Universal Basic Income and Poverty
(Crossposted from Twitter)
I’m skeptical that Universal Basic Income can get rid of grinding poverty, since somehow humanity’s 100-fold productivity increase (since the days of agriculture) didn’t eliminate poverty.
Some of my friends reply, “What do you mean, poverty is still around? ‘Poor’ people today, in Western countries, have a lot to legitimately be miserable about, don’t get me wrong; but they also have amounts of clothing and fabric that only rich merchants could afford a thousand years ago; they often own more than one pair of shoes; why, they even have cellphones, as not even an emperor of the olden days could have had at any price. They’re relatively poor, sure, and they have a lot of things to be legitimately sad about. But in what sense is almost-anyone in a high-tech country ‘poor’ by the standards of a thousand years earlier? Maybe UBI works the same way; maybe some people are still comparing themselves to the Joneses, and consider themselves relatively poverty-stricken, and in fact have many things to be sad about; but their actual lives are much wealthier and better, such that poor people today would hardly recognize them. UBI is still worth doing, if that’s the result; even if, afterwards, many people still self-identify as ‘poor’.”
Or to sum up their answer: “What do you mean, humanity’s 100-fold productivity increase, since the days of agriculture, has managed not to eliminate poverty? What people a thousand years ago used to call ‘poverty’ has essentially disappeared in the high-tech countries. ‘Poor’ people no longer starve in winter when their farm’s food storage runs out. There’s still something we call ‘poverty’ but that’s just because ‘poverty’ is a moving target, not because there’s some real and puzzlingly persistent form of misery that resisted all economic growth, and would also resist redistribution via UBI.”
And this is a sensible question; but let me try out a new answer to it.
Consider the imaginary society of Anoxistan, in which every citizen who can’t afford better lives in a government-provided 1,000 square-meter apartment; which the government can afford to provide as a fallback, because building skyscrapers is legal in Anoxistan. Anoxistan has free high-quality food (not fast food made of mostly seed oils) available to every citizen, if anyone ever runs out of money to pay for better. Cities offer free public transit including self-driving cars; Anoxistan has averted that part of the specter of modern poverty in our own world, which is somebody’s car constantly breaking down (that they need to get to work and their children’s school).
As measured on our own scale, everyone in Anoxistan has enough healthy food, enough living space, heat in winter and cold in summer, huge closets full of clothing, and potable water from faucets at a price that most people don’t bother tracking.
Is it possible that most people in Anoxistan are poor?
My (quite sensible and reasonable) friends, I think, on encountering this initial segment of this parable, mentally autocomplete it with the possibility that maybe there’s some billionaires in Anoxistan whose frequently televised mansions make everyone else feel poor, because most people only have 1,000-meter houses.
But actually this story is has a completely different twist! You see, I only spoke of food, clothing, housing, water, transit, heat and A/C. I didn’t say whether everyone in Anoxistan had enough air to breathe.
In Anoxistan, you see, the planetary atmosphere is mostly carbon dioxide, and breathable oxygen (O2) is a precious commodity. Almost everyone has to wear respirators at all times; only the 1% can afford to have a whole house full of breathable air, with some oxygen leaking away despite the best seals.
And while Anoxistan does have a prosperous middle class—which only needs to work 40-hour weeks in order to get enough oxygen to live—there’s also a sizable underclass which has to work 60-hour weeks to get that much oxygen.
These relatively oxygen-poorer Anoxians submit to horrible bosses at horrible jobs and endure all manner of abuse, to earn enough oxygen to live. They never go on hikes in Nature or otherwise ‘exercise’, because they can’t afford that amount of physical exertion; they can’t afford to convert that much O2 to CO2.
They try to take shallow breaths, the Anoxians who have a kid; to make sure their own kid has enough to breathe, and grows up without too much anoxia-induced brain damage.
And if you showed one of the Anoxians a hunter-gatherer from our world, living in what my sensible friends really would consider poverty—somebody who has 0 or 1 foot-wrappings, no car, no cellphone, no Internet access—the Anoxian would be breathless at the unimaginable wealth of oxygen this hunter-gather commands. They can walk around in a planet of oxygen free for the breathing! They can just go running anytime they like, without having to save up for it! They can have kids without asking themselves what their kids are going to breathe!
As for the hunter-gatherer’s paucity of fabric, the absence of closets full of clothes or indeed housing at all, the Anoxians hardly notice that part—everyone on their planet has enough clothes in their closet, so few people there much remark on it or notice; any more than we on Earth ask whether people have enough to breathe.
What’s my point here?
That it only takes a life lacking in one resource needed to survive, to produce some quality that I think ancient poor people would also recognize as ‘poverty’.
It’s the quality of working yourself until you can’t work any longer; of taking on jobs that are painful to do, and require groveling submission to bosses, because that’s what it takes to get the few scraps to hang on.
Does owning more than one pair of shoes, as would once have been a sign of great wealth, alter that or change that? Well, it can be convenient to own different pairs of shoes for different pedalic situations. But the amount that shoes contribute to welfare, soon saturates –
– just like your whole planet full of oxygen doesn’t mean you live in an unimaginably wealthy society. Once you have enough oxygen to get by, the value of more oxygen than that, quickly saturates and asymptotes. Having 10 times as much oxygen than that, won’t make up for not having enough food to eat in wintertime, or not being able to afford healthy-enough food not to wreck your body.
The marginal value of more oxygen saturates, and can’t cover all aspects of life in any case; which is to say:
Even enough oxygen to make you an Anoxan decamillionaire, won’t stop you from being poor.
I think this is the problem with saying that modern society can’t have real poor people, because they own an amount of clothing and fabric that would’ve once put somebody well into the realm of nobility, back when women spent most of their days stretching wool with a distaff in order to let anyone have clothes at all. That amount of fabric doesn’t mean you can’t be poor, just like having vast amounts of oxygen in your apartment doesn’t rule out poverty. It means that a resource which was once very expensive, like fabric in medieval Europe or oxygen in Anoxistan, has become cheap enough not to mention.
And that is an improvement, compared to the counterfactual! I’m glad I don’t have to constantly worry about running out of clothing or oxygen! It is legitimately a better planet, compared to the counterfactual planet where life has all of our current problems plus not enough oxygen!
But if you agree that medieval peasants or hunter-gatherers can be poor, you are acknowledging that no amount of oxygen can stop somebody from being poor.
Then fabric can be the same way: there can be no possible sufficiency of clothing in your closet that rules out poverty, even though somebody with plenty of clothing is counterfactually better off compared to somebody who owns only one shirt.
The sum of every resource like that could rule out poverty, if you had enough of all of it. What would be the sign of this state of affairs having come to hold? What would it be like for people to not be poor?
I reply: You wouldn’t see people working 60-hour weeks, at jobs where they have to smile and bear it when their bosses abuse them.
When a poor Anoxan looks at a hunter-gatherer of Earth—especially if they’re looking at someone from a time before hunter-gatherers got pushed off all the good land, and looking at an adult male—I think the poor Anoxan legitimately recognizes this hunter-gatherer as being an important sense less like a ‘poor person’ like themselves. Hunter-gatherers die during famine years, which enforces the local Malthusian equilibrium; but at other times can get by on hunting for 4 hours per day, and at no point have to bow and scrape to live.
Or if the bowing and scraping doesn’t strike you as particularly horrible, and you want to know what it is that modern ‘poor people’ really need to work 60 hours to accomplish, if not having unnecessary amounts of fabric—well, what about working that hard to expose your children to less permanent damage, like an Anoxan taking shallow breaths themselves, to try to have their children end up with less hypoxic brain damage during formative years? Like working 60-hour weeks to afford rent somewhere the school districts will damage your child less—where the violence is at a low-enough level that your child keeps most of their teeth. That’s also what I’d call poverty, a recognizable state of desperate scrabbling for scraps.
I think this is what people are hoping Universal Basic Income will finally eliminate.
So—having hopefully now established that there is any general bad quality of life apart from owning a too-small number of shirts, which somehow persisted through a 100-fold increase in productivity since the days of medieval cities—we can ask:
Will a Universal Basic Income finally be enough to eliminate the state of life I’d call ‘poverty’?
And my current reply is that I’m skeptical that UBI will finally be the thing that does it.
If you went back in time to the age of peasant farmers and told them that farming and most manufacture had become 100 times more productive, they might fondly imagine that you wouldn’t have poor people any more—that there would be no more people in the recognizable state of “desperately scrabbling for scraps”.
And yet somehow there is a Poverty Equilibrium which beat a 100-fold increase in productivity plus everything else that went right over the last thousand years.
We can point at lots of particular historical developments that play a role in the current situation.
Eg, high-tech societies imposing artificial obstacles to housing or babysitting. Eg, credentialist colleges that raise their prices to capture more and more of the returns to the credential, until huge portions of the former middle class’s early-life earnings (as once might have been used to raise children) are going to pay off student loans instead.
But to regard these as a series of isolated accidents is, I think, not warranted by the number of events which they all seem to point in mysteriously a similar direction. My own sense is more that there are strange and immense and terrible forces behind the Poverty Equilibrium.
(No, it’s not a conspiracy of rich people, such as some people fondly imagine are solely and purposefully responsible for all the world’s awfulness. I have known some rich people. They don’t act as a coordinated group almost ever; and the group they don’t form, is flatly not capable of accurately predicting and deliberately directing world-historical equilibria over centuries.)
I do not understand the Poverty Equilibrium. So I expect that a Universal Basic Income would fail to eliminate poverty, for reasons I don’t fully understand.
I can guess some parts of the story, parts that are relatively easier for me to guess. Eg, rents in San Francisco would almost instantly rise by the amount of the UBI; no janitors in the Bay Area would be better off as a result. Eg, in 2014 the city of Ferguson, Missouri, which you may remember from the news, issued 2.2 arrest warrants per adult; maybe the Ferguson police departments of the world, just raise their annual quota for fines per capita by the per capita UBI. Eg, governments have always taken the existence of wealth as a license to pass regulations that destroy wealth; many different parts of government would take “poor people have more money” as a license to impose more costs on them.
But none of that quite sums up to a vast pressure that somehow works to the end of making sure that people go on being poor. That’s what I think held historically; so in the future I’d expect a strange vast pressure to somehow not have Universal Basic Income play out as its advocates hope.
And also to be clear: it’s quite possible that tomorrow’s poor people do finally end up somewhat better off, because of Universal Basic Income, than they would have been counterfactually otherwise. The forces that maintain the Poverty Equilibrium don’t actually prevent the people working to exhaustion under horrible bosses, from also having multiple sets of clothing and clean water. People who have that genuinely are better off, even if they’re still working to exhaustion; just like medieval peasants are counterfactually better off for having plenty of oxygen.
(I do worry a bit that Universal Basic Income is the sort of essentially financial engineering which will prove unable to help at all in the face of the mysterious porverty-restoring forces, since it’s not itself a water faucet or a loom. But financial engineering could help temporarily, until the Ferguson police department catches up and issues more fines; and, I sadly suppose, long-run restoring forces don’t actually matter if superintelligence is going to omnicide everyone etcetera. But I don’ t know how else to participate in conversations like this one, except under the supposition that there’s an international treaty banning advanced AI, such that long-run outcomes go on actually existing.)
To sum up: I don’t quite know what would actually happen, with UBI practiced on a scale where large-scale Poverty-Restoring forces would have a chance to catch up; because I do not have an account of history that explains why the Poverty-Restoring forces already had the power they did.
On the whole, however, a UBI strikes me as a much less powerful change than a 100-fold productivity increase. If that didn’t prevent a huge underclass that has to desperately scrabble for scraps, I expect UBI can’t prevent it either.
It’s the sort of thing where, in a better world, one would call for more economics research and more economist attention to questions like “Where does the Poverty Equilibrium come from? How do its restoring forces act?”
But before any project like that could get started, you’d first have to answer the immediate reply that every economist and my sensible friends always give me, whenever I try to pose the question: “What do you mean, there’s a ‘Poverty Equilibrium’ that resisted all our past productivity improvements? The people we call ‘poor’ today own more than one shirt; we only consider them poor by comparison to people even richer than that.”
And to this my attempt at a snappy answer – to summarize the discussion above – is here:
The people we call ‘poor’ also have plenty of oxygen, which would make them very wealthy in Anoxistan; but so what? You can have tons of fabric in Anoxistan, and still need to work a horrible 60-hour job there; or have limitless oxygen on Earth, and still need to work a 60-hour job for a horrible boss, in a medieval city or a modern one. That’s the miserable condition of desperately scrabbling for at least one lacking resource, whose strange persistence in high-tech countries despite vast productivity gains, needs to be better-explained; that’s the strange miserable condition, whose mysterious persistence we’re trying to ask if a Universal Basic Income could finally fix.
Note: I crossposted this for Eliezer, after asking him for permission, because I thought it was a good essay. It was originally written for Twitter, so is not centrally aimed at a LW audience, but I still think it’s a good essay ot have on the site.
+$BIGNUM for this. It’s frustrating when interesting parts of the LW-sphere conversation happen on closed services. Some of us (e.g. and sometimes-feels-like-i.e. me) neither have nor want a twitter account, and twitter has made it increasingly difficult to follow references to it without one.
I have the same complaint about facebook, though it’s not the culprit this time. Every so often I’ll run into a post that depends on a reference that is facebook-account-walled.
Please be aware of https://xcancel.com/ESYudkowsky/ https://nitter.privacydev.net/ESYudkowsky/ https://nitter.poast.org/ESYudkowsky/
How are those staying alive in the first place? I had previously used Nitter for keeping up with some of Eliezer’s posts without being logged in, but my understanding was that the workaround they were using to obtain the necessary API keys was closed off several months ago, and indeed the instances I used stopped working for that purpose. Have the linked instances found some alternative method?
From what I understand, they are using a forked version of Nitter which uses fully registered accounts rather than temporary anonymous access tokens, and sourcing those accounts from various shady websites that sell them in bulk.
I wasn’t aware of these options, thank you.
I gave in and made an account on the X-parrot but I only use it to read things I’m linked to in other sources. (I have been pseudo-ideologically opposed to participating on that service since it first started.)
Thanks for crossposting this. I also figured it might be suitable for LW. Two formatting issues due to crossposting from Twitter: the double spaces occasionally turn into single spaces at the beginning of a line; and the essay would benefit a lot from headings and a TOC.
I am not much of an economist, but the two thoughts that spring to mind:
The change you want to see, of people not needing to do as much work, is in fact happening (even if not as fast as you might like). The first clean chart I could find for US data was here, showing a gradual fall since 1950 from ~2k hours/year to ~1760 hours/year worked. This may actually understate the amount of reduction in poverty-in-the-sense-of-needing-to-work-hard-at-an-unpleasant-job:
I think there has also been a trend towards these jobs being much nicer. The fact that what you’re referring to as a ‘miserable condition’ is working a retail job where customers sometimes yell at you, rather than working in the coal mines and getting blacklung, is a substantial improvement!
I think there has also been a trend towards the longest-hours-worked being for wealthier people rather than poorer people. “Banker’s hours” used to be an unusually short workday, which the wealthy bankers could get away with—while bankers still have a lot more money than poor people, I think there’s been a substantial shift in who works longer hours.
The change you want to see, viewed through the right lens, is actually somewhat depressing. I would phrase what you are looking for as a world where society has nothing to offer people that is nice enough they are willing to work an unpleasant job to produce it.
If you have the choice between ‘work long hours to get enough food to live’ or ‘work short hours and starve’, it makes sense to call that ‘poverty’. If you have the choice between ‘work long hours to be able to have a smartphone, internet, and cable TV’ or ‘work short hours, still have shelter, clothing and food, but not have as much nice stuff’, I would call that ‘work is producing nice enough stuff that people are willing to do the work to produce it’.
On your definition of ‘poverty’, Disneyland makes the world poorer. Every time someone takes on extra hours at work so they can take their kids to Disneyland, you account the unpleasant overtime work as an increase in poverty, and do not account the Disneyland trip on the other side of the ledger. This seems wrong.
I think the comparison with Disneyland misses the point. The essay measures poverty by the level of desperation people experience. People don’t typically work extra hours out of desperation to take their kids to Disneyland; they do it out of a desire for additional enjoyment. The 60-hour work week should be understood as working far more hours than one would if they weren’t desperate for essential resources.
Poverty is about lacking crucial resources necessary for living, not just lacking luxury items. Therefore, adding more Disneylands wouldn’t make people poorer, but people who are not poor might still strive for better things—from a position of security, not desperation. Interestingly, this aligns with your argument right above that “work produces nice enough stuff that people are willing to do the work to produce it.”
Short answer: Money is fungible.
Long answer: If you work 60 hours a week, buy essential items, and can’t buy luxury items, it is reasonable to say that you needed to work 60 hours a week just to afford essential items. If you work 60 hours a week, buy essential items, and also buy luxury items, it seems more reasonable to say that you worked [X] hours a week to buy essential items and [60-X] hours a week to buy luxury items, for some X<60.
If you ignore the fungibility of money, you can say things like this:
Bob works 40 hours a week. He spends half of this salary on essential items like food and clothing and shelter, and the other half on luxury items like fancy vacations, professionally prepared food, recent consumer electronics and entertainment, etc.
Now Bob has children. Oh no! He now needs to work an extra 20 hours a week to afford to send his children to a good school! This means he needs to work 60 hours a week to afford necessities!
But, even if we account a good school as a necessity, Bob’s actual situation is that he is spending 20 hours of labor on his personal necessities, 20 hours of labor on his children’s necessities, and 20 hours of labor on luxuries. He has the ability to work 40 hours a week for necessities. He is instead choosing to work 60 hours a week to afford luxuries.
That’s a reasonable choice for Bob to make! The modern world has some very nice luxuries indeed, and Bob can justifiably think it’s worth putting some extra hours in to get them, even if he doesn’t enjoy his job!
Yes, it would be better still if Bob could afford all the same luxuries with a 40-hour workweek. But don’t tell me that Bob is in the same position as a coal miner who had to work 60-hour weeks to put food on the table and heat his house in winter, and don’t try to use this to argue that there hasn’t been any improvement in poverty.
And as the world gets richer still, there are two ways this could manifest:
Bob gets richer, and uses that wealth to work less.
Bob gets richer, and uses that wealth to have more luxuries.
In the first world, we’ll see Bob working fewer hours. In the second world, we’ll see Bob working the same hours but having more nice things. Both are improvements! But which improvement we get depends on how nice the things our society can produce get. The more new nice things our society can produce, the more likely Bob is to continue working 60-hour weeks to get modern luxuries, rather than working shorter hours and accepting 1980s-era luxuries.
This argument would cease to hold water if there were a substantial number of people working 60 hours a week who genuinely weren’t spending substantial portions of their income on luxuries. I think this was true in the US even in the relatively recent past, that sizeable numbers of the people working 60 hours a week in 1945-1975 e.g. never left the state they were born in, prepared all their own food, had very limited access to entertainment, etc. I don’t think it’s true today: I think the overwhelming majority of people in the US who are ‘working 60-hour weeks, at jobs where they have to smile and bear it when their bosses abuse them’ are also consuming large amounts of luxuries, and I think it’s reasonable to conceptualize this as ‘they are working longer hours than they have to in order to consume lots of luxuries’.
The relation between time and money is sometimes not linear.
I would be happy to work 2⁄3 time for 2⁄3 of my current salary (doing things similar to what I am doing now), but I don’t see such option on the job market. Most employers are “40 hours, or go away”. The ones who offer part-time jobs typically pay way below the market salary, and still think they are doing you a favor.
(To generalize, this is my objection against the concept of “revealed preferences”—sometimes the options we imagine intentionally rejected by other people were never real for them in the first place.)
A large part of the family budget is “money passing through your hands”. You get a salary. You pay for the mortgage, electric power, gas, car insurance, etc. Include some humble amount of food and occasional new clothes and shoes, and… if you have an average income, it is possible that maybe 90% of your salary is already gone at that moment. The remaining 10% are yours to spend as you wish.
My point is that the budget of average people has much less slack than it may seem—at one moment you have a little discretionary spending, the next moment your expenses somehow increase by 15% (your car breaks, you get sick and need some expensive treatment, etc.) and suddenly your salary is not enough even for the necessities. Maybe the people who work 60 hours a day would actually only need to work 50 hours a day to make ends meet, but such option may not be available on the job market.
Anecdotal evidence about the life of people working 60 hours a day: Nickel and Dimed
I think the crux here is the “relative” poverty aspect. Comparison with others is actually really important, it turns out. Going to Disneyland isn’t just a net positive; not going to Disneyland can be a negative if your kids expect you to and all their friends are. A lot of human activities are aimed at winning status games with other humans, and in that sense, in our society of abundance, marketing has vastly offset those gains by making sure it’s painfully clear which things make you rich and which aren’t worth all that much. So basically the Poverty Restoring force is “other people”. No matter the actual material conditions there’s always going to be by definition a bottom something percentile in status, and they’ll be frustrated by this condition and trying to get out of it to earn some respect by the rest of society.
The data bears this out, at least for the United States. The top 10% of earners generally work an average of 4.4 hours/week more than the bottom 10% of earners in the US, although worldwide it seems they work 1 hour/week less, on average.
I have to think that this is one of those hard areas to get a consistent measure of a comment thing. For example, is the 3 hour lunch meeting with a client really the same as the 3 houts a factory worker put in or the three hours recorded by a software engineer records for a specific project worked on?
I suppose we can say in each cases there is some level of “standing around” rather than real work. But I do suspect that the types of work don’t as one climbs the income ladder you start seeing more of the gray areas because the output of the effort becomes less directly measurable.
I also think that in the OP one of the factors in work was the unpleasant nature of the effort. While hardly universally true I have to speculate that at the higher income levels a larger percentage of people are doing things they find both interesting and enjoyable than hold at lower levels.
But clearly those hypothesis would likewise by challenging to evaluate as well.
How much autonomy someone has at work already makes a huge difference, even if it is a similar kind of work. I write computer programs both at work and in my free time, and the experience is incomparable, even if the programming language is the same, and the things I do at home are often more complicated.
If someone offered to pay me as much as is my current salary (or even 30% less), under the condition that I will keep working, but on projects of my own choice and at my own pace, plus I have to work 1 more hour every day, I would be quite happy to accept the deal.
Note that there are plenty of things that count as “working hours” when white-collar workers do them but not when blue-collar workers do them.
Can you give examples?
The relevant figure wouldn’t be the current value so much as its derivative: I don’t know how that situation has changed over time, and haven’t put in the effort to dig up information on what that data looked like in 1950.
I agree; I share your intuition that the reverse was the case in the past (the poor working longer hours than the rich), so the numbers being what they are today bears out the conclusion that the change has been towards the rich working more than the poor. Unfortunately, I just haven’t been able to find a ton of data explicitly focusing on this exact question (as opposed to a ton of related ones grouped together by Our World In Data). Best I could come up with was this Economist article from 2014 (beware paywall):
[Edit: Oops, I misread the UI. I retract this comment!]
@sunwillrise I hope you’ll forgive me singling you out, you’re certainly not the only person to make what seems to me to be the same mistake, but it seems to me that your use of the “I checked, it’s true” react is a misfire here. I think the react makes sense for factual claims that are well-operationalized and where some independent fact-checking occurred. The text you highlighted with that react is an attempted reframe of someone else’s position — a reframe is not a claim about the part of the world that the original person is talking about, it’s a claim about someone’s position. I think the appropriate react to communicate your epistemic state is to “agree” react to the statement starting from “I would phrase”, indicating that you concur that this is an accurate restatement.
(I think the meaning of the “I checked, it’s true” react in this context would be “I checked with the person who this is a paraphrase of, and they concurred that this was an accurate reframe of their position”.)
I’m… confused? I thought the part I had reacted to was this:
Which seems like a well-operationalized factual claim that I looked up sources for (and then linked in my 2 other comments here). I’m not sure what this has to do with paraphrasing someone’s position; are you saying that react should be used only for paraphrasing others, or what? Or that my sources were inadequate (which is a somewhat reasonable criticism, FWIW)?
Perhaps you thought this was a react to the entire comment, as opposed to an inline react? I’m not sure why it showed up that way, but you can see in the text above the names of those who reacted and anti-reacted that the react was only to that part of aphyer’s comment.
Darn it, I misread the UI. When I hover over the react, it only shows me the bold section of the following quote as being reacted-to:
It turns out that’s actually the text referred to by the other react (the “misunderstands position” react, which makes sense in context). I don’t know why the relevant section (“I think there has also been a trend...”) isn’t highlighted when I hover over your react.
Anyway, I retract the above, my apologies for the mistake!
Here, you can go hunt down the people who used the react that way on this comment instead.
I think this post would be much stronger if it tried to back up more of its empirical claims with evidence. For example, the post mentions people working 60 hours a week many times throughout, but my understanding is that <10% of American workers work 60 hours a week, and people who do tend to have much higher wages than average.
EDIT to add more: This post reads to me as making interesting and probably-somewhat-important valid-in-principle points, paired with the totally unjustified speculation that these points are important considerations for reasoning about poverty as it actually exists; it might be the case that this is right, but I don’t see any way to check easily or any particular evidence that Eliezer’s beliefs here are based on fact.
I actually disagree with this. I haven’t thought too hard about it and might just not be seeing it, but on first thought I am not really seeing how such evidence would make the post “much stronger”.
To elaborate, I like to use Paul Graham’s Disagreement Hierarchy as a lens to look through for the question of how strong a post is. In particular, I like to focus pretty hard on the central point (DH6) rather than supporting and tangential points. I think the central point plays a very large role in determining how strong a post is.
Here, my interpretation of the central point(s) is something like this:
Poverty is largely determined by the weakest link in the chain.
Anoxan is a helpful example to illustrate this.
It’s not too clear what drives poverty today, and so it’s not too clear that UBI would meaningfully reduce poverty.
I thought the post did a nice job of making those central points. Sure, something like a survey of the research in positive psychology could provide more support for point #1, for example, but I dunno, I found the sort of intuitive argument for point #1 to be pretty strong, I’m pretty persuaded by it, and so I don’t think I’d update too hard in response to the survey of positive psychology research.
Another thing I think about when asking myself how strong I think a post is is how “far along” it is. Is it an off the cuff conversation starter? An informal write up of something that’s been moderately refined? A formal write up of something that has been significantly refined?
I think this post was somewhere towards the beginning of the spectrum (note: it was originally a tweet, not a LessWrong post). So then, for things like citations supporting empirical claims, I don’t think it’s reasonable to expect very much from the author, and so I lean away from viewing the lack of citations as something that (meaningfully) weakens the post.
I feel like our expectations of the author and the circumstances of the authorship can inform our opinions of how “blameworthy” the author is for not improving the post in some way, but shouldn’t really have any relevance to what changes would be improvements if they occurred. The latter seems to me to purely be a claim about the text of the post, not a claim about the process that wrote it.
Hm. I hear ya. Good point. I’m not sure whether I agree or disagree.
I’m trying to think of an analogy and came up with the following. Imagine you go to McDonalds with some friends and someone comments that their burger would be better if they used prime ribeye for their ground beef.
I guess it’s technically true, but something also feels off about it to me that I’m having trouble putting my finger on. Maybe it’s that it feels like a moot point to discuss things that would make something better that are also impractical to implement.
This is a recipe for Gish gallops.
It also leads to Schrodinger’s importance, where a point is important right up until someone looks at it and shows that it’s poorly supported, whereupon it’s suddenly unimportant. If it’s important enough to use, it’s important enough to be refuted.
I just looked up Gish gallops on Wikipedia. Here’s the first paragraph:
I disagree that focusing on the central point is a recipe for Gish gallops and that it leads to Schrodinger’s importance.
Well, I think that it in combination with a bunch of other poor epistemic norms it might be a recipe for those things, but a) not by itself and b) I think the norms would have to be pretty poor. Like, I don’t expect that you need 10⁄10 level epistemic norms in the presence of focusing on the central point to shield from those failure modes, I think you just need something more like 3⁄10 level epistemic norms. Here on LessWrong I think our epistemic norms are strong enough where focusing on the central point doesn’t put us at risk of things like Gish gallops and Schrodinger’s importance.
Focusing on the “central point” in the midst of a lot of other “unimportant” points is a recipe for Gish gallops because you can claim that any point which has been refuted is an unimportant one. This forces your questioner to keep refuting point after point until you run out of them. That amounts to a Gish gallop.
If the point was important enough to strengthen your argument—and presumably it was or you wouldn’t have used it—it’s important enough that refuting it weakens the argument.
Over at Astral Codex Ten is a book review of Progress and Poverty with three follow-up blog posts by Lars Doucet. The link goes to the first blog post because it has links to the rest right up front.
I think it is relevant because Progress and Poverty is the book about:
The pitch of the book is that the fundamental problem is economic rents deriving from private ownership over natural resources, which in the book means land. As a practical matter the focus on land rents in the book heavily overlaps the modern discussion around housing. The canonical example of the problem is what a landlord charges to rent an apartment.
One interesting point is that while UBI is suggested (here called a Citizen’s Dividend), it is for justice reasons, and is not proposed as a solution to poverty. I expect Henry George would agree that a UBI would not eliminate poverty, and would predict it mostly gets gobbled up by the immense and terrible forces behind the Poverty Equilibrium.
I think George does see the dividend as necessary for solving poverty, but only in addition to taxing rent. On its own it would indeed be gobbled up by landlords.
Also, what George suggests is a bit different from UBI (and I think Universal Land Dividend is a better name for it than Citizen’s Dividend). With UBI, the law dictates a set amount to be given each person each year/month. With the Citizen’s Dividend, whatever revenue isn’t spent at the end of the year is distributed equally between everyone. This on the one hand leads to a variable income, on the other hand it doesn’t place an obligation on the government that it might not be able to fulfil. Personally I think it’s a better and more elegant policy.
I also like the elegance, but… people being people, I would expect that if five years in a row the “variable income” happens to always be around X, people will start to expect it, will make this expectation a part of their personal finances, and if the next year the income is only X/2, there will be riots in the streets.
(Compare to the mortgage crisis of 2008, which happened because of a change in numbers much less directly related to people’s incomes, and yet many people have lost their homes because they relied too much on the numbers staying constant.)
So I expect that in practice the government would take it at least as a soft obligation, and would use various accounting tricks to keep the income constant (and if that means a disaster in 10 years, the advantage of democracy is that it becomes someone else’s problem).
Doesn’t this kind of already happen with the stock market? I can imagine rioting in the case where people loose half of their investments overnight, but I think it’d be different for a cut in dividends since any economic downturn that reduces land values (and thus land taxes) would correspondingly reduce rents and thus people probably wouldn’t be left immediately destitute if dividends cut in half or something.
It is similar, but reducing the UBI would lead to immediate loss of money at hand, for everyone, at the same time. So the reaction would be stronger than if today some people lose money at stock market, which they didn’t plan to spend this month anyway.
Yeah, given that Eliezer mentioned Georgism no less than 3 times in his Dath Ilan AMA, I’m pretty surprised it didn’t come up even once in this post about UBI.
Personally, I wouldn’t be surprised to find we already have most or all the pieces of the true story.
Ricardo’s law of rent + lack of LVT
Supply and demand for low-skill labor
Legal restrictions on jobs that disproportionately harm low-wage workers. For example, every single low wage job I have had has been part time, presumably because it wasn’t worth it to give me health benefits.
Boumol effect?
People really want to eat restaurant food, and seem to underestimate (or just avoid thinking about) how much this adds up.
A lot of factors that today cause poverty would have simply caused death in the distant past.
That’s just off the top of my head
EDIT: Also the hedonic treadmill is such a huge effect that I would be surprised if it wasn’t part of the picture. How much worse is it for your kid’s tooth to get knocked out at school than to get a 1920′s wisdom tooth extraction?
From Protection or Free Trade by Henry George:
I recommend the full chapter, and book.
I want to support this; the initial motivation behind Georgism is, in fact, the exact question of why poverty still exists when so much progress has been made—and the answer is that when private actors are allowed to monopolize natural resources (most importantly land), all the gains accruing from productivity increases and technology eventually go to them.
A UBI, as Eliezer suggests, is a band-aid to the problem, addressing the symptom but not the disease, and so long as land rents (economic rent) are monopolized, the disease continues unabated.
I don’t know if the Georgist Paradise doesn’t have any poverty—land taxes don’t magically cure addiction or depression or any of the other reasons someone might become and stay poor. But I’d bet that it has substantially less of the ‘scrabbling in the dirt’ than our current economic equilibrium.
In many parts of Europe nobody has to work 60-hour weeks just to send their kids to a school with low level of violence. A bunch of people don’t work at all and still their kids seem to have all teeth in place and get some schooling. Not sure what we did here that the US is failing to do, but I notice that the described problem of school violence is a cultural problem—it’s related to poverty, but is not directly caused by it.
I agree that there seems to be something uniquely wrong with USA (or maybe it’s just a different trade-off than other countries have—it’s difficult to guess which problems are part of a greater equation, and which ones are accidental), but that doesn’t answer the central question—if, judging by looking at some economical numbers, poverty already doesn’t exist for centuries, why do we feel so poor; or perhaps, why do we act as if we are poor.
it could be that some important numbers are missing from the official set (the oxygen in Anoxia);
it could be that the extractive systems adapt (give UBI → increase rent);
or it could be something else.
The feeling of poverty, either immediate, or breathing down our necks, is definitely in Europe, too. The absence of that feeling would be… something like a form of “early retirement” where people say that they still keep working, but it’s only because they enjoy it or want more money, but if the work became unpleasant or abusive, they could quit it any time they would want to. Most people don’t have this.
Let’s not forget that people who read LW, often highly intelligent and having well-paying jobs such as software development, are not representative of the average population. Frankly, my life is quite easy, but it still has a lot of stress; so I imagine that for most people it is probably much worse. (For example, the entire Covid thing for me mostly meant “cool, now I can work from home”, but other people have lost their jobs.)
This underlines what I find so incongruous about EY’s argument. I think I genuinely felt richer as a child eating free school meals in the UK but going to a nice school and whose parents owned a house than I do as an obscenely-by-my-standards wealthy person in San Francisco. I’m hearing this elaborate theory to explain why social security doesn’t work when I have lived through and seen in others clear evidence that it can and it does. If the question “why hasn’t a factor-100 increase in productivity felt like a factor-100 increase in productivity?” was levied at my childhood specifically, my response is that actually it felt like exactly that.
By the standards of low earning households my childhood was probably pretty atypical and I don’t mean to say there aren’t major systemic issues, especially given the number of people locked into bad employment, people with lives destroyed by addiction, people who struggle to navigate economic systems, people trapped in abusive or ineffectual families, etc. etc. etc. I really don’t want to present a case just based on my lived experience, even including those I know living various lives under government assistance. But equally I think someone’s lived experience of being wealthy in San Francisco and seeing drug addicts on the street is also not seeing an unbiased take of what social security does for poverty.
Some years back (or perhaps a couple/few decades) Verner Smith was running some experimental economics, I believe with econ student, which were producing some odd or difficult to explain results. Durnig the game play it was nearly universal that players would accept an absolutely lower payout than accept the higher payout option when the other play would then get most of the gains. From a rational actor perspective that seemed to be the same as people refusing to pick up the $5 bill on the ground. Even worse perhaps because at least one of the players, if not both, had to be actively throwing it on the ground.
Jame Buchanan sugested that perhaps absoulte resulter were in fact not the key criteria but the relative outcomes. Makes sense in many ways from an econcomic perspective where pretty much everthing, for instance prices, is relative and not based on absolute levels.
I don’t think that would explain poverty, or the sense of povery, entirely but do think it probably has something to do with it. At least in terms of the question posed above.
I think a more central question would be: do a nontrivial number of people in those parts of Europe work at soul-crushing jobs with horrible bosses? If so, what is it that they would otherwise lack that makes them feel obligated to do so?
Yes they do, at least when I meet people outside my bubble, such as someone working at Billa.
I think they do it simply because the rent is high (relatively to the income at the place where they live).
But working literally 60-hour weeks would be illegal. There are ways how employers try to push the boundary: They can make you do some overtime (but there is a limit how much total overtime per year is allowed). They can try to convince you that some work you do for them technically does not count as a part of your working time (e.g. your official working time is 8:00-16:30, but you need to arrive at 7:45 to get ready for your work, and at 16:30 the shop is officially closed, but you still need to clean up the place, check everything and lock the door, so you are actually leaving maybe at 17:00); I think they are lying about this, but I am not sure. Anyway, even these tricks do not get you to 60 hours per week.
Yes (though OTOH conversely there are also things that many Europeans struggle to afford but Americans take for granted, e.g. air conditioning)
AFAIK, in the countries where air conditioning is useful people have it. I live in Germany and here we mostly think that it’s not worth the noise pollution and making the facade less pretty. But this too might change now that many people are switching their gas heating to heat pumps (that are basically air conditioners with extra functionality).
There was an excellent study on the effect of Universal Basic Income (UBI) in the US that came out recently. OpenResearch calls it their Unconditional Cash Study. 1000$ per month unconditional tax-free, RCT. There are two papers that came out shortly after @ESYudkowsky’s post:
The Employment Effects of a Guaranteed Income: Experimental Evidence from Two U.S. States by Eva Vivalt et al (this one refers to the study as OpenResearch Unconditional Income Study (ORUS), but I assume it is the same).
Does Income Affect Health? Evidence from a Randomized Controlled Trial of a Guaranteed Income by Sarah Miller et al.
Eva Vivalt has both listed on her blog.
My takeaway is:
reduction of labor by 2h per week, replaced by leisure
I think this is fine, actually. Less “by the sweat of your brow.”
reduction of (non UBI) income by 0.2$ per each $ UBI
I think this is fine and to be expected, at least in the “short” run of the study. Where else would more money come from?
no better quality jobs
this is the sad result from the study that hints at the “poverty equilibrium”—UBI didn’t help people avoid bad bosses.
a little bit more education, a little bit of precursors to entrepreneurship
no other relevant significant effects
doesn’t improve mental or physical health beyond year one.
I do wonder whether the stress in year three results from knowing that the UBI will run out.
I feel like the absence of large effects is to be expected during a short-term experiment. It would be deeply shocking to me if there was a meaningful shift in stuff like employment or housing in any experiment that doesn’t run for a significant fraction of the duration of a job or lease/rental agreement. For a really significant study you’d want to target the average in an area, I expect.
The difference you are interested in—short vs long—is explicitly studied by the GiveDirectly UBI study in Kenya.
This doesn’t address how the equilibrium would change if such basic income becomes universal.
Indeed. Clearly, we can’t make this an experiment except in very small, poor countries. The closest I’m aware of is the GiveDirectly UBI study in Kenya. Also, note that Germany has a minimum unconditional basic income of more than 700€/month (not universal, though).
So, we cannot make the experiment, and we also can’t model the effect sufficiently well yet. But with studies like this, somebody will hopefully be able to come up with an economic theory eventually.
I think the answer is simply that the modern world allows people to live with poverty rather than dying from it. It’s directly analogous to, possibly caused by, the larger increase in lifespan over healthspan and consequent failure of medicine to eliminate sickness. We have a lot of sick people who’d be dead if it weren’t for modern medicine.
I’m not sure the “poverty equilibrium” is real. Poverty varies a lot by country and time period, various policies in various places have helped with poverty, so UBI might help as well. Though I think other policies (like free healthcare, or fixing housing laws) might help more per dollar.
Agree; also this post doesn’t seem to address e.g. the fact that the relative sizes of the social classes used to be quite different, and that today there exists a sizeable middle class rather than society being much more starkly divided into the poor vs. the wealthy.
[EDIT: replaced Claude’s estimate of social class sizes with the following:]
E.g. this paper cites economist Thomas Piketty’s research as the original source, shows the share of property owned by the middle 40% of the population in Britain going from 10% to 40% between 1780 and 2015, with the top 10% of the population had 85-90% of the property up to around 1940.
So even if you buy the argument that there’s a meaningful sense in which poverty hasn’t been eliminated, the fraction of people who are middle class rather than poor has gone drastically up. And maybe a UBI won’t be able to push poverty down to 0%, just as past progress hasn’t, but it could quite possibly contribute another significant reduction.
I… wish people wouldn’t do this? Or, like, maybe you should ask Claude for the search terms to use, but going to a grounded source seems pretty important to staying grounded.
Agree that a real source would be better but I think a Claude-source is better than nothing at all, especially in a case where the point is just to get the rough magnitudes and the details don’t need to be exact. I’m not sure if editing my comment to just the first paragraph would be an improvement.
We’ve all seen the reports on how LLMs get good results on standardized exams and tests of general knowledge, so on this kind of question I’d presume it to be basically reliable (again, as long as we’re talking just rough estimates and magnitudes, and take care not to ask leading questions). If my comment had instead included my own Fermi calculation or a random Wikipedia link, I’m guessing that that would have been more accepted, even though I doubt it would have been more reliable.
Excellent point. But these changes are much less than the 100x wealth increase, which implies that there is a very strong poverty-inducing force, it’s just not completely negating progress.
Hmm, I don’t feel like I have a good intuition for what a 100x wealth increase should look like.
On the one hand, you could imagine a 100x wealth increase that didn’t grow the size of the middle class at all, and just preserved existing proportions, so that 90% of the wealth still remained with the top 10%.
I imagine you mean something like “if the poorest 10% of 1700 had their wealth go up by 100x, then they should still be much better off than the poorest 10% of today are now”. Then an obvious question is, how much has the wealth of the poorest 10% of today gone up relative to the poorest 10% of 1700?
This source, which says it’s maintained by the University of Sheffield, mentions that “During the eighteenth century wages could be as low as two or three pounds per year for a domestic servant, plus food, lodging and clothing. A beggar would normally hope to be given between a farthing and two pence in alms, while a parish pauper could hope for a weekly pension of between a few pence and a few shillings”.
One farthing and two pennies is apparently 9/960ths of a pound, and at the same time it mentions that A man’s suit could easily cost £8, while even the uniform of a child looked after by the Foundling Hospital cost £1 12s. 10 ½d. So (rounding the cost of that uniform down to one pound to avoid dealing with old British units), that implies that a beggar would have needed to beg 106 years to afford one child’s uniform, assuming that they didn’t spend any of that money on anything else.
I do find that a little hard to believe—what did the beggars wear, then? (Maybe the number was supposed to be weekly not yearly?) But even if we assume that the beggar had 100x the income implied here, it seems to me plausible to assume that ownership of a smartphone alone—that many homeless people of today do own—would represent a 100x increase in wealth compared to that, given the complex international supply networks and high-end chip manufacturing that goes into building a smartphone.
Poverty equilibrium keep existing despite the increases in productivity due to economic rents. Every time there is some slack in the system, renters raise their prices and capture the wealth. UBI itself is not enough, but UBI+LVT combo is what will allow to move to a much better equilibrium in our world. In Anoxistan, likewise, there would be needed an Air Value Tax, working by the same Georgist principles to erradicate their brand of poverty.
Moloch is the name of this force, and rent-seeking is one of its faces. (edit: I stand corrected; rent-seeking itself isn’t Molochian competition, but it’s enabled by Molochian competition from those paying the rent. See below comments)
I think this is basically correct, although as others have noted it doesn’t completely counteract progress.
There is a form of rent-seeking from other sources than land ownership, like the rising college tuitions. Arguably, zoning is a separate form of rent-seeking that’s not directly based on land ownership but control of government to make ones own life better at the expense of others’ opportunities.
Those two are more clearly Moloch. Competition for good degrees and good zoning drives prices as high as people will pay.
I was tempted to agree, but on a reflection, no I don’t think that it’s correct to classify rent-seeking as a work of Moloch.
Classical example of economical facet of Moloch is a capitalist who would love to give their workers a living wage, but doing so would make the product more expensive, therefore leading to being out-competed by those who did not pay their workers decent wages. Optimization leading to the sacrifice of all our other values.
On the other hand a landlord who raises the price of the rent due to a new business opening nearby doesn’t do it because otherwise they would be out-competed by the landlords who do. They just do it because they want to earn more and can earn more this way. This is not some complicated game theoretic equilibrium that a landlord is a hostage of. In this case, this is just greed.
And the reasons why landlords can get away with this is because the molochian optimization mechanism selectively does not apply to them! While market forces push the capitalist to make the goods and services as cheap as possible, without LVT, this pressure doesn’t exist for the landlord. They are the part of the system that has actual slack. And they can use it to siphon the slack from other parts. Which is, in turn, what leads to such ruthless competition in the other domains of the market and the existence of the market equilibrium which we call “Moloch”.
So rent-seeking isn’t the Moloch. On the contrary, it’s the absence of Moloch in a small privileged domain, which prevents Moloch from consuming itself, and therefore allows its existence. Rent-seeking is what makes the economic facet of Moloch possible.
I agree: rent-seeking isn’t Moloch, for the reasons you give.
But it’s enabled in part by Molochian competition to rent that particular space.
And rising prices of degrees is similar. It’s rent seeking, which is pure greed, but it also is enabled by Molochian competition. Zoning is more pure Moloch. I expect there are other similar factors contributing to the proliferation of poverty despite wealth increase.
NIMBYism is competition for a better living environment and property value at the expense of the commons. And colleges and landlords can only keep raising tuition because people are competing for prestigious degrees and good locations, at the expense of the commons.
Edit: It doesn’t seem like an absence of rent-seeking would do much to prevent Molochian effects in economic trade.
If you analyze the situation from a greater distance (drawing wider boundaries to the system), you can clearly observe that Moloch is the core of rent-seeking in the first place, not the action of hiking prices.
What purpose does rent-seeking serve? What greater good is society drawing from it?
If, in this case, we claim that this is allowed as a mechanism to incentivize private investment into housing development (so that the “right” amount of houses are built), we can see Moloch (i.e., the sacrifice of real value in pursuit of efficiency) very clearly.
Moreover, the construction of prices in a market is not determined wholly by one side. What allows landlords to raise the prices is the willingness of someone to pay that new price. If we assume the landlord is a kind of self-sacrificing saint and refuses to raise the prices, in the not-so-long run, he will face bankruptcy. I.e., he will no longer be able to keep up with inflation. Remember, property taxes are a thing. If the neighbors can charge higher prices, the value of the property rises. If the value rises, so do the taxes.
I would say that the situation is what allows rent-seeking, and the Moloch is the power that says that if rent-seeking is allowed then it will definitely happen (otherwise those who don’t rent-seek or even don’t rent-seek as much as they could, will be outcompeted by those who seek as much rent as possible).
We might be saying the same thing in different terms. From your statement I am confused as what do you mean by the “situation allowing for rent-seeking”? and Moloch being a “power”?
When I used the term “situation” in my previous comment, situation meant the dynamic described by Seth Herd (i.e., land lords rising prices).
Moreover, if “the situation is what allows rent-seeking” but Moloch is the power that determines (when rent-seeking is allowed) that “it will definitely happen” implies that Moloch is a fundamental part of the “situation”.
In other words, without Moloch the “situation” of rent-seeking would never had existed in the first place.
By “situation” I meant that in a hypothetical system where e.g. all land belongs to the state (or king) and everyone is renting it, and the land is always rented to the highest bidder… or something like that, the incentives and therefore behaviors could be completely different. (Not necessarily better, but different.)
The winning strategy is determined by the rules of the game.
Yes, the winning strategy is determined by the rules of the game, but more importantly, what constructs the definition of winning is also determined by those rules. That’s why defining the boundaries of a system is crucial for exploring the nature of incentives.
I continue to struggle with your explanations because I can’t understand where you are drawing the boundaries of the system.
If by “all land belonging to the state (or king)” you mean an absolutist system (i.e., assuming his power is so strong that he faces no competition from within the system’s boundaries), then the nature of competition shifts the target, but the practices remain the same. A rent-seeker is someone who evaluates the system, diagnoses bottlenecks, and positions himself as a gatekeeper.
By “absolutist,” I mean, in historical terms, systems that functioned as totalitarian within an artificially determined boundary (e.g., feudal lords, the USSR, slave plantations, etc.). These systems faced competition from the outside. If a king faces competition from outside his kingdom, he is obliged to maximize the exploitation of people and resources. If he doesn’t, he’s at risk of being conquered by outside forces that adhere to Molochian efficiency. The USSR did not have markets and prices, but it still had a system with many layers of quotas and incentives.
If what you’re describing is a universal totalitarian system, then it would be a completely different system, without historical precedent, but with the same incentives. The nature of Moloch emerges when surplus creates the need for criteria to allocate the newfound scarcity. Unless true abundance exists, the natural order is for status to determine access. In such a context, competition will be Molochian competition. To my understanding this is the exact reason why governments exist in the first place. To enforce Ostrom’s solution to the tragedy of the commons.
This relates to my favorite question of economics: are graduate students poor or rich? This post suggests an answer I hadn’t thought of before: it depends on the attitudes of the graduate advisor, and almost nothing else.
As someone coming from a “poor” European immigrant family, I have always found it interesting that in the U.S. people with big cars can be considered poor.
These U.S. people, the “poor” Anoxan and I know that the abundance of something does not mean having the opportunity to live life. Ask King Midas.
An N-fold increase in selected productivity, like in the number of winter socks or the amount of gold you have, does not mean your life opportunities are going to drastically increase allowing you to gain momentum towards an escape velocity from your miserable situation.
Obviously, many other things, e.g. housing, has still not properly scaled.[1] And so rent can be high in many parts of the world (in particular cities, where there are plenty of juicy opportunities). This makes life miserable to many people (cause your pay does not cover enough rent, so or you go far from work, but then you need to commute, or you keep peeling your check). But flipping the argument about a UBI increasing the average costs, or profits made by the police, a decrease in rent might also bring unintended consequences.
So. Is this about goods? Are goods the answer to overcome poverty? Maybe. I do not know. They certainly play a role. Especially in societies where sharing your riches is uncommon.
Why sharing? I mean, for many of us with riches the reason we are well off is probably because we were born in families. And why we were born in these families?
Even if you believe in fate, genetics, or pure randomness, imagine repeating the event of your birth (without knowing the prior on your birth geography, social status, etc..). In which kind of world would you like to live? In a world where resources are shared across humans, or one where each one is for themselves?
I would argue that in a resource sharing environment I can higher the probabilities to choose different kinds of sufferings in my life, ending poverty. While in a more individualistic society you can have concepts like the poverty-barrier.
I am quite agnostic about the correct method to end poverty. But in my opinion, this is something a UBI could potentially address.[2] [3] [4]Now, if some people end up living the same life even with a UBI, so be it. If others find the way to embrace a new path, so be it. It is not that a Poverty-Restoring force will just come from a UBI.
I am a bit proud, so maybe I would not have taken a UBI. I had food, and a place to sleep. But in an individualistic society, a UBI would have allowed me to buy the books that made me the scientist I am today (instead of going to work to buy them (though temporarily working can teach you good lessons)). Or think less about which kind of path I can take because I want to help my family (so being more selfish and follow a passion). Or to go to vacation. Or allow many of my friends and family to go to art school or university.[5]
A UBI would allow certain people to change the probabilities of their future.
Then, if I really need to think in economic terms, a nurtured human creativity can easily bring you a (M*N)xfold increase in productivity.
For whatever reasons.
Which is the correct way of implementing a UBI? I do not know. But I think we would not need a UBI if from childhood we were taught the value of sharing.
I am personally more for nurturing sharing values in people and rely more on communities rather than big governments/organizations. A lot of people I know unfortunately are not used to these values, but hopefully this will change in the future.
I also would like a UBI or similar to be implemented by a mix of experts with poor/non-poor backgrounds. This is because I discovered that a lot of the agencies that want to mitigate suffering (e.g. FAO ) are filled with rich background people, from many countries, that are well paid to solve problems they do not understand IMHO.
I mean, there are countries that offer something like UBIs to their entire (small) population, and it seems to more or less work, though in this cases other people have to suffer (probably because we still did not scale jobs like construction).
Now, if some people end up living the same life even with a UBI, so be it. If others find the way to embrace a new path, so be it.
Sharing has the obvious advantages, but also a few costs. I am going to talk about the costs here—that doesn’t imply that people shouldn’t share, just they they need to do that carefully.
1)
Producing value requires effort. When you share, it means that other people can participate on the value. The question is, will they also participate on the effort?
If the answer is “no”, then we can get a situation where a few conscientious people work hard to produce value for everyone… but most people don’t join their effort, because they relax and watch movies and debate online instead… so ultimately, people don’t get much value anyway, because little is produced.
The usual solutions require putting guns to people’s heads to make them work; either literally (in communism) or metaphorically by refusing to share with those who don’t produce (in capitalism).
Is there a way to avoid this? Note that people have already tried—and failed—to achieve this. In communist countries there is a lot of propaganda around everyone all day long about how work is glorious, etc. And yet, even in the communist countries under 24⁄7 propaganda, most people avoid hard work if possible.
(And “lazy vs hard work” is only a part of the problem. You also need people to become competent, because an incompetent hard-working person can generate a lot of damage. Learning to be good at something is just another kind of work that many people are happy to avoid.)
2)
Some people destroy value. Well, in some sense everyone does—by eating a piece of bread, you have destroyed it. Things are used by spending them. But some people, through incompetence or negligence (sometimes it hard to distinguish between these two) destroy a lot more value than others.
Imagine someone so careless that no smartphone ever survives in their hands for a week; they will carelessly keep throwing or dropping it, the display will break. Imagine a society where people share everything with those who need it, including smartphones. How many smartphones would such society give to such person before saying “that’s enough”?
Because if you never say “enough”, then a few people like this will ruin the entire society, simply by breaking lots of stuff. But if you say “enough”, then… technically speaking, you are no longer a society that shares everything with all people who need it. Now you have rules about when to share, and when not to. And you have people without smartphones walking around and bitching about the system (even if from our perspective, this is totally their own fault). And we need to decide whether the quota for broken smartphones is “one per year” or “one per months”. Whether we make an exception for disabled people whose hands shake a lot, so they drop the smartphones more frequently even if they really try to be careful. Whether it is okay to break hundred smartphones on purpose while making a comedy movie that thousands of people will enjoy. Etc.
(UBI provides an answer to this part: We share, but only a limited amount. If you spend your UBI to buy smartphones and then you break them… that’s your problem. The damage you can cause to society by breaking smartphones is limited. But that’s because we assume that UBI exists in a system that still respects private property… well, after taxation.)
Hi @Viliam .
On
Isn’t this true even in a work place where people are paid? While in such a case, the person might be fired, sometimes the damage is too big (and among the possibilities I am thinking about, it seems someone working has a higher chance of creating a black swan than someone not working (maybe this https://en.wikipedia.org/wiki/2024_CrowdStrike_incident)).
Anyway, if principle like the Pareto principle are true, we only need 20% of the working force to produce most of the goods. If you are talented, a UBI is a road to join that 20% :)
Yes, you can’t completely eliminate the risk. But there is a huge difference between “an occasional disaster” and “a sad everyday reality”.
There are some families where for cultural reasons it is unthinkable to keep your individual finances separate, and it is heartbreaking to see how one member of the family is working their ass off to improve the situation, and some other member of the family just takes the extra money and burns it (not literally), keeping the family in poverty. And there is no way out, unless they learn to establish some boundaries.
I like this argument! Never heard it before (applied to employment).
I wonder where it applies, though. Probably true for most IT companies. But there are jobs that don’t scale well, for example teachers or doctors.
I guess if we fired the right 80% of teachers and replaced them with “kids watching Khan Academy”, little educational value would be lost. (Though there is other value of schools: babysitting. That one probably scales worst of all.) Even better, kids watching Khan Academy most of the time, once in a week having a debate with a teacher.
So… maybe we need about 50% of the current workforce? And with 50% of people staying at home, we would not need so much babysitting for the children.
We would still need the doctors, I think. One day, machines may replace them, but we are not there yet.
EDIT:
Haha, just saw this at Astral Codex Ten:
That’s funny :)
You give the constraints of the middle class worried they’ll slip down, not the poorest Americans directly. If 12% of Americans live in poverty, then the example concerns are those of the 12-50th percentiles. You say the lumpen-proletariat will always exist, but prove that the lives of the proletariat won’t improve much.
“credentialist colleges that raise their prices to capture more and more of the returns to the credential, until huge portions of the former middle class’s early-life earnings”—Explicitly not the poorest.
“Like working 60-hour weeks to afford rent somewhere the school districts will damage your child less”—but a lot of people’s kids do go to the worst school districts. I’d say if your kid goes to a bad school that’s poverty, not the person who sends their kid to a better school.
“rents in San Francisco would almost instantly rise by the amount of the UBI; no janitors in the Bay Area would be better off as a result”—But housing prices over all of the US won’t rise by the amount of UBI. Some would move out of SF to cheaper areas. They’ve been given an option they preferred so their lives have improved. UBI only does them no good if everyone choose to stay in SF, but why would they?
“maybe the Ferguson police departments of the world, just raise their annual quota for fines per capita by the per capita UBI.”—This assumes the policing level is set by the wealth of the poor. I think it’s set by the level that generates political opposition. Claims there’s on 12% as many arrest warrants after 6 years, clearly a political decision not a reduction in wealth. The Police in Beverly Hills are not stationary bandits nor are SF Cops making more in fines. I don’t think it’s a law of history that governments automatically grind down any surplus the poorest have.
The example of Anoxistan relies on the people not being able to afford the most necessary Oxygen, if they had to work 60 hour weeks to get cars, and some people choose to forgo cars, then that’s clearly an improvement.
The idea that poverty is squeeze from the tightest constraint, not the average of constraints is interesting, but you don’t talk about the tightest constraint on the poorest. I suspect those have eased up: look at average hours worked, or the labor participation rate, or stories of the voluntarily homeless who work 3 months a year. All indicate that some people choose not to work much, thus their constraints are smaller.
“The system will always grind you down”, but you’re allowed to opt out and it’s getting easier all the time.
“But housing prices over all of the US won’t rise by the amount of UBI”.
If UBI were being offered across the US, I would expect them to rise by the amount of UBI.
If UBI is restricted to SF, then moving out of SF to take advantage of lower rents would not make sense, since you would also be giving up the UBI payments of equivalent value to do so.
(Edit): If you disagree, I’d appreciate it if you can explain, or link me to some resources where I can learn more. I’m aware that my economic model is probably simplistic and I’m interested in improving it.
Thanks for this post! I have always been annoyed when on Reddit or even here, the response to poverty always goes back to, “but poor people have cell phones!” It all comes down to freedom—the amount of meaningfully distinct actions one person can take in the world to accomplish their goals. If there are few real alternatives, and one’s best options all involve working until exhaustion, it is not true freedom.
I agree, the poverty restoring equilibrium is more complex than probably UBI—maybe it’s part of Moloch. I think the rents increasing by the UBI amount has something to do with demand inelasticity—people will rent the same regardless of price—so the price can rise until the breaking point once again.
Nonetheless, UBI may still help. Also, I do think there are other concrete steps that can be taken. One cannot leave a horrible job for several reasons: (a) health insurance, (b) having a place to live, (c) having food, (d) school & giving children their best chance; but each of these can be tackled one by one. It may not solve the problem once and for all, but good quality public education (not funded by zip code), universal health insurance, and an adequate supply of housing, are all steps towards reducing the bottleneck imposed by one resource at a time.
The bottom line in my personal philosophy is this—take direct actions against those forces of poverty and Moloch. If there are unintended consequences, take direct action against them. Propose policy, and try them out. Cynicism about any interventions working, is really wishful thinking by the wealthy elites. It’s not coordinated, as you say. They want to believe the systems we have are really the best we can do, because what we have makes them powerful. Acknowledging the possibility that there is a better way would be uncomfortable for them both financially and psychologically!
There are rich people pushing themselves work 60+ hour days struggling to keep a smile on their face while people insult and demean them. And there are poor people who live as happy ascetics, enjoying the company of their fellows and eating simple meals, choosing to work few hours even if it means forgoing many things the middle class would call necessities.
There are more rich people that choose to give up the grind than poor people. It’s tougher to accept a specific form of suffering if you see that 90% of your peers are able to solve the suffering with work than if 1% of your peers can. Right now, accepting your own mortality is normal even for rich people, but as soon as the 20% richest can live forever, suddenly everyone who isn’t immortal will feel poor for lacking it. Maybe some will still embrace death rather than endure professional abuse 60 hours per week, but that is suddenly a much harder decision.
My first order guess for the mental definition of poverty would be if >X% of the population in your polity is able to afford a solution to various intense forms of suffering, but you can’t. (Where X seems to be around 50-80%)
A rich 5th century BCE Athenian was a man for who any illness was very likely fatal, who loses half his children between ages ½ and 18, whose teeth are slowly ground down to the roots by milldust, who lived one bad harvest away from famine, and more. But now we characterize poor people by their desperate struggle to escape the things the Athenian rich person accepted as normal and inevitable.
I can see two ways UBI may solve poverty:
Given UBI makes up a sufficiently high fraction of all income, the poorest person does not feel like their wealth differs enough from that of everyone else to conceptualize their suffering as poverty.
Given sufficiently advanced technology, the UBI is enough to solve all major forms of suffering, from death to emotional abuse trauma, and even those with less stuff don’t feel like they’re missing out.
Option (1) may be possible already, especially in more laid-back cultures, but if not then UBI won’t solve poverty yet.
All of that said, why is this the standard you choose to measure it by? Even if UBI doesn’t solve poverty it can relieve suffering. And while other anxieties might take the place of the old on the hedonic treadmill, it does feel like life is better when sources of suffering are taken away. If you offered me $5000 but if I get depressed a child gets eaten alive by wolves before my eyes, I would say no, so apparently I do prefer my worst days over a hunter-gatherer’s worst days.
Quality of life is what matters. UBI can take out financial anxiety and poverty traps, and likely improve exercise and physical health and nutrition and social satisfaction (assuming the economy doesn’t collapse). Those are all things anyone could recognize as valuable, even if they have more urgent matters themselves.
Did you mean to say “There are more poor people that choose to give up the grind than rich people?”
No. I would estimate that there are fewer rich people willing to sacrifice their health for more income than there are poor people willing to do the same. Rich people typically take more holidays, report higher job satisfaction, suffer fewer stress-related ailments, and spend more time and money on luxuries rather than reinvesting into their careers (including paying basic cost of living to be employable).
And not for lack of options. CEOs can get involved with their companies and provide useful labor by putting their nose to the grindstone, or kowtow to investors for growth opportunities. Investors can put a lot of labor into finding financial advisors and engaging in corporate intrigue to get an advantage on the market. Celebrities can work on their performance and their image to become more popular and get bigger signing deals.
Perhaps to clarify, “the grind” isn’t absolute economic value or hours worked, it’s working so hard that it cannibalizes other things you value.
That feels to me about as convincing as saying: “Chemical fertilizers have not eliminated hunger, just the other weekend I was stuck on a campus with a broken vending machine.”
I mean, sure, both the broken vending machine and actual starvation can be called hunger, just as both working 60h/week to make ends meet or sending your surviving kids into the mines or prostituting them could be called poverty, but the implication that either scourge of humankind has not lost most of its terror seems clearly false.
Sure, being poor in the US sucks, but I would rather spend a year living the life of someone in the bottom 10% income bracket in the 2024 US than spending a month living the life of a poor person during the English industrial revolution.
I am also not convinced that 60h/week is what it actually takes to survive in the US. I can totally believe that this amount of unskilled labor might be required to rent accommodations in cities, though.
I think something like this is true:
For humans, quality of life depends on various inputs.
Material wealth is one input among many, alongside e.g., genetic predisposition to depression, or other mental health issues.
Being relatively poor is correlated with having lots of bad inputs, not merely low material wealth.
Having more money doesn’t necessarily let you raise your other inputs to quality of life besides material wealth.
Therefore, giving poor people money won’t necessarily make their quality of life excellent, since they’ll often still be deficient in other things that provide value to life.
However, I think this is a different and narrower thesis from what is posited in this essay. By contrast to the essay, I think the “poverty equilibrium” is likely not very important in explaining the basic story here. It is sufficient to say that being poor is correlated with having bad luck across other axes. One does not need to posit a story in which certain socially entrenched forces keep poor people down, and I find that theory pretty dubious in any case.
I appreciate the concrete, illustrative examples used in this discussion, but I also want to recognize that they are only the beginnings of a “real” answer to the question of what it would be like to not be poor.
In other words, in an attempt to describe what he sees as poverty, I think Eliezer has taken the strategy of pointing to a few points in Thingspace and saying “here are some points; the stuff over here around these points is roughly what I’m trying to gesture at”. He hasn’t taken too much of a stab at drawing the boundaries. I’d like to take a small stab at drawing some boundaries.
It seems to me that poverty is about QALYs. Let’s wave our hands a bit and say that QALYs are a function of 1) the “cards you’re dealt” and 2) how you “play your hand”. With that, I think that we can think about poverty as happening when someone is dealt cards that make it “difficult” for them to have “enough” QALYs.
This happens in our world when you have to spend 40 hours a week smiling and bearing it. It happens in Anoxan when you take shallow breaths to conserve oxygen for your kids. And it happened to hunter-gatherers in times of scarcity.
There are many circumstances that can make it difficult to live a happy life. And as Eliezer calls out, it is quite possible for one “bad apple circumstance”, like an Anoxan resident not having enough oxygen, to spoil the bunch. For you to enjoy abundance in a lot of areas but scarcity in one/few other areas, and for the scarcity to be enough to drive poverty despite the abundance. I suppose then that poverty is driven in large part by the strength of the “weakest link”.
Your writing sounds like someone put you under pressure to finance UBI and combat poverty. I think that’s not good. If they want you to pay for something, then it’s their job to explain to you why it’s ultimately good for you. Of course, in case the difference is too big, they also have the right to cut tie with you — a threat which is only effective if they are doing it better than you or you are doing better in the community with them than outside.
If you are not under pressure but want to hinder others in implementing UBI and combatting poverty, then you have trespassed. As you said, the definition of poverty can vary from place to place and from time to time, so without looking into the specific case, you can’t actually know for sure if it is productive or not. I heard that Christianity rose as a religion for the poor, which united and empowered them so much that a Roman emperor found it good to adopt this religion. I’m no Christ, so if I’m wrong you can correct me. And even if I’m right in this point, it still doesn’t say much about your specific case which I don’t know.
My point is: everyone has the right to implement UBI and combat poverty if they gather the resources for it on a voluntary basis (forcing in debt doesn’t violate the voluntary principle as long as the debt was made by free will, so if you have received benefit then you have to somehow repay someday) and they can do it in the way they see it fit. In the example about Christianity, the UBI was not designed as a certain amount of money but enough food to avoid starvation and shelter to avoid freezing to death. Of course, one can also do it differently.
Independently of the other parts, I like this notion of poverty. I head-chunk the idea as any external thing a person lacks, of which they are struggling to keep the minimum; that is poverty.
This seems very flexible, because it isn’t a fixed bar like an income level. It also seems very actionable, because it is asking questions of the object-level reality instead of hand-wavily abstracting everything into money.
Side point, but this… doesn’t seem to comply with basic supply and demand?
The amount by which the rents would rise would likely depend very heavily on the ratio of price elasticities of supply & demand[1], and in cases where we have neither a perfectly elastic supply[2] nor a perfectly inelastic demand[3], increasing the income of individuals (which could function as, say, an indirect subsidy of sorts for them to pay housing costs) predictably would not lead to a situation where rents instantly[4] rise by that amount such that no poor person is made better off.
Which is borne out by empirical studies as well, see for example “Why is the rent so darn high?” and Matt Yglesias’s analysis here.
Which we do not, in real life, as we can see, for example, by the fact that construction of new buildings is heavily dependent on expectations about future rent cash flows, so policies like rent control (which reduce that expectation) predictably cause landlords to significantly reduce rental housing supply. More directly, see this 2009 report by Rand that tries to estimate it numerically, as well as CEPR’s statement that the 10th-90th percentiles of the numerical elasticity were 0.4 and 2.6, respectively, in the 2012-2017 period.
Note that “housing” alone is made up of many inhomogeneous goods, there is always the possibility of living in a different city, etc. Numerical estimates for demand elasticity seem relatively more difficult to find by my cursory internet search; this 1980 paper puts price elasticity of demand for housing at between −0.4 and −0.6.
Also note that the short-run supply elasticity of housing is predictably smaller than the long-run supply elasticity, which only further decreases the percentage of the UBI that is “wasted” on increased rent (this is not unique to housing, and is in fact true for most goods or services).
This is why San Francisco was chosen as the example—at least over the last decade or so it has been one of the most inelastic housing supplies in the U.S.
You are therefore exactly correct: it does not comply with basic supply and demand. This is because basic supply and demand usually do not apply for housing in American cities due to legal constraints on supply, and subsidies for demand.
But San Francisco is also pretty unusual, and only a small fraction of the world lives there. The amount of new construction in the United States is not flat over time. It responds to prices, like in most other markets. And in fact, on the whole, the majority of Americans likely have more and higher-quality housing than their grandparents did at the same age, including most poor people. This is significant material progress despite the supply restrictions (which I fully concede are real), and it’s similar to, although smaller in size than what happened with clothing and smartphones.
Housing supply is elastic, land supply is not. Rent from “house-owner” to renter may have a functioning supply curve, but ground rent sucks up all UBI due to its perfectly inelastic supply curve.
QoL has of course risen despite this, because rent can only demand the different between the worst available rent-free location and the location at hand—as technology improves, the productivity at the worst rent-free location (the margin of production) rises, and what people get to keep post-rent rises.
UBI is simply a handout to rentiers. Progress that improves the margin of production raises the floor of poverty.
Your comment is very confusing to me, as it reads like a sort of “productivity theory of value” that doesn’t align either with basic microeconomic theory or with empirical data that has been gathered on this question.
Both demand and supply straightforwardly affect housing rent; it is not just “productivity” that determines what the cost of physically residing in a certain area will be. For example, if a different city close by suddenly becomes much more attractive, demand will (at least in the short-term) slightly go down in the initial city, which will push rent down a bit, even though the productivity in this city has stayed the same. It’s the reverse of Baumol’s cost disease: instead of wages in fields that haven’t experienced increased productivity nonetheless going up because competing jobs are getting more enticing and well-paid (and thus employers need to increase wages to induce marginal workers to stay instead of moving over to those fields), you have a situation where the rent in a city goes down despite nothing happening in the city itself, because landlords have to compete to some extent not only with other landlords in the city but also with other, nearby cities.
Even in a hypothetical word that looked like ours except there was no technological improvement, rents would still change over time because of demand & supply factors, governmental regulation and deregulation, etc.
I also don’t understand what “worst rent-free location” refers to? Do you mean homelessness here, or what? For most people, there is no way to obtain a house in a rent-free manner (given that mortgage payments, for all useful purposes here, can be modeled as equivalent to monthly rent).
(Emphasis mine) I’m not sure what you mean by this, honestly.
If we give all renters in a city $10k (say, by a tax cut, which is mostly functionally equivalent to UBI anyway, at least for our purposes here), are you predicting that this will not actually result in them retaining more dollars in their pockets after paying rent to their landlords? This is definitely not correct, and is what I was getting at in my initial comment: the elasticities, empirically measured, are not such that the entirety of the UBI is eaten up by the landlords (or whoever ultimately benefits through profit from “unearned value”).
And I’m not sure what the housing vs ground distinction is meant to do here, given that… renters obtain value as a result of this arrangement (in the fact that they retain more money than they counterfactually would have if the policy had not been implemented), so it is not the case that rentiers are the only ones who profit from this outcome. So I don’t understand what “UBI is simply a handout to rentiers” means, given all of the above...
I’m simply paraphrasing Ricardo’s law of rent. It’s pretty straightforward microeconomics.
Worst rent free location just refers to the next-best-alternative, so yes, homelessness, or subsistence farming in a marginal location, etc.
Sure, I already said housing is subject to supply and demand.
Obviously true. And?
Landlords will raise prices until the value of living in that city with $10k tax cut = the value of living in the next city with no tax cut, modulo friction. People will want to move into the tax cut city, raising rents.
Local cafes, bakeries and hair salons etc. will raise their prices a commensurate amount, and the improved “productivity” of these local businesses will result in an increase in competition for those locations, raising rents for businesses as well.
The nominal incomes of renters and local business owners increase, but in the end the rentiers benefit.
Rentiers may benefit, but they need not be the only ones who benefit. That was the essence of my comment above, and why I objected to the statements above that “all UBI” is sucked up by rent and that “UBI is simply a handout to rentiers.” The nominal incomes of non-rentiers indeed increase, and I claim that for some of them, the real income increases as well.
I’m not sure if there is any leftover disagreement here?
I honestly don’t know if I understand what Eliezer is getting at so might be far off. If the premise is that increased real income (that 100-fold increase) has not really decreased what is undertood as poverty in human existance then income related factors (a UBI) seem definitionally ineffective as well.
But I’m not sure that he is subtly trying to say the whole UBI effort is essentially a fool’s errand.
But I’m far from sure that his suggestion is that a UBI, at some level of abundance, can eliminate poverty because all the basic necessities (not sure how one defines that in a world where people do seem to care about relative outcomes over absolute outcomes) are guaranteed.
Yes. Trying to make up a new way to redistribute the products among the whole society is pointless, if the means of production are still owned privately.
This statement encapsulates what, IMHO, is the evident shortcoming of the article. UBI is a policy addressing inequality; 100-fold productivity isn’t. Poverty is a social construct; inequality is not.
The social construct of poverty is built differently for every niche. The effects of wealth/income distribution directly affect the construction of the concept. Furthermore, it directly affects the health of individuals.
I can’t claim to know the answer, but let’s spend a few minutes trying to figure it out.
Let’s stick with Eliezer’s definition of poverty as extreme difficulty accessing the necessities of life. That is, if it’s very hard for you to afford, say, housing, you’re in poverty.
It is not difficulties affording luxuries; just necessities. Obviously this is a little tricky because “necessity” is a spectrum, not a binary (is a school for your kids where they’re safe from violence a luxury or a necessity?). But let’s ignore that for now and pretend we can 100% accurately classify goods as either necessities or not (“luxuries”).
Imagine all the necessities are free and plentiful. You can have as much oxygen as you want, plenty of food, clothing, a 1000 meter house, etc. Is there any poverty in such a world? Obviously not.*
Now increase the price of those things to one ($1) dollar. Is there poverty? Very likely.
Consider for example someone who is extremely mentally ill, so much so that they are unemployable. They cannot scrape together even $1 for these necessities. Maybe mental illness (or addiction) is a special case, you say. Ok; there are other classes of people who can’t work: the disabled and the elderly.
These cases are easy enough to deal with; they are what welfare states are for. The government provides either money or resources directly to people who cannot afford them. (Family, charitable donations, or mutual aid societies could play a similar role)
Simple enough, but that was with the cost of necessities fixed at a very low price. What if we increase the price and/or let it vary based on market forces?
Not much actually changes except the classes of people who can’t afford necessities expands to include some who can work but either can’t work enough (e.g. some disabled people who can work, just not very much) or don’t have valuable enough skills, so they can’t afford the prices.
This group could be larger or smaller depending on factors like overall workforce quality/skills and how expensive the necessities become. We can reduce its size by various strategies such as education/job training to improve skills or supplying more of the necessities to reduce their prices. But fundamentally there will always be some people in a market economy who can’t afford the basics.
Not all hope is lost! The government can extend its welfare programs to cover these people too. It is possible there can be logistical issues with this (for example, the country is too poor to actually do so; or government subsidies increase prices so much that even more people cannot afford the necessities). But these are separate empirical questions. Fundamentally, in a market economy, there will always be some poverty unless the government intervenes, and possibly even after the government does.
Large groups of people can only live together by forming social hierarchies.
The people at the top of the hierarchy want to maintain their position both for themselves AND for their children (It’s a pretty good definition of a good parent).
Fundamentally the problem is that it is not really about resources—It’s a zero sum game for status and money is just the main indicator of status in the modern world.
This article made me reflect on the two alternative definitions of poverty. One, relative poverty, and two, what I call lifestyle poverty. The latter being split into ascending levels starting from $2.15 a day (below which you eventually die), with the next level reached at roughly a factor of 4. The factor of 4 making a qualitative difference in lifestyle in a practical non theoretical way.
Relative poverty has a social element which we will probably never escape. But, level 0 poverty below $2.15, also known as absolute poverty is down from 90% before the industrial revolution to about 8% today. I believe we will eliminate it entirely.
The next step is to eliminate the following level 1 poverty at incomes of $2.15 to $8.60. Then as we continue to grow over hundreds of years, we’ll continue to eliminate the higher levels one at a time. Perhaps one day Level 31 in said lifestyle poverty index will be the future relative poverty, but i’d still count that as a success.
Standard of living or lifestyle poverty is real and we can make progress on it. We will escape it one level at a time.
Relative poverty has more to do with status and our limitless wants that expand over time. From two pairs of clothes as a luxury to a need. For cars as a luxury to a need. From an internet connection as a luxury to a need. This relative poverty seems less important as it’s social and not physical.
Your Anoxistan argument seems valid as far as it goes—if one critical input is extremely hard to get, you’re poor, regardless of whatever else you have.
But that doesn’t seem to describe 1st world societies. What’s the analog to oxygen?
My sense is that “poor people” in 1st world countries struggle because they don’t know how to, or find it culturally difficult to, live within their means. Some combination of culture, family breakdown, and competitive social pressures (to impress potential mates, always a zero-sum game) cause them to live in a fashion that stretches their resources to the limit.
Low income people who struggle insist on living alone when having roommates would be cheaper. On buying pre-made food, or eating out, instead of cooking. On paying for cable TV. On attending colleges to obtain degrees that don’t result in enough income increase to pay the borrowing costs. On buying clothing they can’t really afford. On purchasing things in tiny quantities (at high per-unit prices) instead of making do without until they can afford to buy a quantity that’s sold at a reasonable price. And on borrowing and paying interest for consumption goods.
These are bad strategies. For the most part, they do it because they don’t know any better. It’s how their parents did it, and how the people they know do it. People at the bottom of the income scale are rarely brilliant innovative thinkers who can puzzle their way out of crippling cultural practices—like most sensible (and non-brilliant) people, they take clues from those around them, avoiding moving Chesterson’s fences.
I feel that one of the key elements of the problem is misplaced anxiety. If the ancient farmer stops working hard he will not not get enough food. So all his family will be dead. In modern Western society, the risk of being dead from not working is nearly zero. (You are way more likely to die from exhausting yourself and working too hard). When someone works too hard, usually it is not fear of dying too earlier, or that kids will die. It is a fear of failure, being the underdog, not doing what you are supposed to, and plenty of other constructs that ancient people simply did not reach—first they needed to survive. In this sense, we are way better than even one hundred years ago.
Can UBI eliminate this fear? Maybe partially it can help, but people will still likely work hard to preserve their future and the future of their children. Maybe making psychotherapy (t address the fear itself) more available for those with low income is a better solution. I understand that it would require training way more specialists than we have now. However, some people report a benefit from talking with GPT as a therapist https://x.com/Kat__Woods/status/1644021980948201473 , maybe it can help.
Being homeless sucks, it’s pretty legitimate to want to avoid that
I agree, they have a really bad life, but Eliezer seems to talk here about those who work 60 hours/week to ensure their kids will go to a good school. Slightly different problem.
And on homeless people, there are different cases. In some UBI indeed will help. But, unfortunately, in many cases the person has mental health problems or addiction, and simply giving them money may not help.
Giving people with problems money still helps them. It may not solve their problems, but it will make it more bearable to live with those problems.
Note: there is an AI audio version of this text over here: https://askwhocastsai.substack.com/p/eliezer-yudkowsky-tweet-jul-21-2024
I find the AI narrations offered by askwho generally ok, worse than what a skilled narrator (or team) could do but much better than what I could accomplish.
I do not see what there is in a continued existence of 60-hour weeks that cannot be explained by the relative strength of the income and substitution effects. This doesn’t need to tell us about a poverty equilibrium, it can just tell us about people’s preferences?
The income and substitution effects can’t fully negate all increases in income, otherwise billionaires couldn’t exist, and everyone would live paycheck to paycheck.
Reminds me of Material Deprivation Index metrics for poverty—what needed things can they not afford? - as distinct from standard income-based poverty lines.
Reminded me of The Hero With A Thousand Chances
May be societies with less poverty are less competitive
New here. Forgive me. Must confess, feel the sense of emerging from a time warp that transfigured apples to apples, to apples to oxygen, for comparison sake. Not trying to ruffle feathers, step on toes, or be told to kick rocks, barefoot, but….
Oxygen is totally dissimilar to apples, making the task of comparison feel not unlike comparing spaghetti code to moms traditional recipe. Time, availability, space, and more—all dissimilarities of form—both in consumption and regeneration. In the interest of time, and for due consideration, therein, I will focus on consumption (?Time consumption?)
As a peasant from Irish peasant decent, I with great honor, skip meals regularly to feed my daughter; wouldn’t do that with oxygen. I even heard—some “elite men” ( :-/ ) do this for status, “toughness” (whatever that means) or other vain purpose—wouldn’t dare do that with oxygen. Is some sort of ungrounding, and re-grounding, to a conception of flattened time necessary for this hypothetical to produce fruit ripe for comparison? I’m probably missing something, or not yet up to speed.
To the premise, I agree that most value is relative, including the label ‘poverty’, and, that, the devolution of value systems, usually results in seeking distinction elsewhere. ice baths and bench press, or street creed on Crenshaw, seem two sides of the same coin. But, for better or worse, that same coin, brought, or bought, the beauty of romanticism. Maybe the throwedness into life as the child of a hippie misled me, but I believe in love! and without time can love exist, that is, “giving without the expectation of receiving”. That’s a huge loss, no?
Dovbt thou the stars are fire; dovbt truth to be a liar;
But don’t doubt, I love. Either/or. Friends?
Great post! Really. I used to be a picky reader and even if you show me the tweet of a Nobel laureate, I can immediately pick out a few points to criticize, which, of course, doesn’t mean that they aren’t way better than me in economics. A few tweets doesn’t say much about someone’s achievement, if you read my tweets, you can certainly find more to pick on. That you’ve achieved a lot in life, doesn’t even need to be mentioned by me, all know it.
Although I don’t agree with every point in this post, I quite like its philosophical touch, which possibly explains why you, unlike many other non-economists, can directly see through the veil of money and from start on addressed the crucial point (of goods and productivity). I don’t want to list here the points I would pick on, it’s not productive. I don’t need to say what you can improve on either, as the highly rated comments have already said all possible things. Because I‘m not well informed about UBI, I only have one question: why does it have to be paid out in dollar, and not e.g. as coupons for some goods with near zero variable cost?
The LessWrong Review runs every year to select the posts that have most stood the test of time. This post is not yet eligible for review, but will be at the end of 2025. The top fifty or so posts are featured prominently on the site throughout the year.
Hopefully, the review is better than karma at judging enduring value. If we have accurate prediction markets on the review results, maybe we can have better incentives on LessWrong today. Will this post make the top fifty?
You are right to say that money alone is not enough to eliminate poverty, although that’s no sufficient argument to disprove the effectiveness of UBI, because you only distinguish between poverty and no-poverty, but not between more-poverty and less-poverty. I don’t know if UBI can reduce poverty, but if you want to disprove it then you need to say more.
It’s amazing that you addressed various aspects of poverty and not reduced it to more shirts vs fewer shirts, but you somehow mingled everything up so that it’s difficult to see your point. In the story about the lacking oxygen, it’s an example of absolute poverty. As you wrote later, oxygen can be produced, actually market economy always works to produce the most needed goods. I guess for someone to survive, a finite number of goods would survive, then market economy would only fail to fix absolute poverty ultimately if itself produces new scarcity, like of oxygen. Yes, it’s known that production can cause environmental problems and pollute air, due to the phenomenon called externality. Government is actually one possible actor who could intervene and fix this market failure, but then you said governments ALWAYS destroy wealth without specifying what you mean. Is the action of getting more fresh air the destroying of wealth because the action costs while air doesn’t? Or for some reason the government insists to do it in a stupid and costly way and forbids you to do it in a more clever way?
You also wrote something about the necessity of sending kids to a better school district so that they won’t be bullied. That’s an example of relative poverty, and as your friends said, relative poverty will always exist, UBI won’t help, nor would market economy. It doesn’t mean that bullying relatively poor kids should be tolerated or even praised, but that’s not the topic here either, I guess.
@Eliezer Yudkowsky have you seen this paper?
- Following a barrage of down-votes and outright dismissal, I’ve decided to retract the rephrased outline of the paper.
- It’s hard for me to engage with anyone discussing poverty who isn’t cognizant of the historical context and the data issues that often get overlooked. That’s why I felt compelled to share this.
(Note that LLM-written or edited comments are not looked on too kindly on LW2, unless they are making a point, and if you are doing it as a joke, it is likely to backfire.)
Huh? Why is it problematic to have your text edited by an LM? I do this all the time for minor clarity improvements and to fix typos.
I agree that it would be rude to have a part or all of the comment be totally LM written without flagging this.
In this case, seems plausible that the person asked gpt-4 to just summarize the paper and then pasted that in.
It is suspicious because it reeks so heavily of ChatGPTese that it suggests the human may have had little or no input and put no effort into it; ‘fixing typos’ is entirely unobjectionable… and doesn’t produce a comment that looks pure ChatGPTese, down to ‘delves’ and ‘intricacies’ and ‘highlights’ etc.* (Which also means that it could contain confabulations. I’ve called out comments here before for just copying ChatGPT output which contained confabulations, and which the author should’ve known to check because the assertions were implausible. EDIT: another example, apparently)
I almost flagged it for spam before I checked the account and saw that it looked like an unusually old account, and had a few legit-looking comments, and was probably a person who didn’t realize just how bad the comment looks. It’s not necessarily something people will go out on a limb to take the risk of telling you, any more than they will necessarily tell you your fly is down or you have BO, rather than downvote/spam and move on.
* you should also be wary of ‘minor clarity improvements’ suggested by ChatGPT/Claude. I find a lot of them make prose worse, especially if you apply most of them so the gestalt becomes ChatGPTese.
I agree with this, my editing process is to get the new output, view the diff and then copy in changes one-by-one if they seem like a good change.
Another word for ChatGPTese is “slop”, per https://simonwillison.net/2024/May/8/slop/.
(My model is also that limited text-editing where it’s clear that you actually read every sentence and feel comfortable endorsing everything written, is OK. The above comment does seem more like a quick copy-paste in a way I do think is bad for LW)
I rephrased it to provide a hint about the paper’s content, making it easier for others to locate and read the original work. I am very familiar with the paper and have studied it to some extent. I didn’t want to share ‘what I think,’ hoping smarter people can make more out of it by reading the whole thing, as I am not active here and don’t care about upvotes. However, I was uncertain about the legality of sharing the entire paper or any excerpts/data since I don’t hold the rights to it.
I find the reaction quite disappointing because the paper addresses very relevant ‘real-life’ versions of the points mentioned here through fiction and encourages a broader understanding of the history of poverty beyond Western perspectives, as we do here. I was curious if anyone here has actually read it; discussing poverty without examining its underlying principles and issues in the historical data, as the paper does, seems contradictory for this community.
Instead of engaging with the paper, my gpt-rephrasing to provide context was met with heavy downvotes, dismissal and ‘hidden comment’. I’m curious about the rationale behind this approach. Wouldn’t it be more valuable to keep the comment open and ensure that this important research remains accessible, even if it includes a rephrasing?
By downvoting and hiding my comment, the community risks overlooking significant insights that could contribute to our understanding of poverty. Isn’t it more beneficial to prioritize the research and promote such relevant work?