Sunday, November 20, 2016

Universal Basic Income? I've got a better idea.

I was mucking around in slashdot last night for no particular good reason. I think it has been at least a year since I last took a real look over there.

There was quite a bit of discussion of the concept of Universal Basic Income, and at least one article on some overly wealthy entrepreneurs deciding to try to test the concept.

Before I dig into this subject, I need to explain the concept of value that underlies my ideas about economy. I wrote a long general rant on the subject some time ago, and wrote a shorter rant on value in relation to commercial activities some time after that. Last March or so, I started work on an excessively extended rant trying to establish a simple economic system in which economic interactions would become easy to talk about and agree on. I don't think I succeeded. At least I did not succeed well enough to be able to justify continuing at this time.

Well, the short version is this.

By nature, people work. That's part of the definition of humanity. Healthy, functional human beings will work if they have the option.

I'm not saying they work for pay. I'm not saying they do the work that others demand of them. In fact, there is much activity that people pay others to do that would be hard to call work, and there is much that people don't get paid for that very much is useful and meaningful work. Likewise for things people demand others should do regardless of pay.

Work creates value. It may be value only for the individual doing the work. Or it may be something that another person values. It may be both. But it does create value.

Actually, this is a tautology, because I define work as an activity that creates value.

Value is very hard to convert to money.

This is not what you were expecting to hear, I suppose. We use money as a proxy for value. We use it as a communication medium to communicate about value, and we try very hard to communicate real value with money. We get into the habit of talking about money as if it were equivalent to value, and it is not.

Money is only a very poor proxy for value.

But it is the best general proxy we have for value in a pluralistic world.

Think about that. Pluralism means different strokes for different folks.

Pluralism is how we get along when your football is round and my football is shaped sort-of like an egg and my wife thinks football is a lot of bother.

Pluralism says I can be Mormon, you can be not really sure what you believe, your friend can be Catholic, my friend can be atheistically inclined, another, mutual friend can adher to principles of Islam, and getting together in the marketplace doesn't lead us to war.

Pluralism says I can spend my money building a room where I can dance and you can build a swimming pool, if we both have enough money.
Nobody values things quite the same, but money allows us to pretend our value systems are somewhat compatible -- even when they are not all that compatible.

That's how money is a proxy for value.

But money only tells us how much, roughly, at the moment the transaction occurs. No fine distinctions as to what induces the sense of value or in what context the value is established.

Maybe a pizza is worth fifteen dollars. But we don't know whether that is for Saturday night when we're watching football, or for Monday's lunch.

Maybe a twelve-pack of beer is worth fifteen dollars to you. It ain't worth fifteen dollars to me, even as a shampoo substitute.

Maybe a notebook PC can be sold for $1,500 because it has 16GB of RAM and 2TB of hard disk and 128GB of high-speed SD for the OS, 8 cores, etc. But if it has an Intel processor, I'd rather pay the $1,500 for a quarter the RAM and persistent store and an ARM processor, even with just 4 cores. And I'd pay easily more than twice that for a PC with a 2-core 33209 CPU. If I had the money. If the 33209 actually existed in real hardware according to the spec in my dreams.

My wife will pay twice the price for silk, because cotton is hard on her skin. I'll take cotton any day because silk is hard on mine.
On the one hand, the ambiguous nature of money as a proxy for value allows us to go to market without going to war.

On the other, it leaves a lot of important stories untold when it's time for the accounting.
So we get in the bad habit of conflating money with value, when it barely tells us the bare minimum about value.

We live in an entropic world. 

That means that the total available value decreases. This is the Malthusian argument, and is the excuse for inventing economics based on scarcity.

How does the world keep from running down?

We have a source of something that gives us value for free. It seems to reverse entropy. It's called the Sun.

The sun is the huge gravity sink, and we tend to misunderstand gravity. We think it accelerates entropy. (This is wrong, but that's what we think.)

But the sun is actually a huge source of free available energy. That energy can offset the entropic nature of our world -- more than offset it.

Uhm, did I forget to mention that energy is the physical equivalent of value? Not money, value. Trust me. Energy does a much beter job as an exchange medium than money does.
Some people want to imitate that free source of available value by having our governments hand out a Universal Basic Income.
Huge logical errors. Governments are not God, and they are not natural. Man-made (artificial), often in the extreme. Money is not value.

Handing out money tends to inflate prices. Why? Because money is not value. It's a proxy for value, and when we pump more of the proxy in, we just inflate the prices of things that have real value.

How do we add value to the world? 

Work creates value. (Converts bound value to available value, actually.)
Does that excuse slave economics? Force people to work? 
That's the scarcity economics argument again. We want to think that only our allies can properly judge value, and we want to hope our allies will be in charge. But that's backwards. The more people we allow to judge value, the more of the available value there is that can be accessed. Variety increases value, especially variety in work.

What other things create value?

Entertainment creates a value substitute. Kind of like sweeteners are an energy substitute. A little bit is useful. A lot, not so much.

Education often converts bound value to available value. (Does that excuse enforced education?)

Religion sometimes gives people a reason for living. False religion produces false value. (That's a definition of false religion for you.) Religion is not a good universal source of available value, either.

What is the real purpose of this world?

I'll present this as a naked assertion, a proposed axiom:

Observe a junior high school class. Now go observe some company at work.

This world is here for us to gain an education. Not the artificial education dreamed up by our national education associations and such, real education. We are not here to just exist, we are here to learn.

If you have money to give away and Universal Basic Income was an interesting idea to you, I have a better proposition. 
Invent jobs. Well, no, don't just arbitrarily invent jobs. Look for jobs that aren't getting done because nobody seems to want to pay for them to be done right now with the current artificial fads of what's important and what isn't. Look at the work that your accountants won't let you account for, but you know deep inside that it's work that needs to be done. 
If people are doing those jobs anyway, leave them alone. Don't spoil work with money when you can avoid it.
But if nobody is doing the jobs, go hire someone to do those jobs. 
Don't give them money, give them jobs. Help them do the work they want to do, to create available value. 
Yeah, it takes more effort, more follow-up, especially when someone wants to do a particular kind of work but doesn't know how without creating a mess. But that effort you put in is work for you, your opportunity to add to the available value in the economy.

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