Between this essay and the one I saw on HN over the weekend [1], I feel PG really got this essay wrong.
Both response essays have really compelling points, and even as I read PG's original, I felt like he was catastrophizing.
Something that none of the above mention is that, as "job eliminators," we need to start considering how to keep the people who have no chance at a job can continue to live reasonable lives.
California, despite being the home of Silicon Valley, still has "truck driver" as the most common occupation as of 2014. [2] In ten years we'll probably be seeing the first self-driving trucks; in 25 the occupation will likely be gone for any runs that don't require humans to unload the truck at the other end (home or small commercial delivery drivers, movers, etc.; a lot of trucks just move goods from one manned loading dock to another).
Before you say they'll work at some new job, what other jobs at that skill level won't also be automated by that time?
We need a serious movement toward guaranteed income. Capitalism needs consumers; if most of the population can't get jobs, who will be the consumers? And what will happen to those people? Without guaranteed income, they'll be desperate; I don't exaggerate in suggesting that the poor will eventually get to the point of trying to overthrow or attack the rich. A brief look at the fall of various past civilizations will reveal many parallels, and even if the rich could sufficiently arm themselves to resist, living in cyberpunk-style walled enclaves, that's not a future I would want to live in.
Making sure everyone has enough to live a decent life is the only path I can see to a humane future.
On the surface I want to support BI, I really do. But how does it work other than as a replacement (not supplement) to existing social welfare programs? Give someone enough money that they can rent a room, buy food, and cover their healthcare (whatever cost that may incur). The numbers required to do this in the US when you eliminate all social programs seem doable. Most people pay less in taxes, money gets distributed directly to the people, and it seems fine.
So what happens when someone uses their entire BI allowance on Fireball and lottery tickets? The two choices seem to be "they die" or "we don't actually eliminate social service in exchange for a guarantee BI."
The BI proponents typically forget that there's some average amount of money that would work for everyone, but there is clearly a power-law at the expensive end of social services.
As an example, I have an extended family member who was born happy and healthy but contracted meningitis at 5 years old and was severely mentally handicapped afterwards. For the past 20 years, his parents have provided his extensive care buoyed by social security disability, but they won't be around forever, so then what? Giving him or some agent on his behalf $12k/year isn't going to come close to paying for the level of support that he needs.
There are millions of people in similar situations that could not survive without significant amounts of money which is almost entirely funded by the government. Just assuming that this will be covered by any basic income is silly.
So at that point it basically becomes a "you only get BI unless you need more," which is really just what we have now but everyone gets a $12k/yr kicker on top, right (to use your figure).
Throw in single-payer to cover health issues (and include mental health issues) and you'll cover 98% of the problem.
People play PowerBall to extremes and similar because they're desperate.
I doubt $12k/year would be sufficient, BTW. You want people to be able to live a decent, if spartan, life on BI, and at $12k I think they'd be forced to decide between starving or extremely poor living conditions.
Probably $18k/year would be an absolute minimum, plus allowances for kids (how to handle kids is a HUGE question, well outside the scope of this post).
The amount you earn could vary by chosen living area, in proportion to living expenses. Maybe not 100% proportionally; if an area has 150% of the cost of living, but only pays you 125% more than the nominal amount, there would still be a pressure to move to less expensive areas, but more expensive areas wouldn't de facto exclude people on BI.
There needs to be extended discussion on the details. I don't know nearly enough to be able to have all of the answers. But it seems like the answer is out there, if enough people get together to work on it.
>power-law at the expensive end of social services.
Single-payer health care that extends to psychological services and mental handicaps would cover this, right?
Some people need to be institutionalized, or otherwise supported 24/7. BI allows us to close most government assistance programs, but there still would need to be subsidized health care. Maybe there's a serious co-pay for living arrangements, deducted from BI, so that people don't just claim psychological problems to get free housing.
No, even then they really don't, do the math. 300M people, $2T total federal budget.
Everyone is so obsessed with discussing whether or not this would create disincentives to work that the gigantic cost is barely mentionned.
The moral ground has moved so far left that even the right-wing doesn't dare critic it as a massive forced, wealth redistribution scheme. Instead they fixate on barely relevant questions, such as whether it makes people lazy, or if the money is "deserved".
This drives me nuts. The problem is never giving money to people. Technological progress has the same effect. The problem is taking it away from others!
> This drives me nuts. The problem is never giving money to people. Technological progress has the same effect. The problem is taking it away from others!
If automation is driving people out of work, I need not take anything from you to give to others.
Quite the contrary, you yourself will have nothing of value to "take" in the long term. What technology giveth, it taketh away.
I wasn't trying to make a point about the disruptive effect of technology. My point is that people getting free money is functionally equivalent to them having access to more goods and services, which is something technology does (in the medium run) and that no one seriously worries about.
If I include things like Medicare, Medicaid, Social Security, Education, etc... all social welfare programs add up to maybe $1.5T a year.
There are about 320M people in the US. Let's leave out anyone under 18 (23%) that leaves us with about 250M people.
Assume that somehow, all of these welfare programs are dismantled to be replaced by a BI. It's totally politically unfeasible, but let's imagine it happens. That leaves $1.5T to be distributed yearly among 250M people, which comes to about $500 a month. That's as a replacement of all medical aid, all social security, all public schooling, etc...
Proponents of BI cite higher numbers, and political reality means many of these programs will stay. This suggests that BI will not come about without a dramatic increase in taxation.
BI is a great short-term idea. As jobs become replaced, we can keep the keep capitalism alive for at least two generations with this hack.
Unfortunately, the system of Capitalism is starting to fail, and we're seeing the ludicrous hacks applied to industrial age economics in order to keep us afloat.
The need for money, in the classical sense, is disappearing. All the institutions that are held afloat on such a model, are begining to die. blockchains, and trustless ledgers in general, will take down Governments (based on trust, after all), nevermind mere government-backed banking institutions or corporate-welfare-receivers.
We should be mindful (aware) of what a world is going to look like without these institutions, and try to structure our lives around these new changes.
To paraphrase a famous quote, Capitalism is the worst system possible, except for all of the other systems that have been tried.
There are a number of possible ways to hack/change capitalism that, while they don't change the fundamental principles, do make the process more sustainable.
> Literally no one in America, save for a very few on the fringe, is talking about “eliminating income inequality.” People are seeking to and talking about reducing income inequality.
This is disingenuous. On social and mainstream media the issue has been framed as "income inequality is a problem" not "excessive income inequality is a problem."
I agree with you, but I think the author's point holds. Nobody except the truly out of touch are suggesting that every person in the country should earn and be worth the same amount of money. Just that the degree to which it's reached is too much.
Unless you are trying to be obtuse, or hate brevity, the statement "eliminate income inequality" and "eliminate excessive income inequality" read exactly the same. No one is arguing for a move to a fully socialist state, so "eliminate income inequality" in the US means "tax the highest bracket more" and/or "add a higher tax bracket and tax it more" and/or "add a wealth tax". If you honestly look at the arguments rather than just arguing petty semantics you'll be better off in the long run.
Paul Graham is absolutely right, and those who argue against him are doing so from a position of close-mindedness.
First of all: it's irrelevant to the principle whether the goal is to "eliminate" income inequality, or "reduce" it. This being HN, I won't elaborate on why. This place should be above pedantry and people coming from all viewpoints should be able to see why it's the case that if one is bad, so is the other.
Second, Graham is not arguing that the pie is getting larger. He is saying that the type of capitalistic market-based activity that increase income inequality also increase the size of the pie. Sure a new regulation that increases legal fees for the average person but increases the wages of highly educated legal professionals will be a zero sum reallocation of the shares of each slice, but that is not what PG is talking about when he says he's in the business of creating income inequality.
> First of all: it's irrelevant to the principle whether the goal is to "eliminate" income inequality, or "reduce" it. This being HN, I won't elaborate on why. This place should be above pedantry and people coming from all viewpoints should be able to see why it's the case that if one is bad, so is the other.
I'm afraid you're going to have to elaborate a bit for me to see it. (And no, I'm not just trying to be a pedant.)
(Unless you're saying that PG's argument is that reducing inequality is bad, not just that eliminating it is bad. Then I'd have to agree with you.)
One could both believe that inequality should not be eliminated because it actually benefits society (PG's point in the essay) and believe that too much inequality harms society. One could even believe that we are on the "too much inequality" side of the optimum.
Fair enough. Yes, PG is arguing that reducing income inequality is bad.
He did not address the hypothetical notion that there is a goldilocks zone of 'just enough' inequality, either side of which is suboptimal (due to the 'systemic destabilization' or some other deleterious effect of inequality having a dampening effect on productivity that exceeds inequality's positive effects on productivity after some level), and none of the critiques brought up such an argument either, so I didn't feel the need to address that.
It's not clear that reducing income inequality is bad, please explain. The arguments against eliminating income inequality rest on the idea that people won't do a hard or bad job if it didn't pay more than other easier or nicer jobs. While there are very likely jobs that people wouldn't do for a small multiplier on some ideal base pay for some ideal good job. Increasing marginal tax rates, which is the actual way that actual people suggest we handle income inequality, doesn't actually put a cap on pay.
I'm not going to rehash PG's entire article. Feel free to address all of the arguments in it so we can avoid an endless, unconstructive merry-go-round.
And I'm not going to point-by-point refute arguments that aren't particularly convincing, but here's some thoughts.
> Closely related to poverty is lack of social mobility.
It's not just closely related, when considering income inequality the two converge. It's simple arithmetic really. When poverty wages are a lesser multiplier (i.e. income inequality were less) of wealth wages (let's say 2), then it's obvious how to lift oneself out of poverty, split a home with another person earning an income.
> you don't have to grow up rich or even upper middle class to get rich as a startup founder, but few successful founders grew up desperately poor
Sure, but a rich founder has a clear advantage, in the same way that a founder at Harvard has a clear advantage. It's a lot easier to ask a friend/colleague/parent for money than a stranger.
> For example, let's attack poverty, and if necessary damage wealth in the process.
Yes. The way we attack poverty is to spend money to improve schools, spend money to improve transit, spend money to provide food for low cost. Where does that money come from, taxes. If we just talk about fixing poverty, we run the risk of not actually spending money and fixing the problem. Ignoring the greater context of politics, and the almost 100% sign on of republicans to the Grover no new taxes pledge, in order to actually get a mandate to fix anything, the alternative has to be upfront and direct about taxes.
If you'd like me to address arguments directly feel free to respond with something less dickish than telling me to read an article that I've already read.
>Sure, but a rich founder has a clear advantage, in the same way that a founder at Harvard has a clear advantage.
PG didn't suggest otherwise. He didn't say that wealth doesn't beget wealth. He said the absence of it does not prevent one from generating wealth.
He's not arguing against the idea that entrepreneurship contributes to income inequality. He is saying that the manner in which it produce income inequality is not harmful to society, because incomes are becoming more unequal by individuals generating wealth, and not by siphoning existing wealth that others have.
This is just example of how you misinterpret his arguments in a mad rush to defend economic orthodoxy.
Could you please respond to my whole comment rather than cherry picking one thing I said.
> wealth doesn't beget wealth
The return on an investment in the S&P 500 over the past 50 years undermines this.
> absence of it does not prevent one from generating wealth.
Prevent is such a strong word. I'm not technically prevented from breaking the longest free-fall record. However, I do not have 1000s of skydives under my belt or connections in the community of record breaking skydiving. While I'm not technically prevented from getting those things, I'm behind the curve compared to someone that has those things.
> the manner in which it produce income inequality is not harmful
But he doesn't really present any real evidence that this is the case. Now, I agree, that some startups produce new wealth as some percentage of the wealth that their founders, investors, and employees reap. But it's obviously always more complicated than that. Take, for example, the Microsoft office suite, which by almost any measure created an immense amount of wealth. However, it also made a large number of jobs obsolete, and thus "redistributed" the wealth from people working typist style jobs. Take for example, smartphones, which again, have created an immense amount of wealth. However, they also allow smaller independent contractors who would otherwise have rented an office space, and hired a secretary, to simply use their smartphone to manage their day, thus "redistributing" some amount of wealth from a lower-middle class job to an upper-middle class job. Now, obviously, I've ignored that maybe, the loss of these jobs created new jobs that the workers who were displaced could do, but given that PGs argument was basically just "We make the pie bigger" with almost no evidence, my argument of "It's really not that simple" with some examples should be at least equally convincing to you.
> This being HN, I won't elaborate on why. This place should be above pedantry and people coming from all viewpoints should be able to see why it's the case that if one is bad, so is the other.
no, actually you do need to elaborate on why. this is not pedantry. you should accept that reasonable people might disagree with you for good reasons and that your position is not "obviously correct" to the point of needing no explanation or support from its proponents.
> This place should be above pedantry and people coming from all viewpoints should be able to see why it's the case that if one is bad, so is the other.
That's some pretty weak logic. By this way of thinking, what's the difference between US-level inequality and African-dictatorship-level inequality? They both have the same impact, right?
No.. that is not the same logic at all. I did not say they're "the same". I said that if one is bad, the other is bad as well. It's just by a matter of degrees that it differs.
It's frustrating to debate a policy position when people don't even bother to understand what the relevant arguments they're disputing are.
>In the real world you can create wealth as well as taking it from others. A woodworker creates wealth. He makes a chair, and you willingly give him money in return for it. A high-frequency trader does not. He makes a dollar only when someone on the other end of a trade loses a dollar.
But wait a second, the woodworker doesn't get the wood from something? Which happens to be a natural resource? So he's just siphoning wealth from the earth to his own pockets (by adding some more value).
You could argue that the woodcutter is "siphoning wealth from the earth to his own pockets". Or, you could say that the woodcutter is getting paid for his labor.
But the woodworker buys the wood from the woodcutter, rather than cutting it himself. He creates wealth by making a chair that is more valuable than a block of wood.
And I would say that "siphoning wealth from the earth to his own pockets" is antithetical to "adding some more value".
> The crux of your argument?—?that “Ending economic inequality would mean ending startups”?—?is both a straw man (no one’s advocating eliminating income inequality completely) and untrue (people can still pursue whatever they want?—?they just have to pay more taxes on it.)
Will you get a 80% tax rebate on your opportunity cost if your startup, as most do, fails? Of course not, which means you've dramatically shifted the EV of the proposition.
I disagreed in large with PG's original essay but also see the challenge as being bigger than simply increasing taxes. As taxes increase in the US, the wealthy look outside the US for storing wealth and exploit tax loopholes.
The current tax situation is a combination of being low enough to make offshoring wealth attractive to only the super wealthy, whilst being not so high as to lose campaigning and lobbying financial support for each political party.
Increasing taxes is the solution, but ensuring wealth stays in the US and tax is collected is a whole other ball game.
Both response essays have really compelling points, and even as I read PG's original, I felt like he was catastrophizing.
Something that none of the above mention is that, as "job eliminators," we need to start considering how to keep the people who have no chance at a job can continue to live reasonable lives.
California, despite being the home of Silicon Valley, still has "truck driver" as the most common occupation as of 2014. [2] In ten years we'll probably be seeing the first self-driving trucks; in 25 the occupation will likely be gone for any runs that don't require humans to unload the truck at the other end (home or small commercial delivery drivers, movers, etc.; a lot of trucks just move goods from one manned loading dock to another).
Before you say they'll work at some new job, what other jobs at that skill level won't also be automated by that time?
We need a serious movement toward guaranteed income. Capitalism needs consumers; if most of the population can't get jobs, who will be the consumers? And what will happen to those people? Without guaranteed income, they'll be desperate; I don't exaggerate in suggesting that the poor will eventually get to the point of trying to overthrow or attack the rich. A brief look at the fall of various past civilizations will reveal many parallels, and even if the rich could sufficiently arm themselves to resist, living in cyberpunk-style walled enclaves, that's not a future I would want to live in.
Making sure everyone has enough to live a decent life is the only path I can see to a humane future.
[1] http://cryoshon.co/2016/01/02/a-response-to-paul-grahams-art...
[2] http://www.npr.org/sections/money/2015/02/05/382664837/map-t...
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