Sympathy for the Luddites(nytimes.com)
nytimes.com
Sympathy for the Luddites
http://www.nytimes.com/2013/06/14/opinion/krugman-sympathy-for-the-luddites.html?smid=fb-nytimes&WT.z_sma=OP_SFT_20130614&_r=0
13 comments
I would argue that it's not obviously fair that everyone should profit from it. What incentives do people have to make new technologies that drastically increase labor if they cannot be paid for inventing them? People should only invent to serve their fellow men, and receive no compensation for their efforts?
If they do deserve compensation for their efforts, how do you do that aside from "capitalism"? In a capitalist society if you can make more things from less resources, you should (everything else being equal) reap higher profits. That's your compensation for your invention. In the absence of such a mechanism, what is the fair price for an invention? Who decides?
If they do deserve compensation for their efforts, how do you do that aside from "capitalism"? In a capitalist society if you can make more things from less resources, you should (everything else being equal) reap higher profits. That's your compensation for your invention. In the absence of such a mechanism, what is the fair price for an invention? Who decides?
The incentive to work is you make more money.
Everyone gets basic income, regardless of other income. It isn't taxed because taxing what the government gives just so it can redistribute again later is stupid.
If you earn additional income above the government provided basic income, you pay taxes on it, on a sliding scale. The more you make, the higher the rate you pay. The rich who work for their wealth are still rich, but the gaps between their wealth and the "poor" who only receive basic income is made smaller, and no matter what, everyone has enough to live.
Everyone gets basic income, regardless of other income. It isn't taxed because taxing what the government gives just so it can redistribute again later is stupid.
If you earn additional income above the government provided basic income, you pay taxes on it, on a sliding scale. The more you make, the higher the rate you pay. The rich who work for their wealth are still rich, but the gaps between their wealth and the "poor" who only receive basic income is made smaller, and no matter what, everyone has enough to live.
Sure, but who decides what the right number is for a basic income? No matter what number you pick there will be a portion of the population who sees that number as "good enough" and will cease to work.
As the basic income grows, more people will choose not to work. This is good as it reduces the supply of labor, thus increasing the wages of those who do work. But it also reduces the amount of income available for taxation, as this basic income isn't taxed. And as the tax base is reduced through a higher basic income, more money is needed to pay that basic income. That drives up the tax rate. It wouldn't be terribly difficult to find yourself in a situation where the math simply doesn't work.
This analysis also neglects the increase in prices that might accompany such a system. The higher the basic income the more likely you are to see an increase in prices that guts the effectiveness of the basic income.
As the basic income grows, more people will choose not to work. This is good as it reduces the supply of labor, thus increasing the wages of those who do work. But it also reduces the amount of income available for taxation, as this basic income isn't taxed. And as the tax base is reduced through a higher basic income, more money is needed to pay that basic income. That drives up the tax rate. It wouldn't be terribly difficult to find yourself in a situation where the math simply doesn't work.
This analysis also neglects the increase in prices that might accompany such a system. The higher the basic income the more likely you are to see an increase in prices that guts the effectiveness of the basic income.
> Sure, but who decides what the right number is for a basic income? No matter what number you pick there will be a portion of the population who sees that number as "good enough" and will cease to work.
This is, to an extent, self-controlling because people opting out of the labor pool decreases the size of the pool, increases the market-clearing price for labor, and increases the incentive to opt in to the labor pool.
The other thing is that it gives people more freedom to undertake speculative efforts (you still need to get funding to meet any costs of the effort itself, assuming that basic income isn't high enough to provide a surplus that can be used for that purpose, but you don't need as much savings to meet your own living expenses while undertaking a speculative effort.) Opting out of the conventional labor market doesn't necessarily mean opting out of work.
> This is good as it reduces the supply of labor, thus increasing the wages of those who do work. But it also reduces the amount of income available for taxation, as this basic income isn't taxed.
Its not clear that this is the case: sure, those who opt out of work will no longer be paying income taxes, but, as you note, wages for those who work are driven up by supply -- which also increases the total amount of income taxes paid by those who work. What effect this has in total is unpredictable; it seems intuitively likely that overall labor-derived income would drop, which would be expected to drop income tax revenues in a flat tax regime, but its also likely those dropping out would be on the lower end of the labor-derived income scale, and in a progressive tax system, that, combined with increased wages for workers, could still increase overall income tax revenues.
This is, to an extent, self-controlling because people opting out of the labor pool decreases the size of the pool, increases the market-clearing price for labor, and increases the incentive to opt in to the labor pool.
The other thing is that it gives people more freedom to undertake speculative efforts (you still need to get funding to meet any costs of the effort itself, assuming that basic income isn't high enough to provide a surplus that can be used for that purpose, but you don't need as much savings to meet your own living expenses while undertaking a speculative effort.) Opting out of the conventional labor market doesn't necessarily mean opting out of work.
> This is good as it reduces the supply of labor, thus increasing the wages of those who do work. But it also reduces the amount of income available for taxation, as this basic income isn't taxed.
Its not clear that this is the case: sure, those who opt out of work will no longer be paying income taxes, but, as you note, wages for those who work are driven up by supply -- which also increases the total amount of income taxes paid by those who work. What effect this has in total is unpredictable; it seems intuitively likely that overall labor-derived income would drop, which would be expected to drop income tax revenues in a flat tax regime, but its also likely those dropping out would be on the lower end of the labor-derived income scale, and in a progressive tax system, that, combined with increased wages for workers, could still increase overall income tax revenues.
"Sure, but who decides what the right number is for a basic income?"
I addressed a very similar question in an earlier thread on topic (https://news.ycombinator.com/item?id=5658967). It's short and directly applicable enough I'll just copy:
Like any policy question, the answer is:
Ideally, the level will be set to what will produce the best outcome based on our current understanding of the world, where the precise parameters under which 'best' is determined is negotiated through a fair political and/or economic process.
In practice, the question is how we best approximate that. The shape of that should be informed by economics, and will likely depend on the particular country.
All of that said, I agree it's a key factor to look at when assessing a particular BI proposal; I don't think it's an unanswerable question.
I addressed a very similar question in an earlier thread on topic (https://news.ycombinator.com/item?id=5658967). It's short and directly applicable enough I'll just copy:
Like any policy question, the answer is:
Ideally, the level will be set to what will produce the best outcome based on our current understanding of the world, where the precise parameters under which 'best' is determined is negotiated through a fair political and/or economic process.
In practice, the question is how we best approximate that. The shape of that should be informed by economics, and will likely depend on the particular country.
All of that said, I agree it's a key factor to look at when assessing a particular BI proposal; I don't think it's an unanswerable question.
Okay, I get it. I think it's basically unanswerable but I'm happy to agree to disagree.
If we're talking about incentives, I don't think we need capitalism to provide sufficient incentives. Humans are weird creatures. We don't care about absolute wealth so much as we care about relative wealth (processing in relative terms is deeply ingrained into the human thought process at every level). I bet a society with no more than 10 different income levels, set based on productivity, would provide sufficient incentive to get nearly everyone to contribute at near peak capacity.
In the US, we have more than 10 different income levels and a basic consumption guarantee of about 20k/year (i.e., even people earning $0/year tend to consume about $20k/year).
ftp://ftp.bls.gov/pub/special.requests/ce/standard/2009/income.txt
http://www.census.gov/prod/2008pubs/h150-07.pdf
This doesn't stop large chunks of our society from opting out of work.
http://www.bls.gov/cps/cpswp2010.pdf
http://apps.npr.org/unfit-for-work/
ftp://ftp.bls.gov/pub/special.requests/ce/standard/2009/income.txt
http://www.census.gov/prod/2008pubs/h150-07.pdf
This doesn't stop large chunks of our society from opting out of work.
http://www.bls.gov/cps/cpswp2010.pdf
http://apps.npr.org/unfit-for-work/
Does that mean, on average, the minimum anual pay to get someone off the couch in the U.S. is $20K+? My wife is from Colombia, and she tells me people there are motivated to go work and hustle each day for a few bucks. Of course that's off the books. I wonder how off the books work, if counted, would change those U.S. statistics?
As anyone who ever engaged in meaningful activity can tell you, such activity is its own reward. If you're not inventing something to solve a problem you have, or that someone whom you would like to help has, but ONLY to make profit, it will sooner or later show in the inventions you make, and in the world shaped by them, too.
There's a difference between everyone getting some money and some kind of pure communism. Proposals for a basic income aren't arguing that in a 10m-population country, each person's basic income will be equal to 1/10m of GDP.
In addition, many of the gains from technological advances are currently not reaped by the people who actually produce them, because technology is a very interlocked system, and monetization does not track it perfectly. For example, some technologies are produced by a chain involving basic-science research, applied-science research, engineering R&D, and product research, but the earlier parts of that chain are, in many cases, not really cut in on the profits. Sometimes that's because basic science/math is not patentable, partly b/c capturing every bit of value you create is in practice difficult, and partly because there is no good mechanism for capturing longer-term value, e.g. if you invent something today which produces a commercializable product in 30 years, any patent will have expired.
Sometimes that's a good thing: the general technological level increases, and technologies become essentially owned by humanity in general. But "owned by humanity in general" is a fairly nebulous concept, since they don't necessarily benefit people equally: the people best posed to benefit from the common heritage of previous generations' technological advances are those with sufficient wealth to utilize them, e.g. to build new technologies on them or factories to produce them. (Admittedly not always... whether new technologies tend to concentrate wealth or dissipate it varies and depends on a lot of factors.)
Dystopian fiction fairly often poses this thought experiment: Take a situation where all human food needs can eventually be produced by purely mechanized means, and that this has been the case for 100 or 200 years. Does this mean all human food needs are solved? Not if the land and robots are owned by a small subset of humans: in that case you have the strange result that a subset of humans has control over all the food, even though they neither produce the food by their own labor, nor invented the technology that produces the food.
Overall, I don't think the basic-income solution is a particularly radical one. If robots are doing an increasing amount of work, and some portion of today's robots are the result of our common ancestors' ingenuity, it's a really rough floor function on "what portion of robot labor should go to human X?". So everyone gets at least some smallish portion of the robots' output, or put differently, a smallish portion of the automation dividend. Then the rest can be allocated with regular market mechanisms. (One advantage from a pro-market position is that a basic income might remove political pressure for other kinds of social-support policies that interfere with markets more, like making it hard to fire people.)
In addition, many of the gains from technological advances are currently not reaped by the people who actually produce them, because technology is a very interlocked system, and monetization does not track it perfectly. For example, some technologies are produced by a chain involving basic-science research, applied-science research, engineering R&D, and product research, but the earlier parts of that chain are, in many cases, not really cut in on the profits. Sometimes that's because basic science/math is not patentable, partly b/c capturing every bit of value you create is in practice difficult, and partly because there is no good mechanism for capturing longer-term value, e.g. if you invent something today which produces a commercializable product in 30 years, any patent will have expired.
Sometimes that's a good thing: the general technological level increases, and technologies become essentially owned by humanity in general. But "owned by humanity in general" is a fairly nebulous concept, since they don't necessarily benefit people equally: the people best posed to benefit from the common heritage of previous generations' technological advances are those with sufficient wealth to utilize them, e.g. to build new technologies on them or factories to produce them. (Admittedly not always... whether new technologies tend to concentrate wealth or dissipate it varies and depends on a lot of factors.)
Dystopian fiction fairly often poses this thought experiment: Take a situation where all human food needs can eventually be produced by purely mechanized means, and that this has been the case for 100 or 200 years. Does this mean all human food needs are solved? Not if the land and robots are owned by a small subset of humans: in that case you have the strange result that a subset of humans has control over all the food, even though they neither produce the food by their own labor, nor invented the technology that produces the food.
Overall, I don't think the basic-income solution is a particularly radical one. If robots are doing an increasing amount of work, and some portion of today's robots are the result of our common ancestors' ingenuity, it's a really rough floor function on "what portion of robot labor should go to human X?". So everyone gets at least some smallish portion of the robots' output, or put differently, a smallish portion of the automation dividend. Then the rest can be allocated with regular market mechanisms. (One advantage from a pro-market position is that a basic income might remove political pressure for other kinds of social-support policies that interfere with markets more, like making it hard to fire people.)
Guaranteed basic income doesn't mean guaranteed employment. So if you invent something that lets me get rid of 90% of my work force, I can still buy it from you, fire my people, and you can still get rich.
What draq is saying, is that in this system, you still are compensated for your efforts of squeezing out additional profits- by inventing or any other process that leads to increased efficiency and profits. The compensation is just, "less". There is still an incentive to work, but there should not be the huge disparity of wealth we have now.
Serious question: How to reconcile BI with more liberal immigration laws?
I see a benefit of BI, but I personally see a larger benefit of allowing open immigration (else you have large inequalities based on country of origin).
I see a benefit of BI, but I personally see a larger benefit of allowing open immigration (else you have large inequalities based on country of origin).
The problem with "basic income" as I see it is people's ideas about what a proper standard of living is completely subjective. Should a basic income cover an apartment, or a house? Should it cover cheap food or expensive organic food? Should it cover technological gadgetry, and if so, how much? What type of car is "fair" for someone to be given? How do we ensure people's standard of living doesn't continue to increase. Will we not always have someone with more money to compare ourselves to? It's the nebulous definition of what a "basic income" should be that has me worried about the whole concept.
Basic income would make sustained immigration untenable. Our society depends on diversity and vibrancy; we can't put a price tag on human beings.
Technology doesn't drop from the sky, like everything else it is created (or farmed, or dug up from the earth) and rightfully belongs to its creator.
Yes, that is why whenever you invent something independently you're fucked because of this nasty thing called "the patent system" that essentially guarantees that most things you create already belong to someone else.
All inventions are built on those that came before them. How much iteration defines a new invention?
In some ways yes, but if you mean intellectual property then no.
Please read about Basic Income Guarantees(BIG)[1-2], if you are unfamiliar. Essentially, it is a set amount of money for EVERY citizen with NO means testing. It has been promulgated by conservative and liberal Nobel laureates alike. It turns out that the limited, preliminary data shows it to be INCREDIBLY effective. Basic Income offers surprising, non-intuitive effects which -- sometimes -- strongly contradict derogatory stereotypes of the poor. For example, BIG has resulted in increased hours worked per week and wage. These increases were attributed to people finding jobs they liked more and were better at (in lieu of jobs-based means testing programs which incentivize getting crappiest job possible as soon as possible).
[1] http://en.wikipedia.org/wiki/Basic_income_guarantee
[2] https://news.ycombinator.com/item?id=5656249
[1] http://en.wikipedia.org/wiki/Basic_income_guarantee
[2] https://news.ycombinator.com/item?id=5656249
In many ways I think the industrial revolution has made us forget a very important historical fact. Prior to industrialization, "labor" was often little more than serfdom. "Labor" in the purest sense didn't own anything, but was simply a necessary component for the wealth-producing activities of those who did. Laborers only had one economic move: to offer their time and hands in the service of those who owned things (land, a shop, a ship, etc) in return for a wage. That wage, effectively their value as laborers, was determined by the law of supply and demand. All the industrial revolution did was to vastly increase the demand for labor.
However, the ancient fact that one's existence as more than a serf required ownership of something did not change. The living standards of serfs simply improved dramatically. Those living standards still depended on the demand for labor being high and/or the supply low.
When technology reduces the demand for labor, while the supply increases due to population growth, it's easy to think that the economic sky is falling. But since none of us have lived in a pre-industrial revolution era, we are accustomed to thinking of wage-earning labor as an economic strategy that is more common than ownership of property, and just as valid. But historically it has been a specialized and risky economic strategy, and as the demand for labor-intensive physical products decreases it should not be surprising if those who are dependent on this economic strategy suffer. It may be tragic, but it's certainly not a new tragedy.
If you want long term economic security, own something.
However, the ancient fact that one's existence as more than a serf required ownership of something did not change. The living standards of serfs simply improved dramatically. Those living standards still depended on the demand for labor being high and/or the supply low.
When technology reduces the demand for labor, while the supply increases due to population growth, it's easy to think that the economic sky is falling. But since none of us have lived in a pre-industrial revolution era, we are accustomed to thinking of wage-earning labor as an economic strategy that is more common than ownership of property, and just as valid. But historically it has been a specialized and risky economic strategy, and as the demand for labor-intensive physical products decreases it should not be surprising if those who are dependent on this economic strategy suffer. It may be tragic, but it's certainly not a new tragedy.
If you want long term economic security, own something.
> If you want long term economic security, own something.
Ah, let me commend you on your effective and nuanced translation of the French original, "Le peuple n'a pas de pain ? Qu'il mange de la brioche." Very idiomatic.
Ah, let me commend you on your effective and nuanced translation of the French original, "Le peuple n'a pas de pain ? Qu'il mange de la brioche." Very idiomatic.
>> If you want long term economic security, own something.
So your solution is to tell labor that they should turn into capital? That is what you tell the millions of people who will be unable to find a job that pays a living wage?
Come on.
So your solution is to tell labor that they should turn into capital? That is what you tell the millions of people who will be unable to find a job that pays a living wage?
Come on.
> So your solution is to tell labor that they should turn into capital?
Progressive automation, it is at least arguable, makes that an essential part of any long-term solution. Labor as the key to income for the vast majority of the population may well not be a long-term viable option.
Of course, arguably, basic income / negative income tax is just an incredibly way of turning everyone into (at least, in part) capitalist living off what they own; what you own is a dividend-producing share of the commons. At a minimum, its a way of reducing the need to engage in wage labor to meet survival needs, and increasing the ability to direct efforts towards becoming a capitalist.
Progressive automation, it is at least arguable, makes that an essential part of any long-term solution. Labor as the key to income for the vast majority of the population may well not be a long-term viable option.
Of course, arguably, basic income / negative income tax is just an incredibly way of turning everyone into (at least, in part) capitalist living off what they own; what you own is a dividend-producing share of the commons. At a minimum, its a way of reducing the need to engage in wage labor to meet survival needs, and increasing the ability to direct efforts towards becoming a capitalist.
I REALLY like the way you phrase this.
Perhaps that could even be a way to sell it to the populace so that it can't be immediately struck down as "worse than communism".
Perhaps that could even be a way to sell it to the populace so that it can't be immediately struck down as "worse than communism".
A solution would propose a "how to"; I did not. I am merely pointing out a long term historical trend. If a person makes their living based on selling their time and specialized skills in exchange for money (as I currently do), there is no one size fits all strategy to take a wage earner and turn them into an owner that will work for everyone.
Labor is a market like any other. If it's too crowded and competitive, it's best to consider other options.
Labor is a market like any other. If it's too crowded and competitive, it's best to consider other options.
The problem is that labor is the only market you can enter into without already owning things to trade for it.
> If you want long term economic security, own something
Couldn't agree more. Thinking that the only means to an income or wealth is labor a very limiting point of view. I'm optimistic about the trends toward entrepreneurialism and ownership, especially in technology. I think this is good for the economy and society overall.
Couldn't agree more. Thinking that the only means to an income or wealth is labor a very limiting point of view. I'm optimistic about the trends toward entrepreneurialism and ownership, especially in technology. I think this is good for the economy and society overall.
> I'm optimistic about the trends toward entrepreneurialism and ownership
What trends?
What trends?
This website for one.
If you don't already have wealth, then the only means to an income or wealth is labor. The view that you must be trading that labor instead of investing it directly in creation is potentially limiting (and is, I think, what you're actually seeing and objecting to).
We are presently in a situation where our particular skills (which, incidentally, society has poured some resources into developing) are capable of creating things worth owning more efficiently than it can be automated. That is outstanding, but it's not necessarily sustainable.
If labor can't produce value, then people need to start out with something else.
We are presently in a situation where our particular skills (which, incidentally, society has poured some resources into developing) are capable of creating things worth owning more efficiently than it can be automated. That is outstanding, but it's not necessarily sustainable.
If labor can't produce value, then people need to start out with something else.
Well yes, giving the proletariat ownership of the means of production would obviously solve the problem. How exactly do you expect that to happen, short of a nasty and probably quite bloody revolution?
We should stop using the term "highly skilled" when it really means "highly specialized". The trouble is we are still using school, from kindergarten to university (and beyond), as a system to turn people into highly specialized automatons. And the trouble with automatons is they get automated. A few have been lucky during the course of the industrial revolution to pick the right skill to specialize in, and at the right time, but examples abound when you pick the "wrong" specialization, just to see it subsequently automated.
I never really understood what Buckminster Fuller was trying to get across in his Operating Manual for Spaceship Earth, until recently. The amazing thing is he addressed these concerns quite presciently in the 1960s--he saw this coming.
The only advice I can give is always be learning and adapting and apply it in creative and entrepreneurial ways.
I never really understood what Buckminster Fuller was trying to get across in his Operating Manual for Spaceship Earth, until recently. The amazing thing is he addressed these concerns quite presciently in the 1960s--he saw this coming.
The only advice I can give is always be learning and adapting and apply it in creative and entrepreneurial ways.
This problem is inherently transient. The worst case is that it takes a full generation for skills and customs to adapt.
Skills like "reading" and "writing" were once the province of highly-educated specialists. They became mainstream when the economic incentives made them critical to have. People learn what they need to learn -- especially if they start as children.
It's entirely appropriate to worry about how we can help people during this painful transition. But we need to be careful not to turn this temporary problem into a permanent one by creating cultures of dependence.
Skills like "reading" and "writing" were once the province of highly-educated specialists. They became mainstream when the economic incentives made them critical to have. People learn what they need to learn -- especially if they start as children.
It's entirely appropriate to worry about how we can help people during this painful transition. But we need to be careful not to turn this temporary problem into a permanent one by creating cultures of dependence.
You are failing to see the scope of this.
Imagine a world where your latte is served by a machine, your taxi drives itself, when you had surgery the guy operating the waldoes was working from his office in Mumbai, you do your own lawyering with the help of Watson running on your iPad, the malls are self service, and the cops are made by Boston Dynamics.
Now imagine being sacked because your boss has a Watson too, trying to get a job - any job, and realizing that that the system doesn't need you - you are underqualified for the purely human jobs that remain, and your minimum living wage (covering rent, food, utilities and no slack) costs more than a burger flipping robot's amortized installation expense.
Imagine a world where your latte is served by a machine, your taxi drives itself, when you had surgery the guy operating the waldoes was working from his office in Mumbai, you do your own lawyering with the help of Watson running on your iPad, the malls are self service, and the cops are made by Boston Dynamics.
Now imagine being sacked because your boss has a Watson too, trying to get a job - any job, and realizing that that the system doesn't need you - you are underqualified for the purely human jobs that remain, and your minimum living wage (covering rent, food, utilities and no slack) costs more than a burger flipping robot's amortized installation expense.
No, I'm actually ambitious and optimistic about the scope of this.
Massive automation absolutely does not imply massive involuntary unemployment. We've actually been through this before. We used to require 90% of the population to grow food. Now it's less than 1%. The rest didn't end up unemployed -- they ended up involved in entire industries and economies that didn't even exist before.
Most of us have jobs that would sound completely fanciful to a farmer circa 1800. He couldn't have remotely guessed how most people would spend their time and earn a living in 2013. The same is true now for us -- I doubt anyone here could explain what most people in 2050 will be doing with their time.
But the existence proof for there being useful work to do is the fact that not everyone has everything they could possibly want. So long as there are unmet needs and wants, there are necessarily opportunities for people to work together toward satisfying those needs.
Either the poor can afford the outputs of the robotic factories, in which case they will have a high standard of living, or the poor can't afford the outputs of the robotic factories, in which case they constitute a large market in which the robots are not competitive, not relevant, and unable to put people out of work.
Massive automation absolutely does not imply massive involuntary unemployment. We've actually been through this before. We used to require 90% of the population to grow food. Now it's less than 1%. The rest didn't end up unemployed -- they ended up involved in entire industries and economies that didn't even exist before.
Most of us have jobs that would sound completely fanciful to a farmer circa 1800. He couldn't have remotely guessed how most people would spend their time and earn a living in 2013. The same is true now for us -- I doubt anyone here could explain what most people in 2050 will be doing with their time.
But the existence proof for there being useful work to do is the fact that not everyone has everything they could possibly want. So long as there are unmet needs and wants, there are necessarily opportunities for people to work together toward satisfying those needs.
Either the poor can afford the outputs of the robotic factories, in which case they will have a high standard of living, or the poor can't afford the outputs of the robotic factories, in which case they constitute a large market in which the robots are not competitive, not relevant, and unable to put people out of work.
No, they constitute a small, impoverished market in defiance of their numbers. CF: the present day ecosystem of food, etc provision to very poor people. It's heavily consolidated and the products are trashy because the amount of profit to be had is paper-thin.
People learn what they need to learn -- especially if they start as children.
Mass literacy is very much the result of concerted efforts by the state to provide universal education -- it didn't just come into being.
Moreover, the point of the article is that we are in a time where education, whether self- or school-directed, can't solve the problem, because the productivity benefits of technology are going almost entirely to those with capital, rather than labor, i.e., the people doing the learning. You can argue with whether that is the case, but be aware that when you say "people will learn what they need to learn," you are actually stating the argument that the OP is already rebutting.
Mass literacy is very much the result of concerted efforts by the state to provide universal education -- it didn't just come into being.
Moreover, the point of the article is that we are in a time where education, whether self- or school-directed, can't solve the problem, because the productivity benefits of technology are going almost entirely to those with capital, rather than labor, i.e., the people doing the learning. You can argue with whether that is the case, but be aware that when you say "people will learn what they need to learn," you are actually stating the argument that the OP is already rebutting.
"Mass literacy is very much the result of concerted efforts by the state to provide universal education..."
This isn't necessarily accurate. The U.S. was a highly literate society before the advent of state sponsored, public education. State sponsored education did indeed increase the literacy rate because many states forced parents to send children to school.
http://nces.ed.gov/naal/lit_history.asp#illiteracy
This isn't necessarily accurate. The U.S. was a highly literate society before the advent of state sponsored, public education. State sponsored education did indeed increase the literacy rate because many states forced parents to send children to school.
http://nces.ed.gov/naal/lit_history.asp#illiteracy
You're right, I should have said "universal literacy."
I would be cautious to say we have universal literacy today, even with universal education.
You're posing a false dichotomy. Skill is capital. And its worth relative to other forms of capital (cash, land) continues to rise.
Consider what's required to start a new business today. You need less cash than ever before. The limiting factor is most definitely skill. Not just obvious specialist skills, but the basic mindset that takes you from "just punching the clock" to "seeking opportunities to help".
One reason wealth is concentrating is that the vast majority of people are woefully unskilled in the areas that matter now. This creates big pools of labor that have no leverage, which are naturally easy to exploit.
So the existence of growing wealth inequality is not proof that education doesn't matter. It's just as plausible that most people are mis-educated. And when you look at the original intent of our education systems, they were deliberately designed to produce obedient factory workers who could reliably follow simple directions. Which is now an anti-skill.
Consider what's required to start a new business today. You need less cash than ever before. The limiting factor is most definitely skill. Not just obvious specialist skills, but the basic mindset that takes you from "just punching the clock" to "seeking opportunities to help".
One reason wealth is concentrating is that the vast majority of people are woefully unskilled in the areas that matter now. This creates big pools of labor that have no leverage, which are naturally easy to exploit.
So the existence of growing wealth inequality is not proof that education doesn't matter. It's just as plausible that most people are mis-educated. And when you look at the original intent of our education systems, they were deliberately designed to produce obedient factory workers who could reliably follow simple directions. Which is now an anti-skill.
I think the assertion is we are approaching a time in which skills will be automated away faster than the time it takes to acquire them. Where will AI be in a "full generation"? I don't know, but a good bet is getting very close to human-level intelligence, and far surpassing it in many many specialized tasks.
> Where will AI be in a "full generation"? I don't know, but a good bet is getting very close to human-level intelligence
LOL, no. The amount AI would have to advance from its current state to "very close to human-level intelligence" would have to be orders of magnitude more than it has evolved from its initial state to its present state (over the last 50-60 years). Pray tell, what technologies can you name that evolved faster in their second half-century than their first?
Does that mean we definitely won't have human-scale AI in 50 years? No, because revolutions are impossible to predict. What it does mean, however, is that human-scale AI is not the predictable outcome of existing evolutionary trends. Indeed, developments in AI more or less stalled out in the 1980's, most of what we've seen to date is new applications of techniques pioneered decades ago.
To use an analogy, what do you think CPU clockspeeds will be 10 years from now? It's possible that some breakthrough will happen and we'll have 20 GHz processors, but projecting existing trends suggests that the increase in clockspeeds from 2013 to 2023 will be a lesser percentage than what we saw from 1993 to 2003.
LOL, no. The amount AI would have to advance from its current state to "very close to human-level intelligence" would have to be orders of magnitude more than it has evolved from its initial state to its present state (over the last 50-60 years). Pray tell, what technologies can you name that evolved faster in their second half-century than their first?
Does that mean we definitely won't have human-scale AI in 50 years? No, because revolutions are impossible to predict. What it does mean, however, is that human-scale AI is not the predictable outcome of existing evolutionary trends. Indeed, developments in AI more or less stalled out in the 1980's, most of what we've seen to date is new applications of techniques pioneered decades ago.
To use an analogy, what do you think CPU clockspeeds will be 10 years from now? It's possible that some breakthrough will happen and we'll have 20 GHz processors, but projecting existing trends suggests that the increase in clockspeeds from 2013 to 2023 will be a lesser percentage than what we saw from 1993 to 2003.
If you think AI stalled out in the 80s, you deserve a LOL right back. We didn't even have Bayesian nets in the eighties. AI has made huge progress since the eighties, look at Geoff Hinton's work, look at all Sebastian Thrun has done with automated cars - something many experts thought would take 50 years in the late nineties. AI is just now blossoming. It's a very exciting field at the moment.
Wikipedia puts the development of Bayesian networks in the 1980's. As for Hinton: I didn't mean to say we had zero progress since the 1980's (though admittedly, that's what "stalled" technically means), but rather that after a flurry of rapid development we hit a point of diminishing pace of development, as all technologies do.
I don't know if AI is blossoming right now, but all the interesting things I've seen in the field (Watson, self-driving cars) are not theoretical breakthroughs, but rather new applications. I don't think the technology in self-driving cars gets us fundamentally closer to human-scale AI.
I don't know if AI is blossoming right now, but all the interesting things I've seen in the field (Watson, self-driving cars) are not theoretical breakthroughs, but rather new applications. I don't think the technology in self-driving cars gets us fundamentally closer to human-scale AI.
I think what happened is that it fell out of popular usage to call most AI applications "AI", and a lot of the more extreme claims about the near-term potential of AI died out, so there is something of a perception in some corners that the field had died out.
The problem may or may not be transient. Let's examine the cost of making a mistake in each case.
If it's not transient, beating the drums of "no culture of dependence!" will send billions of people to starvation.
If the problem is transient, culture of dependence could indeed undermine further progress, or more likely cause progress to slow down as fewer people will be pushing the envelope.
Which mistake seems worse to you?
If it's not transient, beating the drums of "no culture of dependence!" will send billions of people to starvation.
If the problem is transient, culture of dependence could indeed undermine further progress, or more likely cause progress to slow down as fewer people will be pushing the envelope.
Which mistake seems worse to you?
The worst case is that it takes a full generation for skills and customs to adapt
The worst case is that increasingly large percentages of the human population cannot perform any task that a computer can't do better and cheaper. It's fairly obvious. I admire your optimism though.
The worst case is that increasingly large percentages of the human population cannot perform any task that a computer can't do better and cheaper. It's fairly obvious. I admire your optimism though.
How is it not a permanent problem? Are you seriously asserting that the skills and jobs that workers re-train into will not have the exact same problem before long?
Krugman's trying to juggle two contradictory viewpoints: one (the Luddite view) holds that the purpose of work is to have something to do. The Luddite petition is arguing that allowing these people to fall into idleness simply because there is a more effective machine to do their job will be toxic to society. This is somewhat confused by the Luddites also throwing out a lot of half-baked economic arguments, but those can be safely ignored in hindsight.
Krugman then proposes a solution from an entirely opposite viewpoint: that the purpose of work is to produce useful things, and if the constant disruption of jobs is the cost of efficiency, we should just give the affected a handout to provide for their needs.
But because the guaranteed income doesn't solve the Luddite's complaint, it misses the point entirely.
Krugman then proposes a solution from an entirely opposite viewpoint: that the purpose of work is to produce useful things, and if the constant disruption of jobs is the cost of efficiency, we should just give the affected a handout to provide for their needs.
But because the guaranteed income doesn't solve the Luddite's complaint, it misses the point entirely.
Where do you get that the Luddites' only complaint was having something to do?
“How are those men, thus thrown out of employ to provide for their families?” asked the petitioners.
“How are those men, thus thrown out of employ to provide for their families?” asked the petitioners.
They answer their own question: with a retraining process that will leave their children behind as untrained bums.
They semi-accurately predict a future where employment is sufficiently fluid that nobody is securely enough situated at a job that they can train their children into it.
They semi-accurately predict a future where employment is sufficiently fluid that nobody is securely enough situated at a job that they can train their children into it.
Tangentially, I'd like to note that giving affected people a handout is not only providing for their needs, it's also making sure there are people with the money to buy my products.
What good comes to you from "them buying your goods" if you just gave them the money they are paying you?
Of course, the good comes from not making them suffer, keeping things calm, having a sfety, getting an overall civilized society out of the deal. But that's not the kind of benefit implicit on your phrase (or in the Ford's original).
Oh, and yes, there is one benefit that is not dependent on the price you pay for it. It'll make it possible for lots of people - that otherwise would just starve - to work into making the world a better place (for profit or not). But again, it's at least not obvious that you mean this, and it's obvious that the original didn't.
Of course, the good comes from not making them suffer, keeping things calm, having a sfety, getting an overall civilized society out of the deal. But that's not the kind of benefit implicit on your phrase (or in the Ford's original).
Oh, and yes, there is one benefit that is not dependent on the price you pay for it. It'll make it possible for lots of people - that otherwise would just starve - to work into making the world a better place (for profit or not). But again, it's at least not obvious that you mean this, and it's obvious that the original didn't.
If I have already been successful and paying a disproportionate chunk of the taxes that are going to these people, then it perhaps doesn't do me a tremendous amount of good (directly).
If I'm starting a business, it does me a tremendous amount of good for my customers to have money enough.
If I'm starting a business, it does me a tremendous amount of good for my customers to have money enough.
On the other hand, perhaps it's entirely possible that creators of technology will notice this large swath of available labor and create technology to make use of it.
An important point about the Luddites is that while expensive weavers were put out of work by machines, those machines functioned by employing greater numbers of (vastly lower paid) unskilled immigrants.
If you put a 150k salary expert out of work by creating a piece of technology that requires two 70k workers, you still profit.
An important point about the Luddites is that while expensive weavers were put out of work by machines, those machines functioned by employing greater numbers of (vastly lower paid) unskilled immigrants.
If you put a 150k salary expert out of work by creating a piece of technology that requires two 70k workers, you still profit.
I think we need to start distinguishing between the part of the 1% that builds new technologies, products, etc. and the part of the 1% that speculates on African food futures, high-frequency trading, etc.. The former is useful. The latter is entirely destructive and should be legislated into poverty for the greater good.
This article is specifically about how your "useful" subset of the 1% creates technologies which benefit humanity in the long run, but harm large numbers of individuals in the short run, and what to do about that. Your "destructive" 1% doesn't even factor into this article yet you feel entitled to come in here and rant about them.
how your "useful" subset of the 1% creates technologies which benefit humanity in the long run, but harm large numbers of individuals in the short run
I think you forgot to add "in the current economical/social system". The technology never hurts anyone objectively, it always helps. It's us, humans, who decide that someone should be punished for the technological progress. ("You've been replaced by a machine, go eat cake. To celebrate our newly redoubled productivity, we'll let you starve.")
I think you forgot to add "in the current economical/social system". The technology never hurts anyone objectively, it always helps. It's us, humans, who decide that someone should be punished for the technological progress. ("You've been replaced by a machine, go eat cake. To celebrate our newly redoubled productivity, we'll let you starve.")
In the short term taxing the rich seems like the only viable solution. But just give it some time. Skill acquisition via free online courses will replace high cost universities. This alone will solve most of Krugman's problem. Entrepreneurs have a funny way of figuring out how to solve our problems - without redistributing wealth (save for the overly hyped Tesla)
It still takes time to retrain, even if the education is free.
Yeah he definitely identifies a problem but does not address any of the knock-on effects of a guaranteed minimum income, namely the incentive to not work rather than to work.
What he's arguing is that we should pay people not to work the same way we pay farmers not to grow corn, to ensure that the price is kept high enough for those who do engage in working/farming to earn the "right" amount of money.
It's a noble goal to be sure, to ensure that everyone can feed their families and live a comfortable-enough life and such. I don't argue with his intentions one iota.
The problem for Krugman is that taxing is his hammer and every problem in the world looks like a nail. It's far easier to exhort "we must do something!" and to use the force of law to do SOMETHING than to figure out a better solution to a very real problem.
I am of course in some ways a hypocrite since I can't think of any solutions myself off the top of my head.
What he's arguing is that we should pay people not to work the same way we pay farmers not to grow corn, to ensure that the price is kept high enough for those who do engage in working/farming to earn the "right" amount of money.
It's a noble goal to be sure, to ensure that everyone can feed their families and live a comfortable-enough life and such. I don't argue with his intentions one iota.
The problem for Krugman is that taxing is his hammer and every problem in the world looks like a nail. It's far easier to exhort "we must do something!" and to use the force of law to do SOMETHING than to figure out a better solution to a very real problem.
I am of course in some ways a hypocrite since I can't think of any solutions myself off the top of my head.
Actually, the idea of a basic income (under the rubric 'negative income tax') was favored by economists like Milton Friedman as well (see http://en.wikipedia.org/wiki/Negative_income_tax for an OK overview). The underlying concept here is not so much fairness as that there's an opportunity cost to society in having people engaged in the sort of work they're not especially well-suited to in order to meet the basic needs of survival.
Friedman favored a negative income tax, which is not the same thing.
Also, if properly calibrated, a negative income tax can (assuming diminishing marginal utility) actually create incentives for work. A basic income never does [1].
I don't understand your claim that there is an "opportunity cost to society". Could you explain in a little more detail?
[1] See this previous HN discussion where I do the calculations. https://news.ycombinator.com/item?id=1926061
Also, if properly calibrated, a negative income tax can (assuming diminishing marginal utility) actually create incentives for work. A basic income never does [1].
I don't understand your claim that there is an "opportunity cost to society". Could you explain in a little more detail?
[1] See this previous HN discussion where I do the calculations. https://news.ycombinator.com/item?id=1926061
I never argued against this for "fairness" nor did Krugman mention the societal opportunity cost.
It's more an issue of signaling. People won't go through the pain necessary to learn a new skill if there's no incentive. High wages are encouragements to endure the discomfort inherent (for most) in change necessary for the rebalancing of the labor force. Low wages signal that the skill is not in high demand (relative to supply) and that there may be other more opportunities more attractive.
The negative income tax reduces the incentive to move from one segment of the labor force to another and could be analogous to a tariff, in a way.
It's more an issue of signaling. People won't go through the pain necessary to learn a new skill if there's no incentive. High wages are encouragements to endure the discomfort inherent (for most) in change necessary for the rebalancing of the labor force. Low wages signal that the skill is not in high demand (relative to supply) and that there may be other more opportunities more attractive.
The negative income tax reduces the incentive to move from one segment of the labor force to another and could be analogous to a tariff, in a way.
It's equally arguable that people won't engage in time-consuming activities of uncertain return if there's too much financial risk. 'Lack of demand' is often a stumbling block for new technologies that are ahead of their time.
> The negative income tax reduces the incentive to move from one segment of the labor force to another
The negative income tax also removes the friction that prevents people from being able to move from one segment of the labor force to another, which is the need to continue working where you have the skills in order to survive, which reduces the opportunity to invest time and energy in learning new skills.
Which of these forces would be most dominant depends on details of implementation, but what is clear is that the effect isn't one sided.
The negative income tax also removes the friction that prevents people from being able to move from one segment of the labor force to another, which is the need to continue working where you have the skills in order to survive, which reduces the opportunity to invest time and energy in learning new skills.
Which of these forces would be most dominant depends on details of implementation, but what is clear is that the effect isn't one sided.
> What he's arguing is that we should pay people not to work the same way we pay farmers not to grow corn
Actually, no.
Basic income isn't pay not to work, its pay independent of work (or anything else). It is very different from paying people not to work, in that there is always a positive reward for earning money through work (whether wage labor or capital.)
Its essentially making everyone a stock-holder in the commons, and issuing periodic dividends.
Actually, no.
Basic income isn't pay not to work, its pay independent of work (or anything else). It is very different from paying people not to work, in that there is always a positive reward for earning money through work (whether wage labor or capital.)
Its essentially making everyone a stock-holder in the commons, and issuing periodic dividends.
Okay sure, but it makes a seriously weird nonlinearity to the work/income relationship.
Let's say I make a modest wage, $15/hr. For every hour of work I do, I earn about $12 post-tax. My income is y=12x. $24k per year working a normal 40 hour week. Okay.
Now let's say I make the same wage but I get a guaranteed $20k tax-free. For every hour I work, I earn $12 post-tax. My income looks like y=12x+20000. 44k/year if I work a regular 40 hour week. But I could also work only 20 hours a week and still make $32k/year, doubling my effective wages. I could work 10 hours a week and bring in $26k/year. Or work a single hour and make an effective hourly rate of $22,012 in that one hour.
People are absolutely smart enough to see how that works and many of them will choose not to work at all. Yeah, it might be true that you don't live anywhere near as fun of a lifestyle on $20k/year as $44k/year but that's only if you value spending money. There are plenty of people who would be content to contribute nothing TO society but still collect their checks FROM society. That kind of asymmetry is worrisome to me.
Let's say I make a modest wage, $15/hr. For every hour of work I do, I earn about $12 post-tax. My income is y=12x. $24k per year working a normal 40 hour week. Okay.
Now let's say I make the same wage but I get a guaranteed $20k tax-free. For every hour I work, I earn $12 post-tax. My income looks like y=12x+20000. 44k/year if I work a regular 40 hour week. But I could also work only 20 hours a week and still make $32k/year, doubling my effective wages. I could work 10 hours a week and bring in $26k/year. Or work a single hour and make an effective hourly rate of $22,012 in that one hour.
People are absolutely smart enough to see how that works and many of them will choose not to work at all. Yeah, it might be true that you don't live anywhere near as fun of a lifestyle on $20k/year as $44k/year but that's only if you value spending money. There are plenty of people who would be content to contribute nothing TO society but still collect their checks FROM society. That kind of asymmetry is worrisome to me.
> Okay sure, but it makes a seriously weird nonlinearity to the work/income relationship.
Pretty much every set of real policies in the world does that. So, what?
> Now let's say I make the same wage but I get a guaranteed $20k tax-free. For every hour I work, I earn $12 post-tax. My income looks like y=12x+20000. 44k/year if I work a regular 40 hour week. But I could also work only 20 hours a week and still make $32k/year, doubling my effective wages. I could work 10 hours a week and bring in $26k/year. Or work a single hour and make an effective hourly rate of $22,012 in that one hour.
Which doesn't really matter. Total income over hours worked isn't what measures the incentive to work, the marginal utility (not the same as dollar amount, to be sure, as income experiences diminishing marginal utility) of the next dollar is what sets the incentive. So, sure, the incentive is less in a system with basic income compared to one otherwise identical without it -- but nowhere near what you are portraying.
> People are absolutely smart enough to see how that works and many of them will choose not to work at all.
Sure, some will, but to an extent that's the point; people are going to be without wage labor one way or another.
> Yeah, it might be true that you don't live anywhere near as fun of a lifestyle on $20k/year as $44k/year but that's only if you value spending money.
You mean, if you value any of the things for which money can be exchanged. Which, pretty demonstrably, most people do.
Pretty much every set of real policies in the world does that. So, what?
> Now let's say I make the same wage but I get a guaranteed $20k tax-free. For every hour I work, I earn $12 post-tax. My income looks like y=12x+20000. 44k/year if I work a regular 40 hour week. But I could also work only 20 hours a week and still make $32k/year, doubling my effective wages. I could work 10 hours a week and bring in $26k/year. Or work a single hour and make an effective hourly rate of $22,012 in that one hour.
Which doesn't really matter. Total income over hours worked isn't what measures the incentive to work, the marginal utility (not the same as dollar amount, to be sure, as income experiences diminishing marginal utility) of the next dollar is what sets the incentive. So, sure, the incentive is less in a system with basic income compared to one otherwise identical without it -- but nowhere near what you are portraying.
> People are absolutely smart enough to see how that works and many of them will choose not to work at all.
Sure, some will, but to an extent that's the point; people are going to be without wage labor one way or another.
> Yeah, it might be true that you don't live anywhere near as fun of a lifestyle on $20k/year as $44k/year but that's only if you value spending money.
You mean, if you value any of the things for which money can be exchanged. Which, pretty demonstrably, most people do.
There is no incentive not to work. With or without guaranteed basic income, you stand to lose tens/hundreds of thousands of dollars per year in compensation by quitting work. So there is no financial incentive at least (except e.g. the cost of commuting, which is generally small in comparison to your lost salary/wages).
The solution is obviously to watch the average standard of living get significantly worse, then elect the one promising a chicken in every pot, and a chicken-cooking robot in every kitchen (pot and kitchen sold separately).
Get rid of corporate entitlements like patents, obscenely long copyrights, the FDA (yes, it's an entitlement -- see how hard it is for a little guy to compete when the hurdles are so high), etc. etc. and then see how it shakes out.
> the FDA (yes, it's an entitlement -- see how hard it is for a little guy to compete when the hurdles are so high)
Would you like to try Ed's Patent Elixir? I promise it won't kill you. It's from a little guy, just tryin' to compete.
Would you like to try Ed's Patent Elixir? I promise it won't kill you. It's from a little guy, just tryin' to compete.
If you're too foolish to do some vetting of what you take, you shouldn't compound that foolishness by stripping away others' right to take novel drugs that might, say, cure their cancer, etc.
I'm not foolish enough to not vet what I take. Or I like to think I'm not. But I can't vet what I would take, because I'm not an expert. Therein lies the problem.
And, no, no free-market solution solves this without people fucking dying. Back to mises.org with this silliness, please.
And, no, no free-market solution solves this without people fucking dying. Back to mises.org with this silliness, please.
The fact is that what another person chooses to take is none of your business. You use fearmongering as an irrational pretext to usurp someone's right to choose what they do with their own body, and sadly, that fearmongering works. It just doesn't work on reasonable people, who are in the minority.
Again? What has it been? two months since we last had a round of these "unlike all the other times where we said that things were really different, this time it really is different" opionions bullshit (no it isn't any different this time).
Can we please just let it be just this one article, this time?
Can we please just let it be just this one article, this time?
The argument against basic income is the same as for IP laws. Without money or legal constructs to monetize their products, people have no incentives to work. Maybe we need better incentives for working and creating things.