Just trust the billionaire! A response to “5 criticisms of billionaire mega-philanthropy, debunked”

I too initially thought the criticisms of Mark Zuckerberg’s new philanthropic foundation were in bad taste. Perhaps a little bit of sour grapes. Overly cynical.

Picture of Mark Zuckerberg, Priscilla Chan and their baby daughter Max Zuckerberg

But then I took the time to read some of the criticisms and realised that they had some really good points. So I was interested to see Quartz’s ‘Debunking’ of those criticisms.

I was, unfortunately, disappointed.

Here is my paraphrased summary of their “debunking”:

Mark rightfully wants to have the biggest impact possible with his philanthropy. Therefore he is right to found his own corporation so that he can avoid paying taxes on his capital gains, and retain control of everything. Who are we to question him? And besides, you’re just jealous.

My natural inclination is actually to give the benefit of the doubt to Mark. I do believe he has good intentions. But that doesn’t make the criticisms of his move any less valid.

In a move advertised to “make the world a better place”, his first step is to avoid paying a fair amount of tax on his massive profits. That really does not inspire a lot of confidence.

Everyone not in the Billionaire class seems to be stuck paying all of their tax bill every year – but for the mega wealthy, they are special. They get to make all of their money, and keep it to!

Oh I know, he doesn’t actually get to “keep it”. It goes into the LLC.

….which he controls.

Just stop and think about this for a moment. What does a multi-billionaire do with the extra billions he has in his bank account anyway? He certainly doesn’t need it for ‘cost of living’ expenses.

Once you get past the first billion or two, everything else is just waiting to be allocated to things you think are worthwhile. Like putting it into chosen charities, or investing it into startups and companies you think will make a difference, or potentially using it for political campaigning. ie: Exactly what Mark’s LLC will be free to do.

So the reality here is perfectly clear. Mark has simply arranged things so that he can move all of his capital gains out of the company, into his control (not ownership), without paying any tax on it. It’s brilliant. He, and his family, get everything, in perpetuity, without ever paying any tax on it. Not even estate taxes!

This means his entire lineage will be in the control of many billions of dollars of wealth without ever needing to worry about earning anything. Not that they get to spend it on their own cost of living – it isn’t *their* money. Sure. But they can definitely choose to hire themselves if they need a job…

Better still, when you control vast quantities of capital (which can be invested into companies and political campaigns), it is amazing how many other wealthy people (but not nearly as wealthy as your LLC) are willing to go out of their way to wine and dine you in the most extravagant ways possible in order to secure your support.

Being in control of a lot of money has many significant benefits which go along with it.

So basically, this is a great way to lock in your profits without paying capital gains tax, and also guarantee that your dynasty remains for many generations to come, never needing to pay estate tax either.

A great big F you to the government. And a call to the population to “Praise me!”

In my opinion, the criticisms against Mark and his “Philanthropy” stand. Nothing has been debunked.

Now we have no choice but to let him carry out his business as he sees fit. Hopefully he will actually live up to the ideals he has set forth for himself. Hopefully he will actually make a difference. Hopefully he will make the world a significantly better place.

You’re in charge now Mark.

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)

The Seven Questions of Basic Income Implementation

From the first meeting of our Implementing a Basic Income in Australia group, I presented my outline of what I think are the fundamental questions which need to be answered before a Basic Income can actually be implemented.

In order to answer these questions we want to organise a range of experts like Caravan finance brokers, on social and economic issues into working groups so that they can discuss the consequences of each decision and how it will be beneficial or detrimental to society, economics, welfare, well-being, employment, power imbalance, freedoms, etc.

The questions are:

  1. How Much / How Often?
    $1 – $10,000+ / Paid daily – Paid annually
  2. What scale is it implemented on? Where?
    Small town? Council? City? State? National.
  3. Who gets it?
    Everyone? Citizens? Residents? 18+? Based on tax return submission? etc
  4. How is it funded?
    Local government? Federal Govt? Increased taxes? New (resource?) taxes? Debt? Transaction tax? Charity? Crowd funding? New money straight to the people?
  5. How long will it run for?
    2 years? 10 years? Indefinitely? 5 years on, 5 years off, etc?
  6. What does it replace?
    Replace all welfare? Just unemployment benefit? Nothing? Minimum wage? Wait and see?
  7. Will there be a transitional period? What will it look like?
    Instant implementation, or gradual implementation over time?

(Have I missed any? Please leave a comment below if I have!)

The answers to each of these questions often influences the answers to others. For example, if you want a National (Q2) Basic Income, it will be virtually impossible to fund that through Charity of Crowd sourcing (Q4), but there is a chance that you could fund a Partial Basic Income (Q1) for 2 years (Q5) in a small remote town (Q2) via charity (Q4).

Of course, a partial income in a small remote town isn’t the ultimate goal, so then we’re talking about a first step implementation. A trial, or a demonstration of value, hoping that it will grow to other towns or else convince enough of the population to enact a nationwide Basic Income. In this case, we’d have to design the best “initial test case implementation” and then a second “Ultimate goal implementation” and perhaps even design the strategy which will take us from the initial test to the ultimate goal.

Whether we want a small test case first or not is still to be answered. I don’t believe the NHS, medicare, welfare etc had incremental steps to implementation, so perhaps it is an error to think that a Basic Income would need it. Perhaps we should instead be focusing on the best possible design for Australia, and then fight for grassroots support of that system while lobbying political parties and getting the support of influential think tanks.

This is all just a first step. We still need to reach out to existing Basic Income organisations (BIEN, QUT, Utrecht University (BIParty NL) etc) to see what information, research and conclusions they are able to share with us which will help inform our answers to these questions.

VN:F [1.9.22_1171]
Rating: 9.0/10 (3 votes cast)

If I were in charge… (Part 1)

If I were in charge of a country, I would change 3 significant things:

  1. I would legalise and monopolise all illegal drugs
  2. I would implement a universal basic income
  3. I would rigorously secularise society

Put the cartels out of business legalise drugs

Part 1. The War on Drugs has Failed

This is no secret. It is well documented now, in all sorts of ways. It costs many billions each year, it causes more harm than good, costs lives, creates crime, and completely fails to deliver on its one objective. Drugs are more accessible, cheaper, and more numerous than at any other point in history.

We need a new approach.

Portugal has been the only country to really give decriminalisation a serious go. And it has worked remarkably well for them. But decriminilisation is a weird halfway sort of solution. Sure, it isn’t ‘criminal’ any more, but it still isn’t legal. It becomes more like speeding.

If I were in charge, pending rigorous expert consultation and comprehensive review, I would immediately take steps to create a centralised government drug production and wholesale distribution system.

Dare to legalise drugs

Initial Education

While the infrastructure was being set up, I would ensure adequate educational material was made available and regularly presented to kids of all ages, at least once a year throughout all of high school warning of the side effects and risks of drugs (in all forms), ensuring that everyone in society grows up with a valid understanding of drugs, not a fear based one. TV commercials, paper, radio, and mail-drops of informational pamphlets would also be done at this early stage to inform the public of the changes, and provide them with access to a website where more information and drug facts could be accessed.

With the warnings and education in place, the drugs would start being produced, and retail outlets would be licensed. Either directly through pharmacists, or similar to how liquor outlets are currently handled in Australia. Either way, the government would handle the production and wholesale distribution to private, highly regulated, thoroughly trained and licensed retail outlets. Every shipment of every type of drug would have information sheets which go with each batch, providing crucial information relevant to the dosage, side effects, risks, interactions etc that should be known before taking that drug.

Retail Scenario

The retail outlets would be responsible for ensuring the customer meets age restrictions (most likely 21+ for most drugs, but definitely based on scientific rigour rather than ideology), limiting the quantity purchased per customer, providing cursory verbal information, warnings and queries to ensure the customer understands the risks (as pharmacists currently do for prescription drugs), and of course, giving information pamphlets/booklets with the purchased drugs.

User Consequences

Now, all drug users have a clean reliable source of known quantities of drugs. This will significantly reduce risk of poisoning and overdose. Plus all users have readily accessible information about risks, rather than trusting ‘friends’ and random strangers to advise them. This too will have a significant impact on overdoses, overuse, addictions, bad interactions and many other risks typically assumed to be the fault of the drugs, rather than the fault of ignorance.Remember prohibition it still doesn't work legalise drugs

Crime Results

With a reliable government source, drug dealers will all be rapidly put out of business.

All of the drugs will be sold with a high tax rate and commercial mark up, so drug dealers might be able to keep lower prices. However, people will tend to prefer the certainty of knowing they are getting pure quality of known concentrations from reliable outlets over slightly lower prices. The profitability of large drug running organisations and organised crime groups will simply disappear, and with it, those groups will die a quick death. Most organised crime will simply disappear because most of them depend on their drug sales to maintain cash flow.

With the death of most organised crime groups, violence will decline. Turf wars, inter-gang rivalry, and violence to intimidate and maintain control will disappear with them. This fact is already being demonstrated with marijuana legalisation in Colorado, with violent crime declining by 5.2% in the first 6 months. Legalise all drugs, and it will be much more significant.

Revenue and Expenses

The biggest positive will be the significant new income source taken from crime syndicates and given to the government for the benefit of the public.

The costs of policing drug crime are significant, and these will nearly completely be eradicated over the course of a couple of years. The savings there alone will be immense, but they will be nothing compared to the revenue generated by the sale of the drugs, and the tax revenue generated from the retail outlets.  If there is one thing we have learned over the last 50+ years of drug prohibition, it is that druglords make more money than just about anyone else in society

Some of that revenue would be lost to the initial costs – creation of the farms, laboratories and distribution networks. Ongoing staff costs, maintenance etc will be easily covered by the revenue of sale. The significant profits and the taxation from retail sales would then need to be all used for specialised drug-related concerns in society.

Investment into Education

First, there would be the education side. Some of the money would need to be put into ensuring schools can adequately teach children about the drugs, so that no one is left ignorant of their risks and dangers. So a certain amount would be invested into schools every year and specific teachers, teacher trainings, materials, and other overheads associated with this.

Medical Expenses and Drug Abuse Support

Secondly, most of the money would need to go into ‘medical’ support. This would consist of counselling, addiction rehab clinics in uk, and outright medical expenses generated as a consequence of drug abuse. As part of the constant exposure to drug information provided under this system, constant reminders about counselling, psychological support, and medical assistance would be forever pushed on all drug users, so that no one is ever left feeling isolated, vulnerable and trapped by their drug use. This fact alone will save more lives than any other measure in my opinion (and cut medical costs by helping people avoid the devastating outcomes of untreated abuse).

One of the biggest problems created by the war on drugs is the labelling of drug abuse victims as criminals, forcing them to feel trapped by their situation, pushing them deeper into desperation, crime, isolation, mental illness etc. By breaking that stigma alone, lives will be saved, people will be helped back to functional productive members of society, and everyone will benefit.

Scientific Investment

If money remains, or after a few years of keeping enough money in buffer to compensate for fluctuating incomes and expenses, a fund should be generated for scientific research. By having easy access to all known drugs on the planet, scientific research should be delved into with rigour. Medical applications, long term consequences on individuals, society as a whole, psychology, physiology, etc. The ability to finally get some real research done on these most remarkable of chemicals will yield amazing commercial prospects for the country as new medical applications and treatments will be pioneered there exclusively.

Related to this is the fact that by controlling virtually all drug production, wholesale sales, and regulation of retail sales of drugs, it would finally be possible to get actually reliable statistics on the usage rate of drugs. Governments would be able to monitor just how much of each drug is consumed, and the track that against adverse health affects, long term outcomes etc. Rather than just polling people, and roughly guessing. It would even be possible to recruit far more people into long term health studies of specific drugs, rather than trying to infer the outcomes indirectly.

Invest in Children

One final investment option for the new drug based revenue stream, if there is the money available for it, is to invest in parental support.

This is a bit of a wildcard, but it seems to me like most drug abuse doesn’t come from drug addiction nearly so much as it comes from feeling trapped and useless (see the rat park research). One half of that equation is being unable to fend for oneself – unemployable, destitute, desperate poverty etc. We will deal with this issue in step 2 of this piece.

But the other half of the equation (or at least, another aspect of it) is growing up in an abusive or dysfunctional household.

As a society we already try to prevent children suffering through abusive upbringings. And this is great, but no doubt most of them slip through the cracks because abuse and maltreatment isn’t always obvious. It also isn’t always intentional. Often parents just find themselves overwhelmed. Unsure of themselves. Potentially even inadequate (surprise! Just giving birth to a human doesn’t make you a great parent!).

So the wildcard idea here is to invest in family support initiatives. Definitely keep providing strong support to abused and maltreated children, but also start extending support to parents who just wish they had more help with caring for and raising their children. The idea here is something of a government initiative Super Nanny program. Nannies who come and visit for one work day per week (mornings, middays or bedtimes) or more if required, to help advise parents on how to deal with troubled children, structure and support. Lighten the load and inject alternative unbiased professional experience into the household, and hopefully the children will have better lives for it.

My intention with this idea is to help reduce the number of people who grow up harbouring psychological trauma, mild as it may be, at the hands of misguided parents. I don’t mean to over-generalise here, but like it or not, parents have the biggest impact on our lives, and if you are unlucky enough to get one who repeatedly tells you you are useless, or ugly or a failure at life, or the cause of all of their problems….etc then there is a good chance that these sorts of psychological traumas will follow you for your life, and for some people, these traumas can cause them to seek escape into drugs.

Like I said – wildcard idea, and far from validated. Just an idea at this stage, which I am happy to receive feedback on.

Ultimate Outcome

So in summary, the government produces and wholesales all (currently illegal) drugs to highly regulated retail outlets who sell to very well informed customers who have significant psychological and medical support provided to them should they need it. Drug cartels would be put out of business, reducing violent crime significantly as crime syndicates lose their main source of funding. Policing can focus on actually protecting people rather than arresting drug users, the government has more money all round, and scientific research will undoubtedly find innumerable medical applications for most of the drugs, selling the technology/knowledge/application/treatment globally, creating even more revenue for the nation.

legalise regulate educate medicateCost?

I really don’t see one.

I know, I know: More people will have access to drugs, and drugs are dangerous!

Access will be there, but most people, even if offered heroin for free at a party, would still decline. Hell, alcohol is ever present in our society and I turn that down all the time! Just because something is available does not automatically mean people will start doing it. There has to be a desire to do it.  Just ask a Dutch person whether they smoke marijuana and take mushrooms or not – most don’t.

Secondly, if people want drugs, they can already get them! This is the current situation! The difference is that when you have problems, you have no real support. And your chances of having problems are significantly increased because of the unreliable source, the materials the drugs are cut with, and the lack of education around the drug usage. The only ‘education’ we currently have is “Don’t do it.”

Abstinence only sex education causes more pregnancies than real sex education, and abstinence only drug education causes more death and harms than real drug education.

So, when we get over this automatic assumption that ‘doing drugs’ is the bad thing, and start to think in terms of actual harms – overdoses, adverse health affects, psychological illnesses etc – then we can start to assess which system causes more harm. Does the current system which provides no support and proper education and reliable sources cause less harm than the system outlined here?

I doubt it very much.

Not only do we have easy comparisons between the USA and the Netherlands showing that the country with legal access to drugs actually has LOWER usage, but we have the obvious fact that support and education create better outcomes than ignorance, violence and unreliable sources.

So again.. I can’t see an actual negative.

End the war on drugs. Legalise and monopolise drug production and lets make the world a better, more inclusive and supportive place.

Part 2 to follow soon.

VN:F [1.9.22_1171]
Rating: 10.0/10 (1 vote cast)

A response to Tim Worstall’s article Raising America’s Pay; Might Someone Hit The EPI With A Cluebat Please

I came across this article shortly after it was published, and meant to publish this response back then, but have been exceedingly busy. So here it is now.

In his article Raising America’s Pay, Tim Worstall argues that the Economic Policy Institute has made untrue claims about poverty staying the same despite continuous economic growth because the way the USA measures poverty is flawed and doesn’t take into account the support provided by the government. In his own words:

The American system is much closer to a measurement of here’s the number of people who would be poor if we weren’t helping to alleviate their poverty.

So basically, Tim’s argument is that because the government provides support for many people who would otherwise be in poverty, the EPI’s claim that a growing economy has not proportionately pulled people up out of poverty is untrue.

This argument doesn’t make sense.

Companies are making more money than ever. The wealthiest are making more money. The poor though, they’re getting more government hand outs – therefore a rising tide floats all ships…? No. Clearly, the basic argument of the EPI report remains valid. Exceptional economic growth has NOT improved the lives of the poorest. Continual government oversight and support has done a bit to help them, and that is all.

So, the evidence here seems perfectly clear. Strong economies don’t alleviate poverty. Strong governments do. The rational advice would be to tax the wealthy more, and give that money to the poor.

 

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)

Surviving as an entrepreneur

It only occurred to me recently just how difficult it is for most people to pursue entrepreneurial activities.

The stats of success for small businesses are notoriously bad. The stats for successful startups is significantly worse. Tiny fractions of a percent actually make it to being profitable, and the road to going from new novel idea to successful business is incredibly difficult. It is uncertain and a process which evolves as you make it happen. You start with nothing, and work for nothing to build something of value, never knowing if you will even make revenue let alone turn a profit until you reach that point…and sometimes that point is months or even years after you start working.

How many people can work for years without making money?

Pretty close to 0% I would guess. It is a very privileged minority who can work on a project for years without needing to make money while they do it. Just think about how much this amplifies the difficulty of making a startup you are working on successful. If a startup is already an incredibly challenging proposition – something which is necessarily an unknown proposition, which unfolds as you manually force it all to happen by virtue of your own relentless will, held back by endless setbacks, disappointments, distractions, mistakes and common human flaws – then multiple all of that difficulty by the factor of “Must also work part time to fund this endeavour”, then you now have a situation where you have an incredibly difficult thing to do and only some of your spare time to do it in.

It is amazing anyone ever succeeds.

Of course, the standard solution to this is to pitch early. Get seed funding. Then get series A funding. Get a few million dollars of someone else’s money behind the project, and finally you can just get to work. Money is no longer an issue; not survival money anyway, business money is always going to be an issue but at least you can focus on working for a while without worry about being able to feed yourself, pay rent or catch a bus.

But pitching to investors really isn’t a perfect solution. Pitching doesn’t just automatically lead to instant money. First of all, investors want to see that you have already demonstrated that your product is viable, or is going to work because it has some early traction. So you must have already put in crap loads of work (for free) making something which proves you’re worthy of their money. Then you will need stop working on your project and instead start working on pitching full time (also without pay) so that you can find the right investor(s) who understand your vision. If you want to optimize your store layout and make the most of the available space, you should use retail shelving to display your products attractively.

It is very rare to get investment from the first investor you talk to. I’ve heard numbers where people have to meet with 50-100 investors before they finally get funding, spending 3 to 6 months, or even longer, to secure funding. That is 6 months taken away from working on the project! And again, you’re somehow meant to survive through that whole process… Either you are already independently wealthy, or you’re only pitching part time while you work to survive…or you are lucky enough to have a family or partner successful/generous enough to support you while you work.

When you consider all of the factors against success, and then think about them being constantly reapplied over time; difficulties, rejections, changes in strategy happening every week, every month for many months… the psychological toll is significant. My suspicion is that most startup failures are actually a result of attrition. That is, they would keep pushing and trying if they had the resources to do so, but the constant set backs and rejections are all happening under the shadow of “How much longer can I keep this up for before I lose my house/can’t afford food/disappoint my family for the last time?”

My suspicion is that if this ever-present shadow of ultimate-failure was removed from the picture, there would be a lot more interesting and progressive startups out there…

The Luxury of Being Able to be an Entrepreneur

My life as an entrepreneur has been incredibly lucky. I stumbled into my first business straight out of University and made a fantastic low-effort easily monetised website which then paid me a small income for many years after that. That small income – never quite enough to thrive on, but always enough to get by – gave me the freedom to explore several business ideas over the last 5 years.

At the beginning of 2012 I started working on rbutr, and it became my whole focus. I had actually already stopped paying adequate attention to my first business, and 3 or so years after starting to neglect it, it’s income has now dwindled down to a trickle. With that now the case, I am made doubly aware of just how much support I have from my awesome family. My parents and my partner both are incredibly supportive and explicitly provide the security in my life which ensures that I have the freedom to continue working on a project which has no promise of making money any time soon.

What a luxury I have…

rbutr is one of those projects which is going to change the world. But if I didn’t have the freedom to pursue it relentlessly on account of a bit of early luck, and an awesome understanding and supportive family (who are by no means wealthy, btw, just very generous and understanding), then rbutr could easily become just another footnote in the history of failed efforts to make a difference.

I know that no one else sees the importance of rbutr as much as I do. I know that no one else will make this happen if I don’t. I also know that when it happens, everyone will look back and point out how obvious it was, and how they ‘had the same idea’ and “I could have made that!” But no one else will, because it is bloody hard to do.

I have had great luck. I have incredible support. I got so lucky when I found my partner, Craig, who is an incredible developer that just made the MVP happen within a month. I am lucky that we have been able to build a small group of true fans that keep pushing this project forward. I am lucky we have had other friends start helping out, volunteering their time to work on this project… We have had so much go right for us. And we’re still a million light years away from ‘success’. We could disappear tomorrow and a tiny fraction of a percent of the world population would even remember that we tried.

This shit is hard!

But I have the vision so strongly planted in my mind now that I cannot unsee it. I know where this is going, and it is amazing. I am just lucky that I don’t have to walk away. Not just yet anyway. I am running out of time…I have that shadow hanging over me (in my case, it is a baby due soon combined with the end of savings and a guilt of being so dependent on family)… but that is my issue which I need to solve before I hit that wall.

The point I am trying to make here, is that even with incredible luck in the form of an early success, an incredibly supportive family and girlfriend, and a startup idea that is truly revolutionary, which has some strong traction and powerful allies, I’m still in a position where there is a chance that I can fail just out of attrition. If we don’t get funding within the next few months, or start bringing in a revenue, then I will be forced to get a job. And that kinda sucks….

The Value of a Successful Startup

This leads me to the second part of this post: successful startups are a big deal.

When someone makes a Google or a Facebook, they take an idea, and they turn that little bit of nothingness into a great big money making machine. And I don’t just mean for themselves, I mean a machine which makes money for thousands of employees, for all of the businesses that they do business with, and most importantly, tax revenue which ultimately is intended to benefit everyone in society. Consulting with an employment lawyer can help you understand your rights, evaluate the legitimacy of your termination, and guide you on the appropriate actions to take when your employment ends unfairly.

When you look at the fact that the large tech companies of the USA (Google, Facebook, Microsoft, etc), those companies have the same amount of revenue as Australia’s largest companies (mining, banks and grocery giants). That is, tech companies which (largely) sell non tangible substances (software, copyright, advertising) to a global audience bring in as much revenue (and much more profit) as companies which have to either extract limited resources from the ground, or sell real goods to consumers, or take a cut of transaction costs of Australians. Clearly non-tangible products sold to a global market is of a far greater value to the Australian population than companies who take a cut out of our own resources?

Getting a Google equivalent company in Australia would have such a huge impact on our economic position that it would be worth investing a lot of money into it, right? When you can take an idea from nothing, to 60+ billion dollars in revenue (again, from people all over the world) each year… that must produce a phenomenal return to the Australian economy in the form of jobs and tax revenue.

Surely this outcome is something worth fighting for?

Giving Entrepreneurs a Fighting Chance

What can we do to help improve our chances of finding Australia’s Google or Microsoft? How about removing that ‘shadow’ that hangs over all entrepreneurs? How about making it so that people feel free to work on projects which don’t make money, and aren’t even certain what the final product will look like, without fear of starving or losing their lives and family?

There are a couple of ways to do this. One option is to make a startup focused system, similar to what the Startup Chile program did, but focus it on Australian startups (instead of global), evaluate a pool of applicants and provide generous grants to a certain number of companies each year, giving them all the oxygen they need to keep pushing their idea uphill. This is one narrow method of solving this problem – though it still suffers some of the same limitations experienced by normal pitching (you need to prove your business worthy and spend time perfecting your pitch before you are likely to get the money).

A better solution is to embrace the concept of a Universal Basic Income.

If everyone had access to a guaranteed income which would be sufficient to ensure food and rent, then you would empower innumerable people to take the risks necessary to chase their startup dreams, and push forward on them relentlessly until they succeeded, or at least exhausted their own confidence. You would empower the exploration of ideas which may seem crazy, but also might just change the world.

The finding of another Google, Facebook, Microsoft or Apple would offset the cost of funding these dreamers many times over. It may not cover the costs of providing a Basic Income to everyone, but that is a wider question already well covered elsewhere. I just wanted to point out that it is generally acknowledged that funding many startups is the best approach to finding ‘the one’ which makes so much money that all of the other ‘losers’ are so insignificant in their costs as to not even be noticeable (<- this is a big link because you really should read this to understand how significant this point is!).

Giving everyone a Basic Income won’t make them all Elon Musks, but it does give them the security to try to be, and thereby the opportunity to prove themselves, or not. The ones who fail get to try again, or return to normal employment, or whatever else they wish without ever facing the specter of ultimate failure (abject poverty). While those who succeed – even if it is just 1 or 2 or 3 of them in total – will earn their way off the basic income into the lands of the ultra-wealthy. Where their business will more than pay for itself and all of its fallen brothers, and where the entrepreneur who made it will also hopefully be happy to pay the high taxes appropriate to their absurdly large income, at peace with the fact that they are only in that position because of the tax-sacrifices of those who came before them, not naively holding on to the easily-disproved notion that they made it ‘all on their own’.

No human has ever made it all on their own. We are a social species, and we depend on each other for everything. Let’s accept that fact and empower as many people as possible, and make the world a better place for everyone.

VN:F [1.9.22_1171]
Rating: 8.7/10 (10 votes cast)

Is the singularity upon us?

I feel like the singularity is inching up on us and no one is noticing because they’re all waiting for the fireworks.

Over the last couple of days I have seen headlines about Google’s self driving cars being announced, automation due to cut 50% of all of the US’s jobs, and just now Skype announcing a real time translator service. Oh, I almost forgot – Watson designed a BBQ sauce?!?!?

So of course none of these things are the singularity. But damn me if they aren’t all parts of the future vision we have all been told about for so long. Robots. AI. Real time translators. The general outsourcing of all of our menial tasks and complications in life. Our phones have already taken over our memories, and provided us with instantaneous global chat, voice comms and video calls (4g is pretty awesome, and it isn’t even new anymore), and I don’t think most people even realise that this has happened. It feels like everyone is still waiting for this future, and missing the amazing things already happening.

But just going back for a minute to the automation of our driving, our labour, our translating and to some extent, our thinking, I have noticed lately that it seems like the guys involved in Futurism (see /r/Futurology for example) are the only people genuinely switched on enough about what is happening and where we are going to have the slightest clue how to handle the approaching economic apocalypse.

Seriously – 50% of all jobs about to disappear. Driverless cars putting all taxi drivers, bus drivers, truck drivers….well, all drivers of all descriptions, all of them out of work….

As I joked with my friend on Facebook, the obvious political response to this problem of approaching joblessness will be to cut welfare so that people will be so desperate to get jobs that that desperation will magically create jobs out of thin air.

OR, a sensible person might start considering what is going to happen in a world where ‘jobs’ are no longer what people do. How does our ‘get a job’-centric society deal with the end of jobs?

I don’t think there is a coincidence that the people who have started championing Universal Basic Incomes are quite closely tied in to the Futurist crowd. It is one of the obvious solutions. In a world where costs to produce are approaching zero, and production is growing all the time, it just makes sense that we find a new way to ensure everyone gets a fair share of that arrangement, and those who improve it further get rewarded fairly (by getting more, but not in a way which detracts from the wellbeing of others).

I won’t get into it too much, but I just wanted to say those two things. 1. I think that if you aren’t paying attention to where we are going, then you’re already behind. and 2. Universal basic income is no longer just a crazy hippy commie pipe dream. It is rapidly becoming a necessary next step just to ensure the system doesn’t collapse under revolution.

 

VN:F [1.9.22_1171]
Rating: 10.0/10 (1 vote cast)

Some Thoughts About a Basic Income in Australia

I only heard about the concept of a basic income for the first time in the last year but immediately loved the idea. I especially loved the overwhelming successes which each trial of it seemed to return. Nonetheless I hadn’t taken the time to consider exactly how such a thing would be funded until today.

First of all – what is a Basic income? It is the idea of replacing a welfare system (which only helps people who are in dire need of it) with a guaranteed basic income for all people regardless of whether they need it or not. This overcomes a number of the problems of welfare (the fact that welfare disincentivizes getting low paying jobs for example). But I won’y waste your time explaining the intricacies of the concept or arguing for it here – it has already been well done elsewhere:

And one final point which sticks in my mind whenever I think of Basic income, is the results of a recent study which found the best way to help people in poverty is actually to just give them cash and let them do with it whatever they want: What Happens When You Just Give Money to Poor People?

Australian Budget, Welfare and Basic Income Cost

There is a lot of attention on the Australian budget atm in Australia and it has motivated me to look into our numbers recently. I found this fantastic breakdown of last years budget: Budget 2013. It tells us that last year we spent just under $400 billion dollars. And roughly $138 billion of that went to Welfare.

A fortnightly payment on Newstart (our jobseeker payment system) is worth about $510. If we take the idea that someone is meant to be able to live on Newstart (and that is debatable), then we’re looking at roughly $255 per week.

If we then pay that amount of money to every single person in the country (22.68m) each week, that will cost the government about $5.8 billion per week, or $300 billion per annum. Nearly the entire yearly budget of Australia, and more than twice as much as the current spending on welfare.

It is a bit more complicated than that of course, because usual basic income systems don’t give the full amount to children, so not everyone would get the entire amount. And there would be some level of overhead – but it would be insignificantly small since there would be very little work involved to ensure the payments are made.

Is It Possible for Australia to Have a Basic Income?

Looking at the numbers as they currently stand, clearly we can’t afford it. I mean, there simply isn’t any way we could cut other expenses nearly enough to be able to afford the $300 billion (minimum) of a basic income. BUT, economics is of course more complicated than that. There are of course ways of increasing government revenue. And there are other ways of keeping the overall cost of the basic income down. As I said above, children would receive less for instance.

One idea which came to mind for cutting the cost is to not actually make it universal, but make it universal for lower income earners. As soon as your income (total including the basic income) reaches a certain threshhold ($60,000 pa? $100,000 pa?) your basic income starts to be incrementally decreased. This in effect acts as a steep tax for higher income earners at a specific level, but the real negative of this system would be that it would probably create more overhead and the need to administer the system. A more reasonable approach would be to leave the basic income as a universal system, but simply increase the tax rate of higher income earners overall. So this no longer makes an ‘effective tax’ out of losing the payment, but just increases the amount taxed in our existing taxation system. This method would also be applied more fairly and universally across all higher income earners than just people at a specific threshhold income.

However, it can be said that income tax has a negative affect on the economy (I would argue that the benefits of removing poverty and the lower class and replacing it with a strong guaranteed middle class) would more than compensate for the cost of a higher taxation – but nonetheless, let us accept that higher income tax may have negative affects. So one suggestion is to implement/increase land tax.

And Finally, it is possible for Australia to over spend and go into debt to fund this. Australia currently has the second lowest debt of all of the OECD countries. Our debt is about 60% of our yearly budget, compared to the UK debt which is almost twice their yearly budget, and the US debt which is roughly 4x their annual budget. Of course debt for debts sake isn’t great – but debt to fund an investment can be the most powerful debt possible. Especially when your debt is charged the sort of interest rate that government debt is charged. (To make this point more sound, if you could borrow or at 5% and lend at 10% – would you rather borrow nothing, $100 or $1 billion? If you answered anything other than $1 billion, then you don’t understand maths.)

Why Do it?

If we’re going to have to increase taxes to be able to do this, it better be worth it right? Well, I think the destruction of poverty in a country is a pretty powerful reason alone to do this. This not only affects the lives of those in poverty, but of everyone in society as there would be less crime (less theft out of desperation) and a general improvement of society as more people have the luxury of attending school/college/university or pursuing their dreams rather than feeling trapped by their circumstances.

The benefits of a basic income are numerous, and the long term returns would be immense. I expect most of the article linked to above have already covered that though. So I might just leave it here. It is late. I might proof read this tomorrow or something…. 🙂 Goodnight.

 

(looking at my last few blog posts, it is no wonder my blog will never become popular – who else is interested in economics, drug policy, vaccination, non-monogamy, religion…etc.)

VN:F [1.9.22_1171]
Rating: 10.0/10 (5 votes cast)