also that strong AI is kind of a non sequitur on the topic of whether aggregate demand can be stably sustained primarily though wage labor: we don't need "as good as average human", we need "good enough to be acceptable and cheaper."

Basically, I'm presenting a synthesis of Piketty (capital concentrates until it's destroyed), a Malthusian Marxist argument (the wage level will be driven down to subsistence), and DeLong on the uses of humans (energy source, fine motor control, cybernetic control of the latter two, and emotive/affective labor, of which the first two humans are now mostly uncompetitive and the third is looking iffy. Backs, hands, heads and heart in his formulation.)

Is that more legible? Besides DeLong and Piketty, I'm also drawing heavily on the ideas of Scott Sumner, Nick Rowe, and Kevin Erdman, though I don't know how much the latter three would agree with my conclusions.
posted by PMdixon at 9:59 AM on November 19, 2015 [1 favorite]


I'm not disagreeing about wage levels being driven down to subsistence, that's why basic income is essential. I simply meant that it's not peak human but peak capitalism in the sense that humans remain useful so if they're not being used then capitalism seriously fucked up.

We'll develop powerful AI helpers for intellectual tasks, but replacing the human glue between the special purpose AIs is going to take a while. And it'll take longer if human intellectual labor is cheap.

I'm fine with the poor subsidizing society's advancement, including higher education that frequently leaves them behind. It's enough that poor people are given as fair an opportunity as possible and that efforts to improve their lower education continue.

In fact, another reason for reducing the work week is so that we\re incentivized to educate as many people as possible as well as possible. It's better if companies are starving for say sys admins than if people interested and able to be sys admins cannot get the job because they're not quite as good as someone else the company can get.
posted by jeffburdges at 2:16 PM on November 19, 2015


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