The Allocation Problem

This is a piece from the NYT about a program to guarantee every citizen a cheque every month for being alive. It is one of a string I have read recently about the income distribution problem. Basically, the allocation problem is this: we live in a time when we have the knowledge, technology, resources, and transportation infrastructure to feed, house, and educate everyone on the planet yet millions of people are starving, homeless, and illiterate. There are a record number of billionaires now and they have more money than ever before - the Walton family alone are worth more than $150B. There is nothing you can do with that much money; it is functionally useless. It can't act as money because nothing costs $150B. No sensible amount of items combined cost that much. You like Ferraris? Buy every Ferrari that was ever made, collect them all and then buy all the future products Ferrari will make until the year 2050. What are you going to do with the other $149B? No single person or family could spend that much money in a lifetime (or a dozen lifetimes). It is no longer money; it is only the ability to move the markets and political influence. Great, you want to be important. But the only thing you use your political influence for is to ensure you get to keep your money. Spend money buying politicians who help you make money that you'll spend buying politicians... My name is Jon Jonson, I live in Wisconsin, I work in a lumber mill there...

Classical economics is based on scarcity. The only scarcity remaining is either artificial (imposed by one group of people on another group, either locally, nationally, or internationally) or fetishistic (we can't all own Ferraris but we could provide transportation for everyone if we decided to). I'm not an economist so I refer you to this article about post-scarcity economics (and Star Trek).

The most common argument against this kind of program is the deeply held (and deeply flawed) belief it would provide a disincentive to work. In effect, the economy would collapse because everyone would sit around playing World of Warcraft all day and no one would work. This argument, as the Times points out, works best if you try to imagine what others would do. If you consider what you would do with a guaranteed income the picture changes dramatically. The experiment also works with people you know well.

If I had a guaranteed income I would go back to school to get a PhD in the history and theory of architecture. No question. I would have to think about it for about ten minutes because I would also like to get an advanced degree in architectural preservation and restoration. Well, you say, the world sure as hell doesn't need another architecture theorist! I submit the world doesn't really need another (partially employed) intern architect either. But they've got one as long as I have to put economic demands ahead of my own interests. I've tried doing nothing but reading books and killing time and I hate it! It's the last thing I would do with a guaranteed income. I would also like to volunteer (in whatever capacity I'm able) to the on-going discussions and debates about the future of Toronto's urban form. And that's something the world could use. At least compared to another an architectural historian. Or maybe I would design a set of bookshelves that look good, can hold more than one box of books, and don't cost a fortune. I've looked for one online and, difficult as it might be to believe, it doesn't seem to exist yet.

I'm trying to think of anyone I know who would quit their jobs because they were getting money for nothing and the only person I can think of who would quit would do so to get a slightly different job that pays less but requires fewer hours. Everyone else I know works in spite of the money. I mean that in the sense that they chose their professions because it was what they wanted to do, not because of how they would be paid. So they would change the number of hours they devoted each week to their various pursuits but continue with all of them.

The question of how really unpleasant jobs would get done. The traditional response, and by traditional I mean since about 1800, is that they won't get done unless people fear they will be starved to death unless they do them. It's the carrot and whip argument - the carrot is the wage and the whip fear of starving to death. For the last century or so the whip has been wielded a little less ferociously so instead of starving to death you will just be very very poor. If you live in a rich Western nation. In most other places starving to death remains a likely punishment for the refusal to be a wage slave (I use that term in the classical, not pejorative, sense). People who make this argument have probably never been unemployed for very long. The social stigma of joblessness is huge everywhere except where a permanent under-class exists. That stigma would provide willing employees for jobs nobody really wants as well as eliminating the permanent under-class. In a society where the first question people ask each other is "What do you do?" it's important to work. And I don't mean that as an exhortation, I'm saying people already understand this and don't need to be told. Work is important; it's what you do. How do sewers get cleaned? By someone like me who would rather say "I work for the City" than "I'm unemployed".

As the Times article points out, we are already paying people for being alive. It's the social safety net that is made up partly of cash money, partly of subsidized housing, partly of food stamps and food banks, and other components besides. Right now these are separated from the money supply because a means test applies. The government doesn't want you spending your housing subsidy on a new television. But it would improve the economy and make the system much more efficient if, instead of many difference agencies and volunteer run programs, each separate system and institution was turned into one simple program that deposited a certain amount of money into your bank account automatically each month. Some would stipulate the amount should be low so that you can live on it but not live well. I think that is an unfairly cynical attitude to take towards the generations of people who have done jobs most political theorists and commentators consider below them. Your grass will still get cut even if people get a large enough amount to live without discomfort. It might get cut by someone else but it will get cut. When I lived in Galt, I noticed a lot of really well-tended gardens on small pieces of property. It was a group of people who enjoyed gardening and so ask for, and got, permission to garden on property that didn't belong to them.

If a job is so terrible that even the tiniest guaranteed income would prevent anyone from doing it maybe it says more about that job (or industry) than it does people. I'm thinking of factory farms at the moment. I come from generations of farmers and so I don't think it is at all strange that people can enjoy farming like they enjoy gardening. But they wouldn't work in factory farms. Maybe jobs that are so hideously awful no one will do them without the looming threat of poverty, homelessness, and indigence hanging over their heads is an indication that job really isn't worth doing (in an existential, not economic sense).

Anyone who has read more than three or four of these things (if such a person exists) will know I don't have a whole lot of hope for the human race. But this is one of those incredibly simple and beautiful ideas that gives me hope. It seems like a far better idea than violent revolution, human extinction, death by zombie hoard, etc. I'm not sure all of those things logically follow from the same premise but you get what I mean.