November 13, 2015 at 10:02 am #15347missing_kskdParticipant
Well, we are about to get some data on this concept. I’m looking forward to how this plays out. Frankly, I am a fan.
Just living has a basic, largely locked in cost. And it varies too. But, it’s there, and unavoidable. Everything costs something, and when a person has no money, they either die, or others pay for them to exist.
I suppose a very extreme example might be someone who just retreats into underpopulated lands to grind their life out in a basic way too. Not a significant case for this discussion. And the cost for them is time. Lots of it needs to be used just to make it.
Anyway, the idea here is an attempt to resolve a long standing fight. Employers want to value labor in market terms, but doing that conflicts with the basic need costs people have. What happens is business will underpay, and the rest of us subsidize that somehow. Maybe we allow a live in, or we buy stuff for people, or we suffer crime, or our taxes go to programs intended to help these people. Charity plays here too, and we get pressured to give for the needy, etc…
The minimum wage was intended to marginalize these things and provide an overall better balance. The idea there is an honest days work needs to fund the life of the laborer. And when you think about business, selling our labor isn’t any different from other business. Who wants to work for a loss?
In a business scenario, a loss means the business failed, and it doesn’t exist anymore. With humans, they die. Not OK.
So it’s a stand off of sorts. As much as employers don’t like a floor on the cost of labor, ordinary people don’t like taxes, and or laboring a lot to get nowhere essentially.
In addition, there is the nagging problem of basic labors. They continue to exist, and may likely always exist. And that means some of us will do them no matter what too. How can we insure those basics get done without the laborer living a shit life, or having them be needy to the government?
All of the bumper sticker, AM radio type answers aren’t viable. That’s a lot of, “blame yourself”, “improve”, “bootstraps”, etc…
Now, to be frank, I am a case for the improve and pull up by bootstraps! Was very poor, learned a lot, did a lot, and made it. But, having done that, and having evaluated my peers in life, it’s really easy to see that simply isn’t possible for everyone. There will be people doing basic labors no matter what, and when we don’t pay them, they are needy no matter what.
Now, a lot of people don’t understand the money system, nor what demand really does for us and why we need it to be present for this mess to work for us reasonably well.
Money is created from risk and it’s presented as debt. There is as much money as people can borrow, and for them to borrow, there must be some plausible means for them to pay it back, and that’s the risk. We get new money when people take risks, labor, generate wealth and pay that money back. We are all worth a little more when this happens and the money supply is backed by meaningful value when this happens.
A lot of people think taking out a loan comes from depositors money. NOT TRUE. When you execute a note with your bank, they make the money, right there. Poof! New money, and you gotta get to work to make that money worth something. Taxes are what keep it all flowing as well. Money has value in the basic sense, because people can pay taxes with it. In the end, that’s a basic use that justifies the currency.
All the work we do, trade between people, business, etc… presents as value and makes the currency meaningful beyond mere taxes. You can buy stuff with your money, essentially.
Demand is important. Without it, there really isn’t a justification for business.
The good news is there is pretty much infinite demand. (I think it’s finite and growing with population, but who cares? It’s a lot of demand.)
But, there are two kinds of demand!
One kind is actionable demand. This is demand associated with liquid and or disposable dollars, and it drives business who meets that demand at a profit. (ideally)
The other kind is not backed by dollars. People want and need stuff, but they cannot participate in the economy, and either turn to crime, see those needs unmet, or get help basically given to them in some way. Subsidy.
What we want, if we are going to be real capitalists, is more actionable demand! Where this is true, business and the growth of the money supply and our wealth overall, standard of living, etc… all improve! When this works, it’s great!
When it doesn’t work, we are in a world of hurt.
And right now, it really doesn’t work for very large numbers of Americans, and that is the fight for 15 right there.
So that is the context.
What the Finns are gonna do is simply pay people. It won’t be much. It’s gonna meet very basic needs. A person could eek it out on that basic income and not get much, but not need much either. Fine, right?
Taking a job is for more than basic needs, and definitely for wants.
Adequate food is a need. Good food is a want, for example. Adequate housing is a need, good or housing you own is a want, etc…
Or a person on a basic income might buckle down and labor and save to fund a risk they might want to take, or fund improving themselves too. They won’t be able to get a loan yet, but they can capitalize and do something with their capital. Having done it, they then present meaningful risk to the banks, who then are happy to create some money for them to go about whatever business or investment they want.
In this scenario, it may well be that a lot of public programs go away. And it may be that basic labors and wage minimums make much better sense to employers and those people who do them too. Making $9 an hour, and being able to apply that $9 to more wants is worth it. Making $9, but needing lots of government help, and not being able to fund wants, or capitalize, etc… isn’t so worth it.
And we guilt the shit out of those people too. Not cool, given they are laboring. Someone has to.
That’s the context. This should be interesting to watch. We will get some data we really do need and we may see some options we really should consider too.November 13, 2015 at 10:12 am #15348missing_kskdParticipant
I’m a fan, but a critical one. Honestly, I do not understand how this will play out. There are questions.
Here’s one question:
What happens in a town like this?
I think the Finns, due to their more aggressive application of socialism, have few to no places like this. And being a smaller overall population, they are more nimble and self-aware too. Those are not trivial distinctions compared to the massive USA.
But, it’s compelling. We know giving more assistance to a town like this may not do what we want and what they need. We also know they may not make great choices either.
So we are critics, and “blame yourself” packs a hell of a punch as a basic argument against a lot of things the left would suggest as options. Fair call.
What would happen if suddenly they got $800, which is what the Finns are targeting as the optimal basic income in their model?
Would they just buy more drugs?
Or, would some of them seek to capitalize and improve? After all, there would now be actionable demand in the town. Maybe a few of them pool resources and begin to figure out how to improve it and personally benefit from doing that.
It is to me.
And it is, because I look at my own life experience, and can tell you that a lot of what it took to leave poverty was my own personal investments and attributes and willingness to do the work needed. But, a whole lot of it was luck too. No joke.
I see people really trying. Doing what I did. And they fail.
And I really like being entrepreneurial. Doing stuff to make a profit is beautiful. And when it works, it can work really well. Sure, we have some out of control profiteers. That’s a constant the same as poor people are.
But, maybe a better overall balance can exist.
And my politics center on “better”
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