Fundraising Update: 2 articles a week reached, with a push can make 5 articles a week
In the first week of fundraising we’ve raised $334 in recurring donations, and $2,808 in one-time donations. Multiplying the recurring donations by three puts the total raised to $3,810, which is over the $3,000 needed for two articles a week for three months.
The next threshold is $6,000 for 5 articles a week—$2,190 away. If you haven’t already given, and you value my writing, I hope you will consider doing so.
If you haven’t read it already, there’s a new article on the problems with non-fiction today, and I’ve kicked my most popular, ever, article, on the difference between ethics and morals to the front page. That might seem like an esoteric topic, but the difference is the difference between a good society to live in, and a lousy one.
I’m not exactly old yet, but I’m no spring chicken, and as a child and teenager in the 70s and 80s I read a lot of books from previous generations. I still read a lot, though not so much as when I was younger, and the non-fiction has changed. This isn’t surprising as writing changes with the times, but I think it’s generally become worse.
Oh, writing is smoother, as a rule. It’s Gladwellian. Contemporary non-fiction has lots of anecdotes and fuzzy feelings, lots of profiles of the people affected by whatever they’re writing about, lots of little details about the key thinkers. Many would argue contemporary books are better written, because they connect with people by making the stories personal.
I suppose they do. But they’re also disconnected. Most books today should have been 10,000 word magazine articles. There’s not enough meat: there’s fluff and detail on one issue or a small cluster of issues, but there is very little wide-ranging intellectual context. You can read a book on how important it is that everyone share in economic gains, or how people are risk averse, or how smart crowds are (or aren’t), or how people can’t think properly in time and how bad most people are at statistical thinking, or you read a book about how just a few resources can make a difference in history, and it’s all very well, but there’s no context. There is no world view.
(I am fundraising to determine how much I’ll write this year. If you value my writing, and want more of it, please consider donating.)
As a result, these books become factoids. Because they either don’t sit a coherent world-model, or because they don’t state their world model, most people can’t really integrate these books usefully, because they don’t read enough books, they don’t spend enough time thinking or talking about what they read, and they don’t understand the premises underlying the world view. They have no model of cooperation or competition and how the two go back and forth, they don’t understand generational trends, they don’t understand the rhythms of technology; they understand neither conditioning (nurture) nor nature, nor how those two interact.
This isn’t people’s fault. This stuff isn’t taught in school, and it’s barely taught in university; when it is taught in university it’s rarely taught well or with proper attention to the assumptions of models. The disciplines which teach this stuff best, only do so rarely and are either despised (sociology), ignored (anthropology) or the discipline itself despises those who do integrative work (history).
People don’t know how to think. Despite all the talk about thinking, it isn’t taught because it’s hard to teach, and because employers don’t actually want employees who know how to think on their own (such people are endlessly annoying as subordinates, and executives are chosen largely for knife-fighting skills, not strategic ability, despite what the business books would have you believe).
Specialization can be useful, but before you go narrow, with rare exceptions, you need to go broad. You need context and a model, a schema into which to fit the facts. Modern non-fiction generally wastes half of its words on verbiage—creating an “emotional connection” without actually providing that context. As a result, in order to form a world view, one has to read a vast swath of books, throw out what isn’t useful and put what’s left into a coherent worldview, and do it largely on one’s own.
As a result you are far better off reading books like Jane Jacobs “Economy of Cities” and “Cities and the Wealth of Nations” or anything written by Max Weber, than almost anything published by younger authors in recent years. Nineteenth and early twentieth century authors writing on Empire speak more eloquently to strategy and growth than our current “international affairs experts”, and Keynes, for all he is abused, is far more insightful than most of those who either slag him or claim to follow him while doing what he would not have done.
Of course there is a place for books on narrow subjects, a place for non-fiction books which tug the heartstrings. But the true non-fiction classics, the books that are read and re-read, right or wrong, are generally books with great grasp and reach (The Prince, the Protestant Ethic, The Elementary Forms of Religious Life). And those books give people enough to work with, enough to understand, and speak to something large in society, something that matters: how to rule, how progress occurs, what religion is. You may reject them, as many have rejected all three of those (or Jacobs’ work), but they had reach and grasp and ambition and they spoke large about how the world works.
A book which tries to explain any part of the world must both have integrative ability and context. If it is not clear what is not explained by your theses, then your theses have failed. Everything cannot be explained by any one theory, whether that be self-interest (Darwinian reproduction or Economic utility) or more ancient (but still strong) theories about the will of God.
Let magazine articles be magazine articles. Let books be books, and let them try to shine light on enough of the world to matter.
The best short definition I’ve heard, courtesy of my friend Stirling, is that morals are how you treat people you know. Ethics are how you treat people you don’t know.
Your morality is what makes you a good wife or husband, dad or mother. A good daughter or son. A good friend. Even a good employee or boss to the people you know personally in the company.
Your ethics are what makes you a good politician. It is what makes you a statesman. It is also what makes you a good, humane CEO of any large company (and yes, you can make money and pay your employees well as Costco proves.)
When you’re a politicians or a CEO, most of what you do will affect people you don’t know, people you can’t know, people who are just statistics to you. You have no personal connection to them, and you never will. This is at the heart of Stalin’s comment that “a single death is a tragedy, a million deaths a statistic.” Change the welfare rules, people will live or die, suffer or prosper. Change the tax structure, healthcare mandates, trade laws, transit spending—virtually everything you do means someone will win, and someone will lose. Sometimes fatally.
Ethics is more important than morality in creating a functioning society. This comes back to what I was discussing earlier, that it is worse to kill or harm more people than to kill or harm fewer people.
Morality dictates that you take care of your family, friends and even acquaintances first. It is at the heart of the common admonition to “put your family first.” Whenever I hear a politician say “I put my family first” I think “then you shouldn’t be in public office.”
We call the family the building block of society, but this is nonsense except in the broadest sense. The structure of the family is entirely socially based, generally on how we make our living. A hundred years ago in America and Canada the extended family was the norm, today the nuclear family is, with single parent families coming on strong. In China this transition, from extended to nuclear family, took place in living memory, many adults still in their prime can remember extended families, and were raised in them. The wealthy often have their children raised by servants (I was for my first five years), tribal societies often put all male children into the same tent or tents at puberty, and so on. A hundred and fifty years ago children were taught at home, by the extended family, and not by professional teachers. They spent much more time with family until they were apprenticed out, if they were.
(I am fundraising to determine how much I’ll write this year. If you value my writing, and want more of it, please consider donating.)
To be sure, children must be born and raised for society to continue, men and women must come together to get that done, but there are many ways to do it, and God did not come down and mandate the nuclear family.
This may seem like an aside from the main point, but it is not. Family is not fundamental, it is not first. Society is first, and family is shaped by the needs and ideology of the society.
For a large society, a society where you can’t know everyone, to work ethics must come before morality, or ethics and morality must have a great deal of overlaps. By acting morally, you must be able to act ethically.
Our current ethical system requires politicians to act unethically, to do great harm to people they don’t know, while protecting those they do. This can hardly be denied, and was on display in the 2007/8 financial collapse and the bailout after. The millions of homeowners and employees politicians and central bankers did not know were not helped, and the people the politicians and central bankers and treasury officials did know, were bailed out. Austerity, likewise, has hurt people politicians don’t know, while enriching the corporate officers and rich they do know.
The structure of our economy is designed to impoverish people we don’t know. For developed nations’ citizens this means people in undeveloped nations. For the rich this means cutting the wages of the middle class. For the middle class it means screwing over the poor (yes, the middle class does the day to day enforcement, don’t pretend otherwise.) We are obsessed with “lowering costs” and making loans, and both of those are meant to extract maximum value from people while giving them as little as they can in return.
We likewise ignore the future, refusing to build or repair infrastructure, to invest properly in basic science, and refusing to deal with global warming. These decisions will overwhelmingly affect people we don’t know: any individual infrastructure collapse won’t hit us, odds are, and global warming will kill most of its victims in the future. The rich and powerful, in particular, believe that they will avoid the consequences of these things. It will affect people other than them.
To put the needs of the few before the needs of the many, in public life, is to be a monster. But even in private life if we all act selfishly, as our reigning ideology indicates we should, we destroy ourselves. If we all put only ourselves and those we love first, and damn the cost to everyone else, our societies cannot and will not be prosperous, safe, or kind.
The war of all against all is just as nasty when it is waged by small kin groups as when it is waged by individuals.
(Reprinted from 2013: this is the most popular article, by traffic, I ever wrote.)
Since Monday we’ve raised $1,397 in one-time donations, and $305 in recurring donations. Multiplying the recurring by 3, we’re at 2,312, about three-quarters of the way to the first goal of $3,000 and 2 articles a week. And we’re about a third of the way to the second tier, of 5 articles a week.
I am vastly appreciative of everyone who has donated. We did well last year, but I’m always unsure about such things.
If you haven’t read them, I have also put up a new article on the influence of geography on society, as well as an article on why the world is trending towards negative real interest rates on bonds.
I have written in the past of how the nature of everyday life creates the character of commoners and elites. What we do, the habits we lay down, is our character.
Now our everyday life is created by our technology, where we live (geography), and our culture—how we choose to use our technology and interact with our environment.
A Russian in one of Lee Blessing’s plays once said “History is Geography Over Time.” This is a near pure form of 19th century romantic nationalism.
Assume that humans are basically the same. Go to different countries, or even different locales within a large country. Notice that they are different from other people in ways which are similar—southerners have characteristics in common, bedouin have characteristics in common, Italians have characteristics in common, but within Italy where they come from also changes their character.
This is a common-sense observation, and before the modern era it was even more true: people were very different depending on where they lived.
Why?
Well, the simplest explanation is geography: to live in the tropics is to live a different type of life than to live in cold climes. To live a rain forest is a different type of life than to live in a desert.
This is a hard argument for rich moderns to entirely understand: with our air conditioning and heating: with food delivered from all over the world to our supermarkets; with our travel being almost entirely inside mobile boxes; with almost everyone now wearing western style clothes; with every office looking more or less alike and everyone using the same few word-processing programs;, we can drop half the world away and feel somewhat at home in many of the essentials. A certain type of life has been exported to as much of the world as can afford it, and most of the rest of the world, familiar with western media, aspires to that life.
But it was not always thus. To live in Bengal was to live a vastly different life than to live in London. Heck, to live in northern Scotland was to live vastly different from living in London. To live in the country vastly different from living in a city, but to live in Canton was massively different than in Tenochtitlán (one of the largest cities of its day.) Being a rice farmer in southern China was much different from being an Iroqois farmer in the Great Lakes area.
What you did, each day, was very different. Much of this difference was based on the simple requirements of making a living from that type of land. Much of the rest was the difference in technology: the tools you had available to work with. Some would include social organization in that toolkit, but let’s spin that off to culture.
Culture: the catch-all for the rest of it. But how does culture arise? Given the same pre-modern technology, and dropped on the Pacific Northwest or into Great Plains or into the Russian Taiga, you will live differently. Start off with people with the exact same culture, give it a few generations and you will be different people, because you will have grown up doing different things. And your technology will have changed, because what works best in each of those place is different.
Those differing lives become character, character is reified into culture, and soon you have tradition.
(And all this is before discussing the role of geography on such things as warfare, access to key resources like iron and copper, the role of geography in encouraging or discouraging diseases, natural trade routes, the difference between ocean and land transport, and so on.)
So, Geography is a big deal. It’s a big deal even today: Saudi Arabia cannot be understood without understanding its geography, including the (happy?) coincidence of vast oil reserves. Canada’s population clusters along the southern border, with spars out into areas with resources worth exploiting. Siberia is vast—and underpopulated, for good reasons based on its soil, climate and resources.
(I am fundraising to determine how much I’ll write this year. If you value my writing, and want more of it, please consider donating.)
But it’s also true because of the way cultural drift works: culture is not a completely dependent variable. Drop different people with different cultures into the same approximate geography and they will develop differently: there will be clear similarities (intensive rice agriculture in multiple SE Asian societies), yet the cultures will not be identical.
So, even in the modern world, with our ability to denature the environment, there are geographical effects: but there are also the more than residual effects of culture developed in the pre-modern era. These all swirl about to create our daily lives, and that forms the character of the commons, that point about which, despite our individuality, we coalesce. That mass-character determines how we react to the events of our lives: to how active or passive we are, what we’ll fight for, and how we’ll fight. Change is constrained and channeled by character, by who we are.
Character is destiny, both personally and en-masse.
Does that means some warped form of Panglossianism? Our character is our destiny, and we cannot escape our destiny because our character is formed by forces beyond our control (usually when we are children, and under the control of others similarly formed)?
I would suggest this is not the case. Oh, it’s hard to change character and destiny, but it can be done, especially for the future. We need to decide what destiny we prefer, what character is required and work to change our every day lives to create that character.
This is possible. Huge swathes of the population despise their own characters: guilt and regret and self-contempt are part of humanity as much as smug self-regard. We look on these things ill, but a better way to look on them is as fuel for change: if we do not like who we are, we can change. And we can change as societies. If we don’t want to live in vastly unequal societies, we can change that: it has been done before. If we want to live in a way that doesn’t destroy the environment, we can do that. And if want to live in actually free societies (i.e. not police and surveillance states), we can do that as well.
Within the matrix of what is made possible by technology and geography are vast social universes. What is required to seize them is not despair at how we are conditioned by our lives, but an understanding that that conditioning can work for us as much as against us.
Why are we approaching the new normal of a negative interest rate world? Simple. There’s nowhere good left to put all the money.
Umair is referring to all the countries who are now offering bonds with negative real interest rates. You get back less money than you put into the bond. People are buying these because they have nowhere better to put their money.
Now this isn’t entirely accurate. There are still some better places to put money, but there aren’t enough of them. And there is a ton of money out there chasing returns.
Why there is too much money chasing returns is important, however, so I’m going to tease apart some of the reasons.
Central Bank Policy
Look, the ECB is buying bonds. The BOJ is buying bonds. The US was doing so. This is demand. It pushes the yield of bonds down.
China is printing piles of money, Japan is printing it, etc… That money isn’t staying in those economies, it is hunting through the world for returns or even just security. Federal Reserve policy has put a floor under losses from various securities by accepting that at near par, and Fed policy of free money has underwritten an epic bull market in securities.
No cleanup of the banking or shadow banking systems.
Most money is created by private actors. Banks, shadow banks (brokerages, etc…) There is no effective oversight of these organizations, still (you’d think after 2007, but you’d be wrong.) In fact, not only is there not enough oversight, but in most cases they’ve been effectively encourages to create more money. We have another derivatives bubble underway, we have housing bubbles in multiple countries (e.g. Canada and the UK), and while the US doesn’t have one, parts of the US, like Manhattan, do.
Oligopolistic profits.
US broadband profits are almost 100%-annualized. Every app store takes a 30% cut (a level which would have been shut down by regulators of the post-war liberal period.) Copyright law makes it difficult to impossible to create generic alternatives to common items. These have all led to very high profit levels, and those profits have largely been plowed back into stock buy backs (most corporate borrow is matched by stock buy backs). But much of the economy is not available to be bought on the stock market, many large investors can’t invest on the stock market by law (they have to invest in high-grade bonds), and much of those profits are now priced into stock prices anyway.
(I am fundraising to determine how much I’ll write this year. If you value my writing, and want more of it, please consider donating.)
Inequality
In the United States more than all the gains of the last “recovery” have gone to the top 10% (really the top 3% or so.) There has limited broad based demand for new goods. Luxury goods, investment art, and London and Manhattan real-estate do not scale. Without widespread demand, opportunities for new businesses, with new employers, are limited.
Barriers to Entry
Much of this came under oligoplistic profits. Draconic “intellectual property” laws make it difficult to compete, bringing prices down and increasing volumes while freeing up money for people to spend on other things. 30% cuts from app stores and other virtual marketplaces make many businesses simply unprofitable—first they must make 30% for Apple or whoever, then they get to make a profit for themselves. But if you aren’t on those virtual marketplaces (and there is usually one which controls most of the business) you will not make enough sales to be viable. This sort of “you make no money without us, so we’ll take all the profits” behavior is little different from what the railroads did to farmers in the late nineteenth and early 20th centuries.
And while there’s tons of credit for big business and people who are already rich, a new business trying to get funding faces huge barriers to getting money. It’s boutique investment, it requires a lot of time, and most investors would rather just buy bonds, structured securities, or play the stock market. Money may be cheap, but not for you.
Supply Bottlenecks
In a larger sense the issue is that we still haven’t dealt with supply bottlenecks like oil. Get a roaring economy going again, oil will spike to $150/barrel and the economy will crash. The solar roll-out is underway, along with the wind one, but it hasn’t (yet) changed that reality. The same is true of many other commodities. If we want distributed growth in a world with constrained commodities, well, we can’t have it. We have to remove or avoid those bottlenecks. This requires deliberate government policy, but we have dodged the issue since the 70s (solar should have been where it is today 15 years ago, but Reagan chose an oil play, not a solar play, and chose to crush wages to crush demand.)
The absolute obsession with inflation is really about wage inflation, and the obsession with wage inflation is about widespread consumer demand causing commodity inflation. We’re moving towards a deflationary world (for ordinary people, there is vast inflation in goods and services the rich consume), but our policy makers are still in asuterity “crush employment and wages” mode.
No Future Till The Current Rich Can Monetize It
We could have had a lot of what we have today many years ago. But the rich control the politicians, and the politicians won’t allow it to occur. There was great squealing for years about subsidies for solar, and corruption in how they were given out, but they were always a rounding error compared to subsidies for oil, let along the military-industrial complex, big agriculture, pharma, health insurance, and so on. All of those industries were powerful enough to strangle subsidies to competitors (solar, generic drugs, whatever) and strong enough to insist on new laws which strangled startups and competition (every copyright extension is nothing but an anti-competitive measure intended to keep profits coming to incumbents.)
Bottom Line
We have too much money chasing too few returns because we’ve spent 40 odd years making sure that ordinary people get less and less money; the rich get more; and that oligopolies are nurtured and protected. The rich control government, and they intend to make sure that all the money goes to them. Unfortunately, in a mass market economy, that means the economy becomes lousier and lousier. This doesn’t matter to the rich because they are comparatively better off. Better a Czar amidst serfs than the CEO of General Motors in 1955.
So, Utah decided to just give the homeless places to live. The results are what anyone with sense, or who has followed the topic would expect:
Utah’s Housing First program cost between $10,000 and $12,000 per person, about half of the $20,000 it cost to treat and care for homeless people on the street.
Imagine that.
The right thing to do is almost always cheaper and gives better results, at least if the welfare of people is your concern.
If people are poor, give them money. If people don’t have a house, get them a house. If people are sick, get them health care.
The fact is, though, that you have to want to do the right thing. People tend to get down on the Church of Latter Day Saints, but for all their issues, I’ve always had a soft spot for them because I’ve heard many stories like this:
The church donated all of this,” Bate says. “Before we opened up, volunteers from the local Mormon ward came over and assembled all the furniture. It was overwhelming. For the first several years we were open, the LDS church made weekly food deliveries—everything from meat to butter and cheese. It wasn’t just dried beans—it was good stuff.” (The Utah Food Bank now makes weekly deliveries.)
I ask him if this is why the programs work so well in Utah—because of church donations.
“If the LDS church was not into it, the money would be missed, for sure,” he says, “but it’s church leadership that’s immensely important. If the word gets out that the church is behind something, it removes a lot of barriers.”…
….
“Why do you think they do it?” I ask(my emphasis)
“Oh,” he says, “I think they believe all that stuff in the New Testament about helping the poor. That’s kind of crazy for a religion, I know, but I think they take it quite seriously.”
A major driver of the social welfare movement in the United States was the social gospel. The ending of sweatshops, the huge work programs of the 30s, the provision of Medicare and Social Security was driven in large part by Christian crusaders who believed that what they did to the poor, they did to Jesus.
You have to want to do the right thing.
This is just as true when dealing with matters like inequality. FDR and the politicians of the 50s ran marginal tax rates for high earners at 90% or so because they, and the American people, genuinely believed that no one should have that much money. They believed that it was earned by the efforts of other people: a rich person is someone who gets rich on other people’s work, with very rare exceptions, and even they get rich because of the society they are in. (For a complete explanation of that, something most people refuse to understand, read “It’s Not Your Money.”)
Ethics and mores; belief, is why people do things. It doesn’t exactly come before material circumstances (the two influence each other, with material circumstances, including technology, determining a range of possibilities), but within what is possible, belief in what we should do determines what we actually do.
In the world today we have the resources not just to feed everyone, but to give them a decent life, with education, entertainment, and housing that is warm in the winter and at least not unbearable in the summer. We can cloth everyone well. We have had the ability to do this for at least a hundred years or so, in theory, we’ve had it in practice since the recovery from World War II.
To do so, however, we must believe that we should, and we must be willing to act on that belief. There will be sacrifices (a lot fewer billionaires, a lot less McMansions), but in the end even most of those who complain would be objectively better off, because inequality is robustly associated with worse health and less happiness, even for those who are the richest. The top .01%, if they were still the top .01% but had far less money and power, would be happier and healthier in such a world.
As such, the battleground of belief; of ideology, is as important as that of technology. It is belief, mediated by power and turned into behaviour, which determines what actually happens in this world.
More on that later.
(I am fundraising to determine how much I’ll write this year. If you value my writing, and want more of it, please consider donating.)
The simplest economic principle is this: people do more of what they’re rewarded for. Right now, I can no longer justify writing at this frequency and level for free.
Over the past year I’ve written on ideology, inequality,and austerity. I’ve discussed fundamental questions like what an economy is, the value of human life and the rage of political betrayal. And I’ve covered the effects of current events like the Ukrainian crisis, the rise of ISIS and much more.
As with last year, I need to determine how much actual demand there is for these articles, and how much time I should spend writing them, so I’m asking you to donate if you find them valuable (and you can afford to; please never donate if you’re having trouble paying for food, housing or healthcare).
I’ll fund-raise for two weeks at least. At the end, I’ll add up the subscriptions, divide the one-time donations by three, and use the amount to determine how much I write for the next three months, or more, if we do very well.
$0-$999 —I’ll write when the whim strikes. In the past that has meant that sometimes weeks have gone by between articles, and months between significant pieces.
$1000-$1999 I’ll average two significant pieces a week for three months: articles on important issues like how we came to this, how the world actually works, and how we can change the world for the better.
$2000-$2999 Five articles a week, minimum, for three months, barring unforseen circumstances like illness, accident, or unplanned travel.
$3000+ As the previous level, but I’ll do it for five months.
$More If we do very well, I’ll keep adding months.
I’ve maintained these paces for years in the past, at BOPnews, The Agonist, and Firedoglake, while also being managing editor of the second two.
For individuals, I’ll mention two other donation levels. If you subscribe, when your monthly donations reach this level, they’ll apply:
$100 – Give me the ok, and I’ll dedicate an article to you, or to your designee, within reason (aka. no, no matter how much you give, I’m not dedicating an article to neo-Nazis or Goldman Sachs).
$500 – Email me and I’ll write an article on a subject we determine. I won’t write on anything, I have to have something useful to say, and you don’t get to determine what I write about a subject, but I’ll work with you. (This isn’t the same as commissioning a piece, if you want to do that, email me).
If you value what I write, and can afford to, please DONATE or SUBSCRIBE.
Reasonable accommodations of people’s needs will be made. If they are not, unreasonable ones will be.
Those who cannot understand that will have blood on their hands along with those who decide they have had enough.
Too many have spent too long with generations raised in affluence, scared of losing what they have. They do not understand the lessons of history. And so they will reap what they have sown, though some will be lucky enough to die first.
Their children will see what they have wrought and pay the price of their greed, stupidity and selfishness.
If we will not make an honest attempt at societies which work for all, this future will arise.
Take this as prophecy. And if you are wise, understand that it is prophecy that those who created the social welfare states after WWII were trying to avert.
Basic income—just giving everyone a certain amount of money, is an idea with a lot to recommend it. In any society which isn’t willing to just let people suffer or die because they don’t have money, there is a “social welfare net” with a vast bureaucracy. Why not just give everyone enough money to live on, and wipe out most of that bureaucracy? If you’re going to give poor people money anyway, it’s more efficient, and vastly less humiliating.
There’s a great deal of controversy around the idea of technological unemployment (economists sneeringly dismiss the idea on aggregate as the “lump of labor” fallacy), but even if you don’t believe in it en-gross, changing technology does cause specific people, often large numbers of them, to lose their jobs, and many of them never work again, or if they do, work at terrible jobs. A basic income deals with this issue, at least somewhat, and, again, far more efficiently than welfare and unemployment insurance and so on. And if you believe that there will be widespread technological improvement as AI and robotics improve, this will mitigate against it.
In a demand based society; a consumer society, where the economy is based on large numbers of people buying things, a basic income makes sense. People with no (or too little) money, don’t spend it (obviously) and that’s bad for the economy. Every dollar you give a poor person gets spent; it immediately goes to someone else, and that means that even those who are well off have reason to be for a basic income: most of it is going to wind up in their hands, and if it doesn’t (because you have a basic income which goes to everyone, not just those below a certain income), well, they still get theirs.
One might point out that we’re moving away from a demand based society, however, at least in the West. More than all the productivity gains of the last business cycle in the US, for example, have gone to the top 10% (really the top 3%). Consumer inflation is flat, and in many countries verging on deflation, while the goods that the rich buy (investment art, Manhattan and London real-estate) are booming. Moving away from a broad-based demand society, such as we had in the post-war liberal era was mainly done because it benefited the rich, but it also solved another problem—increased demand fed into oil and other commodity prices, and as the 70s and early 80s showed, that lead to huge inflation and economic dislocation.
So basic income, at any level that would be equivalent to a living wage (aka. letting people live a decent life, not just barely scrape by), can be expected to spike inflation in various commodities, including oil. This is a problem, but it’s not a huge problem, because we finally have the technology which allows us to move off oil (not completely, but enough to mitigate the effect of demand increases), and because, hey, we’re flirting with deflation anyway.
The real problem with basic income has to do with who controls our economy—with the fact that we are sold what we need, by and large, by oligopolies. A few large companies control most industries, and effectively price set. (Broadband profits in the US are almost 100% a year.)
This is known as pricing power. When someone needs what you sell more than you need to sell it to them; when they have little choice but to pay what you ask, you can demand a premium. If something is scarce, either naturally or artificially, those who control it get more of the share of national income than otherwise. In a society whose economy is not controlled by oligopolies this is usually a good thing—prices go up, more people enter the industry, prices drop. That’s the what the economics textbooks tell you happens. But it doesn’t happen in an oligopolistic economy where the oligopolists control government and where barriers to entry are very high.
So those who are in an oligopolistic situation, whether telecom companies, health insurers, pharmaceutical companies or landlords, are generally able to set prices: you must have medicine, you must have shelter, and in a modern economy, try and get by without a phone and internet.
What this means is that increases in income, especially at the lower end, tend to be simply taken away by those who have what you must have. Everyone will know what the basic income is, and they will know who is surviving on just that, or just that plus a low-wage job. And they will raise prices so that money goes to them.
Basic income which does include either oligopoly busting or regulation (or having the government, oh, just provide broadband and/or housing itself) will help many people, to be sure. But in a not very long time, most of the gains will be eaten by those who have pricing power.
This, by the way, is far from a “socialist” theory. This comes out of bog-standard neo-classical economics. Non-competitive markets tend towards concentration of wealth, and those who have pricing power use it (they act in their own self-interest, precisely as economics says they will.) Markets are wonderful things. They are extremely efficient at allocating money. And they will do exactly what they are set up to do. In an oligopoly situation, with capture of government, they will allocate that money very quickly to the oligopolists.
So if you want basic income to work, you must also make capitalism work. You must create actual competitive markets, you must-trust bust, you must regulate and you must move, as government, to ensure that the important things people will spend that basic income on are not scarce—either naturally or artificially.
This extends far beyond basic income. A market economy; a capitalist economy, works to the benefit of the majority only when it is competitive and when scarcities are actively managed, ideally to remove them, and when they can’t be removed, to ensure that those who provide scare necessities, do not reap outsize profits which allow them to buy up the rest of the system, including government and civic society.
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