Just giving people money turns out to be the most effective way to end poverty.

[farscape]

Alright, my one-time lump-sum comment was incorrect.

Nevertheless, all those experiments are still far more limited both in time (few years compared to ~50) and in scope (tens of thousands of people vs hundreds of millions) in comparison the Eastern Europe + Soviet Union "experiment".

What you still do not want to accept is that the experiments in the article and the Socialist regimes in the second half of the previous century amount to essentially the same system. In both case, all people get a regular income sufficient for basic living expenses. In both cases, they can choose to make a low quality living on the received free money OR they can choose to put more effort into their life (higher education or extra work) in order to improve their living standards (earn more money). In both case the experiment was expensive, i.e. required a lot of outside money to be injected -- in the Canadian and US experiments the money came from the rest of the capitalist economy of the country, while in the case of the Socialist regimes the money came from huge loans taken up by the governments that they have never been able to pay back leading to the eventual economic collapse of the system. This is the other point you did not get: I am not claiming the root of the problem to be people turning "lazy".

I am pretty sure based on historical accounts (as I have not lived back then to have first-hand experience) that in the first few years or even a decade, the people in the Socialist system also had an improved life and did not get "lazy", and the economy was doing fine too for a while. However, it was not sustainable long term.

[Essence]

Nevertheless, all those experiments are still far more limited both in time (few years compared to ~50) and in scope (tens of thousands of people vs hundreds of millions) in comparison the Eastern Europe + Soviet Union "experiment".

I don't think it's a fair comparison to make at all. Now, I'll freely admit that I'm not particularly well-educated about the actualities of life in Socialist Russia -- but I'm fairly certain that 1) All prices for goods were fixed by the government, which they were not in any of these experiments, and 2) your assertion that "they can choose to put more effort into their life in order to improve their living standards" is incorrect because the Soviet Union didn't have the concept of 'private property' and thus while you could get more goods in the temporary sense, you couldn't ever actually own anything.

The first assertion kills the entire notion of supply and demand that capitalism is centered on. The second prevents any meaningful incentive to work from ever developing.  Neither of those things is true in the base-wage scenario, and thus your comparison is deeply and fundamentally flawed.

[Aves]

Question: Most of the 'big' experiments were conducted roughly 40 years ago-- in today's society, the aftermath of the first digital revolution, would similar results still occur on a large scale? Would a program similar to these experiments even be feasible today, given that we are no longer in the postwar boom?

[farscape]

I don't think it's a fair comparison to make at all. Now, I'll freely admit that I'm not particularly well-educated about the actualities of life in Socialist Russia -- but I'm fairly certain that 1) All prices for goods were fixed by the government, which they were not in any of these experiments, and 2) your assertion that "they can choose to put more effort into their life in order to improve their living standards" is incorrect because the Soviet Union didn't have the concept of 'private property' and thus while you could get more goods in the temporary sense, you couldn't ever actually own anything.

The first assertion kills the entire notion of supply and demand that capitalism is centered on. The second prevents any meaningful incentive to work from ever developing.  Neither of those things is true in the base-wage scenario, and thus your comparison is deeply and fundamentally flawed.

You are right about #1 (fixed prices). As for #2, you could not own a hotel or land or shop or factory as a private property, BUT, if you had more money, you could by better cloths, cars, live in a better home, have a better vacation, dine in better restaurants etc. Also if you put more effort into your education to become a doctor, engineer, etc. you could achieve a much better living standard. So the lack-of-incentives argument is simply incorrect.

BTW, money-incentives don't even work for creativity (only for simple repetitive labor), which has been demonstrated by several studies, just a couple of examples:

http://www.techdirt.com/articles/20100603/0311539672.shtml
http://intenseminimalism.com/2012/the-misconception-about-money-and-motivation/

[Essence]

Question: Most of the 'big' experiments were conducted roughly 40 years ago-- in today's society, the aftermath of the first digital revolution, would similar results still occur on a large scale? Would a program similar to these experiments even be feasible today, given that we are no longer in the postwar boom?

Do you have a good reason to believe that, as opposed to the 70s, people today wouldn't be inclined to take money freely given to them and use it to build themselves a better life? 

As to the feasibility, that depends on what you're willing to sacrifice to get your economic boom -- according to the article, it would cost about $70 billion per annum, which would be about 1/3 of the US Department of Defense's yearly budget.  So, sure, if the US decided it was OK with being the leader in military spending by ONLY a few dozen billion dollars, we could do it.

You are right about #1 (fixed prices). As for #2, you could not own a hotel or land or shop or factory as a private property, BUT, if you had more money, you could by better cloths, cars, live in a better home, have a better vacation, dine in better restaurants etc.

Source, please? I've been researching this diligently for at least an hour now and I can't find anything that backs up this claim.


But! There is another massive difference between communist wages and the concept of a basic wage: the basic-wage system doesn't require you to work, which means it doesn't result in a glut of available workers and the subsequent trivialization of work.

A reason for failure in work ethics and motivation is the necessity that all communists must be employed. Overmanning positions trivializes the work needed to be performed and placed the concentration on quantity rather than quality. “This fact,” according to David Lane, “gives rise to economic pressures that keep wage low and demand for labour high, which leads to widespread overstaffing and slack work standards.” Instead of each person contributing, each additional excessive worker lowers the overall quality of the product. Therefore, Communism in practice appears to counteract the goal of making society better through communal collaboration.

^^In other words, this wouldn't happen.

BTW, money-incentives don't even work for creativity (only for simple repetitive labor), which has been demonstrated by several studies, just a couple of examples:

http://www.techdirt.com/articles/20100603/0311539672.shtml
http://intenseminimalism.com/2012/the-misconception-about-money-and-motivation/

Umm...you do realize that these articles actually undercut your fundamental argument, right?

From your second link: "Yes. Find the incentive you need for the task you want to accomplish. If you are trying to build a community, to foster creativity, to solve problems, DON’T use monetary incentives." (emphasis theirs) 

The basic-wage concept isn't a monetary incentive; it's monetary security. It's the "base level of money that makes [one] comfortable" that the first link you gave points out. It enables creative endeavor -- even according to the article I linked in the OP.

In short, if you want to build a better society, the base wage enables people who would prefer to be artists to produce art, which communism didn't. It also allows people with great ideas to be entrepreneurs and change the world, which communism didn't. It also allows people who pursue standard employment to continue to be valued for their roles, which communism didn't.

The comparison simply doesn't stand, because a basic wage doesn't come with any of the other market-destroying, labor-devaluing BS that historical Communism did.  You're taking a huge, complex system that failed and comparing it to a different huge, complex system with which it shares a single attribute -- giving people money independent of their work ethic -- and saying that that single quality makes the two equivalent, and it doesn't. Not in any logical, rhetorical, or realistic sense.

[cometbah]

Giving the same amount of money to every citizen for 'free' does not increase anyone's purchasing power.

As a society, our total production is n. The amount of money in circulation is m. Purchasing power is the ratio between m and n.

Increasing m and keeping n constant will only lower purchasing power per unit of m. Example:

There are 10 people in a village; everyone has 1 dollar. The village produces 10 fish. Giving everyone an extra dollar does not make everyone 'richer', it simply increases the ratio of dollar-to-fish from 1:1 to 2:1. In other words, the price of fish goes up from 1 dollar / fish to 2 dollars / fish - i.e. it undergoes inflation.

[Essence]

Your logic is incomplete.  The money given to people has to come from somewhere; let's assume because it seems reasonable that the source is taxes.  So for everyone to get n dollars per year for free, taxes have to go up by n*p, where p is the amount of people in the country.

Because the progressive tax system increases the tax burden on the wealthy and decreases or even reverses it for the very poor, the net effect of the basic wage on society-wide terms is that many people end up at a net-gain in total income, some people end up at or close to net-zero, and a few people experience a fairly profound net loss.

BUT! The people who experience the net loss are the very wealthy, who are those most likely to take that money and either move it off-shore or just sit on it, effectively removing it from the economy. The people who experience the net gain are the poor, who are the most likely to spend it almost immediately, moving it around and through the economy. Giving money to rich people reduces the demand for goods, because rich people already have. Giving money to poor people stimulates the economy by increasing demand for goods.

The benefit here is fully systemic. The poor individuals benefit individually because they can use the basic wage to build better lives for themselves than the current system of wage slavery could afford them. The rich individuals, even though they'll bitch about their money being taken away, actually also benefit in the long term because the money flowing through the economy and the increased demand give them more opportunity for investment, more opportunity for entrepreneurship, and less panicking about government debt, runaway inflation, and so on.

Prices may, in fact, go up slightly because poor people have more money to spend -- but ask yourself this: if prices and wages are actually as closely connected as you seem to imply, why is it that real wages have been flat for three decades, while prices have gone up and up? Wouldn't flat wages seem to imply flat prices, if the market really was that inelastic and simple? 

The reality is that the economy is much, much more complex than anyone is letting on. In fact, the Bank of England recently blew the lid off of the notion that the Fed/Bank of England/really any central bank is responsble for creating new money within the economy.  You really should take the time to read that and ponder what it means. 

[Aves]

Let's put it this way (values are arbitrary)
Originally, Person A makes 100 dollar a day, Person B makes 200 dollars a day, and Person C makes 3000000 dollars a day.
Now, 150 dollars is injected into the system divided equally, with Person A having 150, etc.
The extra 50 really doesn't matter to C, but what about to A and B?

[cometbah]

Your logic is incomplete.  The money given to people has to come from somewhere; let's assume because it seems reasonable that the source is taxes. 

In other words, the government would not be 'giving people money for free'. It would be redistributing wealth.

It would be a zero-sum game, which makes this impossible:

We'd be giving the same money to everyone -- no matter how rich or poor -- just because they were living.

[Aves]

Comet, are you arguing against a progressive tax system? That, almost by its existence, is wealth redistribution if you allow the government to make any type of subsidy or social safety net to any business, individual, or corporation-- say a farm bill, or a tax break for families with children.

[Essence]

It's not a zero-sum game, because you have players in the game who are actively removing wealth from the economy.  By moving the wealth from those players to the players who move wealth into and through the economy, you're changing the amount of functional wealth en toto.

And no, the statement that "we would be giving money to everyone just for living" does in fact hold true. The fact that you give someone money at one time has zero bearing on when or where that money comes from: you're still giving them money just for living.

[cometbah]

Comet, are you arguing against a progressive tax system? That, almost by its existence, is wealth redistribution if you allow the government to make any type of subsidy or social safety net to any business, individual, or corporation-- say a farm bill, or a tax break for families with children.

No, I am arguing that it is impossible to increase everyone's purchasing power.

Wealth redistribution does not introduce additional wealth into a system, so the increase in a person's purchasing power must be balanced by an equivalent decrease in someone else's purchasing power.

It's not a zero-sum game, because you have players in the game who are actively removing wealth from the economy.  By moving the wealth from those players to the players who move wealth into and through the economy, you're changing the amount of functional wealth en toto.

Possession of wealth does not 'remove wealth from the economy'. One does not literally 'sit on a pile of cash'; The money must be re-invested to have any value. When a person puts money into his bank, for example, the money does not exit the economic system. Rather, the bank reinvests the money on the person's behalf.

And no, the statement that "we would be giving money to everyone just for living" does in fact hold true. The fact that you give someone money at one time has zero bearing on when or where that money comes from: you're still giving them money just for living.

It is not 'giving' if the 'gift' was taken from the recipient in the first place.
By definition, wealth redistribution is a zero-sum game. In order for someone to gain wealth, someone else has to lose wealth. Therefore, it is impossible for everyone to gain wealth.

Concrete example:

There are 4 people in a village, who have, respectively, 2 dollars, 4 dollars, 6 dollars, and 8 dollars.
You take 50% of each villager's wealth, i.e. $1 from villager 1, $2 from villager 2, and so forth, accumulating $10 in total.
You redistribute the $10 evenly, and claim that you have given everyone $2.5 'just for living'.

However, this is how each villager would see it:

Villager 1:
I used to have 2 dollars. Now I have $3.5. I have been given $1.5 just for living!

Villager 2:
I used to have 4 dollars. Now I have $4.5. I have been given $0.5 just for living!

Villager 3:
I used to have 6 dollars. Now I have $5.5. I have been robbed of $0.5 just for living!

Villager 4:
I used to have 8 dollars. Now I have $6.5. I have been robbed of $1.5 just for living!