Tuesday, May 19, 2015

It's Never Basic

I was reading The Atlantic, and came across an interesting article on the idea of a guaranteed basic income. At one point, it mentions a German experiment in crowdfunding that has given about a dozen people, chosen by a lottery:

Indeed, the stories told by the winners are inspiring. For example, one recipient is using his newfound freedom to write his dissertation. Another winner quit his job at a call center to study and become a teacher.
And while this is a small sample within a small sample, it raises one of the fundamental issues with a guaranteed basic income that isn't backed up by a command economy - how does one ensure that the basic goods and services that people need to get by will be provided if they're not making them themselves?

Consider a small community of ten people. Alice and Bob are farmers and are capable of producing enough food to feed the entire community. Carol and Don are clothiers, and again, are capable of outfitting the entire community. And finally, we have Edith and Fred, who are homebuilders - and they have the ability to house the entire community. Now, back in the day, the three couples relied on themselves or each other for the basics (food, clothing and shelter) and the other four members of the community provided luxuries - things that Alice, Bob, Carol, Don, Edith and Fred wanted, but didn't need to live. But now, machines can do the things for Alice, et al that the other four community members did more cheaply. If Greg owns the machines, there is a problem. One can talk about giving the remaining three members of the community a basic income that they don't have to work for in order to buy goods and services from the other members of the community, but if we remove money from the equation for a moment, you can see the problem. Unless Alice, et al continue to produce enough to supply everyone, you don't have anything to give the remaining three members of the community. And if they do, they're basically giving it away, because Greg's automation can do whatever they would have done for the farmers, clothiers or builders.

Of course, in a larger community, things become much more complicated, and very quickly, but the basic problem remains the same. If producers make goods and services to meet the demand of the people who can afford to pay for them directly by trading value for value, if you have a number of people on a basic income who aren't necessarily making goods and services that the producers of necessities want, what do they do to justify producing things for them? At some level, a basic income only works if there is a predictable surplus of goods and services for them. But in a society where people can chose, how do you get there?

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