Economic Utopian Plan

Economics Economics Questions
121

Why so obsessed with income disparity? If the money is being earned honestly, who are you to say who should have their money confiscated? If someone earns such amount of money in the market, it’s because that the service being offered by the person is appreciated by people, it’s also a signal to other people that such service is worth pursueing, what stimulates competition and ends up reducing the profit you consider immoral without the use of coercion.

So a place where everybody is equally poor is better?

“Somehow when the govt spends tax money, the money works just fine.”

Really? Are you not aware of the millions of examples of govt spending money in the most stupid fashions? Never heard about of overbudget state projects that are never finished in time? Because there are plenty of them around. What this means is that the acolytes of the goverment can have access to high consumption while producing little, and this is what is really unfair.

By the way, you contradict yourself all the time, a mix bag of economical fallacies debunked since Adam Smith times and ends up saying stuff that doesn’t make sense at all, like:

“The idea that people don’t want to earn $10 million and will just sit around broke, doing nothing, because they dont want to pay $5 million in taxes is wrong on so many levels.”

LOL, WUT?

“The richest countries in the world, with the highest standard of living, have the highest tax rates and the most intervention in the allocation of income.”

You are mistaking cause and consequence. As people become more productive, the state can drain a larger piece of the economy without leading to a collapse of it. For example, in colonial times, people here rebelled when the goverment imposed a tax of 20% in gold mining. Nowdays we sheeply accepted taxes of 35% in basic food.

122

Except that your utopian plan charges a zero percent rate of interest on the unlimited supply of credit. You effectively don’t have to pay back the money you “print”, because you could just create more to pay it.

Also, you’re still confusing money and wealth in a few of your other posts. I can have more money without being wealthier (for instance, if I and everyone else received the same amount of money).

123

Because I must hate it when people improve their living conditions. That’s why I hate communism – it was trying to do the same, I think. (/sarcasm)

So the same amount of wealth ($18T worth) would still be created (and split) if everyone had the option to sit at the beach and sip cocktails? Because incentive-less machines would do all the “jobs” while “work” (i.e. activities done strictly out of pure joy rather than for pay) would be left for the humans, correct?

Btw, if I employ the guy in the next beach chair as my cabana boy while his wife employs me to apply suntan lotion on her back, do we BOTH also get the extra “employed” $50k/year from you?

I still think you’d get more people to vote for you if you outright told them that you’d simply steal (“tax” away) all individual wealth above, say, $2m and evenly distribute it to all with net worth $500k or below. Much simpler and more visceral.

Final advice: Learn economics and how wealth is actually created. Worry about distributing it later.

Z.

124

Baxman said: “Except that your utopian plan charges a zero percent rate of interest on the unlimited supply of credit. You effectively don’t have to pay back the money you “print”, because you could just create more to pay it.”

The plan is not utopian. It was written by economists who, I can assure you, understand what inflation is. Nowhere in the manifesto does it say you can print unlimited money and never pay it back.

The amount of money any person can borrow depends on their income, their ability to pay it back, and the current rate of inflation. That is how loans work now and that is how they would work with this plan. The only difference is you will no longer have to pay a banker hundreds of thousands of dollars to press the key to digitally increase your bank account with the money you borrowed.

“Also, you’re still confusing money and wealth in a few of your other posts. I can have more money without being wealthier (for instance, if I and everyone else received the same amount of money).”

No, you are confusing the difference between money that alreay exists in the economy (which is where the money comes from to pay the dividend) and printing new money (which is not how the dividends get funded).

Everyone receives the $20k dividend but not everyone will be $20k wealthier. If you pay $45k in taxes and get a dividend of $20k, you are not $20k wealthier. You are $25k poorer.

The people who will lose income under this plan is government (they will lose trillions) and people who make over $400k. Everyone else will gain more income.

125

It was written by economists who, I can assure you, understand what inflation is. Nowhere in the manifesto does it say you can print unlimited money and never pay it back.

He is right that this plan is nothing new.

The National Income Approach by Henry Hazlitt

Friedman’s Mistake by Laurence M. Vance

Fallacies of the Negative Income Tax by Henry Hazlitt

If Hazlitt was refuting the idea, then you know it is old

126

I might as well jump into this.

First, from the manifesto:

Interest is an emergent phenomenon that arises from people’s time preferences. Eliminating interest (i.e. outlawing it, presumably with the attendant enforcement) means eliminating time preference. Under a time-preference-less economic “regime”, everything must be consumed as quickly as possible, if not immediately. After everything is hence consumed, there will be nothing left with which to produce new things that can be consumed, and everyone will die.

Good times.

Now, MeSeesBadIdeas writes:

Per point #6 in the manifesto, if one can “get all the credit [he wants], from mortgages to credit cards, without having to pay any interest”, then the amount of credit per person is (theoretically) infinite. Given that, one can just take more of his infinite credit to pay back the loans he’s already taken out, ad infinitum.

In fact, this is pure communist fantasy, where scarcity is magically eliminated by fiat. Any and all tax policies in addition to point #6 are meaningless in the face of infinite credit with zero interest. But since things are still scarce (despite the fiat), people will come into conflicts over who should get which things. Each will ramp up their bidding price until they just claim to have infinite credit to pay an infinite price, at which point there can be no economic decision over who gets it (it’s a case of $infinity vs. $infinity). People will either resort to aggression (i.e. stealing) or no one will be allowed to buy anything, which refutes point #6 in the manifesto.

Am I missing anything here?

127

vitor said: “Why so obsessed with income disparity?”

Why are you obsessed with continuing income disparity?

I have an interest in income disparity because income disparity is a huge problem. The purpose of the economy is to produce and distribute the things people want. Income disparity means there is a problem with distribution. The large, uneven distribution of resources is the source of nearly every social problem we have. The poverty and financial struggle that results is the cause of most human suffering and most crimes.

There is nothing wrong with disparity or someone being a billionaire. But there is something wrong with a person being a billionaire in a country where 15% live in poverty.

If we just used taxes to pay citizens a dividend this problem would be instantly solved, poverty would vanish along with all the suffering and hopelessness it breeds.

“If the money is being earned honestly, who are you to say who should have their money confiscated?”

I do not believe anyone’s money should be confiscated. However, paying a fee for something is not confiscation. Taxes are part of the expenses you will incur living in a modern society with all the services, protection and opportunities it provides. If you don’t like the price of something, tax included, you are free to choose another place to live. That is how markets in the free world work.

“If someone earns such amount of money in the market, it’s because that the service being offered by the person is appreciated by people, it’s also a signal to other people that such service is worth pursueing, what stimulates competition and ends up reducing the profit you consider immoral without the use of coercion.”

Profit is not immoral. It is just a measure of efficiency. But what is immoral is preventing a very profitable society from being a society that works for everyone-no exceptions-where everyone gets access to the best of what society has to offer and where everyone has the resources to reach their full potential.

“So a place where everybody is equally poor is better?”

No, that is what the purpose of the manifesto is trying to end. Because wealth and income is concentrated at the top, 15% are equally left in poverty, 50% equally left to barely earn enough to survive, and only 7% get to equally enjoy a wealthy life.

MeSeesBadIdeas said: “Somehow when the govt spends tax money, the money works just fine.”

Then Vitor said: “Really? Are you not aware of the millions of examples of govt spending money in the most stupid fashions?”

You missed the point. The manifesto proposes that we should use tax money to just pay everyone a dividend instead of have govt spend it. Taxes should be used to make you wealthy, not govt.

You then claimed that the money you get from the dividend will not make you wealthier. Somehow, the money won’t work when you spend it.

So I was simply pointing out that when the govt spends tax money, the money works just fine and is able to get them trillions in goods and services. Your claim that somehow when you spend that very same money that the money will no longer work is just wrong.

"By the way, you contradict yourself all the time, a mix bag of economical fallacies debunked since Adam Smith times and ends up saying stuff that doesn’t make sense at all, like:

“The idea that people don’t want to earn $10 million and will just sit around broke, doing nothing, because they dont want to pay $5 million in taxes is wrong on so many levels.”

LOL, WUT?"

Another one of the wrong claims you made was that when people are taxed they no longer continue to be productive. I was simply pointing out how wrong that claim was. Despite the existance of taxes, we continue to produce trillions in wealth.

Taxes will not hinder progress, it will not hinder the continue creation of wealth, and it will make sure that every single person in that society is wealthy.

128

A Society Where Everyone Is Wealthy, Technology Liberates Us From Jobs, And The World Is A Paradise

What a big steaming pile of horse sheeeeeeeeeet. Sorry I’ve nothing more to say.

129

You can’t make society wealthy by confiscating property from the producers and giving it to the moochers. The producers will have no incentive to produce, particularly if they can get access to infinite interest free credit.

This has been tried before. It is called communism. It doesn’t work. People end up dying by the millions. It’s not a good idea.

130

Wait, so is this plan trying to claim that freedom hinders aggregate wealth, or that aggregate wealth is the same regardless of political systems (free, totalitarian)? It’s pervaded by the assumption that increased state intervention in the economy won’t affect the size of the aggregate wealth pie, or will even increase it (e.g. “we’ll pay to automate everything”).

Is there supposed to be some kind of Keynesian multiplier effect at work that’s supposed to increase aggregate wealth? Or are we just going to assume that everyone will ignore the increased government expropriation and keep on working like they do under our current pseudo-capitalism?

131

RevLeft would love this idea! Or see how ridiculous it is, and then abandon their own ideas of statism. Either way, this is just communism + robots.

You have to remember Mesees, if everyone is going to be rich, what about all the lower income jobs that rich people create through their wealth? Who would want to them? Who will take out garbage? There is no way machines will ever eliminate ALL jobs.

132

z1235 said: “So the same amount of wealth ($18T worth) would still be created (and split) if everyone had the option to sit at the beach and sip cocktails? Because incentive-less machines would do all the “jobs” while “work” (i.e. activities done strictly out of pure joy rather than for pay) would be left for the humans, correct?”

A job is work that nobody wants to do. Productive leisure activities is work people like to do regardless of whether they are getting paid for it.

Sipping cocktails on the beach is an unproductive leisure activity, is not work and does not increase wealth.

Our economy would be most productive and would produce the highest quality of life if all jobs were done by machines and people focused strictly on productive leisure activities.

“Btw, if I employ the guy in the next beach chair as my cabana boy while his wife employs me to apply suntan lotion on her back, do we BOTH also get the extra “employed” $50k/year from you?”

If you have a paying job, you would qualify for the dividend. If you want to hire someone to be your cabana boy and pay him a salary, that cabana boy would qualify for a dividend.

"I still think you’d get more people to vote for you if you outright told them that you’d simply steal (“tax” away) all individual wealth above, say, $2m and evenly distribute it to all with net worth $500k or below. Much simpler and more visceral. "

That would destroy the economy. No business would be able to grow and reach economies of scale. And there is not enough money in wealth over $2 million to make a difference in anyone’s life.

Taxes already exist. It is easy for people to understand that we are just sending that tax money to you instead of the government. Taxes will now be used to make you rich instead of the government. This is not about rich versus poor.

“Final advice: Learn economics and how wealth is actually created. Worry about distributing it later.”

I know this hasn’t reached a lot of the kind of people who would idolize mises and who are still stuck in the 17th century, but we have already figured out how to be productive. It is distribution that is the problem. People don’t starve to death because we ran out of food, it is because they don’t have money.

This plan doesn’t just make sure wealth is more efficiently distributed, it also makes the economy more productive.

There is no benefit from having a human do a job that a machine can do. Our current economy employs more than half the workforce in jobs that can be automated with existing technology. It is enormously inefficient. They should be freed from those jobs so that they can contribute to society in additional ways.

133

Autolykos said: “Am I missing anything here?”

Uh, you missed the entire manifesto! You might want to read it before trying to criticize it. Nowhere in the manifesto does it say you can have infinite loans. The amount of loans you can get depends on all the SAME things that today’s system does: your income, your ability to pay it back and the amount of inflation. The only difference is that you no longer have to pay hundreds of thousands of dollars for some banker to press a key on a computer that increases your bank account balance.

134

liberty student said: “You can’t make society wealthy by confiscating property from the producers and giving it to the moochers.”

Paying a fee is not confiscation. When your landlord demands rent for the trailer you live in, he is not confiscating your wealth.

For the four hundreth time, the dividend does not claim to increase the overall wealth of society. It REDISTRIBUTES existing wealth. So it will in fact increase the wealth of some members of society. When I take $20k out of my pocket and give it to you, I have NOT increased the overall wealth of society, but I have in fact INCREASED your wealth by EXACTLY $20k.

But since people may be less willing to work mind-numbing, menial jobs, that will now incentivize businesses to begin automating the 55% of jobs that currently can be automated. It will make the economy more efficient and more productive, thereby increasing the overall wealth of society.

“The producers will have no incentive to produce, particularly if they can get access to infinite interest free credit.”

Nobody can get infinite loans. And getting a loan does not decrease anybody’s incenve to do anything.

“This has been tried before. It is called communism. It doesn’t work. People end up dying by the millions. It’s not a good idea.”

I know you are a “student,” but it is shocking that someone who is an Admin of and Moderator of and who posted over 9,000 posts to an economics forum doesn’t even know what communism is.

The US is not communist because it has a tax. Our tax has not killed millions. It has prevented the death of millions.

Communism is the theoretical final stage of society where government, private property and money is no longer needed because of the abundance created by technology as popularized by Karl Marx and by shows about the future like Star Trek.

This program only decreases government, not eliminate it, does not eliminate money and does not eliminate private property.

135

Libertyandlife said: “You have to remember Mesees, if everyone is going to be rich, what about all the lower income jobs that rich people create through their wealth? Who would want to them? Who will take out garbage? There is no way machines will ever eliminate ALL jobs.”

That is pretty sinister. I don’t believe any human being should be paid an unlivable wage for any reason let alone to continue making someone else rich.

Progress is not having poor people take out your garbage.

We already have automated garbage trucks that can navigate through roads and can collect the garbage from garbage cans. It doesn’t require the employment of anyone.

Not only can we automate garbage collection, but we can also automate 80% of the jobs people don’t want to do.

Progress is using technology to liberate people from having to do jobs they don’t want to do.

You long for the 17th century with classes of people, our plan moves us into the future where everyone has real freedom and is wealthy at a minimum.

136

MeSees,

Here is an interesting article on social engineering. Although you would disagree, the plan you support is actually quite similar.

Me also sees bad ideas. And they are not the ideas of Mises, as your user name implies.

137

MeSees,

You’re constantly attempting to play God, you keep using phrases like “people don’t want..” etc as if you as an individual have omniscient knowledge of what hundreds of millions of other people desire. I can think of examples in my own life of where automation is available but where I deliberatelhy choose not to use it, such as at automatic tills at supermarkets (I live in the UK and have no idea if they are available in the US).Also I have done jobs when I was younger that I thoroughly enjoyed that you would no doubt class as menial and eliminate (warehouse assistant, gardener, newspaper boy).

Currently I run a small financial business, and there is no question that my efforts help satisfy people and create wealth. However I am naturally lazy, and if I was able to live a life of luxury whilst doing no work I would take that option without a shadow of a doubt and the wealth I generate would not only be lost to society, but I would be living parasitically from other people’s effort.

The cabana boy example above has also revealed another fatal flaw in your plan that I was trying to get at earlier, which is simply that everyone would end up being employed, and no one would be paid ‘only’ the $20k, simply because people would employ each other in spurious roles. To prevent this I assume this utopian government would then have to evaluate each job and decide whether it was worthy of the $30k being paid, in which case you have yourself an authoritarian state.

138

chloe732 said: “Here is an interesting article on social engineering. Although you would disagree, the plan you support is actually quite similar.”

Yes, using taxes to pay people a dividend instead of using it to fund wasteful govt bureaucracies and using technology to lower the cost of credit is VERY similar to genocide. Excellent point.

139

JohnnyFive said: “You’re constantly attempting to play God, you keep using phrases like “people don’t want..” etc as if you as an individual have omniscient knowledge of what hundreds of millions of other people desire.”

All the program does is pay you a dividend. If you want to work as a dirt digger, an elevator man, or a milk man nobody is going to stop you. Nowhere does it say I am God and will prevent anyone from working any job. I know you love working menial jobs. You will continue to be able do that.

But in the real world, where people don’t dream of becoming cashiers, people would argue that paying people a dividend will create a shortage in jobs most people don’t want to do like cashiers. So I am only pointing out that if people in general do not want to do those kinds of jobs, it would not have any effect on the economy because we can automate them.

“I can think of examples in my own life of where automation is available but where I deliberatelhy choose not to use it, such as at automatic tills at supermarkets (I live in the UK and have no idea if they are available in the US).”

And I love sending my messages hand delivered by people riding horses. But I have painfully come to grips that modern society no longer uses that way of delivering messages.

“Also I have done jobs when I was younger that I thoroughly enjoyed that you would no doubt class as menial and eliminate (warehouse assistant, gardener, newspaper boy).”

If you like spending your days moving boxes, nobody is going to stop you. But for the rest of the world that doesn’t share your interest in box moving, they will now have the freedom to do things they find more enjoyable.

“Currently I run a small financial business, and there is no question that my efforts help satisfy people and create wealth. However I am naturally lazy, and if I was able to live a life of luxury whilst doing no work I would take that option without a shadow of a doubt and the wealth I generate would not only be lost to society, but I would be living parasitically from other people’s effort.”

If you don’t like your job, that’s sad, you should do something you enjoy instead. If your financial service is indeed valued by others, somebody else (who has more desire than you and wants to earn more than $20k per year) will be willing to do it. And if they can’t find employees to help, they will develop an automation solution to replace them.

“The cabana boy example above has also revealed another fatal flaw in your plan that I was trying to get at earlier, which is simply that everyone would end up being employed, and no one would be paid ‘only’ the $20k, simply because people would employ each other in spurious roles.”

First, nobody here has pointed out a single flaw, let alone a fatal flaw.

Second, what benefit would you or anyone else get from employing someone in a spurious role that you would not ordinarily employ them in?

140

“Second, what benefit would you or anyone else get from employing someone in a spurious role that you would not ordinarily employ them in?”

Imagine this scenario. Yourself and your neighbour are living in your utopian world, both collecting the $20k dividend, and both choosing not to work. Then one day your neighbour pops round and says “hey Bertie, I’ve just had a great idea! How about I employ you to clean my house, and you employ me to clean your house. That way we will both be doing the same as before but we will now both be employed and pick up the $30k additional money”.

There are a million variations on the above scenario, but the basic point is this; in your world if you simply pay someone $30k to have a job then all that will happen is that every single citizen will be ‘employed’, many in spurious roles created for the sole purpose of picking up the cheque.

The only way to stop this from happening would be via an authoritarian decree from the Government something along the lines of “In order to be given the $30k your job must be evaluated for it’s worth and approved by us”.