Basic income will be a punch in the air

[cosmicalstorm]

This is something that I have thought about every now and then. I think there was a Donal Duck cartoon where old Scrooge gave away all his money and this happened. Solving poverty will be harder than basic income perhaps.

Posted by Eliezer Yudkowsky

Michael Vassar and myself have independently arrived at the suspicion (in Vassar's case, possibly an outright conclusion) that low-income individuals are often stuck in traps with multiple parties competing to extract all available rents from them, e.g. the Ferguson Police Department. Then marginal interventions to cause low-income individuals to have more money, such as the Basic Income or GiveDirectly, will not be effective on whole countries or whole towns, though they might be effective if you give one individual enough money without affecting the equilibrium level of rent-extraction for their whole community. If we institute a Basic Income, rents will go up, colleges will charge more tuition, doctors will charge more to low-income patients, and mysteriously there will still be poverty afterwards - somehow society will seem hardly better off than before.

The reason I suspect this is that we went from 98% agricultural employment to 3% agricultural employment, all this tremendous productivity improvement, and somehow there are still poor people. Somewhere, somehow, there are restoring forces producing a Poverty Equilibrium. Michael Vassar thinks it's competing monopolist, monopsonist, and legalist rent-extractors. It's certainly an obvious guess and I don't know any better. The Poverty Equilibrium has defeated positive forces far more greater in relative magnitude than Basic Income or GiveDirectly. I don't think a Basic Income will be the step that finally defeats it, when a 50-fold improvement in agricultural productivity wasn't enough. Somehow, someway, there will still be people leading lives of horrible desperate poverty, forced to humiliate themselves and work double jobs and all the rest of it, in developed countries that have Basic Incomes... unless one were to understand in advance why it would happen, how it would go wrong this time, and somehow prevent it.

ADDED: It is true that poor people in developed countries are substantially better off now than in the Middle Ages. I mean, most of them aren't dead. They're eating low-quality food that produces adipose tissue disorders with attendant nosedives in quality of life, further confusing various idiots who think they must be "getting enough to eat" since they show the outward signs of divine punishment for the sin of Gluttony; the only food they can afford is poisonous but that *is* better than literally starving to death. They have to scrape and smile and humiliate themselves before Ferguson police officers and McDonald's managers, but the medieval lord of the manor was probably legitimately worse than that in a lot of cases. They're in jail but they're not being executed, usually. Their lives are horrible, there's still a whole 'poor' sector of the economy, but things are significantly better than they were centuries earlier.

It's possible that the Basic Income would produce the next marginal increase - people in a condition of constant material suffering and anxiety and panic over money, working double hours with almost all their income being extracted from them as rents, but still a *little* more able to say no to horrible jobs and being treated a *bit* better by the manager and being *more* able to pay Ferguson Police Department fines and spending *less* time in jail and having to work only 1.5 jobs instead of 2 jobs and so on. But I'm also worried that a purely monetary gain may accomplish literally nothing if the rent-extraction hypothesis is right - that all gains up until now have been from other societal forces than mere income.

[salm]

If rent is the main form of extraction, maybe a basic income needs to be paired with good social housing?

As for the availability of decent food for low prices: I can not see how that is true. You can buy dirt cheap food which is healthy at the same time. It isn´t a problem of availability, it is a problem of knowing how to actually buy and prepare cheap, healthy food and resisiting the marketing of cheap and convenient shit food.

[K. A. Pital]

Eliezer tries to solve a problem that was already solved under socialism, where people got housing for free. The market will always charge more. He discovers that the cost of life will go up when you give the poor more income, because capital is brutal (not necessarily the capitalists - but the market). The only real solution is the deconstruction of market mechanisms - when you cannot charge more because there is no market. But that is a very scary solution, so no one is interested in seriously discussing it.

[Dominus Atheos]

Wrong kind or rent. That article is talking about Rent Seeking, or:

When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.

For example:

The classic example of rent-seeking, according to Robert Shiller, is that of a feudal lord who installs a chain across a river that flows through his land and then hires a collector to charge passing boats a fee (or rent of the section of the river for a few minutes) to lower the chain. There is nothing productive about the chain or the collector. The lord has made no improvements to the river and is helping nobody in any way, directly or indirectly, except himself. All he is doing is finding a way to make money from something that used to be free.

Or the example in the article, the Ferguson Police Department.

Rent-seeking is a very serious obstacle combating poverty in a capitalistic society, and needs to be dealt with as part of a comprehensive populist anti-poverty reformation.

[Civil War Man]

As for the availability of decent food for low prices: I can not see how that is true. You can buy dirt cheap food which is healthy at the same time. It isn´t a problem of availability, it is a problem of knowing how to actually buy and prepare cheap, healthy food and resisiting the marketing of cheap and convenient shit food.

Actually, availability is a major problem. Good food is cheap for people who have access to it, but there are areas, predominantly isolated rural areas and inner cities, where there is little to no access to it. It's easy to get fresh food if there's a grocery store or farmers' market just around the corner, but not if the closest one requires traveling to the next town over or taking a 30 minute subway ride.

It's a concept known as food deserts.

[Simon_Jester]

If rent is the main form of extraction, maybe a basic income needs to be paired with good social housing?

"Rent" here is an economics term.

It does not just mean the money you pay someone for the privilege of using their property.

It is 'rent' in the sense of "rent-seeking." Rent is income gained from permanent control of an asset other people need. Rent paid for land is the most obvious example, but far from the only one. In another thread we're talking about how water rights are handled in the American West, where basically the oldest claims automatically win precedence over others. Having a 19th century-vintage claim on local water supplies that you can then sell to the highest bidder is, in economic terms, 'rent.'

One of the classic examples of seeking to gain 'rent' income, which I admit I got from Wikipedia, is this: Imagine a medieval nobleman who owns land including a river. He installs a chain across the river to block the passage of boats, then charges a toll for anyone who wants to pass the chain. Now, this nobleman has not improved the river. He has not provided a new good or service. All he is doing is found a way to charge money for something that already existed.

Likewise, if someone found a way to charge people for air, that would be rent-seeking.

So Yudkowsky (and, apparently, Vassar) are arguing that there are so many organizations devoted to extracting money from poor people without giving them any real value in compensation, that even if you give them free money, these groups will simply work out a new way to take it from them. The lot of the poor might improve, but poverty won't go away as such.

Is this true? Hm. Well, certainly giving people a flat basic income won't eliminate exploitation. However, it drastically increases choice because it creates a lower limit on how far you can fall in terms of your ability to acquire the necessities of life. It is basically impossible to starve to death in a society where everyone gets paid enough money to buy food, whereas it is at least possible to starve in a rich society with no such guarantee... if you happen to be the guy with no money.
_________________________

As for the availability of decent food for low prices: I can not see how that is true. You can buy dirt cheap food which is healthy at the same time. It isn´t a problem of availability, it is a problem of knowing how to actually buy and prepare cheap, healthy food and resisiting the marketing of cheap and convenient shit food.

People living in high-poverty areas, especially in the US, have other problems you may not fully be aware of.

One is that they are forced to use their time inefficiently (i.e. spending three hours on city buses to get to their job), so they do not have time to engage in food preparation, and instead wind up having to satisfy their hunger by impulse-buying whatever food happens to be conveniently available and high in calories. In other words, junk food.

Another is that stores marketing good food are often hard for them to physically reach from the places they live, further increasing the time and difficulty involved in obtaining good food, even if that food is cheap.

Yet another is chronic fatigue and physical/mental exhaustion, which tend to increase someone's dependency on sugar, caffeine, and other common components of 'bad food.' I'm a lot more likely to drink sugary, caffeinated soda if I'm half-dead from fatigue than if I'm not.

Eliezer tries to solve a problem that was already solved under socialism, where people got housing for free. The market will always charge more. He discovers that the cost of life will go up when you give the poor more income, because capital is brutal (not necessarily the capitalists - but the market). The only real solution is the deconstruction of market mechanisms - when you cannot charge more because there is no market. But that is a very scary solution, so no one is interested in seriously discussing it.

I think it would be possible to convince Eliezer Yudkowsky to become a socialist, but you would have to come up with arguments for it more persuasive to him than the current arguments in favor of markets. He genuinely does seem to think that markets are desirable only as an instrumental good, or such is my impression.

Anyway, more on topic, this is strictly true, you aren't going to have a large desperately poor class under socialism unless there is something very wrong with the administration of socialism, or unless the entire country is very poor. There may still be homeless people because they're mentally ill drunks who get kicked out of state housing and don't file the paperwork for another place of residence, but that's not the same thing.

The reason this does not automatically convert more people to socialism than it does, is the counter-argument that everyone is on average worse off under a less efficient economy and that socialism is inefficient. In which case it reduces to the question, is it better to allow 10% of the population to continue suffering so that the other 90% can be better off?

[The socialist counterargument, or one of them, is that capitalism immiserizes, so the "10% versus 90%" argument is faulty, because sooner or later capitalism will turn all that economic efficiency to the advantage of the elite and none will be left to trickle down to anyone else.]

[K. A. Pital]

They (Eliezer and the others who notice this problem) make the common mistake of thinking that rent-seeking does not come with an offer of value. They are fundamentally wrong. The landlord, in a very simple example, can and most likely will charge as much as his tenant can feasibly pay. In case of a poor tenant, the landlord is offering value (housing), and if the poor tenant suddenly got richer, the landlord can decide that, since demand is expanding, it is time to charge a higher price.

This is basic capitalism. The market will suck out your savings to the penny no matter how hard you try. Notice that after transitioning to capitalism, the savings norm in Asian societies, especially where capitalism is mature, starts to go down. Even people who are conditioned culturally to save are being leeched dry - what to say of the poor people in societies that live under capitalism for ages?

I am very sure Starglider will soon come to explain just how wrong I am, but he'd have a hard time doing it since I very much accept that, under the rules of capitalism, immediately charging a higher price for a previously free or low-priced service is perfectly normal if demand expands and can now sustain that higher price. If there's income and profit to be had, why not have it?

[Simon_Jester]

They (Eliezer and the others who notice this problem) make the common mistake of thinking that rent-seeking does not come with an offer of value. They are fundamentally wrong. The landlord, in a very simple example, can and most likely will charge as much as his tenant can feasibly pay. In case of a poor tenant, the landlord is offering value (housing), and if the poor tenant suddenly got richer, the landlord can decide that, since demand is expanding, it is time to charge a higher price.

This appears to be associated with the definition of rent.

Correct me if I am wrong, but 'rents' refer to income that comes from things that do not involve producing a new good or service. Paying the 'rent' may be beneficial to the payer, compared to the alternative (homelessness, having no water supply, having your boat crash into the chain across the river).

But from the point of view of the overall economy, nothing new has been produced. The house or water supply or river was already there. It was just as usable before I demanded that you write me a check. All that matters is that I have power to deny access to this resource or process or thing, and am charging you money for the privilege of not having your access denied.

Some amount of 'rent' would be necessary to make any non-command economy function, of course. And 'rents' were ubiquitous in pre-capitalist economies just as they are today... as the example of the chain across the river demonstrates. Or for that matter the ubiquitious custom of tenant farming- the landowner does not necessarily create anything new by renting land to tenant farmers.

But the core argument Yudkowsky presents in the passage quoted is that there are a particularly large swarm of rent-seekers converging on the poor. Some of them offer something in exchange for the rent (i.e. housing). Others offer nothing in exchange for the rent, or offer only "protection" from a threat they themselves created. And all of them will (as you say) cheerfully increase the rents they charge to match what their customers can afford to pay.

This is basic capitalism. The market will suck out your savings to the penny no matter how hard you try. Notice that after transitioning to capitalism, the savings norm in Asian societies, especially where capitalism is mature, starts to go down. Even people who are conditioned culturally to save are being leeched dry - what to say of the poor people in societies that live under capitalism for ages?

I am very sure Starglider will soon come to explain just how wrong I am, but he'd have a hard time doing it since I very much accept that, under the rules of capitalism, immediately charging a higher price for a previously free or low-priced service is perfectly normal if demand expands and can now sustain that higher price. If there's income and profit to be had, why not have it?

Markets certainly tend to exert a great suction force on anyone's savings. This, I would not dispute.

On the other hand, your living conditions are determined not so much by your savings as by the equilibrium balance level between your income and your expenses. People with zero savings can still live well as long as they have a secure income. And this is the theory behind guaranteed income payments. The real danger is that the price of all goods will increase until the guaranteed income becomes too small to live on... which you would of course have predicted.

It is this prediction that Yudkowsky and Vassar appear to have laboriously worked out by another method.

[Starglider]

This conversation seems to be operating under the assumptions of both inelastic demand and fixed supply, which is an extreme corner case. Under normal conditions, increasing profits will spur more investment, more production and more market entrants. The resulting competition reduces prices and margins until equilibrium is reached. Usually when this fails to occur it is due to heavyhanded and counter-productive government intervention, as we have seen in the UK housing market. Residential property prices are ridiculously inflated and rents are substantially inflated due to government restriction of supply via an insanely restrictive and byzantine planning system, coupled with a distorted monetary policy that panders to existing property owners and shareholders. It is true that asset price speculation and inflation is a contributing factor to housing cost increases, but this would be addressed by the same mechanism (increasing supply) if supply was not so artificially constrained.

In general then when states don't ridiculously distort supply we expect profit margins to be roughly constant, rather than cost/income ratio. This equilibrium may still be socially undesireable, but you can't even have the discussion unless markets are actually allowed to operate sensibly. States also mandate costs as well as outright restricting supply; e.g. ever more restrictive building codes drive up the price of construction. Of course nicer and safer homes are desireable in theory, but as with indefinitely increasing the minimum wage it is a trade-off against distortions and unwanted side effects. This is a fundamental problem that left-wing commentators often refuse to acknowledge; you cannot mandate standard of living improvements that depend on the provision of tangible goods (of higher quality or quantity) without inevitably increasing the minimum cost of living. Either the state picks up the cost or individuals do.

Health care is a qualitatively different issue because demand is so highly variable; even when abstracted to insurance, risks vary wildly between individuals. Nutrition, housing, even education and transport needs are much more common and predictable.

[Grumman]

Correct me if I am wrong, but 'rents' refer to income that comes from things that do not involve producing a new good or service. Paying the 'rent' may be beneficial to the payer, compared to the alternative (homelessness, having no water supply, having your boat crash into the chain across the river).

Your definition is right, but one of your examples is wrong. Renting somebody a house is not rent-seeking behaviour. Houses do not grow on trees - they only exist because somebody went to the trouble of building them. And in most cases they went to the trouble of building them only because they would personally benefit from that house's existence, either because they wanted to live there themselves or because somebody else wanted a house for their own use and would pay the builder to provide one. It's not until you start sabotaging the alternatives that it becomes rent-seeking.

[K. A. Pital]

This conversation seems to be operating under the assumptions of both inelastic demand and fixed supply, which is an extreme corner case. Under normal conditions, increasing profits will spur more investment, more production and more market entrants.

How, if the food market is already an oligopoly with very few agents? Same for housing and construction, actually.

Residential property prices are ridiculously inflated and rents are substantially inflated

Commie talk! As a property owner, I spit on your 'ridiculously inflated' definitions. I can charge people with thousands, and if they pay, then so has the market spoken. And screw you and the other poor bastards, but I have mine. "Planning system" blah blah.

...but this would be addressed by the same mechanism (increasing supply) if supply was not so artificially constrained.

In Asian countries the supply of housing does not hit constraints: whole ghost towns are built here and there, but the prices are still going through the roof.

This is a fundamental problem that left-wing commentators often refuse to acknowledge; you cannot mandate standard of living improvements that depend on the provision of tangible goods (of higher quality or quantity) without inevitably increasing the minimum cost of living. Either the state picks up the cost or individuals do.

So modern houses are several times more safe than the ones built in the 1970s? You are seriously joking, comrade realtor.

[Patroklos]

Not where they built the ghost towns, markets vary in geographic size and shape.

[K. A. Pital]

Not where they built the ghost towns, markets vary in geographic size and shape.

That alone gives the lie to the claim that the market can magically expand supply of stuff if necessary.

[Zaune]

States also mandate costs as well as outright restricting supply; e.g. ever more restrictive building codes drive up the price of construction. Of course nicer and safer homes are desireable in theory, but as with indefinitely increasing the minimum wage it is a trade-off against distortions and unwanted side effects.

On the other hand however, any minimum standard we impose is liable to become the effective maximum standard because that makes the next quarterly profit report look better and to hell with the long-term consequences.

[K. A. Pital]

One more thing to remember: there are no alternatives. A market cannot coexist with abundance. If there is abundance, the market cannot be.

So any free alternatives will be destroyed; squatting and land seizure, even if done in places vacant for years, will be cracked down upon. Self-constructed slums will be suffering from 'accidental fires' (yeah right), and many other nasty things will also be done. The market shall not rest until non-market alternatives will be gone or reduced to insignificance.

[Starglider]

The market shall not rest until non-market alternatives will be gone or reduced to insignificance.

You should know better than to engage in such infantile anthropomorphisation.

[madd0ct0r]

This is basic capitalism. The market will suck out your savings to the penny no matter how hard you try. Notice that after transitioning to capitalism, the savings norm in Asian societies, especially where capitalism is mature, starts to go down. Even people who are conditioned culturally to save are being leeched dry - what to say of the poor people in societies that live under capitalism for ages?

I am very sure Starglider will soon come to explain just how wrong I am, but he'd have a hard time doing it since I very much accept that, under the rules of capitalism, immediately charging a higher price for a previously free or low-priced service is perfectly normal if demand expands and can now sustain that higher price. If there's income and profit to be had, why not have it?

Markets certainly tend to exert a great suction force on anyone's savings. This, I would not dispute.

On the other hand, your living conditions are determined not so much by your savings as by the equilibrium balance level between your income and your expenses. People with zero savings can still live well as long as they have a secure income. And this is the theory behind guaranteed income payments. The real danger is that the price of all goods will increase until the guaranteed income becomes too small to live on... which you would of course have predicted.

It is this prediction that Yudkowsky and Vassar appear to have laboriously worked out by another method.

Indeed, by that point of view the act of saving is a deflationary measure (including the rich tying it up since they spend much less of their income proportionatly), while anything that increases the monetary supply, the oil in the system will result in each unit of money being worth less, or prices rising.
Given a 2 country system where one has basic income and one dosen't, prices rising might not be the actual result.

[K. A. Pital]

You should know better than to engage in such infantile anthropomorphisation.

That is no anthropomorphisation; no more than I could antrophomorphise a shredder. In fact, in my very first statement ITT I noted how the very impersonal logic of capital will inevitably prevail over even the more benigh human nature of individual capitalists, if such had existed.

[Simon_Jester]

This conversation seems to be operating under the assumptions of both inelastic demand and fixed supply, which is an extreme corner case.

Demand and supply for what exactly?

If I were going to phrase this argument in terms of supply and demand I'd simply say that if you're in the business of marketing goods to poor people (or of extorting money from poor people), and poor people all simultaneously get more resources... you're going to look for ways to modify your services

So the prediction is that either the nature of what is supplied will change in order to support a price increase (the good outcome), or the same supplies will be offered at a higher price point by a de facto conspiracy of the suppliers (the bad outcome). Since the behavior of market economies in the past few decades has encouraged a certain cynicism, you get people predicting the bad outcome.

And rents on residences aren't the only issue that's being talked about here- otherwise the Ferguson police wouldn't keep coming up as an example.

Of course nicer and safer homes are desireable in theory, but as with indefinitely increasing the minimum wage it is a trade-off against distortions and unwanted side effects. This is a fundamental problem that left-wing commentators often refuse to acknowledge; you cannot mandate standard of living improvements that depend on the provision of tangible goods (of higher quality or quantity) without inevitably increasing the minimum cost of living. Either the state picks up the cost or individuals do.

The expectation seems to be, and I don't blame people for thinking this way, that improvements in standard of living should be consistently proportionate to improvements in the overall performance and efficiency of our economy. If we are all allegedly richer as a nation than we were forty years ago, but the individual citizens of the nation aren't any better off, one can argue that the citizens have been cheated.

Correct me if I am wrong, but 'rents' refer to income that comes from things that do not involve producing a new good or service. Paying the 'rent' may be beneficial to the payer, compared to the alternative (homelessness, having no water supply, having your boat crash into the chain across the river).

Your definition is right, but one of your examples is wrong. Renting somebody a house is not rent-seeking behaviour. Houses do not grow on trees - they only exist because somebody went to the trouble of building them...

I explicitly acknowledged this fact when I later said that you need some amount of renting going on for a non-command economy to function.

The subtext I didn't spell out, because I'm tired of always being pegged as the windy guy, is:

"If it's not a command economy you have to give people incentives to maintain necessary services, including services that consist of charging you money for the privilege of using a thing that would otherwise go unused. Because otherwise infrastructure and long term investment don't happen at all in capitalism; the only force powerful enough to get someone to invest in a facility that won't pay off for years is the desire to have a steady and permanent income stream from owning the facility later. Even if, on a day to day basis, you don't have to do anything to maintain your access to that income stream and it's just there, the way "you have a right to collect tolls on this river" is."

So, I'm sorry if you thought you needed to spell this out for me.

[K. A. Pital]

Hmm, Simon, I am not sure why you refer to this as a 'conspiracy of the suppliers'. They need no conspiracy, even no interaction. Say, every poor person gets 1000 dollars more compared to now. It is natural for any involved agent (protection racket, rentier, cheap cellphone providers, etc.) to raise prices even without consulting each other - and at no point conspiring - after receiving the knowledge about this law. It is natural even if they offer no additional service, too. Unless there is a way to keep the suppliers totally misinformed about the actual aggregate demand and the rise that just happened...

[Guardsman Bass]

One more thing to remember: there are no alternatives. A market cannot coexist with abundance. If there is abundance, the market cannot be.

That's not how scarcity works. Stuff being really, really cheap and readily available doesn't destroy a market, unless you want to argue that there's really no market for most food crops in rich countries (super-cheap, and far lower in real prices than they've been in centuries). You just end up with very low-profit margin trade, which plenty of companies are willing to do - just look at the hyper-competitive retail markets in the US and elsewhere, where the margins above operating costs are in the low single digit percentage.

It's why the whole "post-scarcity" idea is absurd. A "post-scarcity" society didn't abolish scarcity - it's just that production is so good that everything's super-cheap, to the point where giving everyone the equivalent of a basic income is a trivial expense.

So any free alternatives will be destroyed; squatting and land seizure, even if done in places vacant for years, will be cracked down upon. Self-constructed slums will be suffering from 'accidental fires' (yeah right), and many other nasty things will also be done. The market shall not rest until non-market alternatives will be gone or reduced to insignificance.

It was the non-market alternative to capitalism that had to keep people in the country under threat of arms with strong border patrol systems, and not the other way around in the twentieth century - as you are undoubtedly aware of. Same thing in the US when slavery still existed - the slave states dependent on a labor force outlawed from freely choosing to work where they willed needed active patrolling and enforcement, while the northern and western states had to engage in enforcement just to keep more people from moving in. Seems like the more market-oriented societies are the more popular ones, the ones that people choose with their feet.

And that's not what happened with squatting in the US. Instead, they developed a whole set of rules about how it would go down so that squatters could make claims to any development they did on land. Not that squatters were something to be praised here anyways, considering they usually served as the vanguard for seizing indigenous lands ahead of the US and state governments.

The expectation seems to be, and I don't blame people for thinking this way, that improvements in standard of living should be consistently proportionate to improvements in the overall performance and efficiency of our economy. If we are all allegedly richer as a nation than we were forty years ago, but the individual citizens of the nation aren't any better off, one can argue that the citizens have been cheated.

It depends on what measures you want to use to determine productivity. I don't completely buy this attempt at arguing that income has actually tracked productivity in the US rather than diverging from it, but it has some interesting points.

. . . .

In any case, back to the OP. Basic Income advocates aren't treating it as a silver bullet for all of societies' problems - the libertarians I read who support it also tend to support legal and police reform in places like Ferguson, and so forth. It's just a really good policy for alleviating suffering and providing some income stability that isn't tied to a particular employer. His "rip-off" argument is a lot like conservatives who claim that raising the minimum wage will just cause more inflation that will erase the gains, something that hasn't happened at the levels we've raised it to.

[K. A. Pital]

That's not how scarcity works. Stuff being really, really cheap and readily available doesn't destroy a market, unless you want to argue that there's really no market for most food crops in rich countries (super-cheap, and far lower in real prices than they've been in centuries). You just end up with very low-profit margin trade, which plenty of companies are willing to do - just look at the hyper-competitive retail markets in the US and elsewhere, where the margins above operating costs are in the low single digit percentage.

It's why the whole "post-scarcity" idea is absurd. A "post-scarcity" society didn't abolish scarcity - it's just that production is so good that everything's super-cheap, to the point where giving everyone the equivalent of a basic income is a trivial expense.

It is not absurd, it is just the fact that food is not abundant. In fact, the only abundant resource is probably fresh air, but even that could be driven out of abundance in some areas. Very low profit margins destroy markets: they stop the growth of profit and then require massive government injections - like the 'cheap food' in the Western countries outcompetes everything else because their markets are (1) protected through various protectionist schemes from Third World food competition and (2) subsidized massively.

It was the non-market alternative to capitalism that had to keep people in the country under threat of arms with strong border patrol systems, and not the other way around in the twentieth century - as you are undoubtedly aware of. Same thing in the US when slavery still existed - the slave states dependent on a labor force outlawed from freely choosing to work where they willed needed active patrolling and enforcement, while the northern and western states had to engage in enforcement just to keep more people from moving in. Seems like the more market-oriented societies are the more popular ones, the ones that people choose with their feet.

I am not sure why you think that is a counterargument. It is true, but so? The relevant fact is: I did not have to pay rent. Almost nobody had to. I did not have to pay a mortgage for decades, either. No market means no market. To expunge the alternatives, usually market nations sanction them (severely, up to a total trade blockade), if they cannot muster enough force to violently destroy them outright. This applies to both precapitalist order and socialist order. A tiny addition: there is a flight of refugees from poorer capitalist countries to the richer (many of the poorer ones are more 'market-oriented' than the West European countries which have lots of compensatory social mechanisms, like extending the rent rights to infringe on private property rights due to 'social necessity'). However, you do not seem to be terribly concerned when you advocate capitalism without borders, even though it seems people vote against capitalism in poorer countries with their feet.

And that's not what happened with squatting in the US. Instead, they developed a whole set of rules about how it would go down so that squatters could make claims to any development they did on land. Not that squatters were something to be praised here anyways, considering they usually served as the vanguard for seizing indigenous lands ahead of the US and state governments.

I am pretty sure that squatting in Europe is cracked down upon. I am not knowledgeable enough to comment on what happens in the US.

[Simon_Jester]

Hmm, Simon, I am not sure why you refer to this as a 'conspiracy of the suppliers'. They need no conspiracy, even no interaction. Say, every poor person gets 1000 dollars more compared to now. It is natural for any involved agent (protection racket, rentier, cheap cellphone providers, etc.) to raise prices even without consulting each other - and at no point conspiring - after receiving the knowledge about this law. It is natural even if they offer no additional service, too. Unless there is a way to keep the suppliers totally misinformed about the actual aggregate demand and the rise that just happened...

IF this happens...

Market economics predicts that whoever keeps selling cell phones at the old price will outbid the competition, win a bigger market share, and make all the greedy fools he's competing with look like idiots. Impoverished idiots, because he's selling phones and they aren't.

What is required for the poor's money to automatically be soaked up with no actual improvement in their lifestyle would be not just natural market forces, but an active effort by suppliers to avoid letting anyone 'defect' by simply offering the same service at a fixed price, or one that tracks inflation.

This effort may not be coordinated but it will need to have the same effect that creating a "cell phone cartel" would.

To quote Adam Smith:

"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings..."

One more thing to remember: there are no alternatives. A market cannot coexist with abundance. If there is abundance, the market cannot be.

That's not how scarcity works. Stuff being really, really cheap and readily available doesn't destroy a market, unless you want to argue that there's really no market for most food crops in rich countries (super-cheap, and far lower in real prices than they've been in centuries). You just end up with very low-profit margin trade, which plenty of companies are willing to do - just look at the hyper-competitive retail markets in the US and elsewhere, where the margins above operating costs are in the low single digit percentage.

It's why the whole "post-scarcity" idea is absurd. A "post-scarcity" society didn't abolish scarcity - it's just that production is so good that everything's super-cheap, to the point where giving everyone the equivalent of a basic income is a trivial expense.

One could reasonably argue that we are not "post-scarcity" in food given that there are still a lot of people spending a third of their income on it.

A better example of "post-scarcity" economics would be, say, drinkable water in the US. If you're willing to drink tap water, water is damn near free, and about the only way to die of thirst is if someone locks you in a closet or strands you in the desert.

There's still a market in beverages, but the supply of basic tap water is so cheap and ubiquitous it isn't even monitored meaningfully except in the driest parts of the country. In a bad year.

It was the non-market alternative to capitalism that had to keep people in the country under threat of arms with strong border patrol systems, and not the other way around in the twentieth century - as you are undoubtedly aware of. Same thing in the US when slavery still existed - the slave states dependent on a labor force outlawed from freely choosing to work where they willed needed active patrolling and enforcement, while the northern and western states had to engage in enforcement just to keep more people from moving in. Seems like the more market-oriented societies are the more popular ones, the ones that people choose with their feet.

Slave economies had a market, it simply decided that labor was part of an employer's capital budget and tried to legally enforce that.

The Soviet Union, honestly, had tyranny for a lot of reasons. Some of them had little to do with its socialism and much to do with Lenin and Stalin's choice to set the precedent that the Soviet government would rule by intimidation. People were trying to leave Russian in large numbers before the Communists took power too, after all- because Russia was poor long before the communists took over.

Also, capitalism is often kept in place by force, but this force is mostly invisible except to the underclass, because there is no reason to direct it against the people who are 'winning.' Whereas in most other systems, people who are winning in one way (i.e. have money) are NOT necessarily winning in all other ways, and may seek to escape for fear of losing something else (i.e. their lives, due to ethnic persecution).

It depends on what measures you want to use to determine productivity. I don't completely buy this attempt at arguing that income has actually tracked productivity in the US rather than diverging from it, but it has some interesting points.

I don't have time to read this right now, but I will observe that whether income has tracked productivity may depend on whose income you track. And even if that is a fair argument (is, isn't, I'm not going to say)...

Again, people will still feel cheated if you create a nation where the top half of the population has experienced a 50% improvement in their standard of living, while the bottom half has experienced only a 10% improvement. Because the qualities like hard work, law-abidingness, and discipline that are SUPPOSED to lead to improvements in your well-being are not exclusive properties of the top half of the country. You can't claim that the people on top earned everything they just received, without by extension claiming that people on the bottom deserve orders of magnitude less. And people on the bottom know this isn't true.

In any case, back to the OP. Basic Income advocates aren't treating it as a silver bullet for all of societies' problems - the libertarians I read who support it also tend to support legal and police reform in places like Ferguson, and so forth. It's just a really good policy for alleviating suffering and providing some income stability that isn't tied to a particular employer. His "rip-off" argument is a lot like conservatives who claim that raising the minimum wage will just cause more inflation that will erase the gains, something that hasn't happened at the levels we've raised it to.

This is true.

Yudkowsky, when talking about subjects like economics, is very sensitive to his own reasoning and often not so insensitive to empiricals.

[K. A. Pital]

Market economics predicts that whoever keeps selling cell phones at the old price will outbid the competition, win a bigger market share, and make all the greedy fools he's competing with look like idiots. Impoverished idiots, because he's selling phones and they aren't.

Actually, market economics predicts no such thing. There is nothing in economics that would suggest the equilibrium price is immune to a demand shock and will stay the same by the mechanism you describe. But even if we do away with equilibrium completely and say the market is in a state of disequilibrium, it becomes even more clear that nothing so simplistic will happen when demand massively expands.

[madd0ct0r]

Would demand expand linearly?

Which is a terrible way of saying would demand for the same products increase, would the shopping basket stay the same, just doubled up, or would the money be spent on a much vaster array of goods and services? Since the latter seems likely, the only extra money avaialbe for the rent seeker to scoop up would the % allocated to their product.

Now, when the entire shopping basket is all produced by rentseekers, as are most of the alternitve new goods, yeah. infaltion results with no rise in standard of living. I think.