Guaranteed Minimum What?

55 thoughts on “Guaranteed Minimum What?”

  1. Instead circumstances are going to overwhelm us until enough of the population is miserable enough to demand real change.

    What do you think was the dynamic behind last November’s change from 1600 Pennsylvania Ave to the latest Trump Tower DC?

    “I’M MAD AS HELL AND I’M NOT GOING TO TAKE IT ANY MORE!” coming up against Business As Usual.

  2. Uncontrolled illegal immigration as the underlying firestarter. Health care as a right and for everyone. Sanctuary city in over 20 States…which when you re-visit history… The last time this many states were in defiance of the Federal Government – it lead to civil war. Both times (end slavery and uncontrolled immigration) were led by Democrats!

    1. I’m confused.

      It was the Republican party under Abraham Lincoln that championed a strong federal government over states rights. The southern rebels were Democrats.

      And there were no laws of any kind to regulate immigration until the Chinese Exclusion Act of 1882 which was well after the Civil War. Immigration couldn’t be “illegal” if no laws existed to restrict it.

  3. Would it be OK if I cross-posted this article to WriterBeat.com? I’ll be sure to give you complete credit as the author. There is no fee; I’m simply trying to ad6d more content diversity for our community and I liked what you wrote. If “OK” please let me know via email.

    Autumn
    AutumnCote@WriterBeat.com

  4. Its rather obvious to anyone who has studied history in some detail. When the youth are unemployed and the middle class destroyed, dissatisfaction will turn to unrest. Protests will become more and more violent as folks realize that representatives are merely slaves to the rich donors and care two hoots about the general electorate. We will have violence on the streets as people start to loot stores and rich residences. Assaults on anyone looking prosperous will become more and more common. There will be more and more police shootings. The national guard will be deployed against looters and there will be heavy casualties. This will lead to an escalating cycle of violence and social breakdown.

    At this point, you can go one of two ways. You may have several congressmen and senators lynched, the president declares an emergency and the representatives out of the need for survival are forced to change, revise the existing tax laws and implement new measures to swing the pendulum of power back the other way from the billionaires to the general populace. Its difficult to predict what these new measures might look like: It might be universal basic income and national health care. It might be taxes on robots, machines and AI’s, taxes on profits held overseas, removal of tax breaks for the wealthy, housing and food for the dispossessed, taxes on gross revenue, breakdown of large monopolistic corporates into smaller units or cooperatives, etc

    The other way is that situation leads to complete social breakdown, the states split across political and religious lines, the military divides and chooses sides and civil war ensures leading to millions of deaths. From the ashes, new governments emerge in the divided states. These will be either be strongly communist or fascist in nature. Some might even be christian theocracies assuming a few of the southern states win battles (doubtful due to extreme population imbalance) or threaten nuclear retaliation.

    Its extraordinarily easy for the rich today to overvalue their own importance to society and devalue the poor by calling them losers and wastrels. The rich simply don’t understand how easy everything in life becomes when one has money and think the poor are at fault due to some intrinsic defect in their character. This view was true in the time of Rome and also at the time of the French revolution.

  5. My goodness.

    You seem to have drawn the attention of some sort of high school anti-tax/anti-union club.

    They seem particularly keen on lecturing here about what constitutes “econ 101”.

    In other words: Classroom econ.

    Which is natural, because they obviously lack much exposure to the real world

    1. I’m happy to let people comment in any way they wish. I learn things from what my readers say.

      I got an additional 20,000 hits on the blog yesterday all tracing back to a re-posting of the “Guaranteed Minimum What?” story on a tech oriented site. It was a classic self-selecting population.

      On paper what the Econ 101 people say should be true. But you have to look around and observe… reality. See here:

      https://granolashotgun.com/2016/02/13/working-poor/

      and here:

      https://granolashotgun.com/2016/02/08/spring-in-the-silicon-favela/

  6. Make human labor less taxing than those automatons and you’ll see a lot of new jobs. The big thing about moving jobs to robots is they don’t have unions. That and also #TaxationIsTheft

  7. > So what about everyone else?

    Everyone else will do fine as the rising productivity increases output and lowers the price of goods and services… increasing real wages. This is economics 101 dude.

    1. Increasing real wages, for whom? If only a negligible percent of the workforce actually have work, increased real wages will do exactly nothing. So there’s a shrinking pool of people that have the financial capacity to consume goods and services, which (economics 101, dude!) lead to a reduced demand and a reduced production that leads to increased prices. Which will increase the real wages for those privileged few that actually still have jobs, while making said good inaccessible for those without.

      Yes. Economics 101, dude.

    2. That’s MICROeconomics 101, dude. These kind of paradigm shifts that affect the whole economy work on a very different set of rules.

      1. Yes, and such changes are typically accompanied by a massive change in social and political alignment. Electing an oligarch (who pretended to be a populist) seems to be a significant step in disrupting the existing political order in the US.

        Aaron Renn has talked about “long wave” changes in US society and politics about every 70-80 years. 1787…1861…1937…today. This observation doesn’t account well for the first Progressive Era, which fell midway between the Civil War and depths of the Great Depression/New Deal era, nor for the Great Society/Nixon regulatory state era, which began midway between New Deal and today.

        1. Read Neil Howe and the late William Strauss. “Generations: The History of America’s Future” or “The Fourth Turning” which describe similar long term historical cycles. Polybius, Kondratiev, and others have explored similar cycles.

          The progressive movements in between the big structural shifts are accounted for in their work. Outer world secular restructuring during a bust is countered by inner world spiritual transformations during a boom. The cycle plays out repeatedly over four distinct generational archetypes in roughly eighty year cycles.

          A great deal of attention was directed at Howe after the Trump election because Steve Bannon was an avid follower of Strauss and Howe’s work. But when their books were first published it was Al Gore who promoted the concepts most vigorously.

          The framework of generational cycles doesn’t predict which ideology or methods will be pursued. Only that a crash will be followed by a new order that will reset the political scene and wipe away the sclerotic and dysfunctional systems that no longer work. Over time the new system will become brittle and fail as well… Rinse. Repeat.

          1. Kondratiev waves were part of my economics readings almost 40 years ago.

            I agree with your last paragraph: wave theory doesn’t predict much outside of gross economic activity. Nor is it gospel that people will vote their pocketbooks (“economic interests”)…hence the “poor red state” paradox and the unpredictability of the inevitable political change.

      2. I’m of the mind of Margaret Thatcher in reference to “Macroeconomics:” there is no such thing, it’s all Microeconomics badly scaled up. No such thing as an invisible hand, just people deciding what benefited them best.

  8. Tax gross revenues instead of corporate profits. A 1% or 2% gross receipts tax as a simply accounted cost of doing business goes a long way compared to 15% on profits. When personal income taxes tank because nobody’s working, the companies can afford 10% or 15% of gross revenues if they’re not paying salaries and wages.

    Automation leads to plenty. So long as that plenty’s shared, that’s a good thing. A capitalist consumer society can’t last without consumers. There can be no consumers with no incomes. Something will change. Either we end up with a stipend for people, a pure communism in the long run, new kinds of jobs that aren’t as easily replaced, or something really dark with two split economies and one of those underground.

  9. The new robots don’t always work. Albertson’s (a big grocery chain) recently gave up on its self-service checkout lanes, converting them to express lanes.

      1. My opinion on selfcheckout for retail is that it’s an invitation to shoplift. The systems I’ve tried to use also seem very prone to malfunction – demanding I put my item in the bag when I already have, misreading items, etc. The second problem is fixable in theory but I think the first is killer.

        1. Self check out systems are the Beta test for the next generation of technology. Each item in every store is already (or soon will be) RFID tagged and each customer will be chipped. There will be no physical check out process. Just grab what you want and walk out the door. Computers will bill you invisibly.

          Cars and trucks will soon all be chipped as well. At first this will be voluntary and drivers will get a discount on their insurance. Then it will be de facto mandatory as insurance companies and law enforcement engage in automated efficiency programs. It’s already underway in parts. I have a transponder that automatically deducts the toll as I drive over the Golden Gate Bridge or park at the airport. If you don’t have a transponder a camera and computer send a bill to your house in the mail based on your license plate number and you pay extra.

          People chip their pets. Some wealthy people already chip their children. I suspect military people will get chips instead of dog tags. It may become fashionable to have a chip rather than a physical credit card. Run that process out for another twenty years…

    1. My local Safeway (same company as Albertsons) did the same thing – I asked the manager why and she said it was because they upgraded to a new backend POS system that was incompatible with their current self-service machines and corporate decided to withdraw self-service machines until they were ready again.

    2. This is a really excellent point.

      There’s a trope I’ve heard a lot among automotive executives that their AI teams are having trouble with ethical questions like, in an unavoidable crash situation is it better for a self-driving car to sacrifice its passenger to avoid hitting a car carrying a family of four. The reality is their AI is nowhere near advanced enough to have to make such a decision.

      There is so much hype in this space it really makes you wonder if many jobs will be lost anytime soon. By the way, last time I checked the global middle class was expanding at a pretty rapid clip, and there’s lots of needed work still going undone because it’s “too expensive”. AI has a long way to go before it’s a real threat to employment in the aggregate.

      1. The issue with AI cars in unavoidable crash situations is that people don’t want to die, whether in the car or outside it. So we get the contradiction of logically deducing that it’s best for the AI car to protect the group by sacrificing itself UNTIL they’re in the vehicle, at which point the crowd becomes expendable.

        Already there’s talk about remaking cities on the street level to further control the human element. Fences between crosswalks, stronger enforcement of Jaywalking laws and more laws against obstructing traffic (complete with cameras in cars becoming evidence in courtrooms) have already been mentioned.

  10. Except the Global World Order isn’t exactly the vast conspiracy that the tinfoil hat folks once described

    Yes, I agree. I hated using the “GWO” term when I wrote that, but couldn’t think of another at the time (and I was in a hurry).

    1. I certainly wasn’t disputing that it exists. Other than the “historical load” that comes with the term you used, it’s on point. Given current events, maybe “The (World) Oligarchy” would be more understood and less fraught with tinfoil-hat imagery.

      1. GEPE. Global economic and political elite.

        Is it so different now? Isnt Facebook and Google in the end about the same as United Fruit except in hoodies?

        And dont kid yourselves, the banks and military complex and oil companies are still very much in charge.

  11. It’s a bleak future but I think you’re probably spot un, reluctantly. I hope that we do more fine-grained corrections before we have to have such a day or period of reckoning, but I’m not very hopeful, at least for current US culture. We’ve enshrined the individual as the highest form of relating and everyone else be damned. These are the consequences of such cultural and hardscape design.

  12. There’s an old joke about capitalists: they’ll sell you the rope to hang them with.

    Robots and financial engineering are just more wallpaper over rotten joists. Beyond ‘who will buy things when they have no money’, the obvious question is how can a society survive that is hollowing out its life support system? At the end of the 19th century, the uneducated and backwards Americans of that time knew the source of their problems. Over many decades they directed some of society’s wealth back to themselves, if only as a temporary deflection.

    Water finds its own level. I suspect that the robots will disappear along with all the notional wealth bound up in all the money we’ve printed, once somebody types the wrong thing.

  13. I think the idea of a guaranteed unconditional basic income for everyone is an excellent idea and definitely something we should probably move to in the future. One guy here (I live in Germany) started a company to see how it would work. Why wait for the government to do it? People can donate money and as soon as 12,000 has been reached, there’s a draw and one person wins a 1,000 basic income every month for a year. Anyone can enter, it’s not just for people who have donated. The stories of people who have won and what they have done during their year are really inspiring.

      1. I don’t think so – most of them are videos. I’ve sent them an email offering to translate if they decide to do that in the future (that’s what I work at).

  14. Churchill famously said “The Americans can be relied upon to do the right thing. But only after they have exhausted every other possibility. ” Very insightful, that Churchill.

    And sometimes, even after we have started down a better path, we turn around and go backwards for a while.

    But this is an important transition we are entering. The key is, robots make stuff, but do not buy stuff. People will buy stuff, but must have income to do so. No income for people yields no market for stuff. Land, Labor and Capital all have their functions in the economic sphere. Too bad Land and Capital resent Labor so greatly.

  15. “…circumstances are going to overwhelm us until enough of the population is miserable enough to demand real change.”

    That demand will mean nothing if the drones and robo cops are strong enough.

  16. Mankind has basically progressed through its ability to shift work from itself to the machines it invents. Certainly technology makes some jobs obsolete, however, a larger impediment likely are policies that might discourage industries that would actually hire the working class from setting up in some states. There’s a reason BMW, Nissan, Toyota, etc haven’t set up their ultra modern factories in Michigan or Illinois. They’re getting old, but a good machinist can still write his own ticket in some parts of the US – especially along the Gulf Coast.

  17. There are a couple of options I can think of in response to the “average is over” economy wrought by automation (outside of government intervention such as make work and basic income).

    The first is a resurrection of the Roman idea of patronage, or Medieval retinue. In other words, a system where a minority of people make most of the money – the so-called creative class, the technicians who maintain the machines, athletes, social media celebrities… – and use their wealth to support a retinue of their extended family, friends, and other associates. Perhaps living in one, very large extended suburban “house”, which is really a dozen apartments which we pretend are still one house and the authorities pretend to believe are still one house. Not a new idea, but one that we haven’t seen in most of the West for a few centuries (though I’m given to understand the Virginian plantation owners had something like this?). You’ve written along those lines before.

    The other is to get a lot more efficient. Accept that a lot more people will be scraping together $10-20k a year to live on from minimum wage jobs, turking, part-time micro-enterprises… and make sure that they can still live a decent life on that (yes, they’re going to have to be Mustachian). That, of course, means they’re going to need affordable rowhouses in walkable mixed use areas, ideally with transit so they can ditch the car entirely. Housing and transportation are the biggest parts of the cost of living, so getting them lower is essential, and we already know how to do that. Will it happen? Well, it’s more of a case of getting the government to *stop* intervening, rather than getting them to intervene. If that happens, though, America might be able to reboot it’s middle class and the American dream, laying in a stronger foundation (no debt!) on which to redevelop itself.

    1. The problem with the idea of patronage is it requires a strong sense of communion/community. With the American/Western World’s enshrinement of the individual as the be-all and end-all to which all else must bow, there is little to no actual communion between people. Even in small places where it exists, there is not enough to make the idea work.

      1. The one exception seems to be top-level professional athletes (at least in the US). The story line on many mega-stars sometimes describes the extended families and clusters of hangers-on that they support with their income and wealth.

    2. “Housing and transportation are the biggest parts of the cost of living, so getting them lower is essential, and we already know how to do that. Will it happen? ”

      This. There’s all sorts of technologies that could lower the two single-biggest costs of living: housing and transportation (food would be right up there too). My hope is that with or without guaranteed basic income, that poverty will become less and less relevant if technology can develop to make basic living as cheap as possible. To make them cheap, the government should start subsidizing any technology which could speed up the production of housing, transportation, and its related inputs.

      1. It’s not really an issue of improving technologies, though. Sure, they would help. But timber frame construction, even with a masonry shell, doesn’t cost that much ($1100/m^2 I think, which gives you a 100 m^2 rowhouse for $110,000 – just over twice the median income in the US, and 50 m^2 apartments would of course be cheaper – and I think volume builders can do it even cheaper). We’ve been able to automate trains for the past several decades, and labour is the biggest cost for public transport systems. We should be able to do a lot with the tools already at hand.

  18. Self driving cars are the big kahuna. There are 3.5 million people employed as truck drivers in this country. They are all going to be out of a job by the end of the next decade, if not sooner. Are they going to be retrained as computer coders?

    1. Speculation has it that we won’t have individual trucks – but a “train” of autonomous trucks (say 3 to 8) which would have a human supervisor sat in one of the trucks – to perform emergency maintenance and take-care of edge-cases that the software can’t handle where manual driving is necessary – so truck drivers will continue to exist, just with significantly less numbers.

      It will be interesting to see if any governments pass protectionist laws that prohibit autonomous trucks or require them to have a human supervisor driver present at all times, a-la the Red-flag Men.

  19. I wanted to personally thank you for an insightful, and spot one on trends in Food Industry. It also shows the new reality for Labor markets currently and future. Great Job

  20. That’s been the historical model and it tends to be messy.

    “Messy” is one way to put it; anarchistic might be another. The frightening thing, to me, is that with each wave of societal re-creation, we centralize more and more power in the hands of a few people (or perhaps a “smaller tribe”). It is becoming more and more difficult to enact real change on any large-scale basis. This is especially true of the type of change that would decentralize power systems and encourage localized economies to provide for themselves. The Global World Order (which is being built IMHO), above all else, does not want that. It cannot be effectively controlled. Just my thoughts.

    1. Except the Global World Order isn’t exactly the vast conspiracy that the tinfoil hat folks once described (Ivy League establishment, world-scale bankers, the UN, Trilateral Commission, etc.).

      It looks more like the technocrats at Google, Apple, Uber and the rest of Silicon Valley, most of whose denizens do not fit the above description. They’re more likely Cato Institute sympathizers.

      1. Doesn’t matter what their “sympathies” are. They still want control and power, even as they doth protest too much. Jeff Bezos may profess to be “libertarian” but Amazon still is a grueling place to work and he effectively centralizes more and more retail under one company’s control.

        1. That’s the essence of the libertarian capitalist way: eat or be eaten. You are right, of course: it’s irrelevant that their notion of power and control doesn’t really involve government.

          Perhaps an economic historian will be able to describe the forces necessary to once again bust up monopolies. Will we see a Second Progressive Era, complete with unionization?

  21. “Instead circumstances are going to overwhelm us until enough of the population is miserable enough to demand real change. That’s been the historical model and it tends to be messy.”

    Hm. Well, I’m a bit skeptical of looking to historical models for what’s about to come next. Once upon a time, forward-thinkers could assuage our fears by reminding us that new technologies tend to create more jobs than they eliminate. For a long time, that was true. Not anymore.

    Likewise, for a long time, the model of society was that you can only lower living conditions for so long before the poor rise up/fight back/make demands. The notion of the poor “making demands” is based on the economic leverage that working people once held–the value of their labor, whether as workers or (more importantly) as soldiers. If your workers turn against you, bring in the army. If the army turns against you, you’re out of luck. For most of history, the masses of human beings have had some measure of bargaining power, even when things were unequal. A workers’ strike or an angry mob was a legitimate threat.

    But what happens when the value of the average human drops effectively to zero? When workers and soldiers alike can be replaced with machines? What “demands” could we make then? Probably something like the “demands” that cattle might make if they were to object to the slaughterhouse. Once the average human being is no longer necessary, I expect the lot of us to be cast away like garbage. And if suppression of uprisings is easily handled with drones, the negotiations are over. The powerful would no longer fear the angry mob, and therefore have no reason to change course.

    The only thing we could hope for after that is a sufficient enough ecological collapse or resource crisis that it levels the technological playing field back down to a more egalitarian one.

  22. San Francisco is like the canary in the mine in this regard. Big winners, big losers. Increased inequality (which is seen worldwide, too). Luckily SF is pretty liberal as far as the US goes, so there is at least a chance of some experiments to see what might help in the decades ahead.

  23. Providing a guaranteed minimum income is being tested in Finland.

    In the US it’s in the stage that “private ownership of roads” was in the early 80s…so it will take 15 or 20 years, some experiments and some political will and probably an economic sea-change to bring about. Or maybe it will catch on a bit faster, like the EIC (“negative income tax”) did.

    1. That seems like an excellent source of recruitment for a future S.A. That will take care of the unemployment problem, also. Plenty of work busting heads and attacking brown people.

      (No…not saying all truck drivers are right wing. But…look at the Teamsters)

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