UBI proponents should be cognizant of stagflation. During the 1960s and 1970s, demand-side fiscal policy was based upon the Phillips curve, an observed correlation between low interest rates and low unemployment. After the oil supply shocks, this observed correlation began to break down as interest rates were lowered to compensate for the rise in fuel costs. By the late 1970s the US was experiencing stagflation, a combination of low interest rates, high inflation, and high unemployment, which should have been impossible according to the Phillips curve.
In reality the Phillips curve was too simple. What was happening was that since wage increases came to be anticipated due to the consistent low interest rate/moderate to high inflation environment, producers would preemptively raise prices to soak up all of the wage gains. This led to a wage/price spiral with no actual improvements in productivity.
Eventually stagflation was ended by dramatically raising interest rates and triggering a nasty recession.
UBI could lead to stagflation because the income allotments and any increases would be according to some formula known ahead of time. This means that producers could anticipate demand and simply raise prices to soak up any income increases.
Something to keep in mind when devising these systems.
Producers of most goods will not be able to raise prices, but providers of scarce goods with inelastic supply will be able to raise prices. Like land. Land has a perfectly inelastic supply, and thus expectations of more income will lead to increases in rent.
Whereas, by contrast, increases in the price of food quickly lead to increases in the supply of food.
As Matt Rognlie of MIT showed, rents have been responsible for almost all of the returns to the already-wealthy over the past few centuries that Piketty documented.
The major thing you’re missing is that UBI will make land (and housing) supply much more elastic. SF and NYC landlords can get away with raising rents because that’s where the jobs are, and people are tied to their jobs. With UBI, lower income people can move to places with cheaper housing instead of paying higher rents. Indeed, UBI could cause rents in high-cost cities to totally collapse.
The point of UBI is to give you money for unfortunate life circumstances like a loss of job, or other unfortunate life events where you would need some money to get by.
UBI is not a replacement for a job. And unless you wish to survive on extremely minimal living standards, UBI alone won't be of much help to you.
I think there's plenty of disagreement over what the "point" of basic income is. Compensating people for unfortunate life circumstances is not at the top of my list.
Maximizing social prosperity and stabilizing the economy would probably #1 and #2 for me.
> Land has a perfectly inelastic supply, and thus expectations of more income will lead to increases in rent.
This is a common misconception. In fact real estate is just as supply-elastic as everything else. New developments open up all the time. Development makes land more attractive for more people. And areas become blighted and therefore less attractive, lowering prices.
Some places have sharply-constrained supply, such as San Francisco, but this isn't the norm. The norm is cities slowly expanding outwards, as new investments in the center require more time and effort to bear fruit. Politics often throws a monkey wrench into market functionality, but the vast majority of real estate markets function and clear just fine.
If that were true then natural monopolies would not exist. Electricity too expensive? Let's just build some electric poles in the middle of the tundra and people will move their homes there for their electricity demand.
Land (as in housing) is widely accepted as being supply-elastic, especially since in addition to scarcity it's also heavily regulated. You can't wave your hands at SF and say it's an exception because you want UBI to work. Markets like SF are proof that housing pricing is income-elastic, and can't be dismissed when discussing raising the income floor for entire populations.
> Electricity too expensive? Let's just build some electric poles in the middle of the tundra and people will move their homes there for their electricity demand.
If you built some electric poles in the middle of the tundra and by moving there people could pay significantly lower prices per KWh, people with high electricity consumption absolutely would show up there to consume it. There are companies that build data centers in cold climates just to save on air conditioning.
> Land (as in housing) is widely accepted as being supply-elastic, especially since in addition to scarcity it's also heavily regulated. You can't wave your hands at SF and say it's an exception because you want UBI to work.
Not all housing markets are hampered by bad regulations. Houston has much less restrictive zoning and rents are much lower there than SF. They're also lower in Tokyo despite the incredibly high demand for housing there, because Tokyo isn't afraid of density.
It doesn't say anything to say the combination of UBI and terrible zoning regulations will cause rents to be high in SF. They're already high in SF because of terrible zoning regulations even without a UBI. The only way to have reasonable rents is to fix the zoning rules, after which supply will meet demand as it ought to.
The demand for locations changing doesn't mean that there's a different number of locations available. The number of locations is fixed.
Nobody denies that within the fixed number of locations that there can be dynamism, the question is how rent functions in lieu of this scarcity. It happens to follow the Law of Rent.
The Law of Rent requires a bunch of things to be true that frequently aren't true in practice, or that are only true in cities like SF with restrictive zoning laws that prevent new housing construction.
Suppose there are 1,000,000 tenants and 100,000 landlords whose land can each support 100 tenants if a tall building was built there. In the absence of collusion or zoning regulations to the contrary, each of the landlords has the incentive to add more apartments to their land until the net present value of rent of an apartment falls below the building cost, because the land isn't "scarce" in the sense that it can support ten times as many tenants as there actually are, and every landlord would prefer to make more money at the expense of the others.
Not at the same commute time and price. Home prices won't be that high, if there was fast, cheap and better public transport to far off places. That again takes a lot of tax money to build and maintain.
Why on Earth do you think producers will be unable to raise prices?
> Land has a perfectly inelastic supply, and thus expectations of more income will lead to increases in rent.
It seems like you're talking about housing rather than land, you don't think that more construction happens when there's more demand? Most of the populated world doesn't have the unique constraints present in the Bay area or NYC.
>Why on Earth do you think producers will be unable to raise prices?
Because of the law of supply and demand, as it pertains to the outputs of a productive process in a relatively free market context. The prices will generally tend towards the costs (including opportunity costs) in the long run, and demand shocks will only cause temporary rises in price until production can catch up.
With naturally scarce commodities, that is not possible, because there is no production.
>you don't think that more construction happens when there's more demand?
Land supply is perfectly inelastic. Improvements on land are somewhat elastic, although ultimately anchored by lots of factors... and the speculative holding of land is a big one. Furthermore, there's an upper limit to the amount of density that a region can sustain and still be livable.
There's a "standard of comfort" that people have, which ultimately determines a lot of it, though. So, in theory, if we became more comfortable at higher densities, we could live like people in Hong Kong. Yet, that doesn't mean even they can sustain infinite density, and indeed they have high rents in Hong Kong.
The idea of speculative holding of land is incompatible with perfectly inelastic supply. If someone is speculatively holding land, there is a price (demand) at which they will sell (supply) that land to be used. The supply of land is not the amount of land which exists, it's the amount of land in the market (just like the supply of oil is not the oil in the ground it's the gasoline in pumps). That amount reacts to price, which is the definition of elasticity of supply.
Land is not the same as oil commodities because oil must be discovered and drilled, whereas we already know where all the terrestrial land is, and for the most part it is all already owned by someone.
Oil rights are a kind of land, of course, because that is what land really is... the rights.
Those rights are precisely quantifiable in the form of land titles. The scope of those titles, and the quantity of land subsumed under them, is precisely quantifiable and does not change from year to year.
The speculative holders of the rights are often neglecting to rent out the land, but in economic terms they are just consuming their own imputed rents. The rents are a flow that continuously accrues to the title.
> Why on Earth do you think producers will be unable to raise prices?
One of the cool things about basic income is that because it distributes the incomes evenly, it flattens out the demand curve or increases the price elasticity of demand. This means that (even absent competition) if producers raise prices, they'll lose customers. Conversely, if they lower prices they'll get more customers.
A basic income creates an incentive for producers to keep their prices low. This incentive is higher than it would be without the basic income.
Another way to think about it is that basic income, doesn't give people more money to spend on goods they're already buying. Instead, it gives money to more people to spend on goods they wouldn't have bought before. It's the difference between giving money primarily to people who already have it and giving money to people who don't.
Basic income allows the economy to start activating previously unused productive capacity that was already available.
Of course this doesn't work for goods whose production is being constrained by resource limits. For example, under basic income, you might see the price of meat rise, which would cause people to buy less meat and substitute other types of food. We have the capacity to feed the world, but we don't necessarily have the capacity to feed everyone meat 24/7.
First of all, your assumption that producers of goods won't be able to raise prices is unsupported by economic theory - inflation is a real thing, and denying it seems silly. Secondly, if your theory on rent is true that by extension must lead to a rise in prices for goods, as commercial real estate costs go up and directly impact the cost of production.
It can affect it, but commodities like food are an international market. More importantly, a basic income increasing the pocket money of regular individuals is likely to raise residential rents, but may have no effect whatsoever on agricultural rents. Only a small portion of UBI recipients are going to be speculating on agricultural real estate.
> Land has a perfectly inelastic supply, and thus expectations of more income will lead to increases in rent.
Sort of. But land is not a uniform commodity. Different parcels of land are subject different levels of demand. For a place like New York City, the demand for real estate is fairly inelastic. But a basic income would decrease the incentive for people to live near where the jobs are. This would likely cause real estate prices to crash in more expensive places like San Francisco and New York. Many of those prices are inflated due to speculation anyway.
Mm I don't think its quite right, but it looks at the right path.
If you implemented UBI federally, rents in general could take a huge hit. That is because people would use ubi to go from high rent to low rent places, because their marginal savings rate would be much better.
Without implementation details, its hard to say if it will raise or reduce rent.
I don't claim to understand economics very well, but I'm led to believe the Georgist Land Value Tax is a good way to combat 'landowners' aggregating wealth sans labour or adding value. How would this marry with our theoretical impact of UBI?
Henry George was alive during a time when the amount of currency the government could create was constrained by the size of its gold reserves.
These days, the amount of money the government is able to spend has very little to do with the size of their tax revenues. You can certainly tax landowners, but you should only do so if you want to punish people for owning land. The money you collect is meaningless.
As has been mentioned by me and others in other comments, basic income will push down real estate prices all on its own.
Your comment doesn't seem very responsive to its parent. Are you saying that did not happen during stagflation or that it will not happen again for some reason?
If labor becomes scarce as a result of UBI, and producers can no longer recoup production costs at current prices, they will cease operations, reducing supply and raising prices.
I think it's incorrect to think that a good has an intrinsically elastic or inelastic supply.
> What was happening was that since wage increases came to be anticipated due to the consistent low interest rate/moderate to high inflation environment, producers would preemptively raise prices to soak up all of the wage gains.
> Eventually stagflation was ended by dramatically raising interest rates and triggering a nasty recession.
An alternative explanation is that, since interest rates were lower than the rate of inflation, producers issued bonds to finance stock (raw commodities and semi-finished goods), which pushed up both the inflation rate and bond interest rates. While the rate of inflation was higher than the bond interest rate, the incentive remained for producers to issue bonds and use the proceeds to hoard stock.
In combination with this, the increasing demand for consumer goods — because of rising inflation — caused the yield on retail shelf space to increase. I.e. if people empty a shelf of flour twice as fast, because they want to stock up before prices increase, the yield on the capital that is retail shelf space doubles. This meant the Fed lost control over the short term deposit rate, since money market funds were able to overbid the Fed by financing the inventory of retail stores. Thus, the Fed lost control over the short term rate of interest, which kept increasing along with the rate of inflation.
At first I was about to jump in with the standard "most people won't end up with an increase in income due to UBI being counteracted at tax time".
Then you said
> UBI could lead to stagflation because the income allotments and any increases would be according to some formula known ahead of time. This means that producers could anticipate demand and simply raise prices to soak up any income increases.
This is a very interesting point that I have never considered before. Thanks for mentioning it.
Apparently they don't think that competition in the market will keep prices as low as possible. Increases in circulating money supply do not automatically turn into inflation/increased prices. Relative to the money supply, when producers can meet the increase in demand, there will be little inflation. I'd argue we have an excess in global production capacity that can quickly be mobilized to accommodate a large increase in demand, thus leaving inflation modest.
Indeed.
One of the issues with the modern economy is LACK of competition. There is significant declines in competitiveness across industries (e.g., https://www3.nd.edu/~wbrooks/BKL_merged.pdf). For UBI to not result in increased prices, and to be effective, we must also solve issues related to monopolization and price fixing of markets.
This was my first thought. If you print money on a fixed schedule, the natural market response is to devalue the currency according to the same fixed schedule. Nobody gets any real income; they get a fixed lifetime endowment of buying power, granted in predictable intervals, and the only thing that changes over time is the denomination of the currency. Interesting idea: "universal basic lifetime income", UBLI. But perhaps not what the author was going for.
It's been a while since I've done serious economic analysis. Please correct me if I'm wrong.
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Also, the whole thing is predicated on a web of trust to prevent Sybil attacks. Fine, but PGP has shown pretty conclusively that a web of trust like this is a failed model. A single trust authority makes far more sense for this application.
In the PGP case, casual users like myself don't personally know anybody who uses PGP. I would have to go out of my way to acquire a reasonable degree of trust on my key: I'd basically have to start asking people I hardly know "hey can you sign my key?" which I'd rather not do. That's fine, because PGP is for hacker nerds and not everybody needs or wants to be a hacker nerd.
The problem, however, is that if this is to be truly universal then you need to guarantee universal access. What if I've been in prison for 5 years, I can't get in contact with any of my family, and my old private key is long lost. So I start up a new account and... what? Who trusts me? I basically have to start asking random people to trust me. So people have to trust each other. Then what's stopping a con artist from going from town to town, getting store owners and locals with bleeding hearts to trust each of his multiple duplicate currencies. The Sybil attack can proceed with trivial social engineering.
You're in a Catch-22: either people are skeptical, and the system is decidedly non-inclusive, or people are trusting, and the system is insecure. You need centralized trust: it's the same problem we have today with domain names. You need an authoritative list of valid domains, and a single source of truth for accessing that list.
The nice thing about a trust authority is that it doesn't need to be physically centralized. Just record everyone's citizenship on a blockchain like Ethereum. But at this point I'm just speculating.
My solution to this is to embed key signing in everyday face-to-face activities. If your wallet gets signed every time you buy something, soon it will have useful identity. https://www.wired.com/2014/07/document-coin/
I am not an economist, and am summarizing the received wisdom on stagflation and tentatively applying it to UBI. If I could put my economist hat on, I would think that the real value of UBI allotments would be constant, as you said, in the best case.
The system as described does create real income in those coins - the newly printed money goes to everyone equally, but the inflation affects those who hold existing money. In this manner, it's an ongoing redistribution of the coins (assuming they stay fungible) from those who have them to everyone else.
PGP didn't show that the web of trust is a failed model. PGP sucks from a UI perspective, so it would have failed even if it was centralised. Which it basically is with MIT's keyserver.
> It's been a while since I've done serious economic analysis. Please correct me if I'm wrong.
=)
> If you print money on a fixed schedule, the natural market response is to devalue the currency according to the same fixed schedule.
This is wrong. Price levels of a currency are determined by the volume of spending relative to the volume of trade. Furthermore, it's not the volume of any trade that matters. It's the volume of trade of goods whose prices you care about.
Money does not spread itself evenly over the course of the economy. To take an extreme example, if we just throw the printed money down a hole, it doesn't affect prices. Or if we spend all that money to buy stocks, it might drive up the price of stocks, but we probably don't care about the price of stocks when calculating the general price level for our currency.
Additionally, people borrow in order to spend. The amount of spending in the economy increases when people borrow more. In this sense, an increase in credit and debt in the economy has a very similar effect to an increase in the amount of money.
As I alluded to previously, there are places in the economy where money flows in faster than it flows out. Money tends to accumulate in these places. The spending that people would have used that money for must be continually replaced or you end up with deflation.
But let's imagine a world in which people are able to buy more of the stuff whose prices we care about. This is the basic income scenario. Assuming that we have the capacity to produce more of that stuff, we will produce more. Note that doubling the number of people who can afford to buy stuff is very different from doubling the amount of money that everyone has. In the former scenario, more people are willing to buy at existing prices. In the latter, people are willing to spend more on the stuff they already buy. The second scenario is always inflationary.
Anyway, I could go on and on about this. And I have. The bottom line is that it's complicated. And you always need monetary policy keeping your currency stable regardless of whether you have a basic income. The effects of a basic income could be either inflationary or deflationary. It probably depends on the amount of the basic income. In either case, monetary policy has got you covered.
I agree with you though that Circles doesn't seem to have any kind of sane monetary policy.
I think we're saying the same thing. Devaluation of the currency and bidding up nominal prices are both synonyms for "inflation" as far as I can tell, and in this case the former happens to be caused by the latter.
The point about deflation is something I hadn't considered. I'm skeptical, and if you have any references on that point I'd be glad to see them.
Not an economist, but wouldn't competition keep prices lower? Also, inflation happens when supply cannot meet demand. More money in circulation does not increase prices until it starts bumping into production capacity limits.
Since the 1980's, the Fed has been very willing to raise interest rates to fight core inflation. Businesses now expect that. So it seems like inflation worries based on what happened in the 70's are overblown.
The Fed doesn't target housing prices. But a basic income (not tied to a job) should make it more affordable to move away from high-demand areas, reducing demand somewhat.
The theory seems to be that when people have a safety net they'll better themselves with long term skills and grow the economy. I'm more inclined to have a more concrete social contract. For example, pay someone to learn a trade, and as long as they hit their requirements - they can live all expenses paid for.
For the cost of a college education we could give people a valuable trade and a small business loan. I think the reality is we have a cultural stigma against physical labor and hard work. Some of us aren't against the idea of "free money", but I want a guarantee it's being used for good.
The thing is, a part of the point of universal basic income for me is that it would allow some people, who have no interest in working for wages, to survive and thrive doing all the things that we need in society that nobody will actually pay for. Community organising, caring for others, and basically acting as social "glue" is something we've lost as we have moved further towards a model of "100% of the population must be in full-time employment for wages" - this is actually a relatively new model, as prior to a certain time, women were not expected to work unless they absolutely had to. An accidental outcome of the feminism of the past century and the creation of equality under capitalism.
I'd argue that inserting companies into the positions where these people once were - asking companies to act as social glue - is where we've gone wrong in the past couple of decades.
While I'm personally not a fan of the outcome of Citizens United, the argument that a company is just a collection of people is not unreasonable to me. What makes an individual any better at acting as social glue than a collection of individuals? I'd argue a collection would serve much better, and really it's more the for-profit nature of most companies that is the issue. There's no reason a company has to "maximize the value for shareholders", and it seems more and more companies these days are challenging that notion.
As long as we call it a company, its raison d'etre is precisely to maximise the value for its shareholders. A non-profit has the freedom not to, and can focus on a core mission. As much as I'd love to believe in social entrepreneurship, if you define yourself as something which by base definition maximises value for shareholders, that's what you're gonna have to do when push comes to shove.
So sure - some kinds of organisation can and do provide social glue. The problem is, the capitalist notion of organisation doesn't support this. Not to imply I'm against capitalism - it has its benefits, but social glue is not it.
Ok, but what if they fail to hit their requirements? Either they lack the skill to hit the requirements, or maybe they don't put in the work.. what do you do then?
Do you cut them off and watch them starve? If you have any sort of criteria, SOME people will not meet the criteria and will have no resources. They will have no food or shelter. The fundamental question, then, is whether you believe there are some people who just deserve to starve and die, because they are either unable or unwilling to support themselves.
Lastly, you say you want some 'guarantee [the free money] is being used for good'. While this seems like a reasonable desire, how important is that? If data shows that you have to spend more money trying to catch people abusing the system than the money you would lose just paying people who abuse the system, is it worth spending more? This has happened before; they started drug testing welfare recepients in Florida, and they spent more money on the drug tests than they saved. Is it worth spending extra money to make sure no one 'gets a free ride'?
How should hospitals distribute limited resources like vital organs? Or is that a dumb question because it's solved by Universal Basic Organs? I'm just going to take this one step further and pledge my support for Universal Beach Houses as well. Because what cruel monster would oppose free beach houses.
I don't see how your questions follow from my comment. No where am I trying to argue that resources aren't limited. I just said you will have to decide what to do with people who don't meet your requirements, and that you may spend more money checking that people are meeting requirements than you would save.
I also never said that letting people starve who can't or won't support themselves is morally indefensible. If you want to argue that it sucks but is a better alternative than what would happen if you tried to save everyone, it doesn't make you an immoral person. My only point was that you have to think about what you will do with the people who don't meet your requirements.
This is exactly where my argument ends up with anyone I discuss this with. The problem of people starving and dying won't be solved, it's going to happen in some capacity.
This is basically the intent of the existing means-tested systems. While they've got us this far, we can also see all the people who fall between the cracks; recently this was covered by people getting on disability benefits of one sort or another, but the constant pressure of " is this person deserving" erodes that.
I thought it was "universal" because it was meant to replace all social welfare programs with a basic income..
But what about it requires to be at the federal level? Is there a base number of participants that are required? Does that mean smaller governments can't have UBI? Or, is the idea just so big we can't be bothered to get into the technicalities of it all?
> Is there a base number of participants that are required?
Well, the money has to come from somewhere. If you have a homogenous group, all with the same income/wealth, then UBI would do nothing. You'd give everyone the same money you took at tax time. No net change.
You need a group of people with diversified income/wealth. The wealthier contribute more than they get from UBI, the poorer contribute less (if any) than they get from UBI.
I like it mainly for the idea of replacing welfare with a much simpler system. But it will never happen in America, land of absurd tax code complexity. And certainly not with a name like Universal Basic Income. It would have to be called something else to avoid triggering people.
> If you have a homogenous group, all with the same income/wealth, then UBI would do nothing.
True. In this scenario, demand is already as elastic as it's going to get. It would basically be impossible for the economy to be operating below full productive capacity. A basic income would either cause inflation or indirectly cause people's incomes do decrease by the same amount in some other way (e.g. taxes or monetary tightening).
> You need a group of people with diversified income/wealth.
Yes. In this case, basic income would actually benefit us because it can increase quantities demanded at current prices thereby incentivizing producers to produce more stuff for people.
> The wealthier contribute more than they get from UBI, the poorer contribute less (if any) than they get from UBI.
Hmm. Not really. I'm going to push back on you here a little bit. The value of a UBI does not come from people "contributing" to it. It comes from the capacity of the economy to produce more stuff in response to the additional spending.
I think you're talking about taxation here. But I don't think it's useful to think of basic income as being funded by taxes. The amount you tax does not have any direct effect on how much basic income you can afford to provide.
> But it will never happen in America, land of absurd tax code complexity. And certainly not with a name like Universal Basic Income. It would have to be called something else to avoid triggering people.
Yup. At least politically, taxes and government spending are hopelessly intertwined. But it doesn't have to be this way. And there's nothing stopping a startup from offering a basic income. I'm skeptical that Circles is the start up to do it, but I fully believe that it can be done.
> I thought it was "universal" because it was meant to replace all social welfare programs with a basic income..
No. Universal just means everyone gets it. In fact, the word "universal" is redundant in the term "universal basic income" because "basic income" is already an income that everybody receives. It forms a base upon which you can build further income.
Some people believe that basic income should replace existing welfare programs, but it doesn't have to. After we implement a high enough basic income, we certainly might discover that we don't need some of these other welfare programs anymore. But in my opinion, there's not really any reason to shut them down ahead of time.
> But what about it requires to be at the federal level?
It's hard to implement a basic income if you don't issue your own currency. Currency is issued at the federal level, so that makes it a natural choice.
If you tried to implement it at the local level, you'd probably have to raise taxes or something... or create some kind of local or alternative currency. It's not impossible, but it's certainly less efficient.
> Does that mean smaller governments can't have UBI?
In a way, yeah. You've got to have a stable currency in which to pay the basic income. The smaller the government, the harder it is to maintain a currency. Furthermore, the amount of the basic income is constrained by the productive capacity of the economy. There's a limit to how much spending the productive economy can absorb. So if your country has a very resource-rich economy, you might be able to get away with a higher basic income.
But it's a continuum. The most efficient basic income is probably a worldwide basic income. Since the United States controls the world's reserve currency, they could probably pay everyone in the world a basic income in dollars without causing inflation or anything. But a country like Mexico couldn't do something similar.
> The theory seems to be that when people have a safety net they'll better themselves with long term skills and grow the economy.
That's certainly a theory. It's not a theory I subscribe to. Teach a man to fish and he'll fish for a lifetime. Give him fish for a lifetime and he's free to do something useful with his time.
If our economic output is constrained by demand and you give people money, they can buy the stuff we're already capable of producing. It's as simple as that.
> Some of us aren't against the idea of "free money", but I want a guarantee it's being used for good.
It's not free if it comes with such a restriction. We don't need to force people to work. If we want people to work, we can always pay them.
I agree with you that people should use their money for good. But what is the ultimate good that we care about? We care about people's well-being and the prosperity of society, right? Using money for good means spending it on things that benefit you.
> Is this only an issue if you print money to pay for the UBI? If UBI is payed for by taxes then it shouldn't devalue the currency.
The amount of money the government can spend without causing inflation has very little to do with the level of tax revenues they collect.
One way to think about it is that the economy has a certain amount of spending that it can productively respond to. Beyond that level of spending, you start running into problems such as inflation, interest rates that are too high, etc.
It doesn't matter whether you took any money from the rich to fund that spending because the rich people weren't going to spend very much of their money into the productive economy anyway. The productive economy can still absorb the same amount of spending as before.
But you're right that there does have to be some kind of mechanism to keep the currency stable and I don't see such a mechanism in Circles.
> UBI proponents should be cognizant of stagflation.
Everyone should be. =)
> In reality the Phillips curve was too simple.
Yes. The Phillips curve relationship between inflation and unemployment only holds under certain conditions. Policymakers thought they could stimulate the economy by causing inflation, but this kind of thing isn't going to work if the underlying problem with your economy is that you have less access to resources (in this case, oil).
So the policymakers made a mistake in the 1970's. And, as you say, the expectations of inflation led to institutional inflation, which is basically just inflation that reinforces itself out of habit.
Small amounts of inflation can be okay because they help the economy more evenly absorb adverse conditions. For example, instead of firing a bunch of your workers, inflation allows you instead to choose not to give people raises. But there's a limit to how much benefit you can get out of inflation.
> UBI could lead to stagflation because the income allotments and any increases would be according to some formula known ahead of time. This means that producers could anticipate demand and simply raise prices to soak up any income increases.
Hmm. I'm not sure this is right. UBI or not, you need to keep inflation in check. But there's a lot more to inflation than just the amount of money in circulation.
In order to keep prices stable, the amount of spending in the economy must stay aligned with the amount of actual stuff being traded. Generally speaking, monetary policy keeps prices stable. If there otherwise would be deflation, monetary policy incentivizes borrowing (lowers interest rates) to increase the amount of spending in the economy. If there would otherwise be inflation, monetary policy disincentivizes borrowing (raises interest rates).
UBI, on its own, won't cause inflation, let alone stagflation. In fact, it can lessen the need for monetary policy to encourage borrowing in the private economy. Through the monetary policy response it induces, basic income can take some of the fuel away from the speculative bubbles that tend to destabilize the economy every so often.
However, Circles hasn't described how they plan to implement monetary policy. Without solving the problem of price stability, they won't have much of a currency, let alone a basic income. A flat increase in the amount of the basic income isn't going to cut it. Monetary policy must be able to respond to various economic conditions.
It's probably a mistake not to keep your monetary policy separate from your basic income.
In true HN fashion, everyone's first reaction is to hate this.
I don't really know enough to say whether this will work/won't work, but I think it's a cool idea. It's blending technology, market forces, social contracts all in one in attempt to do something new and beneficial.
I'd love to see more concepts like this being created and tested.
I don't think it's being hated on because HN is closed-minded, I think it's being hated on because it's half-baked. After Bob and Alice get done exchanging coins to prove the concept, where would they actually spend them? Why would any business accept these coins? Why would anyone ever exchange a dollar for any quantity of them?
I like UBI schemes and I like novel cryptocurrencies but either I'm missing something big or this one is still at the stoned-dorm-room-conversation stage.
> I like UBI schemes and I like novel cryptocurrencies but either I'm missing something big or this one is still at the stoned-dorm-room-conversation stage.
That's the question, isn't it?
I've been circling around this from a different angle. I think it requires a shift in how you think about it. This really isn't meant to be thought of like currency we currently have, requiring a majority-rule consensus social reality. This tracks closer to the personal relationships you have with other people.
So I'd start with using on tracking exchanges of favors among friends. Some people have tools or expertise they want to borrow, and this would formalize some of those exisiting exchanges.
Since I'm interested in strengthening local communities, I'm going to find a way to work with that.
Another is applied to open source projects -- start with a tipjar on the projects you use; offering bug bounties, for pull requests. etc.
I also think there is a danger in turning these interactions into transactions. Relationships are not only transactional; the most important relationships are transformational (that is, the participation in a relationship will involve a change in who you are). I'm not sure how to resolve that, yet.
For a UBI to work people have to be able to actually spend the currency they receive. In places that people (especially the poor) actually spend their money. Let me know when the neighborhood bodega, grocery store, barber or daycare start accepting cryptocurrencies.
>For a UBI to work people have to be able to actually spend the currency they receive.
I don't see why this is true. People were saying the same Bitcoin, yet people still use that, which is turning this conversation in to a circular argument. The truth is a UBI has never really been tested out in the world, it's all theoretical, and a cryptocurrency UBI even more so. I don't think it's right to just write it off completely without actually testing it.
And by "hold value", i meant that humans find value in it. Although I admit that was a poor choice of words due to the traditional financial meaning.
>>For a UBI to work people have to be able to actually spend the currency they receive.
>I don't see why this is true.
Because otherwise they can't pay rent, get evicted, and/or starve to death?
Unless I'm missing something here, isn't a key part of any UBI system must be using that income to spend it on things you need to survive, no?
It'd be an odd chicken-before-egg problem, where you would need everything required to survive to be purchaseable with whatever new cryptothingy you do UBI with, before you can actually distribute UBI with it. But who is going to support the thing which doesn't exist yet?
I'm not writing it off completely just because. I'm writing it off completely because it doesn't even seem to address the really hard part of this all: how do you spend cryptocurrency in the same way I can use regular currency? If it's not eventually going to be useful as a currency, can we stop calling it cryptocurrency and call it cryptogold or something?
Edit:
Also, you seem to take it as proof that since people are buying BTC, there must be a demand for a currency that cannot even be spent anywhere. That's one way to look at it, personally I explain it with the Greater Fool Theory [1]. I think this because whenever I heard about people buying BTC who aren't die-hard true believers (ie normal people, not cryptocurrency enthusiasts), they don't know why BTC is valuable. They don't see any value in it, other than the fact that it's price has gone up a lot. They don't understand it, they don't think it's useful, they just see other people buying it and driving the price up and want to get in on the action.
> The truth is a UBI has never really been tested out in the world
Huh? Yes it has. There still isn't nearly enough data, but there have already been multiple pilots studying various basic income schemes, with encouraging results.
Agreed. Anyone who claims they know what possible outcomes we can expect from UBI is deluding themselves (or more likely feeling their comfort zone / world view threatened).
UBI could be as significant event for the human race as invention of fire; for the first time large number of human beings with the time and opportunity to develop their talents vs being forced to work minimum wage. It could be like unleashing an army of "Linus Torvalds" - amazingly positive. We don't know
In this instance, nothing more than the parent reinforcing its point by saying, “it could be [whatever random possibilities] ... we don’t know.” The parent is not claiming to know possible outcomes, but specifically calling out that we don’t know what the outcomes will or could be.
You see this faulty reasoning a lot when discussing religion:
We can't know or understand God any more than a cockroach can understand an iPhone - but we will now tell you all about God, what he wants from us, and how to obtain the everlasting rewards that he has promised to believers.
If "bijstand" is anything like the Danish "bistand", then it's nothing like UBI. It's nothing like UBI because it comes with infinite strings attached that in practice gives you no incentive to get a job. To see a rather nice explanation of UBI and it's differences to current social security schemes watch this.. https://www.youtube.com/watch?v=kl39KHS07Xc
Well you have a poor outlook on people. To backtrack a bit, throwing money at people doesn't work. Look at the failure of post-colonial African aid. More fundamental and intelligent help is required. UBI is not about that. It is about recognising every individual's right to economic freedom. What a person does with that freedom is a better problem than how to be free from wage slavery for example. If a person exhibits destructive behaviour, that's a different problem. Supposing that people will partake in destructive behaviour given more freedom implies that you think that people _naturally_ have destructive tendencies. UBI is based on the opposite asumption.
Assumption among being mother of all spectacular fuckups is also a very fundamental concept and is required to form any kinds of predictions of future, which are in turn required for any form of planning.
His point is you are missing the most important part of UBI, the "universal" part. This encourages participating in society, unlike means-based welfare.
The entire point of universal basic income is that it's universal, not limited. Other forms of social security (including no-strings-attached social security for those unable to participate in society, such as bijstand in The Netherlands or leefloon in Belgium) are not intended to replace pensions, unemployment benefits, disability benefits, benefits for children or parents, public housing, subsidized tuition, tax exemptions, a tax free personal allowance, and so forth and so on, whereas UBI is intended to function as a replacement for at least a large chunk of these various schemes, not an addition. That changes the entire dynamic. Is it a good idea? Frankly, I don't know, but you can't point to abuse of one particular form of social security and say "see, universal basic income doesn't work!" because it's not nearly the same thing.
This is totally not snark: how is this different from people without ambition who have a low-end service industry job and no ambition to do more than wash dishes or pump gas?
Why would there be anything more dignified in an old man washing dishes in a restaurant over an old man just drinking his days away? Neither is what I aspire to, but the latter feels more honest to me.
In other words, what I try to wrap my head around is: who cares how someone else wastes their life, if that's ultimately the big-picture goal they choose?
At what point do you start judging people though? I absolutely do not use 100% of my potential or ambition, and I can be fairly certain most don't.
I piss away countless hours watching Netflix, drinking wine and just being.
But. With a job, or even the desire for a job, even if it's just man-made theatrics, I'm engaging in society. There's an expectation (either knowingly or unknowingly) that you contribute more value than you take when you have a job - whereas if you literally did nothing, you are just extracting value.
Don't misunderstand me, I don't argue we should be optimising solely for "value" (and it becomes tricky with different groups who can't engage with society), but I don't equate "wasting themselves in what they do" with "doing nothing".
Personally though, I do believe in the dream of UBI, for me, I think if I was unshackled by the theatrics of the workforce I'd be more creative.
> Why would there be anything more dignified in an old man washing dishes in a restaurant over an old man just drinking his days away?
I don't know if you've ever seen anyone die of alcoholism, but sadly it's very painful and undignified.
It seems to me that an abstemious old dishwasher would have a much more enjoyable and dignified old age, regardless of any moral judgement about the two.
Most of the old people in my family are dead or dying of alcohol-related things, and I still don't give a shit if people want to do that over working as a dishwasher well into old age. Forced labor isn't dignified because we're calling it capitalism.
To play devil's advocate, people who go to work are very likely to interact with other people, which might help keep our society a little closer together. They might become bitter (since nobody respects low-end service workers), but at least they remember what people are like, and don't turn insane/radical through isolation.
I am not sure if there's data to support this claim, though.
Something I've come to realize: I don't care what greedy people want for society. I think their ideas are seldom any good, because personal greed is sort of the polar opposite of what society is all about, in a fundamental way.
The discussion of society is all about, "how do we work together?" and this guy's just thinking about his pocketbook. Wrong priorities. Figure out what we want everything to look like, and figure out how to pay for it as the last stage. Looking at your wallet now is, to use the parlance of this site, premature optimization.
Oh. That's a dumb reason. Until this it was sounding like you had an argument against UBI from society's point of view, not just based on your own financial interest.
That is an argument from society's point of view. When people don't work or contribute to the general welfare of society in any way (and they are able to, not talking about people unable to do things,) and they take from the general pool provided by the rest of the social group, they are taking away resources that could be used for other things, things that may further benefit the individuals providing resources for society.
There are arguments to be made about decreasing crime, but most of the most convincing moral imperative arguments are related to religion. The more convincing Keynesian argument is about money going into the economy and driving growth because none of the people dependent on UBI will save anything at all. So from a purely utilitarian point of view, individual financial interest does come into play.
I want people to have an option not to work, because I want an option not to work. Maybe I'd like to use that time to drink myself into a stupor and write a terrible novella and pretend I'm Ernest Hemingway in a house full of alley cats. Maybe I'd like to use that time to consider a startup idea that wouldn't be big enough to pay for everything I need like healthcare and retirement, but would be otherwise an interesting project if it didn't have to meet those financial goals out of the gate in its business plan. Maybe I would like to use that time to teach young kids how to program, not as a trade, but as a means to entertainment.
You want to ascribe morality to those options, but I find the freedom to choose more interesting. It's not my job to judge which is more "productive". Maybe that novella in the end turns out to comment deeply on the human spirit, maybe those kids never use those skills "productively", maybe that startup goes bust and I return to the next plan. The moral imperative is that I should have the freedom to choose outside of the strictures of what the current job market finds productive or what government can legislate to be considered productive.
If that means there are a lot more people following the first idea and drinking themselves to a stupor, then that is a market failure. Surely the labor market can stretch to entice people to such "productive" labor if it actually has to compete for their time and energy? We use a "productive morality" to prop up a market that has never had to truly compete in the entirety of its existence. (Which is to say that labor has never been a free market.)
I find it funny, too, that you bring up religion as providing the most convincing moral imperative arguments for UBI, when in my mind it also religion, the Puritanical Zeal, that so colors the debate against UBI. The Puritans believed that men must work to appease God, that Productivity was an end to itself, a way to measure yourself before God. Why does everyone need to work so? You claim it is "society" that demands productivity and wishes to keep score, but many societies have never kept score, and have no need to keep score. It seems to me that the scars of Puritanical Zeal have simply replaced "God" with an uncaring "society" in a lot of the arguments.
(From a purely utilitarian point of view, the more people with an option not to labor under someone else's mandate, and truly choose their own path in life, presumably the greater the well being of those individuals and the overall more well being across the spectrum of that society. Individual financial self-interest is never utilitarian, you can't maximize others' happiness thinking only of your own.)
> You want to ascribe morality to those options, but I find the freedom to choose more interesting. It's not my job to judge which is more "productive". Maybe that novella in the end turns out to comment deeply on the human spirit, maybe those kids never use those skills "productively", maybe that startup goes bust and I return to the next plan. The moral imperative is that I should have the freedom to choose outside of the strictures of what the current job market finds productive or what government can legislate to be considered productive.
There is a moral aspect to this whether you like it or not. If you aren't living off your own money and resources, you are living off money and resources that have been taken from others and given to you. Those others might not want to give money they worked for to people who could work but choose not to. What right do you have to force them to give it to you?
You currently already have the option not to work. The problem is that since we are not post-scarcity by any definition, there is a negative impact of your choice on other people. That is the case even with UBI. The question for me is if that negative impact is outweighed by the positive impact of UBI, most of which I think has nothing to do with choosing not to work but instead is about propping up an economy based on labor when we're shifting away from the labor coming from people.
I wasn't ascribing morality to your freedom to choose to be entirely dependent on society, I was saying that the moral argument that people are important and that socially we should care about, feed and clothe the needy is mostly grounded in religion. Your use case, where a person intellectually chooses to be dependent on UBI because they don't really like working very much, is very different from the one I envision: robots take your job and you have nothing and so are forced into dependency.
The problems this will cause a consumer driven economy are fantastic, and the easy way to prop up said economy is to simply give people money to spend - not too much, or they’d save it. Just enough so that they spend everything you give them, sustaining the cycle. That's the convincing Keynesian argument.
> Your use case, where a person intellectually chooses to be dependent on UBI because they don't really like working very much, is very different from the one I envision: robots take your job and you have nothing and so are forced into dependency.
I think that happened already 20 years ago, though not just robots but also centaurs (in the chess sense of people using computers/working in tandem with machines) have taken most of the jobs, even accounting for globalization.
I think the reason we aren't talking about it, in that way, is that it's still too easy to sweep the problems under the rug. It's still too easy to blame the people that are out of work rather than the labor market that doesn't need people.
A society is people. People being dependent on their society is somewhere between an oxymoron and baseline assumption. Everyone is dependent on the day to day cooperation of their society, in one way or another, even if it is "just" roads, and breathable air, and a political reality in which they can live their day-to-day.
I think we are far too stuck on "someone not working is taking away from me", because we see it as some zero-sum game, but robots and centaurs have changed the equations. The labor market is unfair and neither free nor liquid, and yet we are letting it ascribe morals to people, looking down on people working multiple jobs to make ends meet (because the labor market has no incentive to offer a fair price) or who can't find work because there isn't enough work to go around.
I think it is far past time to stop judging our neighbors by their position in the labor market. For me, a part of that is realizing that a global and broad option to leave the labor market is important, that we should celebrate that as a right. If capitalism needs more hands on deck, it can pay for them. It's time to stop assuming everyone should work, and let the market tell us why we should work (and how much it is willing to pay to let that work get done).
We don't really have an option not to work so long as our basic subsistence is tied to how we spend our labor. But companies don't have to do right by us, because they aren't our societies, they don't need us, they don't depend on us. The basic problem is that we are post-scarcity in the labor market, and companies have a "free lunch" by this "morality" that basic subsidence should be tied to some nominal value of productivity that they decide based on a quarter-to-quarter bottom line.
Why should society continue to give capitalism this free lunch? I think society should invest more directly in its people. I think this zero-sum mentality that to invest in a person who chooses not to work has some "negative impact on other people" hurts us as people, and is a bad excuse for society in general. The fact that there may be some people who decide to spend that investment solely on shortening their life with as much alcohol as they may acquire doesn't mean that a society investing in people has a net negative impact on everyone else.
>A society is people. People being dependent on their society is somewhere between an oxymoron and baseline assumption. Everyone is dependent on the day to day cooperation of their society, in one way or another, even if it is "just" roads, and breathable air, and a political reality in which they can live their day-to-day.
In some sense, people depend on society to maintain their quality of life and provide for a subset of their needs; people also contribute to society and maintain it in turn. You're talking about cutting out the latter and keeping the former without replacing it with anything to support yourself with, which makes you completely dependent on society to provide everything for you, not just some things.
I didn't and I don't think most people do look down on those that cannot find work because there is no work to be found. Your 'I want to be able to choose not to work despite having the opportunity to work' perspective, though - that I look down on.
By the way, if you decided to work for yourself - to grow your own food, live off the land, and trade your labor specifically for your own sustenance, you could probably do it. That's a choice you continuously make.
>If capitalism needs more hands on deck, it can pay for them. It's time to stop assuming everyone should work, and let the market tell us why we should work (and how much it is willing to pay to let that work get done).
It already does do that. I don't volunteer at my job, I'm paid for my labor. The market tells you why you should work by pricing goods. You should work so that you can afford goods and services that improve your life. If you don't want any of those things, that's fine, but there's an argument to be had about whether my labor should subsidize your lack of it.
>companies don't have to do right by us, because they aren't our societies, they don't need us, they don't depend on us. The basic problem is that we are post-scarcity in the labor market, and companies have a "free lunch" by this "morality" that basic subsidence should be tied to some nominal value of productivity that they decide based on a quarter-to-quarter bottom line.
This is a weird argument to me, because companies absolutely depend on their workers. There are deficiencies in the labor market that cause certain labor to be valued at a higher rate than others; companies routinely hire from their competitors and give their workers raises or better offers. That's the labor market at work. It's not a free lunch.
>I think society should invest more directly in its people.
I agree. I think subsidized education is a pretty good thing, and it has positive impacts on society which is why we continue to do it. 'Investing in people' doesn't mean paying you to do nothing, though; that'd be a pretty terrible investment.
> In some sense, people depend on society to maintain their quality of life and provide for a subset of their needs; people also contribute to society and maintain it in turn. You're talking about cutting out the latter and keeping the former without replacing it with anything to support yourself with, which makes you completely dependent on society to provide everything for you, not just some things.
Sorry, no, that's not what I'm talking about.
I am saying that I'd like to see the notion of "contributes to the labor market" entirely disentangled from the notion of "contributes to society". Those are very separate concepts, but today everyone talks about the morality of the first as if it is the morality of the second.
Consider it moral relativism if you will, but I think "contributes to society" is and should be a very low bar. Existing as a law abiding member of a society alone is a contribution.
Child care is extremely undervalued by the labor market, but hugely valuable to society. Child care raises the next generation of that society, after all.
In the case of the "town drunk", making transactions to buy a legal vice is a contribution, keeping the money circulating in that town. That "town drunk" may even contribute directly to the well being of people directly in the way that they brighten people's days.
The lower the bar we set as a society, the greater the safety net, the larger the trampoline. Yes, that's a bit selfish to want, but a large safety net, a giant trampoline lets you take huge risks in the labor market, lets you take huge risks undervalued by the labor market.
I got laid off in a terrible state once, where to collect the unemployment insurance money to which I contributed, almost all of which came out of my premiums, I was treated as a guilty, negligent individual that needed constant supervision to keep from a life of crime, I was micro-managed in how I could use my money, and my unemployed time. Every form was designed to infantilize me, and possibly also designed to humiliate and judge me and guilt me, for daring to make use of the insurance product for which I had greatly contributed in a time when it was decided it would be nice to "cut overhead this quarter to bring shareholder value up for a buyout". That's not a society I want to live in.
We are post-scarcity in the labor market for all unskilled and easily trainable jobs. We are dangerously close to post-scarcity for a lot of skilled labor. That scares me. I want to selfishly redefine what "contributes to society" means because I fear we need to do that sooner rather than later. We don't all want to be standing in lines in government offices, for the rest of our days, filling out forms demanding us to prove our worth as people. It would be better if we could assume people are worth something as a baseline.
I'm able to do some types of work, even though all my attempts so far have been torturous for me and subpar for the employers.
And I'm certainly able to work according to society, in particular the doctors who have found me mentally and physically healthy.
And yet instead of working, I'm taking resources away from others while contributing nothing. I consider this a better ethical outcome than making my life even more intolerable in the name of fairness. I would vote for a feasible basic income in a heartbeat.
I'd also vote for legalising suicide as an arguably more moral alternative to both leeching off of society and living lives not worth living.
Anyone outraged by the prospect of paying for others' laziness has yet to agree with me that forcing people to contribute to society while depriving them of legal access to safe and comfortable means of exiting society is unfair, too.
If you're talking about an opt-in system (like the one described in this article) then the opinion of those who'll be net contributors matters a lot - if they choose not to join, the whole system has no value; for someone to get UBI, someone else has to create and provide this value.
Wait, this is what we're calling 'UBI' now? Many countries have had this for ages. Australia calls it colloquially "The Dole" and its nothing like UBI.
It's like saying a disability pension is 'limited UBI'.
It is interesting but I haven't thought about it enough yet to comment fully.
One of the hopefully benefits of UBI is that it enables huge amounts of volunteering in society. I'm actually working on a charity that approaches this specifically from that angle. It is a free platform and I'd be glad for more feedback. You can learn more here: http://thegoodloop.org
I suppose I was a bit hyperbolic, and I'm sure there are some legitimate issues with this. But in my defense when I posted this, this post was over an hour old, and there 10-15 comments on here by people who clearly hadn't even read 10% of the paper. They were just instantly dismissive about it when they didn't even understand the basic concepts the paper was outlining.
I was just hoping to promote some reasonable discussion on it. Why do you hate it?
I was sceptical about this - where does the value come from? - until I read the part about mapping the social trust.
There is value in mapping these relationships. Trust enables lowering the cost of transacting. Low cost of transacting enables creation of powerful ecosystems.
It's the first proposal that I am aware of that introduces an economic incentive on an individual level for mapping trust. The system seems potentially very robust:
1) I add people I trust in order to increase the value of my coins
2) If I make a mistake and add an actor who turned out to be untrustworthy I am penalized by losing some value from my coins
Thanks to this dynamic, there is both an incentive to expand the network and eliminate bad actors on an individual level.
I like this idea. I am skeptical that it will work.
Necessary in this idea is an inflation curve to continue to provide the basic income and discourage hoarding. It is also necessary to scale the user base to make the idea meaningful. This could lead to hyperinflation as the network bootstraps, creating a headwind that scales at least as fast as the idea.
The requirement of actual meatspace peer-to-peer trust is an extremely hard problem as well. It seems like one option is people take this seriously and trust networks end up resembling current social networks with the inherent stratification. And you don't get internet money.
Alternatively this requirement is eroded or ignored because it's too hard, until it becomes obvious that there are entire networks of fake accounts, everyone is holding FakeCoin, the risk can't be arbitraged out because of the 1 to 1 requirement, and now it's 2008 and FakeCoinCo is Too Big To Fail.
Regarding meat-space web of trust, I think solutions like Keybase can help with this (though I'd want to see the principle of it decentralized, rather than only one service as it is now).
With validators, you also largely solve this problem. The vast majority of people are not hermits with no physical connections. I can create an account and go through my apartment building's validator. The apartment office has a vested interest in making sure my account is legit (I'm paying them!), and now I'm connected to a real world entity. Similarly, my employers can create a validator and connect my account during the normal on-boarding of a new hire. They also have a vested interest: a fake account impacts their reputation; they pay into that account and may even be paid from it (suppose I overspent on a business trip and need to reimburse them, they need me to pay back in a currency they trust).
It does still run into problems, don't get me wrong, but this validator concept could mitigate many of the scaling issues of web of trust.
The validators idea to accelerate bootstrapping is a good one. And I think you're right; it be institutions like companies and banks that will provide the validation services.
The issue is tying this to a non-fungible asset. The most obvious problem will be ghettoisation. You can envisage "invitation-only" validators at one end of the economic spectrum and a state sponsored validator at the other end.
You could, possibly, force them to interact by mandating a common intermediary, presumably the state, so that there are connections across the population. But, at that point, the personal asset/currency idea seems superfluous.
Might as well be an account linked to, say, your social security number that mints a fungible asset periodically. You can look at enhancements to the SSN idea to make it less forgeable but that's a separate issue.
Having said all that, I've been quite skeptical of the social benefit of UBI. Largely as I couldn't see how you could sensibly start from here, as it were, and control its development. I still can't see how to do that but I'm less skeptical that it's possible.
I'm skeptical that there's enough to prevent validators from acting maliciously here.
Firstly, the only leverage against a validator is that if they act poorly, others will no longer accept their currency, so their personal UBI is possibly lost.
Secondly, the validator doesn't necessarily _gain_ anything from continuing to act in a trustworthy manner. Maybe they require membership fees or something, but that's not intrinsic to the system.
Taken together, all it requires is for a validator to insert _one_ fake account into the trusted pool to break even, and _two_ fake accounts to profit significantly. For example, they could create 50 fake accounts at the start of the experiment and let them accumulate fake wealth on the side, then operate as a validator for two years, then introduce these 50 fake accounts into the trusted pool and exchange 100-man-years of UBI for actual value. This appears to be more than they would receive over a lifetime of acting in a trustworthy manner, it's trivial to pull off, and if anything it's a _conservative_ attack - if a validator can get a userbase of 10000 people, 50 fake accounts doesn't sound easy for another person to detect.
I think there are plenty of flaws here, but I upvoted it because I think there's something novel and creative here that can be leveraged. To those posting criticism and nothing else, let's see if we can try to be constructive with it, or at least helpful in identification of central flaws that will be roadblocks. I'm sure there is a lot to be sorted out.
I'm not sure UBI's issues are technical, and that you can just solve it with the blockchain.
But it still looks rather exciting!
I hope we'll get the code running soon, the white paper lacks some details to understand in depth the protocols. (Is there PoW ?)
Btw, I don't get what is "minting". This is not really explained. Is it like mining?
Are people expected to run a miner on their personal computers? Or do the coins appear automatically, based on the age of the account ?
I think the idea is that the contract just produces more coins on a schedule.
As you can't arbitrarily start accounts (at least that's the thinking), it's the equivalent to the state handing you some money periodically. Mining wouldn't be necessary as the rate limit would be account creation.
I would guess that the creators and proponents of this idea don’t see it as merely providing solutions to technical issues with UBI. This idea is much more than “a standard UBI proposal except using blockchains.”
I don't have anything to contribute regarding UBI or blockchain, but I just wanted to compliment the author on creating an extremely well-written readme. This is exactly what I want to see from a github project: "what", "why", and "how" presented in a very clear, organized, just-long-enough format.
> The existence of trust relationships is how users protect themselves from fake accounts by specifying which ones they know for a fact represent an individual human’s primary account, forming a native Sybil resistance in the system.
I don't think so. What if my friend and I both create 2 accounts and both trust both of each other's accounts? We get twice as much money as everyone else who plays by the rules?
The "Defending against fake accounts" section suggests that this wouldn't be effective except between you two. If I trust jstanley but not jstanley-fake, then you can still only give me jstanley currency. You've got to convince me to trust jstanley-fake in order to get me to use the money.
However, since this is basically a currency based on web of trust, at a large scale you could probably dupe enough people into trusting your fake account. Or introduce both currencies into separate social networks. One here with the technical social circle, another with your in real life community, for instance.
Given the existing scams that loads of people fall for, I see no reason they wouldn't figure out how to dupe people into accepting this fake currency. If then everyone accepts the fake currency, it isn't fake anymore and the scammers really are just printing money.
Maybe I'm too cynical but I would expect the scammers to win.
It would still fail when you got to the broad network. The idea of the validators presented in the paper is to prevent things like this. As you want to exchange money internationally, you would need an internationally accepted validator.
I’m sure some people could get away with it for some amount of time, but each person in each circle is incentivized to keep an eye out for these personal schemes.
Adding to this, how long until we see bots mass-emailing people with scams like "Add this account number to your trusted UBI list and double your UBI overnight!"
From what I understand, people other than you and your friend will only trust one of your accounts (the real one), and will only accept money from it. So even though you might have 100 FakeYous, you will only be able to pay with RealYous.
But of course when I pay you, you’ll have no idea which account is my primary. I’ll tell you it’d FakeMe23 and you’ll accept the money because why wouldn’t you?
Per the authors, they want people to use a real peer-to-peer trust network. I have never met you, dpark, and so the only way for you to pay me (or me to pay you) is for there to be a web of trust between you and me. And then we will only be paid with currencies of people who we trust. This also means they have a stake in it, they could end up with 50 dpark-fake coins that no one else will accept so they need to be careful of trusting people they don't know well.
You won't pay me with dpark-fake because I don't trust it, instead you'll pay me with pg because I've trusted him and he's trusted you.
However, this gets to the fundamental problem of the web of trust: It's really hard to do. Physical key signing parties are impractical to scale. You need systems like keybase which correlate your keys/accounts with each other if we aren't able to meet and communicate in person (which also requires trust, I wouldn't trust you after a single meeting, but would readily trust my friends who I know well but are physically remote from me).
Quoting from the paper:
This example demonstrates that Bob can only ever
receive money that he trusts, and Alice can only ever
spend money that other users trust in turn. Even if
Alice makes 100 fake accounts and has them all trust
each other, she will never be able to spend more than
the amount of AliceCoins she has, since that’s the only
account that other users will trust. This is why it is
crucial that users take direct peer-to-peer trust
relationships seriously.
This whole thing relies on users to essentially enforce the trust web. No way this works in reality.
Eve won’t try to establish trust with Bob directly. She’ll establish trust with Bob’s grandmother who doesn’t know any better. She’ll essentially phish her way into the trust network. After convincing Grandma to accept a single EveCoin, Grandma will perform any currency exchange for Eve and let Eve buy whatever she wants with BobCoins.
When your premise is that “it is crucial that users take direct peer-to-peer trust relationships seriously”, you are doomed to fail. You cannot expect security to derive from the average person being extremely diligent.
Or you could sidestep all those issues by having a single currency which everyone who participated would accept, the same way that dollars and euros work.
Sure, which is what we do now and generally works well. I'm not advocating for this system, merely addressing the question by pointing to their documentation where they answer it.
Why would I trust your account if it wasn’t, well, trustworthy? Think about the current world we live in. There are some people I would accept a verbal “I owe you” from (namely, my friends) and some people I would not.
Because you’re relying on a web of trust. You obviously won’t trust me directly. But you’ll trust me indirectly because I only need to gain the trust of someone in your web at which point the authors expect me to be able to engage in currency exchange to find a coin you’ll honor.
And at the end of the day, it’s unclear why you wouldn’t want my FakeAccount coins. Once I’m in your web of trust, you can spend my coins like any other trusted currency.
The authors seem to believe it’s the users’ responsibility to somehow police this when the users in this case just want a medium of exchange and derive little to no value from excluding my fake coins.
But what if I pretend to be two different people? It seems we'll need some kind of centralized organization to verify identities here (the government? )
I assume the point is that an individual wouldn’t just form a trust link with another individual without some confidence of their “true” identity. For me to trust someone’s currency, I would either need to be very sure of their identity through some trusted third-party system (e.g. a centralized system like government ID), or be involved in an extensive social (and probably in-person) relationship that would be difficult to fake (like friendship).
For the latter, what I mean is that it’s probably prohibitively difficult to maintain two significant in-person social graphs that have no overlapping members. Sure, people can get away with it for things like romantic affairs, but the incentive there is very different than money exchange, not to mention that romantic affairs often get discovered.
I don't see that overlap in the social graph implies a high enough chance of discovery. Wouldn't discovery require that members from each group are actually involved in the same financial transaction (in a way such that people are paying attention to who's involved)? It may well be possible to keep that rare enough for long enough that people try it, and are sufficiently successful to be a problem.
(This is certainly not confidence that it wont work, just lack of confidence that it will, pending further reading/experimentation/analysis...)
Read the linked website. They include validators, a decentralized set of organizations, that can check government IDs to provide that sort of trust.
(This is like the only response I seem to be contributing, no one seems to have read the full thing, so people keep asking questions like this that are answered by the source, so there is no interesting conversation).
It's not quite "identity" that we need to verify, but rather uniqueness. Centralized approaches are theoretically easy; I'm not sure there isn't a possible decentralized solution. The one proposed does seem to be a partial solution, but probably not enough of one.
I don’t think you need an explicit decentralized solution. I think the individual incentives are such that this type of scam is unlikely, because it’s probably prohibitively difficult to maintain two significant non-overlapping social graphs.
I agree that the proposed solution seems not enough, but I'm impatient to see what will happen when they try it out. Maybe the trust chain will work out
Loving the discussion on this submission. We are building our own Basic Income solution around community currencies (not individual) so that a person can belong to one or more communities (voluntary association) which provide their members with basic income by issuing new coins to them and gradually inflating their money supply. They may get the equivalent of $5 a say from a Poets' guild, $20 a day from their city and $1 a day from some other association. They convert it all to their city's currency with no fees, and use it.
If you are curious, check it out (https://intercoin.org) would love to get feedback.
My main concern about UBI has been exactly this - producers of scarce goods raising prices, because they can.
But people need to pay for necessities anyway, so the current welfare state has to deal with it somehow, right?
One way is collective bargaining via single payer systems, which actually lowers prices. But this leads to an arms eace between sellers and buyers and centralization into single payers and cartels (AMA).
I'm not sure I'll ever be convinced that normal people should be operating with cryptocurrencies at the protocol level. This whitepaper goes into a lot of technical detail that users should never be expected to touch.
It appears someone doesn't like this answer (or possibly think I like it), but UBI and implants very likely will go hand in hand. No free lunches in this universe. None.
I think the difference here is who's minting coins. I don't see a reason the disenfranchised couldn't band together and create their own validator. This gives them currency internal to their community, which they can start using right now. A huge difference from what exists now. How would you possibly do this with our previous technologies, youd need enforcement to stop cheaters and scammers, youd need trustworthy regulators to distribute coin equaly, avoiding bias and discrimination. Both of these very real negitive behaviors are now very difficult if not impossible, and it didn't require a military and a complicated beaucracy to enforce.
Just my opinion but I believe the inflationary nature proposed here will create a pressure to immediately swap your basic income to other crypto, there are too many cons in holding this coin eg you don't know who will accept it and for a decentralized system is too personal, I understand that with the level of specificness of every person having their own coin politics will come into play with validators Nations refusing each others coins
Interesting concept that the validators are incentivized not to validate the wrong people but perhaps need more incentive to validate people, perhaps the validators would start printing their own money and automatically disperse it, fairly dangerous ideas but we are all lucky the ball is rolling on this.
If the answer is no, what happens when a scam account is discovered? They get to just keep mining new coins forever and passing them to the people unwise enough to trust the account before it was discovered to be fake?
If the answer is yes, what happens to the coins already mined by the scammer? Last person holding them loses?
"...it is crucial that users take direct peer-to-peer trust relationships seriously"
I personally doubt that most people will take it that seriously, especially if they're new and in a position where they find it difficult to make transactions. There's also the issue that inevitably, even if people 'trust' someone else currency, that person acts deceivingly and is malicious. How does the network protect against a certain number of 'broken' trusted links?
The main issue here that stops it working is the requirement for a fixed exchange rate. If I'm industrious and you are lazy why would I exchange my output for your coins. You are adding nothing of actual value to the system that I could buy with the coins. So once I have hoovered up all the coins of the lazy there is nothing of value I can buy with them.
The result is actual inflation - all the industrious people have lots of coins but nothing to buy because the lazy haven't produced anything.
If the values floated so that AliceCoin can only be used to buy the output of Alice then you might have a system that works. AliceCoin would swap through the system like an endorsed cheque until Alice redeemed it by actually doing something.
To game this system you just need to appear industrious until you are trusted and then stop doing anything. You then get the output of those that desire to be trusted without actually adding anything yourself.
And thats how UBI works - it requires constant new blood to operate as a slave class until they are granted 'freedom' by the system. If you look at UBI systems you'll always find that slave class - a five year qualification period, a fixed exchange rate with those that don't get the UBI, UBI less than the living wage, etc.
Here's a thought experiment: make a crypto currency that binds to personal human lifetime, i.e. that (in order to disincentivize rent-seeking and exploitation) makes it prohibitively expensive to spend this currency if the blockchain indicates that it has been "tainted" by not originating from an individual's lifetime bound contingent (i.e. tainting your contingent with other people's money has an exponentially increasing penalty).
Exploitation is disincentivized (since the more money you aggregate from other people, the less it is worth to you (relatively speaking)). Monopolies are disincentivized by the same mechanism, i.e. the Coca Cola company selling to 100 million people makes less money than 10000 companies selling to 10000 customers each.
"But this stunts growth!" Yes, it does; but the curve can be shaped, and could probably be adjusted by forking in a democratic fashion (if mining is actually democratized).
The trust part breaks this I think. Would like to see a UBI that is distributed to Estonia e-citizens, Fummi, or similar. Something where a real live person is validated once and only once in person.
This requires far too much careful manual bookkeeping to ever work at scale. People would never be able to manage dozens (let alone hundreds or thousands) of trust relationships, especially when each decision might end up being rather important, financially speaking. It would be a constant cognitive tax that I can't imagine anyone paying.
This one of many reasons that good money is fungible and completely interchangeable. It doesn't matter where your balance came from -- it can be used just the same.
One other big concern. I think proposals of this nature run a dangerous risk of linking financial associations too tightly with social associations. Becoming someone's friend shouldn't require vetting their long-term financial stability right off the bat.
Okay, so the system ensures (assuming that it manages to achieve everything it says) that people get an appropriate number of coins and can spend them based on this web of thrust.
But what is the net flow there? Some people will want to buy food with these coins, but they have no goods or services to ever offer in return (that's the whole point of UBI). Let's call all their personal cryptocurrencies in aggregate PoorCoin. Some people will be using these coins to participate in a real economy, and not only be using to buy stuff but also sell their own goods and services for coins of others and perhaps buying back the coins they issued themselves.
Let's assume Alice would be willing to sell food for a coin where they can get goods or services or labor in return - i.e. Alice would not be willing to trade food for PoorCoin, but she knows Bob is a trustworthy, diligent, hard-working dude so she'd be happy to sell food for BobCoin. So far so good, the system allows to do that.
If Bob knows and trusts (in this system) any people who truly need UBI, then they'll be able to buy food.... at the expense of Bob. Alice will gain BobCoins - ones that Bob could have been using to buy stuff for himself. Instead of his own coins Bob will gain PoorCoins, which are comparably much less useful. If someone selling food would accept PoorCoins, then they would have done so, but since they don't, Bob is stuck holding coins of poor people he trusts and can't spend them on anything useful (remember, those people have nothing of economic value to offer by definition - if everyone can do so, we don't need UBI).
The same applies for coin flow of any communities - poor communities would need a net resource inflow in any UBI-like environment; so there would be a perpetual, permanent flow of different poorcoins out of that community. Would the other communities be ready to accept those coins? As some people would and some won't, it'd result in the "trusting" minority funding the whole system in an opt-in manner. We can expect the total volume of "trust" that the trusting minority is ready to spend in this way to be limited to, say, the current total amount of charity - and we do know that we can't run UBI out of charity, the amount is simply not sufficient.
An UBI system has net consumers, but it also needs to have net contributors, the ones who are funding the UBI without getting anything in return. It's clear why people who want to get UBI would join the system, but why would the merchants who sell food or the landlords who have cheap apartments join the system? Okay, they might get some value of the employable people they trust, but then the that those people, any person who's an "intermediary" between the producers and consumers will be the one who's funding the system, which is kind of weird since those are not the people who can afford to support everyone else - generally, those tend to be the working poor, who can only contribute a tiny amount of taxes; your local millionaire doesn't personally know or trust that much people who really need UBI to survive. To solve this, you'd need some entity which would be ready to offer (significant quantities) of goods and services for PoorCoins, taking them from the poor directly or from people like Bob, but if you do that, then that entity is the one doing UBI, not this blockhain, and it might as well hand out dollars instead - it still needs to provide (and fund) all this value; and it still needs to solve the identity and fake account problem itself, since it can't rely on the whole web of trust; it either has to take coins of people who noone else wants to touch (so it needs an independent mechanism of identity verification) or it can't provide universal income to all real people.
This is a great response, explaining the problem with any UBI in general.
I think the only way it could work is when the rich actually CAN gain something for the goods flow going to the poor - that something can be a sum of "moral satisfaction from charity", "diminishing the chance of the poor majority revolting against the rich" and "statistically helping young poor geniuses (and creative people in general) to join the rich in the future".
For each rich person, the ratio of these will be different, but multiplied by a portion of their worth they are willing (or being forced) to give, will in the end define the total amount of UBI available.
My theory is that after automation is widespread, it won't really cost much to support the poorer portion of humanity, just as now there is a surplus of basic goods made of plastic (clothes, everyday items). In the future this will extend to food, shelter and connectivity.
But at the same time, the rich and poor will be further separated, as there will be no incentive for the rich to interact with the poor.
Involving the rich, IMHO, is a 'tragedy of the commons' issue - it's generally not worth for any one of them to get involved, since that doesn't provide a meaningful impact to the practical goals like "prevent the bad effects of inequality around me" or "reduce the risk of pitchfork-driven regime change"; but it could be worth for them to get involved iff there's a certainty that all of them would do so (willingly or not).
>Involving the rich, IMHO, is a 'tragedy of the commons' issue - it's generally not worth for any one of them to get involved, since that doesn't provide a meaningful return
It's unfortunate your analysis of Circles cryptocurrency not solving for _value_creation_ is not near the top for further discussion by more than one person.
A very similar currency proposal (Group cryptocurrency) also didn't account for sustainable _value_creation_ that I discussed with its creator on HN before: https://news.ycombinator.com/item?id=9501355
Both the UBI cryptocurrency proposals are flawed because they get the wealth-to-money cause & effect backwards. It's the wealth creation (the value of labor / food / calculating the stars to predict floods / singing poetry / catching fish / etc) that causes money to be worth something. The Circles whitepaper using concepts like "validators" and "transitive exchange" doesn't solve the value creation.
> Some people will want to buy food with these coins, but they have no goods or services to ever offer in return (that's the whole point of UBI).
Is that true? The whole point is that these coins themselves will have value. There will be no such thing as PoorCoin. It doesn't matter whose coins they are so long as they are real and trusted (as in not fake). I don't think there's any correlation to trust and economic output as you are describing.
The unique thing here is no one is funding the system - it's being mined out of the system itself. Just like no one truly "funded" Bitcoin. The difference is that mined coins are equally distributed, always, instead of to the miner, who will no longer be needed.
As mentioned I believe in the paper and at least in the comments here, a trusted identity system is required in tandem with this.
Read the article carefully, that's the exact consequence of the core system.
Assume a rich community and a poor community, where each of them trusts everyone else in their community and noone else. In this case, there can't be trade between the communities.
Assume that Alice from the rich community trusts Bob from the poor community. This will allow Carol from the poor community to get stuff from Dave in the rich community - if Carol spends one coin, then Dave will get 1 Alicecoin, Alice will get 1 Bobcoin, and Bob will get 1 Carolcoin. This can only happen up until Bob runs out of Bobcoins (since Alice won't accept Carolcoin) or until Alice runs out of Alicecoins (since Dave won't accept any coins from the poor community) - so the whole community will have "consumed" the generated resources of those intermediaries.
There needs to be a sustained flow of coins from the poor community to the rich community to enable the flow of goods from the rich community to the poor community. If the system can't enable (and motivate!) the rich people perpetually accumulating coins of poor people, then it's not an UBI system. The poor people got their coins, spent them for stuff, and have no coins remaining. So inevitably someone else had stuff, traded it away, and now has coins of those poor people, i.e. that someone funded the system.
If there's noone funding the system, then noone can get real stuff out of the system - you can't create food out of thin air. UBI is a mechanism where large number of people can get food and services for nothing - so, for that to be possible, someone else needs to give out food and services for nothing.
Interesting, thanks for the substantive reply. I'm not convinced fully but I think you've highlighted a problem area.
The thing I see is that the coins the rich community got for the food still have value. They can trade them for other resources, workers, and still manufacture things. Let's say this is a bakery. They can still buy flour and eggs and hire bakers (let's say this is a bit bigger than a mom and pop shop).
So people still need to work at some level, but they will have enough money to buy bread and feed themselves always. I'm wondering how that balance works though (aka how much of COL is actually given by the UBI, and what variables change this).
> If there's noone funding the system, then noone can get real stuff out of the system
I don't think this is true. See currencies everywhere that no longer hold to a gold standard, etc. No one is funding the value behind printing money. Why it works is because of confidence and agreed upon value of the currency, which is required here in the same way.
I'm wondering how this could possibly tie in with a deflationary currency used in tandem with it, and an exchange rate between UBICoin and StagantCoin. I'm spitballing here with little economics background though so I'm not claiming there isn't a central flaw there, but I'm curious what results.
"The thing I see is that the coins the rich community got for the food still have value."
I think in your replies you are begging the question, though. The question at hand is precisely where the value comes from.
"Why it works is because of confidence and agreed upon value of the currency, which is required here in the same way."
The fundamental base of the United States Dollar is that you can use a dollar to buy one dollar's worth of protection from the United States-affiliated men-with-guns from coming and taking you to prison for not paying the United States Government what it has determined to be its fair share. The US Dollar is built upon the confidence that the United States can and will do this to you, not a vague confidence in the currency for currency's sake. (This is why when governments collapse, their currencies collapse; any alternate theories of value are obligated to explain that connection as part of their theory of how currencies obtain value.)
Currency is a unit of exchange, not really intrinsically valuable in itself except inasmuch as it exists in a market for which it can be exchanged. As a UBI proposal, this system very clearly has a mechanism for people to consume resources; the question is, who is going to put them in, and for what purpose?
Even waving at BitCoin isn't enough to answer this question. BitCoin has always been about exchanges, not unilateral consumption.
I think it may help you to ponder this question: Nothing stops you from creating adjkantCoin today. You can simply declare yourself to have a thousand of them. There is a deep and profound way in which that's exactly what this system does. How do you walk down the street and convince your grocer to take any of them in return for his apples? And don't consider it from your point of view... consider it from the grocer's. I am not asking this because it's impossible per se; BitCoin did indeed pull it off to some extent. But it's non-trivial, if you do successfully put yourself into the grocer's shoes, and something that this system will need to be able to answer many times over in order to work. And I don't see that answer right now. I'm not even sure it has a stable answer if you magicked it into existence, I'm deeply unconvinced it has an answer to get from here to there in the real world.
I completely agree it's non-trivial to convince people to adopt this system. However, once adopted, I don't think the 1 to 1 problem highlighted in this chain exists.
If I had to give a very simple argument for why adopt, I think it would have to come from a place of "UBI would work if we all did X and you could still make money that could be exchanged for good and services with a similar inflation rate, so this currency is better than dollars. We should switch to it. Don't believe it will work? Look at Bitcoin!"
In that way, pointing at Bitcoin naively can actually have value to validate the possibility of the coin's success.
The biggest problem is of course not convincing one grocer, but the whole world at once.
> "The question is, who is going to put them in, and for what purpose?"
I fully agree with the question and its importance. I think the answer is everyone at once on the premise of "we're all in this together" and for the reason of "pursuit of a better social system". I don't think this will likely happen, but I think that theoretically, it's possible to function (the concept not this specific coin, which would need quite a lot more study to make this claim with). My hope is that given study and time, this idea has the potential to inspire a final system that could eventually be implemented this way in say 100 years, maybe sooner, maybe later.
PS: Did not downvote, even if I disagree I appreciate the substance and am sad to see the downvote on such a substantive discussion.
The adoption problem is that it should be expected to be asymmetrical - most of the would-be-net-recipients would join early, most of the would-be-net-donors would join late or never.
And this transition period matters a lot. If a system doesn't provide a solid benefit during the early transition, then it's worthless to discuss how it would work once adopted since it won't be, it can't be. See Bitcoin for example - it provides a solid financial benefit to early adopters, early investors. Without that benefit, it wouldn't get widely adopted and would be worthless.
The transition does indeed matter a lot. I think there are other transition methods you are missing though. Look at how the US switched quite quickly to chip readers. I could also imagine a system where US dollars (or insert currency here) and UBICoin exist together for some time, but dollars are only valid if you were born after year X. Merchants would accept both during this transition time with an exchange rate.
There is a ton to discuss in terms of transition. I don't think the transition being another unsolved problem invalidates the entire idea, particularly when virtually no time has been spent examining the transition options.
Okay, in the example of the poor community, the rich community can trade some of the coins back to the poor community for labor. Assuming that the farmers aren't as poor, the poor people have no flour or eggs to sell, but they can sell off some labor.
However, let's assume the third community, who are homeless and permanently unemployable for mental health reasons, and (for the sake of argument) will never ever earn a coin from anyone else. Since this system enforces a 1-to-1 exchange rate, can you name any practical difference whatsoever between Alice trusting one of those people for 1 coin (i.e. they'll be able to trade with someone in a scenario where that someone will get 1 AliceCoin and Alice will get 1 Homelesscoin) and simply gifting 1 AliceCoin as charity? IMHO there is none, except Alice would be able to "keep score" of how much she has given to charity.
This is a key issue here, that with this system trust isn't simply "Bob is who he claims to be", in this system trust means "I'm willing to guarantee that Bob's coins are as good as mine by agreeing to an automatic 1-to-1 trade", in essence you're willing to co-sign any purchase Bob makes since sellers will happily take your coins instead of Bob's; and in any environment where's an innate disbalance (i.e. your coins actually are more valuable than Bob's because more people will trust your coins) this arbitrage will be exploited up to your trust limit, resulting in you losing your coins and gaining Bobs coins instead.
The same applies with community coins; no matter what happens, the coins of some communities will be de facto more valuable than others, so any link of trust between these communities will be arbitraged by that built-in 1-to-1 trade option until that trust runs out and trade between those communities stops. If someone makes a 1-to-x trade reflecting the actual difference of market power, then again people can exploit the built in 1-to-1 trades - so there's a strong disincentive for anyone to make that trust between those communities, since you have to bet (and spend!) your resources in keeping the different currencies linked. The system doesn't provide for "partial trust" of say, 1-to-0.8; you have to be totally sure that Bob's coins are as good as yours, since by making the trust link you're willing to trade all your coins for Bob's coins automatically (with no confirmation or refusal possible) at a 1-to-1 rate. There's a lot of theory and experience for national currencies pegged to each other - and how it can get exploited for financial gain (e.g. Soros had some profitable deals).
I see what you're saying, but you haven't convinced me of this disbalance. What incentive do sellers have to accept AliceCoin over HomelessCoin if everyone adheres to this 1 to 1, even though de facto this is not the case if you consider economic resources?
> Since this system enforces a 1-to-1 exchange rate, can you name any practical difference whatsoever between Alice trusting one of those people for 1 coin (i.e. they'll be able to trade with someone in a scenario where that someone will get 1 AliceCoin and Alice will get 1 Homelesscoin) and simply gifting 1 AliceCoin as charity?
The key difference is that she has lost no value if everyone holds to the 1 to 1 always. This is an important distinction, you're right. However, I don't see any incentive to break from 1 to 1 if everyone is holding to it. If the grocery store accepts HomelessCoin, I have no preference for AliceCoin. If everyone breaks from 1 to 1, then you suddenly have to calculate and consider the value of billions of currencies now. Who wants that? What value do I get out of that change?
This coin is inherently built upon the idea that we are not tying individual coin value to someone's economic value. The seller should just want more coins, and it doesn't matter who they come from.
The "... if everyone holds to the 1 to 1 always. " part is a lot of wishful thinking. As I said, look at the real world examples of currency pegging failures, many of them artificially engineered by large scale market activities.
1) There is an innate difference in practical value, initially even if some coins have just a bit more liquidity i.e. wider range of acceptors as others.
2) If everyone holds to the 1-to-1 agreement forever, then there's no difference between the coins and everyone can freely make the trust deals.
3) If the 1-to-1 does not hold forever, then the people who were betting on the link failing can earn a lot of free coins in this arbitrage, taking them off of people who have made the 1-to-1 trust deals - draining their resources until the assigned trust limits run out.
4) Thus, there's a strong incentive for skilled, resourced people to try to break any 1-to-1 peg between any arbitrary communities, since they can earn a lot of coins if this trust breaks. Especially since it's an automatically enforced 1-to-1 without fees, it's a safe bet - if you fail, then there's no effect, if you succeed, you win a lot. Someone will eventually do so, and the 1-to-1 will break. This system design contains rewards for would-be exploiters of trust, so this design will be exploited.
You have an incentive for 1 to many trades makes sense. What possible incentive does someone have for making that trade with you though when they can go anywhere else and get 1 to 1. This only becomes a problem if everyone ignores 1 to 1 entirely.
If 1 to 1 breaks and it is known, the system could collapse and the coins would now be worthless.
Even if you secretly broke 1 to 1 and managed to find someone willing to take the short end of the stick, you could also be identified and people could simply blacklist all new coins from you and avoid trading with you. There's a lot of risk in failure.
I still don't see the incentive/means for breaking 1 to 1 once implemented. And again, I'm not saying adoption is easy.
In a simplistic manner, the system for breaking 1 to 1 is as follows:
1) The attacker (either an individual or organization with substantial wealth to invest in this endeavor) identify a potential mismatch - i.e. a "subnetwork" that is weakly linked in terms of trust and have an substantial import/export imbalance; i.e. that there is ongoing demand for that subnetwork to buy stuff from elsewhere, and due to that historical imbalance that subnetwork has comparably few outside coins, and the main network has comparably a lot of the subnetwork's coins. Ideally, that subnetwork is one large "coin validator" as described in the original paper, but constitutes a small part (say, 0.1%) of the whole market. Lets call those coins PoorCoin.
2) You borrow PoorCoin (assuming that the currency is in wide practical use, that shouldn't be an issue - none of the cryptocurrencies eliminate the need for credit, and if it becomes popular, credit will be made in it). A lot of it. If collateral is an issue, you provide it in other coins or US dollars. A lot of it - cornering the market is the goal. In a sensible market, actually, that will be very visible and that by itself will be enough to break the 1-to-1 peg; that's what happens with real pegged currencies - pegged currencies require sufficiently huge reserves to clearly demonstrate that breaking the peg takes more resources than anyone can afford, and the peg is lifted as soon as it's obvious that a credible attack is possible. If it happens now, then you buy PoorCoin at the new (lower) exchange rate, pay back your loans, and profit from the change.
3) Otherwise, for every single Alice in the 'rich' part of the network who trusts poorcoin, you "trust Alice", and immediately send through as much funds as you can to yourself, converting the PoorCoin to AliceCoin. This is the key flaw of the system - you can force an arbitrary large number of 1-to-1 trades without the possibility to get refused, unless Alice stops trusting PoorCoin (in which case you win anyway). Then, use AliceCoin to borrow more Poorcoin. You have to control more wealth than all the Alices combined (that's the goal of #1, to identify a market where you can do that), so that you can drain all or at least most of them. This is the key part of the attack - you remove the possibility for 1-to-1 trades by taking all such opportunities and saturating the market.
4) People on the PoorCoin subnetwork want (need!) to buy stuff from the main network, and find out that they can't. The pool of people who were willing to take PoorCoins at 1-to-1 is exhausted or highly depleted because of your actions; some people are willing to do so but not enough to sustain the ongoing PoorCoin trade imbalance. In the main network, people become wary of PoorCoin, since it has become obviously different from the rest of the coins, it's harder/impossible to spend with the usual, automatic 1-to-1 trade. So..... eventually some of those people offer a trade at less than 1-to-1, because they want those imports even if the price has suddenly raised. And that's it; you've accumulated an enormous short position of PoorCoin, you gradually buy it back with normal coins and due to the lower exchange rate in the end you have a lot of normal coins left over.
This profit happens at the expense of all the Alices who trusted PoorCoin (and thus would be rightly fearful and less able to trust any other such subnetworks in the future), and at the future expense of everyone earning PoorCoin, whose income just fell.
Blacklisting all new coins from me is a non-issue - this attack doesn't work on small scale, it fails with amounts that are too low to break the peg and succeeds when the amount is large enough; one person's lifetime UBI doesn't make a difference on a large scale exploit. It takes some effort to make, but when implemented, it brings great rewards, so it'll attract organizations that are able to do it in an organized manner as sneakily as possible (i.e., it's worth for them to create sham organizations/buyers to mask their intentions at some point). In real world currencies, this is futile with hundreds of millions, but feasible with many billions for a smaller currency (IIRC some $30 billion for the Thailand baht back in 1997).
1. A centralized trust/identity system (as I have said is need with this) means that there could be no such thing as PoorCoin as defined here. The idea is that because it was an XCoin, created on this network and tied to an identity endorsed as a single user by Centralized Thing X (this could be registered to SSN for example, though of course that has problems right now. You get the idea.), anyone will accept any trusted coin.
2. You're applying concepts like pegged currencies that don't really seem to apply. This isn't really a currency market - to everyone, it's just Coin. It doesn't matter what name is on it, they all have the same value. A low/high availability of XCoin doesn't drive the price anywhere because it's equivalent to literally any YCoin. There is no market to corner because no one cares. To put it in economic terms, buying up a market and hoarding doesn't matter if there are literally billions of equal value substitutes.
3. It will be impossible to run out of accepted 1 to 1 trades for PoorCoin, even if it were ever to exist.
4. Anyone on PoorCoin, if it were ever to exist, can then still make trades.
You're correct, there's a huge risk of this outcome from the structure they've proposed. Their validator concept, however, could work to break down the barriers between communities.
A validator that isn't totally arbitrary (TigersFans), but rather based on existing communities would potentially cut across a lot of the barriers. I could trust MicrosoftValidator and consequently everyone from their CEO down to their janitors could do business with me. Validator communities springing up from universities, for instance, would cut across a lot of the geographic barriers.
Related to my other post, these validators have a vested interest in being reputable: A university might only add accounts that it has verified at the registrar or bursar because those are the accounts used to accept tuition and fees from, and to pay out reimbursements and stipends to.
If it's only based on individual peer-to-peer connections, it's bound to see various chokepoints where a handful of people are responsible for connecting large communities that are largely disconnected from each other.
Good analysis. It's an interesting technology, but trying to use it to create UBI doesn't make sense for the reasons you stated.
I think you'd get something interesting if you dropped the universal constant rate of money creation (individuals can mint coins at whatever rate they want), and replaced binary trust with exchange rates (I'll buy 10 BobCoin for 1 AliceCoin). This would create a currency exchange that democratizes the ability to print money. Which, to be clear, is not UBI - printing money makes your currency inflate.
While UBI is a cool idea, one problem with this idea I don't think anyone has brought up with yet is a single global currency would be terrible from an Economics point of view.
I don’t think this would need to look anything like a “global currency.” It would probably just be a currency with exchange markets for other real-world (i.e. government) currencies, meaning it would be no more a “global currency” than USD or euro is today.
I don't understand why someone can't just create hundreds of fake accounts early on in the process and eventually get them trusted. If you are Alice and you create a real personal account, how do you ever get your account trusted? Couldn't someone just create a fake account and use the same process Alice used to get their fake account trusted?
The potential benefits are huge, double your income if you can pull it of for just one more account.
On boarding is literally covered in the document.
New users have two options.
1. Get their closest friends to trust them, and then build trust from their.
2. Use a well trusted validator.
Fake accounts do not really gain any benefit for sitting, other then their account gathers coins. What really matters in making fake accounts is gathering social connections. This whitepaper that the trust connections are a critical part of the system.
It sounds like a pretty unforgiving system for someone who is a rehabilitated criminal or anyone who fights against popular opinion. You can arbitrarily remove trust and never have to add it back again. You can remove trust as retaliation for anything.
If anyone wants to meet a good chunk of the Circles team, we are having an informal get together at a bar that will hopefully become one of the first vendors accepting Circles - in Berlin, Germany, tonight (Thursday, December 14th) at 19:00 http://meetu.ps/e/DwzBg/CNd94/f
I like this idea! Bitcoin is broken by design: people don't spend their coins, and you can't blame them, they would be silly to to that, because Bitcoin is a deflationary currency. But this universal basic income idea would actually make people spend their money and we would have a thriving economy. The big challenge is: how to prevent fake accounts?
It would be easy to create a Bitcoin-like cryptocurrency that is not deflationary. You could make it issue new coins at a fixed rate or at an increasing rate.
(With cryptocurrencies, you can't change the rate new coins are issued, for example in response to the currency's buying power. Central banks do that with fiat currencies, to keep the currency's buying power reasonably constant, or to affect it as they see fit.)
I don't think deflation is enough to stimulate an economy; you need demand, by which I mean taxes! You must pay taxes with a particular fiat currency, so everybody in your jurisdiction needs some of that fiat currency, which makes it valuable.
If there was a jurisdiction where people could choose to pay their taxes in fiat or cryptocoin, both would be equally useful. The exchange rate would be governed by the tax prices.
Basically, if Estonia decides that Estonians will be able to pay their taxes in estcoin for the foreseeable future, at a rate of 1 estcoin = 0.01 euro, then 1 estcoin quickly becomes worth 0.01 euro.
Maybe we don't need to prevent fake accounts at all. I think that could be possible to create a better distribution scheme through the analysis of the transactions network kept in the blockchain. The goal of this distribuition scheme could be maximize the flux of coins. Actually, I'm supposing that this is the intent of UBI, but I'm not am economist. So, the algorithm would put an amount of coins at nodes with higher probability of maximize the flux and therefore keeping the economy active.
I first thought it's some anti-inflation speak but it can't be since they want inflation in their system too and not all currencies inflate all the time (i.e. Swiss franc, but then again they might not care about Switzerland). Similarly they mention UBI and climate change being absolutely stonewalled which is totally not true in many European countries (EU has strong environmental agenda overall and Finland is experimenting with UBI on its own this year). This leads me to believe that their definition of 'world' is some subset of the first world or even just USA itself.
This is inflation, (arguably) a positive force in the economy, it's not universal (see Swiss currency for a nice example) and it's also part of their own scheme (using the same justification as real life inflation) so why would they point it out as a problem and then copy it?
I enjoyed this read far more than I expected.
I'm sceptical about the abusability of validators however. Overall though it makes me wish I could run a social experiment implementing this idea just to see what would happen.
Wow truly impressive! If you aren't trading with your friends, Validators are essentially free of any fraud. I am looking forward to seeing how this can be implemented because you have convinced me UBI is a technological issue and not a cultural one. It is clear fiat, and the markets created around fiat were never built with UBI in mind.
UBI is capitalistic. Provide an income based on ownership of a citizen stock title. Let individuals decide best how to invest and spend it, and not let government control how it gets spent.
One way this might fail is through big Validators with misaligned incentives.
Suppose Coins become popular and worth something in the real economy. A big company like Facebook (or Google, Amazon, Microsoft, etc.) might become a Validator and endorse all their existing users.
They would do this because it would add value to their platforms. Most people can't or don't want to use complex new technology (e.g. keeping a private Coin wallet secure and backed up). Facebook will tell them: just click here to get "coins" to your FB account every day! You can use those coins to buy things from / on Facebook, like silly apps or even ad placements. And you can even convert them to real dollars (at a fluctuating non-guaranteed rate)! What's not to like? So of course all the FB users will sign up. Maybe FB will even opt everyone in by default.
Facebook already has a Real Name Policy, what could go wrong? Millions of people will happily trust the Facebook validator, so transitively almost everyone will trust them. But creating fake/duplicate FB accounts is actually easy (they might be removed, but not immediately). This will drive down the global value of the coins; businesses other than Facebook will stop accepting them. Eventually the whole project will become useless outside FB, or several big inter-operating social networks.
And when this has happened, even if everyone 'in the know' agrees that Facebook is a lousy validator and should not be trusted, they will never convince all their non-techie friends to dis-trust Facebook, so everyone will keep trusting Facebook transitively through no fault of their own. There are several reasons for this:
1. People who created their Coin accounts via Facebook might not even have their private keys locally. If they're just using their Facebook accounts for authorization to access their coins, they can't open a non-FB Coin account without actually closing their FB wallet. But FB might not let people (or make it easy to) close their FB wallet without closing their whole FB account.
2. If a user dis-trusts FB, then FB can (as an automatic policy) dis-trust them back. Then, anyone who dis-trusts FB risks not being able to spend their coins on FB anymore. And we know that it's impossible to coordinate an exodus from FB; when people have to choose between FB and <the rest of the online world> many choose FB.
3. FB can sell certain services to users and demand they pay via their personal coins, not someone else's. They would bill this as making sure each FB account can only buy up to X resources of some kind, e.g. pay-for-use items in a competitive online game. Then if you choose to dis-trust FB, and they dis-trust you back, you can't buy those services at all; that's a powerful incentive to manage your Coin account on FB and not to leave.
4. FB might make it cumbersome or just impossible to pay for FB services from non-FB wallets.
Counterpoint: if people pay FB in Coins, then FB will amass a lot of Coins. It will want to be able to spend those Coins elsewhere (e.g. convert them to dollars). That's an argument that FB would want to keep the value of Coins outside FB high, contrary to my scenario.
Counter-counterpoint: if FB has a big enough network of partners / businesses willing to buy Coins with dollars, it won't care about the free Coin market. Who would want to buy Coins? Anyone who wants to use them to buy FB services, in more than the amount they get to their private UBI account! So e.g. advertisers and publishers.
I have a fundamental question about the technology.
As soon as a single centralized service such as any business accepts trust in order to facilitate payments, they are added as a link of trust no?
Wouldn't that lead to any fake account being able to simply "spend money" in order to fundamentally legitimize their Personal Coins?
Wouldn't this mean that anyone can Mint literally any amount of coin types and purchase literally anything, only for each of those currencies to gain the same global value?
EDIT: I have no issue with the Economic principle of UBI. I believe if appropriately applied it is literally the absolute final goal of any organized civilization.
EDIT 2: I am actually quite concerned about this model. Several large initiatives seem to have backed a system that not only is broken by default but literally legitimizes discrimination. I don't mean that in some whiney "everyone should be equal!!!!!" bullshitty way, but literally.
This model places the burden of trust on any acceptor of the currency, i.e. vendor/service. This means that essentially any business that IS concerned by their contribution as legitimization of so called Scammers will increase scrutiny drastically. Any orphan/Retiree/Huge segment of population of any demographic that might not have any fundamentally trusting connections are fundamentally unable to spend any amount of currency.
This would REQUIRE a form of centralized Trust which would need to be regulated in the identical way ISPs and Hosting providers handle SSL Certificates. Some form of fundamental right to trust by citizenship or other inherent association with a trusted entity simply by existing would be absolutely required. Which essentially leads to a regular currency within a few basic steps of reasoning, since eg. governments trust one another, and each of these trusts any citizen. Immediately the exact same existing financial scenario.
EDIT 3: I mean this is essentially the EXACT same model as any centralized Stock Exchange. Except instead of shares in a central service/business we get shares in individuals. Which leads to absolute nightmare scenarios where highly connected individuals are inherently more valuable and produce an equal amount of currency, however at a far higher value.
Seems familiar no? A CEO that acts as the central trust for a corporation (lets ignore the obvious issues with having a potentially temporary individual as the inherent financial representative of a registered business) would require to be trusted by all employees in order to redeem their pay checks.
Meaning that CEO can spend his personal coins at a far higher value since they are inherently trusted be a large amount of individuals. Meaning there is no UBI and everyone still has currency, except instead of being backed by the hypothetical stability of a sitting and established authoritative structure it's affected by the hilariously unstable social graph of the world.
We NEED to research systems like this, I CANNOT STATE THIS ENOUGH, but we can't let good intentions lead to an even worse scenario than our current model for fiat currency.
That requires initial capital. If people were to use this globally, it would theoretically be an opt-in system that would put everyone on a level playing field (pending start time).
Bitcoin was once just as worthless as this coin. All of this is based on confidence in the value. So were all other currencies minus the value of the paper and ink itself. In order to actually get people to use this, you need an argument (not a technical one) about why people should use this. I can imagine one focusing on an accessible UBI and global resource reset. While that argument would eventually be important, this paper obviously has other flaws to consider before getting that far ahead of getting into the nitty-gritty there.
The coin itself would give you money to your bank account. It's like the US mint delivering coins to you hourly just for being a U.S. citizen. Bitcoin would require someone to buy all the coins.
The coin itself would via technology divvy out newly minted coins on a set schedule to everyone equally. All current coins have transaction fees and other things involved in giving money, and no way to currently make anything like this without up-front seed money.
You do in order to enable UBI directly in the protocol, which is the goal of this paper. You can't regularly distribute Bitcoin to all users without first acquiring it. I think this is one of the few examples of a new coin that actually is needed in order to accomplish its goals. Of course, whether it actually does that successfully is another argument entirely.
It seems like the real challenge here is solving the identity issue. That is something which would require a brick and mortar solution, and those have existed for quite some time with varying degrees of success. Identity companies like Equifax have done a shit job, and they try to pass the liability on to end users who then have to deal with the fallout of fraud.
There are a few identity management on the blockchain startups already, but I'm not sure any of them will be more successful than the DMV.
Yes, the identity issue is still there. Solving that doesn't make Bitcoin a viable option for this idea though. This whole comment thread is discussing why this coin is needed over any other, not the identity issue. I think that need is well established for the stated goal.
The White Paper solves the identity issue under the Validator section. Equifax, the US Govt, or a State Govt could start a validator and Companies that trust the Validator will accept any coins that are validated by the Validator.
Money has value because people agree on it as a medium of exchange. Perhaps some day this new coin will be worth something, but I'm pretty skeptical of creating new coins when there's already literally hundreds that can do the job.
It can't hurt, but IMO it would make more sense if the government did what it was supposed to do in providing health, security, and providing for basic needs of every citizen. How exactly you implement that, and which shitcoin you use (USD, BTC, ETH, LTC or make a new one) doesn't matter.
UBI is at its essence a resource redistribution system. It can't be solely opt-in (at least not in the near future) to achieve the value necessary for the "basic" part (i.e. being sufficiently large to cover basic needs), it requires either a large external source of capital or (more likely) a sufficiently strong organization (such as a government) to enforce participation of the top 1% / 0.1% / all local companies, i.e. taxation.
An opt-in redistribution system is called charity. We know how much resources our society is willing to spend in that way, and that's not sufficient for universal basic income.
In this case, opt-in is playing double meaning. But you're right, in order to work, a significant number of people and business must opt-in and treat it like a currency to be spent. I don't think that's a prohibitive problem inherently, though obviously still a tough one.
>The Circles Money System was designed to get started creating a UBI economy today. We believe that the combination of resilience and global accessibility afforded by blockchain technology is a key catalyst that makes a Universal Basic Income achieveable within the next generation.
Sounds like they don't trust governments to quickly implement a UBI, and they want this to solve that.
Why would I want to invest in BobCoin with all its associated trust issues when I can just buy Bitcoin and keep doubling my money every few weeks, forever?
I'm not sure why you think Bitcoin is so trustworthy. Personally, due to the extreme volatility, obvious price manipulation, and outright theft of bitcoins with no recourse to get them back, I find it extremely untrustworthy.
I have no idea if this personal currency will be more trustworthy.
UBI is a pipe dream and will never happen. If people would quit spending all of their time dreaming/wishing/hoping UBI becomes a thing, and instead used half that time on building/delivering value to people in the marketplace, they'd never need UBI in the first place.
"Opportunity is missed by most people because it is dressed in overalls and looks like work."
Some people don't even get the opportunity to create value in the marketplace. You seem to think "but just create a startup" but for some people who earn just enough money to feed their families, they can't take the risk. Don't you think UBI could give them more opportunity to take the risk and try to create more value?
I didn't say "startup." There are literally hundreds of jobs, trades, and skill-sets that will be valuable for years. Create value in someone's life in some way, exchange that value for money, and you have a business.
I see few millenials seeking employment or learning the HVAC/electrician/construction/plumbing trades, and yet, they can be extremely lucrative... especially after you are skilled enough to start a business.
Robots and AI will not be replacing these trades anytime soon.
Automation has put millions out of their jobs, and is growing explosively. They can't all become skilled workers - we don't need another 30 million Engineers even if they could all do that.
So folks work at McD's and the feds pretend its 'employment' but nothing like they used to earn.
Economics isn't solved with platitudes. We're in the middle of a major disruption and it isn't going to be pretty.
I realize this, but if mass unemployment ensues, where will the money for UBI come from? It can't be printed from thin air and it simply isn't fair to take from those who sacrificed their time and efforts to build wealth, only to have it taken away.
My hint at the trades (HVAC/Plumbing/whatever) was that the supply will be incredibly low in the next decade or so, when many of these workers retire, but their demand will be higher than ever.
Automation that makes 50% of people worthless means that the remaining 50% of required labor can produce the same amount of goods and services.
If you ignore money and look at the flow of stuff, there's nothing impossible - we produced enough to feed, clothe and house all those people back when they worked, and we would still produce enough to feed clothe and house all those people even if half of them have no need to work.
It's a distribution issue. And really, if/when technology causes significant permanent unemployability, there are only two options - either the society chooses to simply redistribute that stuff to people who don't work (despite, as you say "it simply isn't fair to take from those who sacrificed their time and efforts to build wealth"), or the society chooses not to do so, in which case they don't get fed, clothed and housed, and die.
There's no third option - they can't not be a drain on society (that's what being permanently unemployable due to tech changes means) while they're living and need resources. Either society provides basic income also to those who aren't sufficiently productive to earn a living, or they will try to take those resources from society (theft, crime, revolution), or they'll die trying. Thankfully mass technological unemployment isn't that close yet, so we have time to fix the social issues, but it's coming.
But it is. The folks who used to be machinists or warehouse workers or assembly line employees, are now working McD's or worse. It looks like employment but in fact the total value of US employment is dropping like a stone. The stats just say "92% employment" and we say "Yay! That's good" but its not good if most of the new employment is a drop in pay and standard of living.
But we all know they are talking about wealth, not paper money. You can't create wealth out of thin air. The closest you get is things like stocks, but those are worth what people are willing to pay for them and thus still have real value.
Printing money without adding wealth means each unit of currency is worth less, which tends to ruin the whole "free money" thing.
No, it doesn't. The amount private citizens are paid in a UBI would be very small compared to the economy. Inflation would still be a thing, but this is a small part of it.
We print money now; but its loaned out thru the federal reserve. How is that ok, but not directly distributing it to citizens?
Its not a zero-sum game. Automation means folks aren't sacrificing their time; printing money is very feasible; currently various housing/welfare programs add up to approximately what a UBI would cost right now. Its much closer to reality than we imagine.
Yes. It's a sad truth, but nobody is responsible for staying ahead but yourself. Continuous improvement and self-directed learning should be emphasized in schooling, but it isn't. You're merely taught to behave and do as you are told.
Why is it your fault or my fault that someone didn't pay attention to their environment and work on pivoting their career?
I don't think that's necessarily a truth, at least not as you've posited.
A truth would be universal in my mind, and there are plenty of people in this world that succeed without every having to grow or adapt to the times. They just pay someone else to do it for them.
You're disregarding the impact of income on the growth of children. Maybe if we had a creche system like in A Brave New World where everyone got the same start.
Having poor parents and growing up in a poor neighborhood as an oppressed minority will severely hamper your ability to create value.
"A Brave New World" creche system was quite far from giving everyone the same start, the difference between Alphas and Deltas was induced in those creches e.g. oxygen deprivation to ensure a limited intellect to better fit the menial tasks they'll be doing all their life.
Mostly, yes. Opportunity is abound for those who wish to seize it. Regardless of your background/upbringing, you hold the reigns and control your life's destination. This is what needs to be emphasized.
I am one of those who did not come from means of wealth. Much like many of you, I invested my time building skills and learning so that I could get myself out of that situation.
To be fair, a lot of the UBI supporters commenting above are making similar assumptions. They think of the freedom that UBI would create for them as generally well educated, smart, creative people. In reality I'm willing to bet we would end up with Idiocracy after a generation or two, not a creative utopia.
You're right. Unemployed people still have lots of experience and talent, so they can use it in the service of community. A people-only currency could create a marketplace for services. Most of the needs of a community can actually be provided with internal resources - construction, repair, food preparation, education, health, farming, energy (solar) - we can do all of these and more by ourselves. So instead of UBI, we need to make it possible for people to be self reliant. We'll be benefitting from automation as well, so self reliant communities need not be back breaking jobs. People have been self reliant even at the level of a farm, since forever - we can be self reliant again, with enough hard work and ingenuity.
Your argument would be way more fun to read if you actually provided some points for WHY it would never happen, instead of just stating "it'll never happen".
Because the only way to create UBI is to take money from other people and redistribute it. Horrible idea. I do not want my hard-earned income and efforts wasted on those who wish to freeload. I'd much rather donate to charities and responsible non-profits, who will do a better job at supporting those who find themselves in tough situations.
Perhaps you should look at this implementation of UBI. While there is more or less practical redistribution through inflation, no money will be taken from you via taxes and the like. One could even conceive of writing incentives against "freeloading" into the protocol.
lmao, what? Do you think poor people do nothing but dream about how to steal money from rich people?
>half that time on building/delivering value to people in the marketplace
So, say they spend an hour a day commenting about UBI. At minimum wage, that's a whole $3.63 every day. Don't spend it all in once place.
>Opportunity is missed by most people because it is dressed in overalls and looks like work
This does a great job of explaining why people work two jobs their entire life and don't make it out of poverty, and why most rich people are descended from rich people.
In reality the Phillips curve was too simple. What was happening was that since wage increases came to be anticipated due to the consistent low interest rate/moderate to high inflation environment, producers would preemptively raise prices to soak up all of the wage gains. This led to a wage/price spiral with no actual improvements in productivity.
Eventually stagflation was ended by dramatically raising interest rates and triggering a nasty recession.
UBI could lead to stagflation because the income allotments and any increases would be according to some formula known ahead of time. This means that producers could anticipate demand and simply raise prices to soak up any income increases.
Something to keep in mind when devising these systems.