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Author Topic: Finland is considering giving every citizen €800 a month
cherrypoptart
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http://www.telegraph.co.uk/news/worldnews/europe/finland/12035946/Finland-is-considering-giving-every-citizen-800-a-month.html

Finland is considering giving every citizen €800 a month


"Proposals for a national basic income are intended to simplify the social security system and encourage more unemployed people to take on temporary work.

By Adam Boult

3:40PM GMT 06 Dec 2015

Authorities in Finland are considering giving every citizen a tax-free payout of €800 (£576) each month.

Under proposals being draw up by the Finnish Social Insurance Institution (Kela), this national basic income would replace all other benefit payments, and would be paid to all adults regardless of whether or not they receive any other income.

Unemployment in Finland is currently at record levels, and the basic income is intended to encourage more people back to work. At present, many unemployed people would be worse off if they took on low-paid temporary jobs due to loss of welfare payments..."


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The intermittent libertarian streak in me would obviously be against this. But more important than that I'm all about doing what will actually work.

This makes a certain amount of sense. If people work part time now they get less money or very little more money than if they don't work at all. The new way would give them only extra money for working.

It's an interesting experiment and I can see how it might improve the situation. It seems like it can't encourage people who are working to stop because they get this extra money anyway, unless... they figure all they need is enough to live on and this government stipend will do the trick.

If they go through with it then the results will be fascinating to observe.

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JoshCrow
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Yeah, we've had a thread about this idea in the past but this is the first I've heard it implemented anywhere. I do prefer the Negative Income Tax model to the Basic Income model, but they serve the same purpose.

I feel like by replacing all other benefit payments, it kinda levels the "subsistence" playing field in a socialist way while still preserving the essentials of capitalism.

Setting the amount of the payout is tricky math... too high and you depress certain low-wage jobs. Too low and you probably see more misery, crime and other undesirables.

I'd follow this experiment with a lot of interest. If one day in the future automation has driven up unemployment and the humans-to-jobs ratio gets bad enough, this is a potentially interesting solution.

(on a side note, I've read that the cost of a robot worker is now cheaper than a Chinese laborer...)

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JoshuaD
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quote:
I do prefer the Negative Income Tax model to the Basic Income model, but they serve the same purpose.
How come?
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Fenring
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Basic income is the natural segue to the elimination of capitalism and the employment-based rationing system, so I'm all for it. Automation will eliminate almost all jobs eventually, so this step ought to be inevitable for a rational society. Eventually a slightly more nuanced system will be needed in order to properly ration goods according to true supply levels, but for now "market price" will suffice acceptably to that end.
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Rafi
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About $860 a month, seems a little low.
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JoshCrow
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quote:
Originally posted by JoshuaD:
quote:
I do prefer the Negative Income Tax model to the Basic Income model, but they serve the same purpose.
How come?
Well, NIT costs the government less because it is "to each according to their need" and doesn't give handouts to the Donald Trumps and Warren Buffets.

Basic Income is more costly to run, but has an ideological benefit of being simple and "fair".

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JoshCrow
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quote:
Originally posted by Rafi:
About $860 a month, seems a little low.

It's Euros... it's more like $930. Since this is per citizen, a married couple would be getting by on $1860/mo. Depending on the local cost of housing and food, might work fairly well as a subsistence floor.
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NobleHunter
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The bit about people not working due to welfare implies this might actually be a cut for some people. On the other hand, it removes an incentive for an employee to accept under-the-table pay and could encourage risk taking since people know they have a cushion to fall back on.

I wonder how onerous the Finnish welfare system was to stay on? Some of the model's I've heard of make complying with the paperwork a full-time job in itself. If something similar is true in Finland, the switch might help do more to help employment than expected.

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Rafi
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quote:
Originally posted by JoshCrow:
quote:
Originally posted by Rafi:
About $860 a month, seems a little low.

It's Euros... it's more like $930. Since this is per citizen, a married couple would be getting by on $1860/mo. Depending on the local cost of housing and food, might work fairly well as a subsistence floor.
I just did the conversion at current exchange rates and it's about $860 right now. Still, $1700+ per month for a married couple could be pretty livable. That's above the IS poverty limit if they have no kids. What's the poverty income limit in Finland? If they have kids, do the kids get paid as well?
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JoshCrow
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It would also reduce the size of government (far less complicated as a system, no need for means testing or other such things).

Rafi - you're right about the amount. I had a brain fart and put 860 into the Euro calculator when I should have put 800.

I do imagine kids would get the amount as well but I'm not sure how that would best be implemented. Should it be given directly to their parents? Put in trust until they come of age?

[ December 07, 2015, 11:03 AM: Message edited by: JoshCrow ]

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D.W.
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It did say "adult" and was targeted at getting people to work. I would imagine (my turn) that they have different systems in place for child welfare subsidies or tax breaks and the like.
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Pyrtolin
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quote:
Well, NIT costs the government less because it is "to each according to their need" and doesn't give handouts to the Donald Trumps and Warren Buffets.
It seems to add unneeded complexity and temptation to fraud when really, the amount wouldn't even amount to pocket change for the people at the top end and could pretty much. Normal taxes could easily reabsorb any excess if there's a worry about it giving and significant inflationary power to those at the top.

My feeling is that $10k/adult/year, $5k/child/year in the US would be reasonable, so this seems right in line with that, though I'm not sure what the amount actually comes to when adjusted for cost of living, rather than just current exchange rate.

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Pyrtolin
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quote:
Originally posted by JoshCrow:
I do imagine kids would get the amount as well but I'm not sure how that would best be implemented. Should it be given directly to their parents? Put in trust until they come of age?

I'd imagine that it would be paid at hte household level. Money put in trust for you doesn't exactly put food on the table for you today (or ensure that you have a big enough table to put food on in the first place) which is what the basic income payment is essentially intended to do. With that money covering the basics, it means that parents might actualyl be able to afford to put money into investments and savings instead of having to struggle to to keep ends meeting.
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Pyrtolin
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quote:
Setting the amount of the payout is tricky math... too high and you depress certain low-wage jobs. Too low and you probably see more misery, crime and other undesirables.
You might adjust the nature of some of those jobs, but if they require desperation to maintain a low wage, then it's probably a net good taht they'll have to adjust based on the real market cost of attracting labor instead of depending on exploitation and externalities to keep the nominal price down.
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JoshCrow
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Well, "real" market cost is a rather subjective notion, isn't it? It's not that I disagree with the bedrock of what you've said, only the idea that a certain cost is any more "real" than another in the face of all the possible externalities.

However, I do agree that fruit-picking jobs aren't likely to attract laborers who can already survive , and it would all but eliminate "local" produce (indeed it would be unable to compete with imports) so you would see an increase in imported fruit, for example, with a corresponding increase in pollution from the transportation required. Doh. [Frown]

Here enters the lucrative market for non-citizen laborers who aren't getting the basic income...

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Pyrtolin
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quote:
However, I do agree that fruit-picking jobs aren't likely to attract laborers who can already survive , and it would all but eliminate "local" produce
I don't think it would be that simple. You'd see an increase in labor rates, and probably, overall working conditions as companies needed to make a better bid for workers. You'd also have more workers that could actually begin to invest in ways to improve their output from a firsthand perspective and shifts towards hydroponics.

We'd also need to take a look at the overall industry and decide if it was worth supporting domestically (and it certainly would be for those fruits that are best suited to grow in certain areas) and thus perhaps pitching in for the difference between the production cost and the baseline reasonable sales price at the public level.

I think cheap, exploitable labor is keeping us stuck in a broken model for such goods because it's easier to run on inertia as long as nominal costs are so low. Putting pressure on the industry to get its house in order will force the innovation we need to break it out of its current trap.

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Fenring
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There would be a brief holdover of the old market conditions as certain jobs are not yet ready to be taken over by robots. But that period won't go on forever, and local produce can easily be viable without human labor behind it.

As far as kids go the kids shouldn't be receiving a basic income. If Finland decides they should I think they'll be making a mistake, although perhaps they could offer a very low amount. Giving the money to "household" discriminates against various alternative lifestyles such as married people living in different places, joint custody of children, and so forth. The whole family living together in one house should not matter.

Offering too much income for kids would turn breeding into an occupation, with additional kids creating much more income than the additional expense of one more mouth to feed. Offering basic income to adults only (16+?) puts the brakes on birth rate and makes having children a burdensome expense, which it should be. People should have kids only if they really want to, and additional services should subsidize that other than adding more money to the basic income (such as low-cost day care facilities).

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Pyrtolin
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quote:
Giving the money to "household" discriminates against various alternative lifestyles such as married people living in different places, joint custody of children, and so forth. The whole family living together in one house should not matter.
If people are living as two separate households, then they're separate households. Usually in joint custody situations, there's a primary residence for the kids, especially for purposes of (in US terms, at least) school districts, official communication, etc...

It wouldn't be unreasonable, in fully split situations to have some formula for splitting the income between households if necessary, by that's an implementation detail, not the overall fundamental principle.

quote:
Offering too much income for kids would turn breeding into an occupation, with additional kids creating much more income than the additional expense of one more mouth to feed.
Only to people with no sense of how much time, energy and support kids take. This notion is a boogeyman that really has more basis in prejudice than reality.

I mean, the basic concept is already to map to a lower floor on income/standard of living, so the notion that it's enough but not "too much" is already built in. Not giving that baseline amount per child amounts to punishing people for having children, and more to the point, the children for simply existing.

Trying to use an income support system as a social control tool is both futile and exceptionally oppressive, supporting classist abuses of poorer people. A basic income should free people to make their own economic decisions, not be used as a paternalistic tool to dictate decisions to them.

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JoshCrow
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quote:
Originally posted by Pyrtolin:

Trying to use an income support system as a social control tool is both futile and exceptionally oppressive, supporting classist abuses of poorer people. A basic income should free people to make their own economic decisions, not be used as a paternalistic tool to dictate decisions to them.

I'm not sure I agree with this principle. Cigarette taxation, for example, has most likely saved untold lives just by 'disincentivizing' a harmful practice. I would go further and say that society would be much more equitable if rich people had more children and poorer people had fewer, rather than upside-down as it currently happens. I don't think a heavy hand is needed (like China), but I'm not opposed to social engineering as a series of incentivized/disincentivized life choices.
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Pyrtolin
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quote:
I'm not sure I agree with this principle. Cigarette taxation, for example, has most likely saved untold lives just by 'disincentivizing' a harmful practice.
I'm not sure how you're seeing a cigarette tax as an income support system?

quote:
I would go further and say that society would be much more equitable if rich people had more children and poorer people had fewer, rather than upside-down as it currently happens.
That's what happens as people become more economically stable. It's hard to financially incentivize more reproduction, because the more people have, the more future oriented their decision making, and that includes fewer children to better invest in the ones that they have.
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JoshCrow
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quote:
Originally posted by Pyrtolin:
It's hard to financially incentivize more reproduction, because the more people have, the more future oriented their decision making, and that includes fewer children to better invest in the ones that they have.

One option might be to simply provide diminishing child tax credits for offspring beyond a certain point. It's akin to saying "we aren't going to help you with your huge-ass family, so please procreate responsibly". [Smile]
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Rafi
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quote:
Originally posted by JoshCrow:
It would also reduce the size of government (far less complicated as a system, no need for means testing or other such things).

Rafi - you're right about the amount. I had a brain fart and put 860 into the Euro calculator when I should have put 800.

I do imagine kids would get the amount as well but I'm not sure how that would best be implemented. Should it be given directly to their parents? Put in trust until they come of age?

The problem is, you get what you incentivize. Pay people to have kids, they'll have kids. A family of 4 pulling down over $41,000 is not a plush lifestyle but it's comfortable enough and you don't have to do anything. Subsequent kids cost less, hand me downs and all that. So pop out a half dozen and get that $82+ per year income (probably tax free) and that's not bad.
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Pyrtolin
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quote:
Originally posted by JoshCrow:
quote:
Originally posted by Pyrtolin:
It's hard to financially incentivize more reproduction, because the more people have, the more future oriented their decision making, and that includes fewer children to better invest in the ones that they have.

One option might be to simply provide diminishing child tax credits for offspring beyond a certain point. It's akin to saying "we aren't going to help you with your huge-ass family, so please procreate responsibly". [Smile]
Sorry you had to go hungry growing up, blame your parents for not acting like we told them to?

It's one thing to put a cost on socially or economically harmful behavior; quite another to effectively penalize people just for existing as a way of doing that.

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Pyrtolin
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quote:
So pop out a half dozen and get that $82+ per year income (probably tax free) and that's not bad.
Not exactly an easy thing to do, never mind the fact that effective costs escalate per kid, especially in terms of physical and mental effort to manage a group that large.
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Fenring
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quote:
Originally posted by JoshCrow:
One option might be to simply provide diminishing child tax credits for offspring beyond a certain point. It's akin to saying "we aren't going to help you with your huge-ass family, so please procreate responsibly". [Smile]

This isn't bad either. One problem with the desire to have huge-ass families is that they materially consume more of the Earth's resources than a smaller family would. This has repercussions that go beyond merely whether the family can monetarily afford it or not. I think it's the state's duty (putting aside whether it even has this right) to ensure that both the supply of what's available is divided up in some kind of rational way, but also that an unsustainable demand for that supply is not generated. It's very hard to say what would become of the birth rate if large amounts of people decided they didn't need to work any more as a result of the basic income. This would be offset by offering incentives to work (e.g. the basic income being in addition to, not instead of), but also by discouraging excessive procreation. If basic income isn't offered for new babies it would mean the parents would have to think long and hard about whether to have kids. If they're living entirely off the basic income then perhaps not being able to afford kids would make one of the parents go get a job. In this sense having babies would be treated like a luxury that could be afforded if one or both parents had a job. I see no moral problem with this setup, especially since at present two poor parents can barely afford to have a kid even if they have crappy jobs.

We've never thought of it in mechanical terms before since the birthrate has always been artificially stifled in industrial economies. This can be trivially seen when inspecting the natural birth rates in poor undeveloped countries as compared to 'first world' countries, the latter of which sometimes even have a negative net birth rate. The gating mechanism here is the cost of the children, plus lack of available time due to parents being at work all day. Once a basic income is established this problem returns and must be addressed using the mechanisms involved. This kind of approach is only as oppressive as the idea of rationing itself is.

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Fenring
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quote:
Originally posted by Pyrtolin:
quote:
So pop out a half dozen and get that $82+ per year income (probably tax free) and that's not bad.
Not exactly an easy thing to do, never mind the fact that effective costs escalate per kid, especially in terms of physical and mental effort to manage a group that large.
No, Pyr, he's right. The system has to be set up so that it can't be gamed by having more kids to generate more income like this. It would be quite easy for parents to determine a fairly inexpensive method of accomplishing this. By the 3rd or 4th kid they're all wearing hand-me-downs and using the common toys, and the extra food cost might frankly be trivial once you're shopping at Costco to buy food in bulk.
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NobleHunter
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I have to second what Pyr says about the effort involved with a large family. Without proper spacing, each additional kid increases the amount of work added by the next. With proper spacing--to fully take advantage of older siblings caring for younger--there's a sharp drop in peak cash flow since the oldest will age out much sooner than the youngest.

Does anyone have any actual evidence that welfare payouts drive reproductive decisions? Especially in terms of having more kids to get more money rather than having more kids because there's money to feed them.

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Pyrtolin
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quote:
The system has to be set up so that it can't be gamed by having more kids to generate more income like this. It would be quite easy for parents to determine a fairly inexpensive method of accomplishing this. By the 3rd or 4th kid they're all wearing hand-me-downs and using the common toys, and the extra food cost might frankly be trivial once you're shopping at Costco to buy food in bulk.
On what basis? Such nonsense has been used to undermine public support systems despite it simply not being a real concern, given that anyone foolish enough to believe that and try to actually do that will regret their choices pretty quickly. NEver mind the mental, emotional, physical, and financial sink that simply having a child is in the first place, they don't get any cheaper with quantity in terms of any cost.
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Rafi
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Come on, having more kids is easy. People do it all the time despite being unable to afford it. Hand me downs, older siblings taking on chores, etc makes each kid cheaper and easier. Add in the financial incentives and you potential make a compelling case to have half a dozen or so.
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NobleHunter
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That people do it when they can't afford it is an argument against economics driving reproductive decisions. Though that probably depends on local marriage practices.

Historically, fertility was strongly affected by average age of household formation which was an economic decision. I'm pretty sure age at marriage trends up when it's hard to make enough money to sustain a household.

[ December 07, 2015, 03:06 PM: Message edited by: NobleHunter ]

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Pete at Home
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quote:
Originally posted by Rafi:
About $860 a month, seems a little low.

It's almost exactly what I live on (disability, from that courthouse shooting incident I told y'all about in 2010) after child support and student loan payments. With that income I qualify for SIXTEEN Dollars per mo food stamps. It's enough to scrape by on, and motive to go get a job. It got me out of homelessness and into my own apartment.
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Pete at Home
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quote:
Originally posted by Rafi:
quote:
Originally posted by JoshCrow:
It would also reduce the size of government (far less complicated as a system, no need for means testing or other such things).

Rafi - you're right about the amount. I had a brain fart and put 860 into the Euro calculator when I should have put 800.

I do imagine kids would get the amount as well but I'm not sure how that would best be implemented. Should it be given directly to their parents? Put in trust until they come of age?

The problem is, you get what you incentivize. Pay people to have kids, they'll have kids. A family of 4 pulling down over $41,000 is not a plush lifestyle but it's comfortable enough and you don't have to do anything. Subsequent kids cost less, hand me downs and all that. So pop out a half dozen and get that $82+ per year income (probably tax free) and that's not bad.
Remember Europe suffers from low birth rates. Even back in the 1970s my parents got thousands of dollars for the births of three of my sibs in Paris.
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Pyrtolin
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quote:
Come on, having more kids is easy.
Let's put that out to any women here who might actually have to try to do it. You're arguing like they leap into the world grown enough to be at least slightly civilized. ANd even then, it's not a pretty picture.

And handme downs are a fractional reduction in cost, since they mostly amount to the last wave of stuffy you bought that the kids happened to grow out of before they destroyed. Sure there are a few rare items taht can stand up to a few rounds, but those are the exception, not the rule.

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Pyrtolin
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There's also a huge real estate price. One kid in a small apartment is doable. Unless you're planning on stacking them lie cordwood in a closet, each additional one eats up more more space and scales up the needed real estate cost in a very non-linear manner.
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Fenring
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quote:
Originally posted by Pyrtolin:
There's also a huge real estate price. One kid in a small apartment is doable. Unless you're planning on stacking them lie cordwood in a closet, each additional one eats up more more space and scales up the needed real estate cost in a very non-linear manner.

You're forgetting that if they intend to live off a basic income and have a lot of kids then "location, location, location" becomes irrelevant and they could easily afford a larger place off the beaten path.

And I tend to agree with Rafi that having a large family isn't that difficult. Many families used to do it, historically, and the only reason they stopped was lack of that lifestyle being economically viable in combination with declining rates in infant mortality. If you literally never had to go to work it wouldn't be too hard to manage a large family with BOTH PARENTS at home. That would make a big difference, and yes, the older siblings share the load. I don't see why you think hand-me-downs isn't a cost saver...it's a huge advantage, and is not having to buy toys over and over.

That being said I don't think that many families would want to have a huge family, but I could certainly see families of 3-4 kids being common with a lot of free time on one's hands. My main point is that I think even having 3-4 kids would but a strain on natural resources in the long-term, and until we master asteroid mining I think a more sustainable form of rationing is in order.

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Pyrtolin
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quote:
If you literally never had to go to work it wouldn't be too hard to manage a large family with BOTH PARENTS at home.
The number of relationship and interactions that have to be managed increase exponentially with each additional person.

quote:
That would make a big difference, and yes, the older siblings share the load.
On a good day, sure. On an average day, not a chance. On a bad day, being older means they take far more effort to manage than someone that you at least have a decent size advantage on and has less complex requirements.

quote:
I don't see why you think hand-me-downs isn't a cost saver...it's a huge advantage, and is not having to buy toys over and over.
MOre kids, more breakage, now each needs a full set, so where one set of toys does for one kid, two requires about two and a half, you're looking at about 6 by the time you get to 4. And, as noted above, hand me downs are just the handful of things taht you bought right before a kid grew out of them, a starter set for the next kid, but not nearly enough to get them all the way through that age.

HAving just doubled the number of kids in my own household and taken on an additional adult, the notion that there's less work for more kids instead of vastly more is completely absurd.

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Pyrtolin
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quote:
You're forgetting that if they intend to live off a basic income and have a lot of kids then "location, location, location" becomes irrelevant and they could easily afford a larger place off the beaten path.

And starve? Or now need larger vehicles, more fuel, higher utility cots, etc...

I guess they could take up farming, but the costs escalate pretty rapidly for that as well, and the notion that hey're not working goes away completely.

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Pyrtolin
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To put his another way- _getting pregant_ for many people, can be easy. Especially if you're in an economic position that exhausts or preempts your ability or will to avoid it. Nothing that comes after is remotely easy, never mind when you repeat the process.
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Seriati
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I'm hard pressed to see how paying people regardless of whether they work, would be better than fixing the weaning off process so that it's not starkly against their interests to work.
quote:
I don't think it would be that simple. You'd see an increase in labor rates, and probably, overall working conditions as companies needed to make a better bid for workers.
So companies would incur higher costs of production. Which means higher costs for their products, which eats the basic support costs up leaving a new hole to fill. Which we will solve for with, central planning....
quote:
We'd also need to take a look at the overall industry and decide if it was worth supporting domestically (and it certainly would be for those fruits that are best suited to grow in certain areas) and thus perhaps pitching in for the difference between the production cost and the baseline reasonable sales price at the public level.
So central planners pick the good industries and subsidize the good products to ensure that they remain affordable, notwithstanding the higher costs. And we even use price controls to make sure it all fits together. How is this "never been tried system" different in any way from the failed communist systems? Oh yeah, we're smart and we'll do it right! Cause you know a few enlightened experts can always make better decisions about what people need and want to buy than the people themselves, and no one in a collective ever turns out to just act in their own self interest and mooch off of the system.
quote:
I think cheap, exploitable labor is keeping us stuck in a broken model for such goods because it's easier to run on inertia as long as nominal costs are so low. Putting pressure on the industry to get its house in order will force the innovation we need to break it out of its current trap.
Yep, the USSR was world renowned for its innovation and for breaking people out of the trap of low wages.

It's not exploitable labor, it's labor that can be done by anyone, any where at any time, and that is generally replaceable by a machine at any higher cost level. The fact that people take the jobs contra-logically to you does not mean that they want the jobs, because like the central planning committee you don't believe those are jobs anyone should want (or that the pre-Obama care insurance rationally met their needs), hence they must be exploited. Care to explain, why so many people in a modern society, with free education, manage to get to adulthood without any useful skills?

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Rafi
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quote:
Originally posted by Pyrtolin:
To put his another way- _getting pregant_ for many people, can be easy. Especially if you're in an economic position that exhausts or preempts your ability or will to avoid it. Nothing that comes after is remotely easy, never mind when you repeat the process.

How many children do you have? I'm guessing none.
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