> Technology provides leverage on ability and luck, and in the process concentrates wealth and drives inequality. I think that drastic wealth inequality is likely to be one of the biggest social problems of the next 20 years. [2] We can—and we will—redistribute wealth, but it still doesn’t solve the real problem of people needing something fulfilling to do.
What's the best case realistic scenario for redistributing wealth?
Basic income. People may scoff, but this is one of the extremely rare ideas that can draw significant support from both sides of the isle in the US.
There are pockets of strong opposition to the idea on both the right and the left, but I can only hope that the far left's opposition to basic income continues. That opposition in and off itself makes most politicians in this country take a serious look at the idea.
I'd say it's one of the rare ideas that almost no one supports. The right obviously objects to redistribution. The left prefers inefficient redistribution. It's hard to say there's much tangible opposition on the far left or that opposition causes consideration or that most politicians are taking a serious look. I think you might have just gone 0 for 5.
The right also tends to like freedom of choice, reduced bureaucracy, efficient markets and price discovery, all of which BI does much better than current welfare systems.
This is an obvious strawman. The current inefficient solution is a compromise between the left (who want the government to help the poor) and the right (who don't want the government to help the poor, but can be persuaded if you mix in enough penalties for perceived sin.)
In order to have an efficient solution you need a majority of people voting to agree on what the goal is.
That's not quite true; just they want the main beneficiaries of redistribution to be the bureaucratic class rather than the working class. What you see as inefficiency (in terms of money reaching the end recipients) is in fact, the actual design doing what it was intended to do. Ideally (for them) ALL the money would go on civil servant salaries.
Since I am not an economist or very experienced in these matters may I ask what would prevent the cost of goods simply going up due to basic income being supplied? Wouldn't we end up in the same situation all over again except the government would then be forced to write checks as the population would be dependent on them due to increased costs?
> Since I am not an economist or very experienced in these matters may I ask what would prevent the cost of goods simply going up due to basic income being supplied?
Prices of goods demanded by the group of people receiving a net benefit from basic income (which, even though BI itself is universal, isn't everyone, because its funded by progressive taxation, which makes it a net downward transfer of wealth) would almost certainly go up with a basic income. The thing that suggests that the increase in price would generally be restrained such that the quantity of goods the net beneficiaries could afford would still increase despite the price level increase is "elasticity".
The "problem" that basic income is trying to solve is the massive increase in productive capacity due to automation, of which the increase of unemployment is a symptom. It's not so much that supply would meet demand (and so prevent prices going up), as that basic income allows demand to keep up with supply even as automation makes more with less labor.
You're assuming redistribution wouldn't happen through heavy taxation of existing capital and property, like France's wealth tax[1], where you pay when your worldwide net worth is above 1,300,000€.
2.
The US taxes citizens regardless of where they live[1], and in the case of renouncing the US citizenship it is required you pay an exit tax[2] equivalent to the capital gains of selling all your property when above $680,000.
1. Inheritance taxes are one part of the solution. Capital gains taxes are another.
2. Make the right to conduct financial transactions contingent on one being part of a global financial network which abides by a specific set of taxation rules. This can take many forms. The U.S. in particular is well-placed to initiate and control such a system. However, considering that Wall Street has captured Congress, I doubt the U.S. will come anywhere close to this in the first place.
I believe the goal is some kind of universal basic income, where the developed countries affected by these changes provide similar benefits. Of course, no matter what the solution is, political and social structures will have to change drastically to accommodate this kind of change in the world.
Disagreements on implementation are real (some on the right want this implemented only as Friedman's negative income tax, which is not a true GBI, and some on the left want a GBI in addition to the current welfare state), but there is still significant agreement, especially over the past few years.
The problem is implementation, do you really trust the US government to give it even more power over its people by allowing to hand out 'basic incomes' to everyone? I'm sure it will only become yet another tool to oppress dissent.
The federal government has a terrible record of trying and succeeding in ruining people they perceive as a threat to the status quo, including people like MLK Jr., a Senate confirmed target of the FBI. These tactics continue today, they are currently being directed towards investigative journalists and whistle blowers. The threats are so great as to create a very real chill among conventional journalists to keep on approved topics and messages.
Free speech zones, excessive pursuit of whistle blowers, proposed restrictions on cryptography, extensive use of national security letters, resisting FOIA requests, defending NSA programs, killing US citizens in secret.
I'm flabbergasted you believe my fears of government overreach and suppression of dissent is not well grounded.
Not sure if you're asking sama about his opinion or if you want others to chime in. A popular answer among the HN crowd that I tend to agree with is to tax the wealthy and distribute the proceeds to the poor via a "basic income" scheme.
> distribute the proceeds to the poor via a "basic income" scheme
Basic income goes to both the poor and the rich. It's universal. The net affect may be redistributive, but there's no preference given to the recipient's income level.
Most rich people would just take the basic income as a small tax break, but they're still getting it.
I know you know this, but it's important to frame this issue properly if you want to support it. There can be no question in basic income of "undeserving" groups getting it, because everybody gets it. This also has the worthy effect of eliminating all the bureaucracy that current benefits programs carry.
Why wait for a tax? If we're in the top %x of income earners, why aren't we taking it upon ourselves to give away our wealth? Form a charitable organization that takes care of people, donate your money.
Edit: I'm with the others here replying with "reduced burdens on the middle class and small businesses" and "...teach a man to fish..." I keep seeing this basic income and wealth distribution topic on HN and I would genuinely like to understand why those preaching for these ideas never actually do anything about it. "Make the government bigger" isn't the answer as it'll then be used as a tool of oppression.
Further, assuming we implemented a basic income in the USA, how many generations until the motivators for innovation and advancing society are completely eliminated? I've everything I need at $BASIC_INCOME, and as soon as I start producing more income, the government is stripping it from me, so what's my motivation to ever do anything besides subsist on that minimum? And once everyone is just taking the minimum and not doing work, who's gonna farm the food? Drive the trucks? Operate a grocery? Build the houses?
I don't have a good answer for why this doesn't happen. However, the fact of the matter is that the wealthy, on the whole, don't naturally redistribute their wealth very effectively.
Because keynesians don't really want to help the poor, they want to be taxed which serves as flogging to atone for their guilt for the poor, which then makes them feel better about themselves.
If we wanted to help the poor we would be making things easier for small businesses, not harder.
You don't help people by giving them fish, you help them by teaching them how to fish. I can't believe I'm having to remind HNers about this.
A better answer is removing expensive barriers of entry to allow small businesses to compete with larger companies, removing artificial boundaries to allow labor to go where it is most needed just as capital is allowed the same today, and _reducing taxes_ allowing the middle class to thrive once more instead of giving special privileges to the wealthy and buying off the poor with free debt.
I am puzzled by this. There is also this first order decrease in cost of living that technology drives, that really is the 'rising tide that lifts all boats', in effect, a 'natural' progressive redistribution[0]. It would be hard to argue that inequality increased between, say, 1700 and 1900 because of the increase in technology.
[0] This 'natural' redistribution tends to be counteracted by authorities that debase the money system. Currently we have an explicit anti-deflationist policy on the grounds that lowering prices are believed to inherently have a socially destabilizing effect. Monetary policy tends to be regressive redistribution, because the primary executors of these policies are connected to banks, and the secondary effects are to create upward market indexes that beat inflation (but are eventually corrected downward, hurting middle-class 'slow movers' like pension funds and disproportionately helping upper-class 'fast moving' investment classes).
> It would be hard to argue that inequality increased between
Based on averages, why would it be? Inequality does not measure where you are coming from, it measures the relative economic distance between groups now. We can all live better these days and yet have a far greater difference in wealth between the richest and poorest.
Imagine a system which levied taxes not to fund government expenditure but to carefully control inflation. In this system there is no need for the government to collect taxes from citizen X to fund the needs of citizen Y. How is this possible? Study U.S. fiscal policy and you will learn about such a system. Given enough consideration you will eventually see that 'the redistribution of wealth' from citizen X to Y is an antiquated idea given how our monetary system actually works. A more accurate description of what occurs is: given the growth of the productivity of the population as a whole, we can 'distribute wealth' to those with less as long as this distribution doesn't cause the system to become unstable.
What's the best case realistic scenario for redistributing wealth?