Basic Income, and other nonsense

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I’ve been looking into the economic philosophy behind the basic income. Some keywords might be automation, the singularity, Manna, etc… I’ve decided that it is all bunk, based on ideas that are half-cooked and misinformed.

We have been through this before. We’ve been doing this since the moment someone decided to put a stick into the ground to help plow their field.

The argument for basic income goes something like this: We need to guarantee everyone a basic, livable income because robots and computer programs are taking over our jobs. We should be able to afford it, because we’re super-duper rich now, and it will help free people up to do what they should be doing: being creative!

The problems with these kinds of argument are many.

One, jobs are not disappearing, or at least, not for the reasons you think they are. This is a difficult concept to fully grasp, but it is the same argument for free, global trade and free and open markets. It is actually the same arguments for the free interchange of ideas in academic and free / open source software communities. The basic idea is this: People should be free.

When people are free to act in an economic context, they will always help the economy grow, provided they pursue noble adventures such as feeding their family, clothing themselves, and finding a nice place to live that isn’t a disaster area. I am confident when I say this. I am also confident that a dividend of the economic growth they are responsible for will end up in their pockets. That’s just how life works.

Those who believe the machines will take over our jobs are forgetting some very fundamental things. First, why do we have machines taking over people’s jobs in the first place? And second, what really happens when they do? The answer to the first question is that people are greedy. They will always try to do those things that give the best benefit to themselves and those they care about. The answer to the second is that everyone’s life improves, provided that they follow basic moral directions such as “don’t murder” and “don’t steal” and “don’t lie”. (Sounds familiar?)

Let’s “follow the money” and see what happens when a company decides to fire it’s million-person workforce, hire a thousand engineers, and put them to work installing a million machines to replace the million factory workers. Let’s be cold and heartless about it, and not try to be politically correct to make things sound nicer than they are.

What happens is the following:

  • A million low-skill and low-paid workers lose their jobs. They are never, ever going to get those jobs back. Sorry. Sucks to be you.
  • A thousand high-skill and high-paid workers get jobs that appeared out of thin air. Where do they come from? Given that there isn’t an army of unemployed engineers, they have to be trained. Where do they get trained? In the school of Real Life and Hard Knocks. 1,000 new people need to join the engineering profession and begin the process of becoming master engineers. Where does that 1,000 come from? Why, there’s a million unemployed people over there eager to do anything to make money! So we have 999,000 people left to employ.
  • The company makes billions.
  • The company spends billions. Or rather, they spend some of it and then invest the rest in a bank account, the stock market, etc… The owners of the companies and the executives, naturally, get to determine how large sums get spent. Even the things that get spent on pointless luxuries go somewhere. Cavier comes from fish. Someone has to raise the fish, collect the eggs, prepare them, package them, transport them, and finally sell them to the rich. And then someone has to prepare and serve it. That money all ends up in the pockets of some worker somewhere. Let’s say some of it ends up paying for machines or robots or other executive’s pockets. Follow the money, eventually it is turned into someone’s wages. The point is this: There is new demand for luxury goods, and there needs to be more people in that industry. Some of the factory workers that were laid off get to work in this growing industry.
  • Let’s talk about investments. The company decides to use some of the profits for R&D, meaning they need scientists and researchers and more engineers. Where do they come from? That new demand stresses those industries, and so there is incentive for more people to join that industry. More laid off workers are employed there in one capacity or another.
  • The rest they send off to investment banks on stocks or just to cool its heals in a low-yield investment such as a bank account. Where does that money go? It goes into the pockets of people trying to start new companies or expand existing ones, and willing to either take a risk or promise to pay back interest. What do they do with that money? They buy things and hire people. More workers get employed.

The point of this exercise is that when you “follow the money”, you see that in a capitalist economy, it all ends up back in the pockets of the low-income low-skill workers. When you hire a high-skill, high-wage worker, that creates a vacuum that creates an opportunity for a low-skill low-wage worker. When you buy something, it creates demand which requires more economic output which eventually translates to opportunities for low-wage low-skill workers.

Low-wage, low-skill workers can work in careers that will gradually translate them into high-wage, high-skill workers. Or they can stagnate because they are pleased with their position until the next economic disruption comes around that causes them to rethink their economic strategy.

This is how the US went from hunting fish and deer to the most advanced economy in recorded history all in the matter of a few hundred years. This is how we will continue to grow and grow and grow, overcoming every economic challenge by letting the free market do its thing.

Now, the question on your mind should be, “Why aren’t we doing this now? Why is unemployment so high, why are we not hiring more people, etc?” The answer is blazingly obvious: We aren’t doing this right now! We live in a perverse economy, and economy that rewards bad behavior and punishes good behavior. Right now, there is no incentive for any company to invest in America. All the capital in America is diverted to where it is needed most, places where it will get the highest rate of return. Right now, that is not the US! That’s why China and Europe are doing better: We’re sending our cash over there because we want to earn more money!

How do we get back to a non-perverse economy? Why, one part limitation on government, and one part religion. Limiting government puts power back into the hands of regular folks, and creates an environment where capital will flow back to our country. Lower taxes, reduced regulations, no more favoritism, etc, because these things all stifle rather than encourage independent action. Religion is there to pick up the pieces when it fails individuals.

The idea, in my mind, that during this time of economic disruption, that there will be starving parents with starving kids is utterly absurd to me. Churches like mine are more than ready and able to feed these families. We can also help the father navigate this new economy. That’s because we bring people together, people who know what works and people who don’t, the rich and the poor. The rich in the church want to share their wealth because that’s what Jesus wants them to do. They work hard to make sure they get the most bang for their buck and also put a personal touch on it.

We are experiencing problems today because we have forgotten how important religion is to the common man. It used to be that we had independent communities of charitable people who would work together to help each other out, but now that atheism is sweeping our country, we are all left to fend for ourselves with whatever resources we have, with little incentive to share our surplus with one another.

On a final note, I want to share with you my understanding of the eventual Zion that our church would like to establish. In Zion, there are no poor or rich: all are the same. Not because we are all carbon copies of each other and we each own and eat the same things, but because rich and poor is a stupid way to group people. In Zion, the bishop figures out the best way to help people who are not very productive become productive. He draws on the people in the community and their expertise. In Zion, people own stuff and are expected to make profit with it. With the profit, they feed their families and pass the surplus on to the bishop to help the poor become rich. Do you see why there are no poor or rich in Zion? You may make the distinction between those with surplus and those without, but even then, with the careful eye of the bishop, no one will be under-served or forgotten.

As an example of what Zion could be like, consider the recent story that appeared in one of our church’s General Conferences. A young mechanic was put out of work from his auto repair shop. He had nowhere to turn and couldn’t find work. After exhausting all of his resources, he turned to his ward and asked the bishop for help. The bishop was ready to help with rent payments and food and such, and the other members got to work trying to figure out how to help him create his own opportunity, even going so far as to investigate possible alternative careers. In the end, they decided together that maybe opening an auto repair shop in another location that was under-served was a viable option. But where to raise the capital? One member let the man use his barn. Another member had some of the necessary equipment. Another member knew how to do advertising and marketing and helped to spread the word and get the business off the ground. Another knew how to do accounting and legal things and helped the man navigate that. Before long, he was the proud owner of an auto repair shop.

Do you see the difference between this model of community helping each other, and the model of writing a check to everyone each month? The former brings people together in a common goal of each other’s well-being. Want and necessity drive people to bond more closely. The latter reduces people to a number, and separates people from each other.

In fact, one thing basic income people never talk about is what happens if everyone decides to stop working altogether? That is the issue we had in the USSR and other socialist systems. What happens when people don’t try their very best or don’t pay particular attention to producing something really want? The answer is economic ruin. You can take a burgeoning economic powerhouse of a country, flush with natural resources and a workforce eager and ready to do anything and everything to make each other’s lives better, and reduce it to the miserable conditions we found in East Germany and the USSR in a matter of years if you employ the same methods they used. Basic income was one of those methods.

Please, don’t be ignorant about basic economics and alternatives. Please don’t fall for the same trap that many nations fell for a hundred years ago! It took nearly a century to dig themselves out of that hole. Why would you want to fall back in?

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