GoodHorse413🔸

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I think this post is unreasonably optimistic. A repeated theme in your post is that exponential growth in technology and the animal advocacy community could result in drastic pro-animal change, but it ignores the fact that there could also be exponential growth in the animal agriculture industry and anti-animal attitudes. There has been a rise in veganism, but there has also been a rise in meat-eating. AI could be used to convince people to become vegan, but it could also convince people that eating meat is okay and they shouldn't worry about it. AI could be used to come up with welfare-improving interventions in animal agriculture, but it could also be used to come up with profit-maximizing interventions, and I suspect the latter tools are far more likely to be applied. I don't see a persuasive reason why the animal welfare movement will gain an advantage over competing interest groups. 

Your claim here is that a tax on the lowest income tax bracket is "less costly" than a tax elsewhere which raises the same quantity of revenue. I don't understand how or why this is supposed to be the case. First of all, even with your small transfer example, I'm not sure if I consider the incentives to be that minimal. If a student would have stood to gain 800 dollars a month if they got a part-time job, and now they only stood to gain 700 dollars, I'd expect them to be less likely to get a job. But that's not even relevant. Compare the two situations which you claim differ in cost:

Both situations, as you describe them, involve a UBI of 100 USD per person per month. In both situations (we will assume), part of the cost is paid by a flat income tax (this isn't how I think a UBI should be paid for, but it's easier to understand this way). In America A, there is also a 100% marginal tax rate on the first 100$ of everyone's monthly paycheck (making it equivalent to a 100$ monthly GMI). In America B, there is only the flat tax, which has to be higher. In both Americas, the tax system must raise roughly 30 billion dollars a month. In America A, every wage earner pays 100$ a month in taxes from the first tax. Let's say there are 150 million wage earners. That's 15 billion dollars raised by that tax. The flat tax must be at a rate to raise another 15 billion dollars then. Let's say the total amount of labor income in the US is a trillion dollars a month. To raise 15 billion dollars from a flat income tax, you'd raise it by 1.5%. America 2 is the same but the flat tax needs to be raised twice as much, to 3%, because wage earners are no longer all paying 100$. I'm oversimplifying here but don't nitpick me. The point is that it is not at all obvious to me that a 100% tax on the 0-100$ income bracket is "less costly" than a 1.5% raising of the income tax across the board. In monetary terms it's obviously exactly as costly, just much more regressive, and If there were some reason that it WAS in some way less costly, then I would expect it to be even less costly to raise all 30 billion of the dollars from that same tax bracket, by putting a 200% tax on the first 100 dollars. And this would apply if you wanted to raise a tax for anything, not just a UBI. No one would propose such a taxation scheme to pay for a 15 billion dollar investment in green energy for example. It has no advantage. 

Let me explain my first point more clearly. 

Yes, guaranteed, means-tested incomes have some costs due to substitution effects that UBIs don't. People near the income threshold might work less or even quit the labor force to avoid losing benefits, potentially increasing program costs.

This is not what I mean. Observe Kevin’s graph describing the guaranteed minimum income in section 1.1. Notice how the first two income brackets have the same total income. An individual’s total income consists of their factor payments (in this case their wage) and their transfer payments. The GMI is structured so that the the wage plus the transfer will always equal at least a particular total income (I’ll continue to use 50,000 as an example). This means that if your wage is 10,000 dollars a year, your total income is 50,000 dollars, and if your wage is 50,000 dollars a year, your total income is still 50,000 dollars. This means in practice that you receive none of the first 50,000 dollars of your wage, making it indistinguishable from a 100% marginal tax rate on those dollars. This is very unintuitive to many people, so let me elaborate:

If you get a raise of one dollar, by how many cents does your total income increase? Your effective marginal tax rate equals 100 minus that number. I pay a tax of 25%, so if I get paid a dollar, I take home 75 cents. In the GMI world, if I got paid a dollar, I would take home 0 cents, because my transfer income would reduce by one dollar. 100 minus 0 is 100, so the effective marginal tax rate equals 100%. You say:

people near the income threshold might work less or even quit the labor force to avoid losing benefits

This is an inaccurate description of the problem. There is no income threshold. EVERY wage earner in this scenario is paying that 100% tax on their first 50,000 dollars. And there is no losing benefits. Going from a 40k yearly wage to a 50k yearly wage does not cause the earner to “lose” anything. It just doesn’t cause them to gain anything, so they have no incentive to take on the marginal disutility of the extra work for nothing in return. If they quit the labor force, it’s not to avoid losing benefits, it’s because it’s not worth it to work for no pay.

The same problem remains in the more realistic scenario where the GMI phases out slowly, so that rather than the first two bars in 1.1 being the same size, the second one is slightly larger than the first. This is how most means-tested benefits work in the real world. Let’s say that the GMI now works by paying a transfer of 25,000 for the unemployed, and for every dollar of wages earned, the transfer reduces by 25 cents. Now, if you get a raise of one dollar, your total income increases 75 cents, and pay an effective marginal tax rate of 25% (ignoring all other taxes) on all income between 0$ and 100,000, after which point there is no more transfer money to take away, and you start receiving one dollar for every dollar more you get paid. This is a better tax, but it’s still a tax. It’s not cheaper than a UBI. The cost is the same.

Compare phase-out world to a world with a UBI paid for by a flat tax. In phase-out world, there is a flat tax of 20% (arbitrary number), and the transfer payments phase out at a rate of 25 cents a dollar, meaning that the effective marginal tax rate is 45% between 0 and 100,000 dollars a year (assuming they phase out for each dollar of pre-tax income, not post-tax), and 20% for all income after that. In the second world there is a flat tax of 30%, and the effective marginal tax rate is 30% for all earners. The UBI is not “much more costly” than the GMI, because if you add up all the “labor dollars that someone doesn’t get”, you get the exact same number either way. The only difference is that in UBI-world, the rich receive less total income, and in phase-out world, the poor receive less total income. The same holds if the transfer payments are paid entirely through non-labor income taxes. 

Because the “phasing out” of the transfer payments would not appear on the IRS’s balance sheet as being a tax, it’s easy to mistake the GMI as somehow saving money compared to the UBI, even while accomplishing the exact same distribution. This is the mistake of thinking like a tax collector and not like a planning demon. In the same way that it’s easy to produce seemingly valid proofs that 1+1=1 by hiding a division by zero, it’s easy to make money appear out of nowhere by hiding a tax in the transfer system. The 50,000$ GMI world and the UBI+100% tax world have exactly the same distribution, and therefore exactly the same incentives and exactly the same amount of total wealth. There is no dollar that someone has in one world, but not the second. But the second world looks more “expensive” because the government chooses to give money and then take it away rather than withhold it, so it looks like there’s more distribution going on than there actually is. When we look at it from the demon’s perspective, we can see that there’s no difference between giving someone something and then taking it from them, and giving them nothing. This is what I was trying to convey with my example of the one million dollar UBI plus head tax. 

> However, empirically, these effects seem small.

The magnitude of the incentive effects is not relevant to the comparison between GMI and UBI. The key thing to understand is that the incentive effects of each are equivalent (if the GMI and UBI arrive at the same distribution). It’s the same effect both times: someone gains fewer cents when their wage is raised by a dollar. 

> real-world evidence suggests they do not seem nearly significant enough to make guaranteed income programs comparable in cost to full UBI systems.

They are comparable in cost because they are the same cost. Part of the cost is just hidden with a means-tested system by taxing the transfer payment instead of the wage, giving it the appearance of saving society money, even though everyone’s total income still adds up to the same number.

Two points:

Firstly, you say “In a labor economy, a guaranteed minimum income is a lot cheaper to implement than a universal basic income of the same amount”. I reject this. The cost of a transfer is the incentives it creates, not the total quantity of money moved around. If the US instituted a million dollar per person UBI, and funded it with a million dollar head tax, the “cost” on paper would be 300 trillion dollars, but the actual cost would be whatever the bureaucrats at the IRS are getting paid to write down all those numbers. No one’s incentives are changed, so society doesn’t actually pay any costs. It’s still producing the same amount of wealth as before, and distributing it in the same way as before.

Imagine two worlds: one in which there is a guaranteed minimum income exactly like the one you described, at a rate of 50,000 dollars. The second, where there is a UBI which gives everyone 50,000 dollars, and there is also a 100% marginal tax rate on all labor income less than 50,000 dollars (which doesn’t apply to the UBI). The first world seems reasonable, and the second crazy, but they are identical for all practical purposes. If you live in either world, and you have no job, and someone offers you to come work for their company to make boxes (or whatever) for 40,000 dollars a year, you’d have to be an idiot to accept! Because you’d be effectively taxed for 100% of that 40,000 dollars no matter what. You’d have exactly the same yearly income either way. A UBI funded by a tax on the poor is not cheaper than a UBI funded by a tax on the rich. 

You then say that a guaranteed minimum income would become more expensive as the labor force declined, but the cost of a UBI would remain the same. This is only the case because the effective tax has fewer payers, and is only paid by the tax bracket between 0$ and whatever the guaranteed minimum income is. World 2 would feel the same need to raise taxes elsewhere in the same situation, even though the quantity of money transferred would remain the same. However, if the UBI were paid for by a flat tax on labor income, the quantity available for transfer would stay the same assuming that the total quantity of labor income was the same, and if it were paid for by a progressive tax, the quantity available for transfer would increase! If your worry is that the total amount of labor income will decline, then that brings me to my second point.

My second point concerns financing a UBI. To start, I want to point out that automation increases “society”’s wealth, so if society suddenly has way more stuff in it, but everybody is poorer, something has gone wrong. It should get easier to pay people more if there’s more money to pay them with, not harder. 

To simplify, wealth is created by land, labor, and capital. People “earn” money by owning one or more of these things and selling it on the market. I agree that in a post-labor economy, you could not finance transfer payments by taxing the sale of labor, because the value of labor would go way down, and the value of land and capital would increase. But this is actually fortuitous, because land and capital, unlike labor, are alienable. Inequality between wage-earners is a result, at least partially, of nature. You can redistribute some of the income they earn through their skills, but you can’t redistribute their skills. Land and capital are very different. The same bond or share will pay the same return to whoever owns it. A post-labor society’s factor payments would all go to land and capital, which could be owned collectively. Land could be held in common and leased out to those willing to pay society ground rent for it (georgism), and governments could manage large (and/or numerous) social wealth funds on behalf of society, paying out dividends equally to every citizen (some kind of shareholder socialism? Property owning democracy? Really this should be called market socialism but that name is already taken by a different idea). Ideally, everybody would be a landlord who owned an equally valuable slice of land, and a capitalist who owned an equally valuable share of the world’s capital stock. In a world where we don’t need labor to make things, we also don’t need labor income to pay for things. 

I talk about all this here

Seems rather silly. Economic demand for data centers is very high. Even if you managed to garner some large political movement that supported stricter land use regulations for the construction of data centers (but were unable to garner a similarly sized political movement for pausing AI or something similar), AI companies would just pay more. NIMBYism can't price rich people out of homes, only poor people. When rents rise across the board people are pushed out from the bottom first. Trying to use zoning law and local development opposition to keep AI companies out of data centers is like trying to use them to make Elon Musk homeless. 

Also, just about any large building can be used as a data center, so it would be hard to restrict. Even then, if data centers in silicon valley became so scarce that google couldn't even afford them, they could just go elsewhere to build them. Location is very important for housing. I don't think that's as much the case with data centers.

Plus, we might think that privately allocated research effort is better matched to social value than whatever university scientists can get through the NIH committee.

Wouldn't we assume the opposite? As a rule, public dollars have more utility than private dollars. Most private patents probably have a negligible effect on social value, and some probably have a negative effect, even if I'm certain that more private patents tends to be a good thing. That 2.5 million dollars per patent via tax cuts could be paying for a patent on new modes of advertising, blenders, corporate interview software, and items on the taco bell menu, whereas the 3.1 million dollars per patent via the NIH is all paying for patents on vaccines, antidepressants, non-invasive surgery methods, and painkillers. Not all innovation is created equal. 

Take care of 2 and 1 will take care of itself. The reason people fear unemployment is because they fear poverty. If the economy is producing incredible amounts of wealth, and there are robust distributive policies allowing everyone access to that wealth, I would expect people to be much happier than they are today. If people have the positive liberty to hang out with their friends, travel, learn new skills, go to restaurants, etc. they'll do it. There are a myriad of ways that people will find to be "useful" and "valued" outside of the workplace. They can derive meaning from their relationships or their creative pursuits. 

Disclaimer: politics is really hard and really controversial, and I'm about to give a political opinion.


I think the evidence is already overwhelming that capitalism is suboptimal. The difficulty isn't in providing evidence for that, it's in providing evidence for a specific superior system. No matter how clever you are, you can't write down a system for the organization of an entire world economy and know with perfect accuracy what would happen if that system were put into place. The world is too complicated. This isn't really a problem with anti-capitalism, but rather a problem with non-reformism. EA's have differing political opinions, although they cluster around social liberalism/social democracy (if the polls are to be believed), but they're universally reformist because reform is just a way safer bet. 

For example, it's generally uncontroversial that markets lead to inequality of wealth, and if you're a utilitarian you should consider unequal distribution of wealth to be suboptimal (in a vacuum at least), because of the principle of diminishing marginal utility. In fact if you believed that market outcomes were axiologically perfect, you wouldn't be an effective altruist, because in order for that to be the case all dollars spent would have to have an equal effect on global utility. So let's say you're an EA looking at the cause area of "wealth inequality" and you brainstorm some solutions:

  1. Organize a large group of revolutionaries to overthrow a government and institute a one party state that appropriates private property and runs the economy via a central plan.
  2. Institute a higher progressive income tax, using the revenue to fund more social programs, a universal basic income, and public housing.
  3. Organize a large group of revolutionaries to overthrow a government and institute a stateless gift economy that relies on negotiated coordination between firms to distribute goods and services according to need. 

The empirical data doesn't like the first idea. It's been tried, and it successfully reduced inequality, which was the goal. In 1980, the GINI coefficient of the USSR was .29, which is pretty equal! But the country was plagued by political problems, mostly a result of a lack of democracy, which lead to mass executions, ethnic cleansing, and other things but I think we've proved the point already. The same approach led to similar problems elsewhere. 

The second idea has also been tried, and it also successfully reduced inequality. The country with the highest income tax in the world is Belgium, which... okay that's a bad example because they also committed mass executions and ethnic cleansing. But the second highest income tax in the world belongs to Finland, which has a GINI coefficient of .26, even lower than the USSR! And it's a stable democracy with a very high standard of living. Other countries with mixed market economies and strong welfare states achieved similar results. This seems like the standout intervention so far, AND it requires the least effort!

The third idea has never been tried on a large scale, so there is no empirical data. You could give arguments for why it would or would not work, but it would ultimately all be speculative. I'm not sure what kind of non-empirical data would convince me that the non-speculative opportunity cost of revolution is worth the speculative benefits. Also, I have extremely strong suspicions that it wouldn't work because of things like price signals and rule of law.

The odds that the current global economic status quo is better than any possible alternative is 0%. However, constructing a system that performs better is very difficult. If it were easy, someone would have done it by now. There are some very interesting models of socialist economies. I find the Cockshott-Cotrrell model really interesting, I really like the Lange-Lerner model. I don't like Parecon. But can these models perform as well as or better than the current world economy? Predicting the behavior of the capitalist economy is infamously difficult, and we have hundreds of years of empirical data to work with. Predicting the behavior of an economy that doesn't even exist yet is impossible. It's too complicated. I can't predict what would happen if the whole world adopted the Lange-Lerner model, but on priors, I think that any system made "by hand" is automatically at a loss against a system with hundreds of years of tweaks, regulations, and real life trial-and-error adjustments to its known failure modes.

So I guess the only thing that could convince me to agitate for the founding of a specific radically different system would be if that radically different system already existed and was superior according to my value system. Previous attempts at socialist economies produced low inequality, low unemployment, and decent growth, which is cool and all, but the Nordic model can do exactly the same thing but with more consumer goods, more democracy, and without the shortages and surpluses that plagued the soviet bloc. I am aware that this approach means that there are utopias in possibility space that I am actively ignoring, but I think the risk-neutral approach is to do exactly that.

EA's of different political opinions than my own likely have different justifications.