Munger's Three Arguments For Welfare For Everybody -- AKA "Universal Basic Income"
Michael Munger, a professor of political science, public policy and economics at Duke University, writes at The Hill about his prediction that "we stand on the verge of another wrenching economic revolution, where workers at all levels will once again feel desperately insecure."
He likewise predicts rioting in the wake of this -- as well as other destruction.
Munger feels that "Universal Basic Income" -- a living stipend given to citizens from the government (translation: other people paying taxes) -- is a solution. Here's why:
First, economic revolutions do a lot of good, overall. The "sharing" economy -- Uber, but for everything -- will drive down prices and the need for storage and ownership. It will be better for the environment, and we'll all have more space to live.But it won't benefit everyone equally; people with "gigs," a good source of income from a skill they can advertise on LinkedIn, will prosper. People with no source of income will be harmed, because it doesn't matter how much prices fall if you don't have a job.
If the new economy is as great as some claim, it should be possible for the gainers to compensate the losers and still come out ahead.
Second, a UBI would be cheaper and more effective than what we do now, economically. If you take the total amount we spend on anti-poverty programs and divide by the number of poor people, there should be no poor people!
As the Cato Institute's Michael Tanner argued, we are already spending at least $15,000 per poor person, including children. For a family of three, that's $45,000.
But instead of just giving them the money, we have created what experts call the "benefits cliff": The first $10,000 earned in a new job by a single mother in Section 8 housing, with food subsidies, costs her $12,000 or more. That's a marginal tax rate of more than 100 percent.
Poor people aren't lazy; they're trapped in the current system. A UBI is not contingent on staying poor, so it would both lift people out of poverty and flatten out the benefits cliff. Of course, this means that the new UBI would be instead of existing programs, rather than a supplement, and not everyone agrees with that.
Finally, there is crude "realpolitik." Plenty of very wealthy people already live in the U.S., and the new economy is likely to create inequality on steroids. In a democracy, the poor and middle class have many tools to "negotiate" redistribution at gunpoint.
If political parties and factions get organized around class differences rather than considerations of regional or industry politics, the rich will lose. That was actually the argument that Bismarck used to motivate German industrialists back in the 19th century: You folks can pay a little now, or a lot more later.
That last bit may seem cynical, but we're talking about politics, not high school debate. And even if this third argument offends you, it means that we may end up doing the right thing, even if it is for the wrong reasons. A UBI isn't perfect, but it's a step in the right direction.
Are you with him? Against him?
And why?
Another take -- from Warren Mundine at Quillette:
The greatest thing in the world you can do for another human being is give them the opportunity to work.
Mundine tells this story:
Andrew Forrest is one of Australia's wealthiest men - a self-made billionaire who built an iron-ore mining company to rival the big, established players. He grew up on a cattle station in Western Australia's remote Pilbara region. As a child he considered the Aboriginal people who lived and worked on the station as family and was disturbed to see how their, and so many other Aboriginal people's, lives turned out when they were moved off the stations to live on welfare on the fringes of towns and cities from the early 1970s.Forrest was determined to create employment opportunities for Aboriginal people. He created an employment model called Vocational Training and Employment Centres (VTECs) based on a simple principle that once a person had successfully completed training they would be guaranteed a job in his company.
He learned that for people who'd been dependent on welfare for a long time, skills training wasn't enough. Many who came through the VTEC had multiple barriers to employment. Drug and alcohol addictions. No driver's licence. Criminal records. No secure accommodation. Some couldn't read or write. Some hadn't worked before in their lives. The challenges didn't end once the person started the job. Some workers went home after their first rostered period and didn't return. Sometimes family members demanded their money. Whatever the hurdle the VTEC would help them overcome it.
What Forrest found was that if a person stayed in the job for twenty-six weeks, he had them for life. They'd never look back.
Is there a way, practically, to square this ethos with the harsh reality Munger predicts?
We’ve recently tried a version of this with college students with the federally guaranteed student loans. The pattern is clear: to ensure that students can afford college costs, the amounts which can be borrowed have been annually increased. As soon as the borrowing limits were raised, tuition and other costs were raised. Over a fairly short time this has made college unaffordable to many, and saddled those who attend with huge debt.
A “ guaranteed” income will result in prices rising for everyone, driving increasing numbers of people into poverty. Instead of a safety net, it will trap more and more in poverty and create an unsustainable program.
Wfjag at August 6, 2018 12:16 AM
Another Munger theme is that aggregating the totality of social services into one mondo UBI check will allow recipients to barter resources as do the rest of us... 'I'll skimp on elegant food and direct transportation for a month, and use those savings to buy good clothes or transportation for seeking work on the other side of town.'
I think the problem with the scenario is that Munger assumes that everyone else has, in their interior life, a secret professor of political science who's just dying to get out... A competent, competitive, cooperative spirit who can move purposefully. This seems improbable.
A difficult truth is that a lot of people really aren't up to this. Peterson affirms that the most reliable finding of social science is as follows: The personal quality most highly correlated to success in life is intelligence. It's not family wealth, or good schools, or orderly law enforcement or anything else. That's the biggest truism that psychology can prove statistically. That truism is what we got...
...But that truism ain't good for much. There are other qualities in life, including conscientiousness (and a cluster of other indistinct stuff, like 'ambition') which help people move forward, too. These are terrifically difficult things for a culture to collect in buckets with which to bathe the poor. And the most damnable part of the truism is that we can be certain that a lot of people, whatever their other characteristics and cultural burdens, are simply not going to be bright enough to hold down a job and create wealth for society... And that's about 15% of humanity. Per JP, for nearly a hundred years it's been against the law for the United States armed forces to induct anyone with an IQ lower than 85— There's just no point.
Now imagine the edge cases. And ponder for a minute what it means to tax the wealth of others (essentially at gunpoint, because that's how taxes work), and then pass that value to someone in a bundle and say, if not in as many words: 'Here's your livelihood! You don't need to strive, or cultivate skills or friendships or arrangements, because this UBI bundle will be there for you no matter what!'
I got issues with that idea.
Listen, the 'Peterson truth,' that 15% of us will never be up to making a steady contribution, is daunting in the extreme. Don't be upset that it makes you feel bad... No culture has ever known what to do about it. Ever. Christianity may well have come closest, but any answer is speculation.
And my speculation is that UBI ain't the answer.
Crid at August 6, 2018 2:00 AM
The statistic might have been 65% for military exclusion. I forget the precise numbers. I was told there would be no math.
Crid at August 6, 2018 3:02 AM
Libertarians should oppose an obvious tactic to establish total control over what a person thinks and does - like your California Medicaid-for-all is abusing people who choose not to be vaccinated and denying them care for other things until they comply and submit to the state.
El Verde Loco at August 6, 2018 4:28 AM
The idea does not scale - where do you get the money to give everyone in the country free money? 330 million people in the US x $1,000 per month = approximately **$4 trillion dollars** per year.
> Poor people aren't lazy
It's not just poor people. I think you will find that if people are guaranteed a living income, even more of them will decide not to work.
No analysis of immigration is included - even with a Trump wall, at $1,000 per month, people would be streaming into the country to get that money.
No analysis of inflation is included - if everyone suddenly received free money, prices would shoot up, and the amount received would no longer be enough to live on. That would create a demand for more free money, causing more inflation.
There is simply no limit to the demand for free money.
Snoopy at August 6, 2018 5:29 AM
I voted against it when it came up in Switzerland.
First of all, Switzerland has a pretty good economy, why fix what isn't broke. There's already a strong safety net.
But my bigger concern is inflation. Suppose you're a poor person and you're given an apartment, the current market value of which is 1,000 francs. So they give out a basic income, say 3,000 francs (not gonna get you far in Switzerland but I'm just using examples that are easy to calculate). So with this, you can afford your same apartment.
But now EVERYONE has 3k a month, and rents go up. Your rent is now 1,5k on your same income. Now there's no safety net, there are now no government-sponsored apartments for you to move into.
So either a whole bunch of people will be sharing a studio, or they will bring back the safety nets we already have AND everyone will be getting 3k.
NicoleK at August 6, 2018 5:36 AM
The UBI is something that sounds good on the surface, but won't work in reality.
If everyone has a basic income and everyone can live somewhat comfortably without working, then the wages required to get someone to come to and stay at work will rise. This will drive up costs for producing, stocking, and selling products, which will in turn drive up the prices of those products.
When that happens, that universal basic income will no longer have the purchasing power it had when it was implemented. That will drive up the taxes required to pay for a universal basic income, which will drive up the price of getting someone to work (i.e., labor costs), which will drive up the prices of goods - and so on and so on in a never-ending cycle.
Conan the Grammarian at August 6, 2018 6:15 AM
He's asking the corrupt government to fix a corrupt system. A system that they've been promoting all along.
You want a solution for human greed, you're not going to find one. Unless you want the government to come in and micromanage everything.
The bottom line is that the executives in major corporations now consider themselves entitled to 6-7 figure salaries while paying their employees peanuts. The typical CEO makes 204 times what their employees make. And there is no way to intellectually justify that. He doesn't work 204 times as hard, isn't 204 times as smart. That, with all his talents combined wouldn't make his contributions 204 times as valuable.
Sam Walton would be disgusted by his own children. He never considered himself to be 204 times more valuable than his employees.
This system will remain in place until it breaks. What has to happen before the system breaks? No idea. I would imagine it would come down to employees not being able to afford to live, even with whatever benefits and programs the government comes up with.
Patrick John Colliano at August 6, 2018 7:05 AM
"What Forrest found was that if a person stayed in the job for twenty-six weeks, he had them for life. They'd never look back."
Sounds about right. There is a unpaid benefit to work but it takes a while to manifest, a purpose to life in working. If that is gone there is a lot of momentum that stops change. I also wonder how long out of the workforce before habit/benefit is broken.
Joe j at August 6, 2018 7:22 AM
Actually....
The actions of a CEO and his team have a major impact on a company's stock price - which in turn has a major impact on the company's ability to borrow money and finance capital improvements.
No one invests in a company because Bob is manning the phones at the call center in Boise, no matter how good an employee Bob might be. However, investors do invest in companies because of confidence in the management team.
Would Apple have been as valuable without Steve Jobs, GE without Jack Welch, Microsoft without Bill Gates, Tesla without Elon Musk, or Amazon without Jeff Bezos?
The CEO's impact can also be bad. Imagine Kmart without Chuck Conway, Countrywide without Tony Mozilo, or Enron without Ken Lay. Would those companies have survived with different CEOs?
No matter how bad an employee Call Center Bob might be, he has very little power to lift up or break down the company.
I worked for Wells Fargo before Norwest took over in 1998. At the first meeting, we could see there was a profound difference in the philosophies of the two companies. Norwest put sales (cross-selling) and profits over everything else, while Wells Fargo put its highest priority on customer experience and loyalty, this despite its public image as a company obsessed with efficiency.
Those company-wide values came from the respective CEOs, not from Bob in the Boise Call Center. Nor-Wells' current ethical problems stem directly from the values imparted to the company by Norwest CEO, Richard Kovacevich and carried on by his immediate successor, John Stumpf (also from Norwest).
CEOs can have a profound impact on a company. 204 times that of the average employee? Way more than that.
Conan the Grammarian at August 6, 2018 7:34 AM
Munger doesn't have a clue.
"it won't benefit everyone equally; people with "gigs," a good source of income from a skill they can advertise on LinkedIn, will prosper."
The gig economy is entirely based on people being unable to find a regular job and being forced to take part time irregular work instead. The whole situation is based on people being unable to profit. Similar with his LinkedIn thoughts. It's a cute product but it hardly has the real influence he attributes to it.
He is right about the effective marginal tax rates on poor people. But those same issue affect far more people than the poor. Oh, and poor people are lazy. But so are rich people and most anyone else. It is just part of the basic human condition.
In the end Munger doesn't understand people. The culture of work and exchanging voluntarily with others changes the way people look at the world. Which is why some religions enshrine it so. A universal basic income doesn't hit those psychological buttons. Instead you get a tragedy of the commons effect. As the Russians who had a UBI would say, 'They pretend to pay us and we pretend to work.'
Ben at August 6, 2018 7:49 AM
Lots to think about here. First of all, to address what NicoleK brought up: I looked up the current U.S. money supply numbers. The Fed has several that they use. To make the most optimistic assumption, I am using "M2", which includes currency in circulation, bank deposits, and other on-demand / quickly withdrawable funds such as money markets, mutual funds and short-term certificates of deposit. (source)
As of the end of June, the M2 money supply stood at $14,1112 billion. (source) The population of the United States is about 0.325 billion. Dividing out, the current money supply works out to about $43,400 per capita. In order to provide a UBI of $15,000 per capita per year, we would need to inflate the money supply by 35% in the first year. Imagine the effect this will have on price inflation.
(This is assuming that the UBI is added on top of existing welfare benefits. One can argue that the UBI will replace at least some of those benefits, reducing the inflationary effect. However, in the world of real politics, the former is more likely to happen.)
Cousin Dave at August 6, 2018 7:55 AM
Norwest put sales (cross-selling) and profits over everything else, while Wells Fargo put its highest priority on customer experience and loyalty, this despite its public image as a company obsessed with efficiency.
Wonder if Wells-Fargo wish they hadn't gone down the Norwest road?
Unless you want the government to come in and micromanage everything.
Heh. All they'll have time for is graft and corruption. The trick is to make people's greed align with some good outcome. In general, it is difficult to get government sponsored graft and corruption to to align with anything like a good outcome.
I R A Darth Aggie at August 6, 2018 8:09 AM
"The actions of a CEO and his team have a major impact on a company's stock price - which in turn has a major impact on the company's ability to borrow money and finance capital improvements."
Yeah. Let's assume that a ticket taker for the Los Angeles Dodgers is making $60,000 per year (not very much money for living in L.A.). Clayton Kershaw is being paid $33M by the Dodgers this year. Does he deserve to make 550 times as much as the ticket taker? Erm, yeah, he probably does. In sports, nothing succeeds like a winner. Lots of fans come to the ball park, or tune on television, on days when Kershaw is pitching specifically because they know that the Dodgers have a good chance of winning on such days. That's hundreds of thousands of extra dollars for the Dodgers each game Kershaw pitches in. Within the vagaries of how contracts relate to player performance in baseball, Kershaw is earning his keep.
Cousin Dave at August 6, 2018 8:16 AM
Calling it a "merger of equals" was putting lipstick on a pig. Complications from the First Interstate merger left Wells vulnerable. The stock price was too low as investors were wary of paying too much for a company that had almost choked on swallowing its cross-state rival.
Wells knew that Norwest was only buying the stagecoach and was going to absorb everything else wholesale, but Wells had, in reality, no way to fight them off. So management smiled, called it a "merger of equals," and agreed not to fight the takeover in exchange for a few concessions from Norwest, including the headquarters of the new entity being in San Francisco and some operations remaining in California so employees could keep their jobs.
Conan the Grammarian at August 6, 2018 8:41 AM
Your high-school math teacher is crying, loudly.
This is THE example of where you would use algebra in the real world.
When you add the same thing everywhere in an equation, what happens to the inequality?
That's right. Nothing changes. Yet the KEY things that do not change are:
• people who are given things consider themselves entitled to those things
• when things come from the government, not personal effort, there is no such thing as property; theft becomes normal and crime becomes commonplace.
This idea is a minimum wage for everyone, simply extended to those who will not or cannot work, and this is why that is awful.
-----
About CEOs and their income: it's not your business - and it's not mine, either (unless you own their stock). Corporations must act according to their charter, a legal document filed with the state, and the company's board of directors determines what officers are paid. People think an hourly wage is how you make money, and it's not.
Radwaste at August 6, 2018 8:42 AM
In my personal experience, it was hard times that solidified my work ethic. If I hadn't spent time painting houses I don't think I could have gotten A in calculus etc. Also, fear of bankruptcy is a great motivator to be careful with your money, not buy stuff you don't need, save, get a second job.
People would like to be safe, of course, and we used to count on relatives to help in times of trouble--but not much anymore. Either no relatives or they won't help. But absolute safety is demotivating. Working hard enough to never need help and be successful is hard.
The author is correct that the welfare beauracracy is very inefficient. However, his claim that people are on the verge of rioting is hilarous--we have the lowest unemployment is decades and wages are rising (in spite of shrieking to the contrary)--if the big city dems would just stop opposing construction and freezing rents, things would be great.
Mundine's story about Australia is a great counter to the prof's claim: he found that having been on welfare too long destroyed people's ability to work. What is needed is more opportunity. I remember being in China 20 yrs ago: there were food carts everywhere, a guy with a chair on the sidewalk who would give haircuts and another who would fix bikes. We need to be more tolerant of the messiness and imperfection of small time entrepreneurs--instead cities have been waging war against small businesses for decades.
On CEO pay: only the top companies have a CEO making 200 times the avg worker. 90+% of corporations are small to mid-size and the CEO makes 5x or 20x at most. This railing against CEOs is simply envy. I think it was Mark Perry who calculated that if you took the pay of the CEO of some large firm and gave it to the employees they would each take home a couple dollars extra per paycheck..
cc at August 6, 2018 9:28 AM
Not only bureaucrats but also established businesses will go after them.
Try feeding the homeless/disaster victims for free.
It's gotten to the point that it's safer for you to feed stray animals than people.
Sixclaws at August 6, 2018 9:48 AM
He left out the part about magic beans and a cow and some sort of giant beanstalk.
Gog_Magog_Carpet_Reclaimers at August 6, 2018 10:59 AM
I think he places too much faith in revolution.
We don't do Revolution we do Ratios.
smurfy at August 6, 2018 11:12 AM
“What Forrest found was that if a person stayed in the job for twenty-six weeks, he had them for life. They'd never look back.
Is there a way, practically, to square this ethos with the harsh reality Munger predicts?”
I wonder what the percentage was of aborigines who actually stuck with the jobs program for 26 weeks?
My guess is, less than 10 percent.
The harsh reality of actually having to work in order to live with not much of a social safety net beyond your extended family is
the reality of human existence for about 500k plus years.
Evolution is a bitch. It selects for intelligence, perseverance, and economy of effort (situational laziness), a stone cold killer mentality in men, nurturing and attractiveness in women, and darn little else.
No guaranteed income or other such socialist pixie dust is going to change that.
Isab at August 6, 2018 11:16 AM
Have ya noticed that people objecting to high CEO pay rarely voice objections to sports stars or movie stars commanding high salaries?
That's 'cause it's not about the high salary. It's about anti-capitalism, with a healthy dose of class envy thrown in.
Conan the Grammarian at August 6, 2018 11:21 AM
"The typical CEO makes 204 times what their employees make. And there is no way to intellectually justify that. He doesn't work 204 times as hard, isn't 204 times as smart. That, with all his talents combined wouldn't make his contributions 204 times as valuable." PJC
I doubt the 204 but lets take a look from my own experience and guesses. From the CEOs I've worked under. I'd go with 2-3 times as smart, 3 times the experience, 2 times the number of hours they put in, 5 times the guts and determination. 2x3x2x5 =60 pretty close to the 204 Probably missing a factor or two. Easily intellectually justifiable and didn't even break a sweat.
"That's 'cause it's not about the high salary. It's about anti-capitalism, with a healthy dose of class envy thrown in." Conan the Grammarian
Definitely.
Joe J at August 6, 2018 12:39 PM
The welfare cliff is a problem. What if we reduced benefits more gradually? For every $ you earn you lose 90 cents in benefits... still coming out ahead. Bet you would get more people off welfare.
NicoleK at August 6, 2018 12:45 PM
Isab, "My guess is, less than 10 percent. "
It would depend on % of what. of total local population, I'd guess 10% was generous. but % of people who showed up to try, I'd guess higher, 20-30%.
Joe j at August 6, 2018 12:48 PM
Before reading anyone elses comments I would agree to UBI on a few caveats,
First ALL OTHER WELFARE PROGRAMS ARE SHUT DOWN, medicare, medicade, everything except paying veterans for their injuries
Second, its not garnishable - this will stop payday loans and credit cards from being offered to such people
Third, it is dependent on taking BC, if one is allergic to all forms of BC get sterilized
Fourth, no one under the age of 10 is eligible, this will dissuade people from having kids to get more money
Fifth, citizens only
Sixth, applying for UBI within 15 years of gaining your citizenship voids it and will result in deportation
Seventh, cashing a UBI check in a election year voids your eligibility to vote
Eighth, all drugs are leagalized
Ninth, public intoxication leading to the injury of bystanders results in life time ban of UBI eligibility
Tenth, no restriction of what people are allowed to spend the money on
lujlp at August 6, 2018 1:59 PM
Joe:
Prove it. Prove their 2-3 times as smart. I doubt the standardized IQ test would bear your assumption out. Prove they have 5 times the guts and determination. What test will you use to quantify this?
Very easy to insist that unprovable premises make your case.
Conan:
You're a smug, sanctimonious jackass, and I would prefer you didn't respond to me at all. But since this board doesn't have a block function, I'll tolerate it, though I do not "suffer fools gladly." -- II Corinthians 11:19
I have no use for you, and never will.
Minimum wage employee: "Gosh, I work full time. I would love to be able to live without relying on goverment assistance to eat and pay rent."
Conan shrieks, "Stop it with the class envy!"
Patrick at August 6, 2018 3:48 PM
“Prove it. Prove their 2-3 times as smart. I doubt the standardized IQ test would bear your assumption out. Prove they have 5 times the guts and determination. What test will you use to quantify this?
Very easy to insist that unprovable premises make your case.”
I’m not distrssed by the high salaries of CEO’s of private corporations.
What I am upset by is the number of public officials whose salaries are in the stratosphere based on the faulty assumption that the president of a public Univeristy has at least as difficult a job as being the CEO of Microsoft and *should* be compensated accordingly.
Public universities are not the free market. No administrator of a public university or any of their staff should get more in salary than the governor of the state in which they exist.
These crony oligarchies funded by the taxpayers need to be dismantled.
Only five states are fiscally sound, without excessive unfunded pension liabilities. Hope you live in one of them.....
Isab at August 6, 2018 4:50 PM
I'll agree with Isab about the university presidents.
Patrick at August 6, 2018 5:01 PM
CEOs with an IQ of 150 or 180 and whatever other qualities and abilities exceptional CEOs have may not be anywhere near 200 times smarter than employees with an IQ of 90 to 110, but they are extremely more rare. There are probably way fewer of them than there are companies that wish they could afford one. So they go to the highest bidder. If the government put a cap on CEO compensation, say $1,000,000 a year, there would be a whole lot more companies that could afford those exceptional ones. I wonder how it would be determined who they would work for. Maybe a lottery?
Ken R at August 6, 2018 6:14 PM
Your cite was from my response to Cousin Dave, dumbass.
I'd be more than happy to never interact with you again, but this is a public forum and you don't have exclusive rights to unanswered assertions, especially uninformed conjecture.
If your hypothetical minimum wage employee wants to "be able to live without relying on goverment assistance to eat and pay rent," cutting the CEO's salary ain't gonna get 'im there. Society doesn't owe him a high-paying job, and neither does the CEO. In fact, getting a cut-rate CEO might just cost your guy his job as the company goes under due to bad management.
Like a broken record, you've been harping on CEO pay for years now, insisting that high CEO pay cannot be justified when compared to the pay of minimum wage employees.
Your only argument is that a CEO isn't worth whatever the multiple is that day. You've yet to demonstrate you understand what a CEO's job entails. You just see someone making more money than you do and hate him for it.
By the way, minimum wage employees are lowest on the pay scale, by definition. Comparing a high-salary earner to a minimum wage employee is going to give you a high multiple, by default.
Maybe you're the minimum wage guy whose circumstances you lament. You sit there and type away, stewing in your resentment, not letting facts or logic get in your way, nursing your anger and lashing out at people you perceive as more successful than you are.
Or not. I don't really care.
I can be, at times.
Or, it could be that I'm right and that pisses you off.
By the way, it's "prove they're 2-3 times as smart," not "their." I wonder if that proves me 2-3 times as smart. /sarcasm
Well, I'm just devastated. I base my entire self-worth on your opinion of me.
Conan the Grammarian at August 6, 2018 7:07 PM
"Prove it" lol, never been asked to prove a stated guess before. And I'm sure you used a rigorous test for claim they don't work 204 times as hard. Calories burned? perhaps.
Looks like this is where the 204 came from, and as expected only looks at largest companies with estimates for workers pay.
https://www.glassdoor.com/research/ceo-pay-ratio/
It also only looks at salaries, not total compensation packages. I so wanted 408 weeks of paid vacation per year, along with 204 insurance polices. On the other hand stock options would be interesting.
"while paying their employees peanuts" PJC
Looking at the 'worst offender' on the glassdoor list the median workers are making 80,000 salary, not exactly peanuts. 1/5 of the companies pay median over 100,000 pretty nice peanuts.
Joe J at August 6, 2018 10:34 PM
Patrick is nine. We've covered this.
Crid at August 7, 2018 1:18 AM
Also, there's good stuff at lujlp at August 6, 2018 1:59 PM, but he should change it to just "Louie" so it doesn't seem like he's a wounded teenager trying to prove thing to people.
Crid at August 7, 2018 1:20 AM
No, it isn't. It's a privately-owned blog, numbnuts.
And what are you at all other times? Asleep?
I doubt it. You're probably a smug, sanctimonious jackass in your dreams.
My arrangement is quite comfortable, thanks. Thanks to my military service, I can live comfortably and modestly until the day I die.
So, I'm not bothered by the fact that a CEO makes so much more than me. I have enough, and as far as anyone can reasonably predict, I always will.
A CEO's salary is incomprehensible to me. It's more than I would know what to do with. If I won the lottery tomorrow, I would probably arrange a comfortable, if modest life for myself, perhaps give generously to my nieces and nephews. As for the rest. Worthy charities, I guess? Veterans' causes, perhaps.
I don't want an opulent lifestyle. I've had more than a few samplings of that (Hulk Hogan was my next-door neighbor) and a more petty class of persons I have never encountered. They absolutely ruminate over the dumbest things.
From my comfortable vantage point, I see on one end people who work full time and can't afford an adequate life for themselves, let alone a decent one. Then on the other end, there are their CEOs, who have more money than anyone needs.
Problem on one side, solution on the other. The miserly, greedy Ebenezer Scrooge oppressing poor, faith Bob Cratchit, not even allowing him a lump of coal to warm the workplace to a comfortable temperature.
Patrick at August 7, 2018 2:21 AM
Don't be bitter.
Crid at August 7, 2018 5:16 AM
So, you've appointed yourself the arbiter of how much is "more money than anyone needs?" And you call me sanctimonious?
Verily. See below.
And therein lies one of the main problems with having a UBI in a democracy. Wasn't it de Tocqueville who was supposed to have warned us about the dangers of politicians bribing the people with their own money? Only in this case, they'll be bribing the people with other people's money.
Conan the Grammarian at August 7, 2018 5:57 AM
Crid, I've been using that moniker since the 90s when I was in high school
As far as IQ goes 85 = retarded on the level of downs syndrome
People at 100 are more than twice as smart as those as 85
even assuming every 15 points only makes one 1 times smarted an IQ of 160 would make you four times smarted than a person at 100
lujlp at August 7, 2018 12:52 PM
As far as IQ goes 85 = retarded on the level of downs syndrome
Not quite. Someone with an IQ of 85 is low normal. Probably will be able to read and write adequately and do Arithmetic with decent methodical instruction.
Downs syndrome kids have quite a range of IQs. Some have almost normal intelligence but there are a host of other health problems that go along with that genetic defect.
Isab at August 7, 2018 9:33 PM
There seems to be lots of discussion here about IQ and little understanding about how it works.
IQ seeks to measure the distribution of intellectual capability across the population (to what extent it achieves this goal is a matter for debate, but it is irrelevant in terms of the ongoing discussion).
The scores are normalized to an average value of 100 with a standard deviation of 15 points.
This of course assumes a Gaussian distribution (i.e. a bell curve), which may or may not be the best descriptor for the overall population (it is possible for example that a distribution with multiple modes would be more appropriate).
What this means is that ~68% of the population will have an IQ that lands between 85 and 115.
From this information it is not possible to conclude how much smarter someone is than someone else on some multiplicative scale. It doesn't work that way.
Someone who is one standard deviation taller than mean for example is not twice as tall as the average person.
All IQ tells you is roughly how likely you are to run into someone at random on the street with an IQ of a particular value.
For example, the chances of just running into someone with an IQ between 130 and 145 (2-3 standard deviations from the mean) would be ~2%.
Artemis at August 8, 2018 4:46 AM
In terms of UBI, no discussion of this topic can possibly be complete or properly informed without a simultaneous conversation about the so-called "end of work" that inevitably arrives with ubiquitous automation of labor.
We are rapidly approaching a time when human labor will be essentially worthless (not just manual, but also intellectual labor that is fairly repetitive).
Automated driving for example will rapidly make many professions go the way of the elevator attendant.
We can either seriously discuss what we plan to do for folks when there aren't enough lobs to go around... or we can stick our heads in the sand and pretend a major cultural shift isn't looming on the horizon.
Artemis at August 8, 2018 4:55 AM
Artemis! The IQ post is great!
Now, to make a point: the IQ argument is not all there is to CEO qualifications. Charisma, for one thing, isn't measured by Voight-Kampff. (heh)
"W" outpointed Gore AND Kerry in college, and was a certified fighter pilot. Obviously better Presidential material than either of them, right?
Radwaste at August 8, 2018 8:32 AM
We're facing the same situation that confronted China at the turn of the 20th century. After centuries of traditions and economics built around using human physical labor, China was faced with the introduction of machines (trucks, railroads, steam shovels, forklifts, etc.) by Westerners, which took away the jobs of China's human laborers, leaving thousands of them unemployed, idle, and angry. Throw in a years-long drought, religious conflict, political unrest, and a weak Imperial government and you've got the Boxer Rebellion.
We're at the point at which it is not only cheaper, but a better long-term investment for companies to use automation to do some of the jobs for which less-skilled and unskilled labor has up to now been employed to do.
Unskilled laborers are no longer worth the wages and other costs required to employ them and inflation has robbed them of the ability to live comfortably on the wages they could command.
In some cases, automation is already the default. Office automation has taken away the jobs of clerk-level employees.
Conan the Grammarian at August 8, 2018 9:32 AM
Conan,
I agree with pretty much everything you said except I do not think that the following statement is expansive enough for what we will be dealing with in relatively short order:
"We're at the point at which it is not only cheaper, but a better long-term investment for companies to use automation to do some of the jobs for which less-skilled and unskilled labor has up to now been employed to do."
We aren't just talking about "less-skilled and unskilled labor" this time around.
Here is what I am talking about:
https://mashable.com/2017/02/22/ibm-watson-clinical-imaging-cardiology/#RSMIDiPH9mqR
We are rapidly approaching a time when deep machine learning algorithms will be more adept at diagnosing patients than fully trained physicians.
It turns out that super computers like Watson are prohibitively expensive at the moment to take over such jobs... but that isn't a perpetual barrier. The costs of such systems will continue to decline while at the same time the efficiency of the software improves.
What I am saying is that this time around jobs that have traditionally been considered highly-skilled will go the way of the dinosaur.
Almost no jobs will be safe in the long run... and if we ever get a general purpose artificial intelligence working (current estimate is ~50 years) then human labor in its entirely becomes essentially obsolete. 50 years is the blink of an eye from a cultural development perspective.
So what exactly is our plan when human beings en mass aren't really suitable for any jobs at all?
If not UBI, what then?
Artemis at August 8, 2018 1:03 PM
“What I am saying is that this time around jobs that have traditionally been considered highly-skilled will go the way of the dinosaur.”
You can count on government to make sure that doesnt happen, by putting us all to work painting rocks while the civil servants watch. In return you will get 1800 calories a day, and a semi private bunk.
Or you could go with my preferred solution, and let the free maket take care of it. It will be ugly and messy. All change is, but it will ultimately be better than a lifetime of grail slavery.
Isab at August 8, 2018 1:23 PM
Isab Says:
"Or you could go with my preferred solution, and let the free maket take care of it. It will be ugly and messy. All change is, but it will ultimately be better than a lifetime of grail slavery."
The free market does not function in a society that has achieved post scarcity in terms of available labor.
In principle what should occur is that the cost of all goods should approach zero in such a free market... in practice what business do is purposefully limit supply to drive up consimer price to extract greater profits.
One good example of this is De Beers when they purposefully constrain the supply of diamonds to the market in order to keep the cost per diamond high. A second good example is the foreclosed housing market after the crash in 2008. In a free market those homes would have made it to market at depressed prices due to the high inventory rates... but instead the banks trickled them onto the market to create the perception of scarcity where none existed.
These are captured markets... not free markets.
The free market as you put it is not prepared or designed to resolve a problem of this nature.
Artemis at August 8, 2018 1:33 PM
True, it's not a perpetual barrier. Machines can replace less-skilled and unskilled workers easily today, but they still require someone to manage the process and perform maintenance. Some day, perhaps not.
Trying to solve the issue now is not possible as there will be other variables in play once it becomes a pressing issue. The cost of the machines should be lower by then and, along with lower labor costs from not using people to do routine work, perhaps the problem will solve itself. Perhaps each person will own shares of various companies and receive dividends from that.
Until then, were just imagining a Matrix- or Terminator-like dystopian future that probably won't happen. Watson did beat Kasparov at chess, a fairly mathematical game, but what about situations that require some intuition? "AIs have long dominated games such as chess, and last year one conquered Go, but they have made relatively lousy poker players."
To your point, the day of regular poker victories for the machine is coming. After all, while the machine may have won a poker game, self-driving cars still struggle with human drivers on the road, so I think we're safe for a little while.
Conan the Grammarian at August 8, 2018 2:04 PM
Conan Says:
"Perhaps each person will own shares of various companies and receive dividends from that."
That is an interesting alternative to UBI.
The problem here is that not everyone is invested in the market and so it can lead to other problems.
"I think we're safe for a little while."
I agree with you here, the problems I am referencing will likely come into play on the 15-40 year time scale.
My worry is that if these future issues are not considered ahead of time with potential plans of action we are going to be caught flat footed.
The societal consequences for failing to have a plan ready in advance could be quite serious.
Artemis at August 8, 2018 2:29 PM
The free market as you put it is not prepared or designed to resolve a problem of this nature.
Artemis at August 8, 2018 1:33 PM
Correct. It wasnt *designed* at all, But it is infinitely preferable to the government solution.
We’ve seen the government solutions world wide to economic inequality and they are inevitably worse than doing nothing at all.
Yes, certain industries have captured government, and engineered legislation to peotect themselves from the free market , but the solution to this, is never *more government*.
Isab at August 8, 2018 2:36 PM
My worry is that if these future issues are not considered ahead of time with potential plans of action we are going to be caught flat footed.
The societal consequences for failing to have a plan ready in advance could be quite serious.
Artemis at August 8, 2018 2:29 PM
Life, and economics is an unending series of pedantic plans, that end up being inadequate to solve immediate problems, never mind long range ones.
It is also filled with historic examples of governments banning and restricting advanced technology is order to maintain control of people, or to create an artificial demand for manual labor, sometimes both.
We want to hear your plan Artemis, complete with examples of how it will take into account every possible varible that might exist fifty years from now, and also how you are going to enforce it.
Isab at August 8, 2018 2:52 PM
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