American Equity

Can someone actually explain what Sam wants to do here? I've read the post 4 times and I still can't see an y sort of plan, numbers, etc to actually critique,

Which is odd because he specifically ask you to give feedback but never follows through on presenting the actual idea.

He does motivate why he thinks a share of the GDP is so he gets the why, but never actually gets into the what, and how.

I mean the GDP isn't just something you can siphon off money from and give it to someone as it's not a thing that anyone owns.

So if you want to give out a portion of the GDP, I think what he really means is pay a universal income that is locked to GDP growth, but he never really says this.

This is an old idea in science fiction. See Mack Reynolds, "The Fracas Factor" (1978), where he lays out the system in some detail.[1] He called it "United States Basic Common Stock". Everyone got some shares of "Inalienable Basic" at birth, providing a basic income. People could buy and sell "Variable Basic" as well. Thus, a welfare state. He outlines how the transition takes place.

Reynold's old books from the 1960s and 1970s explore a world where manufacturing produces more than enough stuff and there's a huge excess population. It's not dystopian; he outlines how such a world could work. His world is capitalistic but government plays a very strong role.

This model comes from an era when corporations were about equity and dividends, not debt. Altman may see the world that way because he comes from venture capital, which is an equity world, not a debt world. Larger corporations today tend to be heavily debt financed, because interest payments are deductible while dividends are not. That interest paid is a deductible expense powers the debt-heavy corporate structures of today.

Also, if all of your income comes from dividends, you have to be able to handle considerable volatility, even across the whole market. At least 2x. That's not acceptable as a basic income scheme. People will starve.

[1] https://books.google.com/books?id=NOg1AgAAQBAJ&pg=PT43

Matt Levine has been musing on some issues adjacent to this one over the last year, e.g.

https://www.bloomberg.com/view/articles/2016-08-24/are-index... https://www.bloomberg.com/view/articles/2017-10-26/maybe-ind...

The basic observation being that if we can get the benefits of capitalism when most equity is owned by a passive investment fund like an index tracker, then what's the problem with the state owning all the equity in that tracker, and redistributing the proceeds to the population?

Note that there are a few significant questions left unanswered in there, but the fundamental question of "if index trackers work why wouldn't communism" is quite provocative.

In discussing the basic income stuff offline I realized that there is a naming problem. If you call something basic "income" then it attaches to it all of the mental imagery/modelling around the word income which is something you get in exchange for work, so without work basic "income" creates a cognitive dissonance. This effect seems exactly analogous to home "schooling" which people attaching a mental model and imagery of the word "schooling" to the activity (which is learning).

By calling a basic income system American Equity, Sam shifts the conversation away from the word 'income' because this clearly isn't "income" in the traditional sense, to "shared wealth" which is much closer to the ideas brought along. I think it is a reasonable way to look at it, although I continue to believe that what is the fundamental factor is keeping wealth inequality in check. Extreme wealth inequality is just as unstable a system as extreme wealth equality.

> I’d like feedback on the following idea.

> I think that every adult US citizen should get an annual share of the US GDP.

Sure thing, sama. I hope you saw it[1]: https://medium.com/@simon.sarris/after-universal-basic-incom...

Without addressing these issues, UBI could look like a nightmare even if we're all on board.

I think he's committing the usual assumptions:

1. That what people struggling and suffering in the US need is money, and not some other thing that they've also lost, that may be more important.

> imagine a world in which every American would have their basic needs guaranteed

2. That those struggling would be content if they had the $ part figured out.

3. That such disbursements would ultimately lead to less inequality, and not more.

etc

Just as you can find Silicon Valley techies who think Soylent is the only sustenance a person will need, intellectuals tend to think everyone could be as content as they would be living life in their heads or inventing their own destiny. Most people need to be doing something to feel satisfied and UBI addresses this just as poorly as disability checks. Cue drug epidemics.

> And we should consider eventually replacing some of our current aid programs, which distort incentives and are needlessly complicated and inefficient, with something like this.

Tread very carefully, Sam. As I mention in the anti-UBI article, thinking you can replace case workers who do very real, inefficient, difficult tasks like getting medicaid patients to just sign up and show up at a doctor at all is not easy. You will not eliminate poverty just by giving everyone money, especially if you do it by eliminating the pesky overhead of case workers at the same time. UBI looks great because its easy to explain, but we probably need a basket of hodge podge solutions to meet the needs of the poor. The poor and their needs, I promise you, are much more diverse than the Silicon Valley rich and theirs. Be very careful not to think the poor think precisely like you, just minus money. E.g. what works for a top 1% IQ engineer who lost his job will not work for a senior citizen drug addict who has had trouble holding a conversation with another human for the last 5 years due to his isolation.

[1] Because dang messaged me about it being re-upped on HN so I assume somebody at YC eyeballed it.

Corporations have been operating under the mistaken belief that they are legally obligated to maximize shareholder returns for a couple of decades now, to the detriment in general of labor and the overall quality of goods and services provided.

I would expect something similar to happen to here: this would incentive massive changes in attitude towards national infrastructure and services. Take NASA for example: it's already difficult to convince taxpayers at large to support NASA even to the meager extent that it is; now put NASA into the context of being even perceived as a very minor drag on GDP in a country where citizens expect to get an annual return on GDP, and there's no way NASA would continue to be funded.

Everyone would be willing to forsake long-term goals and returns in exchange for short-term financial incentives -- exactly the problem of so many businesses today.

(Rural areas would also be absolutely gutted by urban centers -- this would become a system that empowers tyranny of the majority.)

I think former President Obama has already replied to this idea more eloquently than I could:

"...government will never run the way Silicon Valley runs because, by definition, democracy is messy. This is a big, diverse country with a lot of interests and a lot of disparate points of view. And part of government’s job, by the way, is dealing with problems that nobody else wants to deal with." ... "...if all I was doing was making a widget or producing an app, and I didn’t have to worry about whether poor people could afford the widget, or I didn’t have to worry about whether the app had some unintended consequences -- setting aside my Syria and Yemen portfolio -- then I think those suggestions are terrific." https://obamawhitehouse.archives.gov/the-press-office/2016/1...

Context: Y Combinator has funded an experiment in Basic Income, which basically gives everyone in (a city, a country, ...) a guaranteed income independent of labour/capital. A (Universal) Basic Income should let people focus on art/science/... if they want, and ensure that everyone continues to have an acceptable live as automation makes more and more jobs obsolete.

This appears to be the same idea, but in capitalist language (Americans as stockholders in the US.)

Something very similar was tried in Russia after the fall of communism, as voucher privatization. The vouchers were immediately bought up at a discount and concentrated wealth in the hands of a few oligarchs.

A similar dynamic led to massive pyramid schemes in Albania, which badly eroded public trust in government.

A common thread in Altman's proposals for a better world are their ahistorical presentation, as if no one had ever tried experiments like universal basic income, voucher privatization, planned cities, or the other pet ideas he has backed. If YC wants to experiment with social transformation, it's behind time they hired some adults who know sociology and history, and can put some guard rails around these ideas before they're backed with serious money.

Meta question: if this essay about "American Equity" is another way of proposing "universal basic income", why is there circumlocution around UBI?

Possibilities are "UBI" has been poisoned with negative connotations can you can't talk about it anymore. That's possible but it seems like the overwhelming sentiment on HN and reddit is massive support for it.

As far as I can tell, "UBI" doesn't have negative connotations such as the phrase "welfare queens". UBI is already widely understood. What's the motivation for the neologism "American equity"? (My guess is it's a UBI-indexed-to-GDP.)

This could a bit tangential to Sam's core point, but there is a lot of value that can be added to society that ends up reducing GDP (especially true when we talk about things governments should be doing), so I am not sure aligning everyone to maximize that singular metric is necessarily the best thing one could do.

More directly relevant to the core point is the short-term/long-term question: as also evident in the stock market, it is not clear that the companies controlled by shareholders are better focused on the long term than the ones where founders have majority control.

GDP, as I understand it, is the total value of all goods and services produced. It seems that in order to give someone something, it has to be taken from someone else who has it. But there is no single person or entity who owns the GDP, so how can a share of it be given to anyone?

It seems what Sam is suggesting is using taxes to redistribute wealth and provide a basic income, which, sure I think a lot of people are already on board with that and more will be as time goes on. But this idea of equity in a country is only confusing the issue.

A government is not a corporation. It does not exist to generate a profit. It should not be run that way. There is no "market" for governmental products or services. A government is necessarily a monopoly over a specific geographic area.

This seems like an extreme case of "If all you have is a hammer...". Sam clearly lives and breaths startups and business, so maybe he sees everything through that lens. It doesn't apply here and I don't think it's very helpful.

I'm a little unclear how this would work in practice. What is the financial instrument and is it equity in the government or equity in all the companies in the US?

I see no reason why companies would do it and no incentive to take a part of the government (is the US government going to pay a dividend?), I'm not certain everyone having a share they couldn't trade would be worth it. I think the ability to trade state monopolies was tried in Russia, how is that looking?

Finally isn't the stated aim of YC to create companies that are monopolies and use network effects to entrench their positions, accumulating wealth into a few hands?

The GDP is a poor measure of economic health. Even the IMF has its doubts https://www.imf.org/external/pubs/ft/fandd/2017/03/coyle.htm. The GDP doesn't consider natural resources like clean air and water as assets but pollution clean-up efforts (successful or not) are seen as positive economic activities, for example. A proper alternative would measure quality of life and sustainability, not "growth."

Oh, no. We tried that in Russia one hundred years ago.

At first it was good. More opportunities for the little men, yay!

Second generation was like: why do I have to work this complicated job? Strive? Mathematicians live no better than janitors. Overcrowded not-so good resorts with bad attitude (remember, no one have incentive to be polite, servicing others, since there is little money to get from eath individual customer. Almost everyone have same wealth)

Third generation is almost total stagnation. Everyone is just sitting in queue of some sort, waiting for hand-out from the almighty government.

Sometimes for years.

Production is forgotten, redistribution rules the world.

Because the impact of any one individual on the economy is so small, and because people can't be "fired" from the US like they can from a company, the free rider problem could be real. This could end up just being an added cost to the country that doesn't actually increase productivity or incentives in a meaningfully different way that other forms of putting more money into people's pockets (lower taxes, universal basic income, etc)

I think it is awesome though that influential people are putting forth creative ideas on how to make our country better. We need this

GDP is obviously the wrong metric in a lot of ways; the only advantage is that it can be relatively easily measured. What you really want is some measure of surplus economic capacity.

I don’t like the direct results of this policy (taxation, presumably new and higher taxation, specifically to redistribute income and wealth).

However, the second and third order effects are interesting — our immigration policies, assuming the amounts being paid out are meaningful (unlikely at the start) would look a lot more like Canada/NZ — there would be a strong bias toward immigrants who will be net contributors (young, educated, healthy, culturally compatible), vs family unification or politically chosen.

With a correct metric, people would push to reduce military expenditure to the minimum required for actual defense, and to spend the money efficiently; same with other government programs, assuming $300B saved on defense could be turned into direct payments, etc.

I have a better (may be slightly insane) idea. Open up startup investing (VC rounds especially) to a wider audience through some kind of index fund. Retirement and pension funds, endowments etc are too roundabout a way of actually benefitting from the windfall in the now.

While this is obviously risky, in the 2/10 chance where the startup IPOs or gets acquired, everyone stands to benefit a big deal.

I recently heard about the case of a private school which was able to invest $15K in one of $SNAP's funding rounds (the VC partner was a parent at the school). At IPO, the school netted $50M on this investment. This school was already well off but I can imagine what this would do for a lot of public schools if this option were available to them.

American Equity already exists is the US Dollar currency, the problem is that the Government is always issuing new stock certificates thereby diluting the value of stockholders.

People need a variety of goods from society, like security, healthcare, education, a way to settle disputes via law as opposed to might; etc. American inequality is not just about money or shares. Racial segregation is enforced by the unique system of local taxes funding local schools an erecting barriers for poor people to both move in and access good education. This was intentionally and purposefully set up as a means of segregation - i.e. deny black people from entering white communities and access the same social goods.

One basic suggestion is to pool all public education dollars at a larger unit, and distribute across all schools in a given state equitably. Eventually all public schools in a given state will have similar quality, and more importantly, the upper middle classes will now put their considerable resources and energy to improving the whole state system instead of their idyllic town, lifting up the standards across the whole state.

Of course people will be upset about their property values - in fact, that's when you begin to see the true proportions of American social division: People have equity built up in segregation. They bought in to the system.

Many countries have roughly comparable public schools across groups of a couple million people. It is not tiny districts with massive disparities across one another.

Another idea is national health care - the US Government already pays for most of the actual costs: Veterans, active-duty military, Children in need, the poor, and the majority of elderly Americans. These constitute most of the actual costs. The government also pays indirectly through healthcare benefits provided to roughly 1/3rd of America employed via various levels of government (state, fed, local) and government-run entities (like subways, school etc.).

So - the gov pays for the sick people, whereas the healthy working age people pay into insurance. So the costs come out of gov, but the $ goes to private.

We also have massive inefficiency maintaining bureaucracies in hospitals, government, and insurance companies to do billing. Europeans are shocked at just how much of the healthcare $ is spent on this staff, that is more than half of all staff. You can fire every single person doing reimbursements and billing if you had a nationalized healthcare system. You can also remove perverse incentives to docs, who make money by treating you unnecessarily. When Doc has college bills to pay for little junior, you're GETTING that stent, need it or not.

"The savage beasts," said he, "in Italy, have their particular dens, they have their places of repose and refuge; but the men who bear arms, and expose their lives for the safety of their country, enjoy in the meantime nothing more in it but the air and light and, having no houses or settlements of their own, are constrained to wander from place to place with their wives and children." He told them that the commanders were guilty of a ridiculous error, when, at the head of their armies, they exhorted the common soldiers to fight for their sepulchres and altars; when not any amongst so many Romans is possessed of either altar or monument, neither have they any houses of their own, or hearths of their ancestors to defend. They fought indeed and were slain, but it was to maintain the luxury and the wealth of other men. They were styled the masters of the world, but in the meantime had not one foot of ground which they could call their own.

Tiberius Gracchus tried to stop the ancient Roman 1% from stealing the wealth of the 99%. They personally clubbed him and 300 supporters to death, beginning the chain of violence that ended the Roman Republic.

I think question of transferring and/or borrowing against your future basic income (which Sam mentions) is a big one. Note of course that the only practical way to not allow it would be to shield all of the basic income from debt collectors and bankruptcy.

Without rules like that, then all of the safety net programs we have will still need to exist, because people could end up with a net income far below the basic income otherwise.

Absolute poverty would be eliminated, and we would no longer motivate people through the fear of not being able to eat.

This is just UBI with a new branding platform, basically. There are tried and true solutions that have an established track record of working, such as universal basic health coverage. It would make more sense for the US to implement those things first, rather than try something experimental.

U.S. health care spending grew 5.8 percent in 2015, reaching $3.2 trillion or $9,990 per person. As a share of the nation's Gross Domestic Product, health spending accounted for 17.8 percent. *

There you go. The $10k per person that is so often bandied about for UBI, and it would do more for the neediest automatically. People with serious health problems would get more out of the system without having incentives to try to game the system or milk it.

* https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...

I completely support this idea. Additionally, I think the USA needs to move away from anything that doesn't reflect majority rule. For example, abolish the Senate, end the electoral college, end gerrymandering, and reform campaign financing.

The USA could be a lot more democratic than it is at present and until that is fixed, you will keep seeing a minority of the population control policies that affect the whole nation.

> I believe that owning something like a share in America would align all of us in making the country as successful as possible—the better the country does, the better everyone does—and give more people a fair shot at achieving the life they want. And we all work together to create the system that generates so much prosperity.

And here I thought I was getting a slice of the GDP when I get a paycheck every 2 weeks.

The basic analogy underlying this article is wrong. The US is not analogous to a joint-stock company, and the US GDP does not correspond to the revenue or income or profits of a joint-stock company.

The US government could be considered somewhat analogous to a joint-stock company, but the US GDP does not correspond to the revenue or income or profits of the US government either. The proper analogue would be the US government's revenues from taxes and other sources, but of course that just makes this proposal into universal basic income. It doesn't give anyone "ownership of a share in America".

If you want people to feel ownership of a share in America, then owning land in America is indeed one way to do it (as the Homestead Act did, which the article refers to). Another way would be to own a share in a US company. One could even corporatize the US government and give every US citizen a share in it. But none of those things would correspond to giving out shares of the US GDP.

Frankly, I'm disappointed to see Sam Altman making such an elementary mistake.

Since we do not have political equity, asking for economic equity is more than a stretch. Our republican system of government is gerrymandered at multiple levels. States are a gerrymandering. The electoral college is a gerrymandering.

As a practical point, you won't get economic equity before political equity and them that have the political equity have no reason to redistribute it fairly.

Or... and I know this is crazy... why don't we make these benefits much more valuable by taking the total pool of money an negotiating collective strategies for services every human needs to varying degrees. Like health care, transportation, housing, food, and network connectivity.

What if it was as easy to start a private small business in the US as it was in the UK _for the individual_.

Yes. That would seem to be a better UBI (Universal Basic Income).

The problem with UBI is not just logistical, it's also psychological and cultural. It might work in other countries, but it won't work well in US. For many reason, some good some bad, many people here would not accept receiving what they see is a "hand-out". First they won't accept others receiving it but many would not even justify getting it themselves.

So it would have to be a UBI disguised as something else. A share in the GDP is brilliant I think and solves this issue. It is a bit like they have the oil payment in Alaska, people seem to accept that as valid and well earned income. The GDP dividend would be the same in a way.

I think the shares should be equally divided. Everyone gets a share if they are a citizen of the country or lived here for X number of years for example. Sam Altman gets the same number of shares as Steve the Carpenter, Jane the Software Developer, and Irene the Newborn Baby.

There's an interesting precedent to this: Biblical Israel. Individuals/families within tribes received an allotment of land, which they were free to trade or sell over time. But every X number of years, the land would revert back to the family of the original owners. The idea here was that everyone had a stake, with an upper bound on how long they could lose that steak. It also set an upper bound on the corresponding wealth inequality that resulted directly from the land.

Seems like there's two primary considerations when looking at a concept such as this. The first is how to implement within our current political climate. The second is how it aligns incentives moving forwards. The first is an obvious challenge, so let's assume for the moment that it is solved, and only worry about the second.

Ideally we want incentives aligned in such a manner that citizens:

1) focus on long term health over short term benefits. It may be tempting for people to reject immigrants because of the perceived cost of a bigger denominator, without appreciating the long term numerator upside.

2) recognize that all benefit from the success of everyone. Put differently, suddenly I care about the state of the individual with limited opportunities on the other side of the country, because it could impact my own wallet in future years.

3) don't somehow become more disenfranchised or powerless through a secondary market of these "shares".

I think it's wise not to ascribe direct political purpose to the various shares. It would be tempting to try to address power inequality directly via share ownership, but that seems misguided.

I assume there's many more incentive issues to consider, but that's just an initial list. I don't know what the answer is to any of these, but if I were to do a full analysis, I would continue to ask questions about what we wanted to incentivize, and what we wanted to de-incentivize. Then whether this actually addresses/mitigates those considerations in a realistic manner.

I really don't understand this idea. The GDP isn't like an actual account or something that the government can pay into or out of.

It's "a monetary measure of the market value of all final goods and services produced in a period of time," to quote its Wiki definition. That is, we're summing up the value of everything we made that year. It's like a hypothetical number meant to evaluate what we accomplished. It's not like accounts receivable or something. And we already all have a share, by definition....it's the sum of what we all did.

Am I missing something here? Or does Sam not know what GDP is? Seems unlikely, but I really don't get it.

US GDP is just a bunch of revenue. It's also near impossible to understand the accuracy of the number because of differences in applying revenue recognition principles like cash vs accrual accounting. Also, if US business became zero margin (a thought experiment for the sake of argument), making companies pay a percentage of US GDP would create a less competitive US economy globally. A better idea would be a "US Free Cash Flow" figure, which if we could arrive at such a number accurately, would allow for such a setup, which would be cool.

A better thing to do would be to campaign the SEC to remove the accredited investor regulation so that we can choose what we want to invest in, instead of forcing us all into this America bucket while the rich and connected get first pick on every opportunity.

I'm tired of sitting back and seeing companies that I liked but couldn't invest in become > 500m market cap successes. If I spent 4 years at one of these companies I could get _common_ stock, but I can't spend 1k to buy some preferred stock.

The whole startup system is rigged. People are going to start realizing it.

This is an interesting line of thought that needs to be more fully explored, especially as we move into an era where things like UBI are a more serious consideration.

Off the top of my head I'm not sure how such a thing could be structured without allocating some non-trivial portion of tax revenue to it, and then figuring out how to sell that to Congress who seem to prefer more targeted things like deductions + pork that let them more actively micromanage where the funds go.

But worth brainstorming about and not ruling out any idea just yet.

TL;DR: America should implement basic income.

My usual objection to basic income applies: Basic income in some form already exists in most European countries. It's just a not-that-big parametric change to our current systems plus a change in mentality and social perception of welfare.

Suggesting that we should implement basic income of x euros is roughly equivalent to suggesting that we should increase the welfare unemployed people get today. If it was politically / economically feasible, we would already have it by now.

Universal Basic Income is not a new idea, no matter what new phrases one uses to promote it. At root, to be honest, it's based on this ideal: "From each according to his ability, to each according to his needs." (Karl Marx)

If we are open about it, this fight is about an ideal of equality. Altman's fundamental motive is egalitarianism (oppose inequality, promote fairness, undermine white privilege, etc.). He should be sincere and explicit about it.

He's not the first, and he won't be the last. It will never work. People are profoundly, inherently unequal. Individuals are different, by nature, by nurture, and by will. Whether it is in terms of beauty, productive ability, height and weight, intellectual prowess, athletic performance, sexual preferences, leadership, fecundity, musical achievement, what have you -- we humans can be and can do so much in so many different ways, and will always be profoundly individual, different, unequal (unless we are oppressed into conformity by statism, or other forms of collectivism).

Behind the tired ability-needs line lies the notion that since somehow the problem of production has been solved, all we should care about is consumption via the distribution of wealth. This is Marxist nonsense, no matter how much capital (machines and robots) is involved.

"I believe that owning something like a share in America would align all of us in making the country as successful as possible"

This assumes that everyone is cooperating together. I had a discussion with my friend about this and not everyone who plays a game (in this case making the country successful) tries to optimize globally, some optimize locally or just don't care. Ever played a video game and been TK'd?

While this sounds good in theory, I don't think works in reality.

"Giving equity" undermines the equity given. Instead, make equity available, and make incentives that increase that equity to a reasonable level more available, and let people "buy into" their community. Perhaps the worst impact of the Great Depression was rent control, not because it supported diversity in cities, but because it undermined the opportunity to own some, more, or much equity, and reserved the real estate interest tax deduction to upper middle class residents. By making housing more important than equity, rather than equity earned by housing important to community, rent control recognized the crises of the '30's and '50's, but deferred real solutions to those crises with a palliative and transitive tool. Ownership is the best vehicle for equity, even if it is limited in its appreciation. The strength of European diversity comes from the European model of limited equity ownership, whereby long term municipal employees, working people, and young and old can be secure in their housing costs while building equity as either legacy or retirement security. "Giving equity" is not nearly as critical as giving access to equity and incentives to build it.

I sort of get the intention behind this but I'm entirely unclear about the mechanism.

Is Sam proposing that citizens get stock in an actual entity?

If yes, what entity? All public assets are already jointly owned by all citizens so I'm not sure what assets there would be left to distribute.

If no, and it's some kind of virtual entity, how would the proposed dividends be paid? Out of tax money? Why not just adjust the tax laws then (something that has to be done anyway) and make that more fair?

>I think that every adult US citizen should get an annual share of the US GDP.

This is an odd way to phrase it. GDP is a measurement of consumption (which is taxed), investment (which isn't taxed until it gains), government expenditure (which is often the action of sharing wealth itself), and net exports (which actually does make sense to share). I think that you want to make more of a direct correlation between a country's wealth and its citizens' wealth, but this is not a great framework for it. I don't know what is, but you should talk with some economists to dive further into this thought.

In general, I'd criticize this for being too vague. The topic you're trying to conquer could maybe be genuinely addressed by Richard Rorty doing a very well funded 5 year research and philosophical study. An investment manager just writing a few words about what is going on in his gut doesn't really do it for me, especially when so much is hand wavy and imprecise, and what is specified (some benchmark to GDP) doesn't really make sense.

As a tax reform idea this is extremely promising.

I hope that one or more silicon valley billionaires run for national office on this kind of platform.

Sam is smart to point out that one of the main friction points is how this kind of thing pertains to immigration.

What's missing is an updated version of the narrative behind give us your tired, your poor, your huddled masses. Instead we get the vile rhetoric of Donald Trump that blames immigrants and minorities for all sorts of problems.

The American version of this sort of program needs to be fundamentally different from the "stipend" given to Saudi citizens by their elitist monarchs, and it cannot be designed to serve a similar political function (keeping the masses content).

Instead, we must view basic income as a system of positive and negative taxation that preserves the incentives individuals have to work hard to improve their own outcomes.

It must also eliminate the many perverse incentives and psychologically defeating categorizations (welfare, workers comp, etc.) that assault the dignity of those receiving income from the state today.

There are many costs of poverty that are not typically accounted for properly -- the harm done to children whose parents can't manage adequate prenatal or early childhood care, the human capital wasted by those who experience a setback that makes their planned investment in their own skills financially unwise, the time and energy wasted attempting and policing all sorts of major and minor fraud related to state payments, etc.

The biggest enemy to progress in America is the zero-sum mindset that plagues so many people and fuels their resentment toward immigrants. The areas of the nation facing the most decay and the least hope are the ones that seem to have adopted this mindset.

Sam: I like this idea. It's pretty much what everyone says when they mean "Basic Income" on a national level. A safety net and no cap on wealth. The question is about governance -- who will decide how much of a "dividend" to pay. The Alaska Permanent Fund already does this.

However, doing it at a national level requires a lot of changes, including implementing a national ID (social security numbers already do this but they have no password) and then you are in danger of being tracked by this id and so on, like China does.

However, why do it at the level of a nation? Why not communities small and large, local and virtual? That is what my company's been building since 2011. Well, not necessarily American Equity but a platform that any Community can run, to have its own social network, currency, and so on.

Take a look at these two links:

https://qbix.com/communities

https://intercoin.org

Here is a book on the topic that has had much more thought put into it than a Sam's short blog post.

Equal Is Unfair: America's Misguided Fight Against Income Inequality

https://www.amazon.com/Equal-Unfair-Americas-Misguided-Inequ...

In what sense is it "American equity"? This seems like an idea that superficially makes sense, but really doesn't.

> I think that every adult US citizen should get an annual share of the US GDP.

> I believe that a new social contract like what I’m suggesting here—where we agree to a floor and no ceiling

So like...basic income but with limited downside and unlimited upside all the while ignoring income inequality? And Who decides on the payment based on "social contracts"?

This is all about the minimum wage.

> The annual earnings for a full-time minimum-wage worker is $15,080 at the current federal minimum wage of $7.25. Full-time work means working 2,080 hours each year, which is 40 hours each week. [1]

GDP per capita 2016 = 57K [2]

10% GDP per capita = 5.7K

20% GDP per capita = 11.4K

15K - 11.4K = 3.6K

So my options are:

- no work + ubi = Gain 40 hours of personal time per week; lose out on 3.6K if we didn't have UBI.

- work + no ubi = Better off by 3.6K without UBI, but at the cost of 40 hours working a shitty job.

[1]: https://poverty.ucdavis.edu/faq/what-are-annual-earnings-ful...

[2]: https://www.google.de/publicdata/explore?ds=d5bncppjof8f9_&m...

> I think that every adult US citizen should get an annual share of the US GDP.

Someone should tell this guy about SPY/SPX.

Where would this money come from?

You're talking here about distributing amounts starting in the hundred-200 billion dollar range and eventually ramping that up to 4-8 trillion. Is this just going to redistribute wealth from income taxes, or is it going to be an incredibly high corporate tax, or what?

It sounds interesting in theory but I'm worried that this will create additional tensions between countries if each country did this.

I think that part of the reason why the threat of war is much lower now than it was in the past is because patriotism is at an all time low.

Another problem is that this already exists in the form of the US dollar. The better America does economically, the more the US dollar will be worth relative to other currencies. Maybe if the Fed stopped manipulating the money supply, people would actually be able to see the value of the USD increase predictably when the economy does well.

I totally agree with attempts to redistribute USD to its citizens to even things out.

Nonetheless, I think that cryptocurrencies will solve the problem of inequality without the need for government intervention.

Interesting. I've thought for a while now that this is the only long-term solution that works at all.

But getting there is going to be a huge mess, with the establishment fighting every inch of the way.

So it's nice to see someone whose voice will be heard saying it's the way to go.

He's proposing UBI but with a better name. But, before we go with that approach, let's just create wealth out of thin air. It really is possible. Just take all the land in CA that is locked up and undevelop-able and give it to the people. Those people can then sell it to developers and earn a huge amount of money. Now, I know, the way I've laid it out, has a lot of problems to overcome: mostly logistical and political. but the core idea of using unused land is quite sound, here in CA, where we deny ourselves the use of land. Most of the cost of housing is due to the cost of land, which need not be expensive in rural areas where unused land is found in every direction you look.

Whole I agree with the underlying idea, the national level seems a bit arbitrary. Why not global gdp, distributed globally, to really help engage the most disenfranchised people? Why not at a state or city level, so you feel like you can have a real impact?

With the current explosion of neoliberal and libertarian extremists UBI is nearly impossible to pull off in this country, but hats off for trying. There has to be some value in at least trying something.

It's everything they hate, stealing money from their worshiped 'supermen job creators' to give unearned handouts to 'lazy others'. These ideologues care about 'society' only in as much as facilitating 'great individuals'.

The kind of hate campaign that will be launched to stop this in its tracks if it becomes anything more than wide-eyed utopianism will be unparalleled in history. Any so called experiments will be sabotaged with prejudice and fail.

Homesteading act could still be applicable in modern times. Ownership of real property is low and a large part of most American's budget. If people didn't have to pay rent and mortgages every month, everybody but banks would be wealthier.

I really like the core idea here. I also like when people take big swings. This bothers me because I think it's too big of a swing though - YC is influential and Sam is singularly positioned as a 30-something to put this forward but publishing idle thoughts at this scale is firmly in the realm of fantasy.

A Senator couldn't make this happen. The President couldn't make this happen. I'm gratified to have thought about this for a moment and don't want to detract from the core idea but it is very much an idle musing. Even for someone in Sam's unique position, this is just a "Wouldn't it be nice if?" post.

These are just words that don't mean anything without a concrete implementation plan. Owning a piece of America... What is America? Is it US based companies? Is it physical property and capital? These things are already owned by people. Everything worth being owned is already owned by someone or some corporate structure. Who is going to rearrange and adjust all these existing ownership structures to introduce joint ownership by the American people? Why would we expect existing stakeholders to want anything to do with such a plan?

Silliness.

> Absolute poverty would be eliminated, and we would no longer motivate people through the fear of not being able to eat

That's the biggest misconception about poverty. It isn't about not having access to financial help when you need it (we already have plenty of programs in the US that should - in theory - solve those same problems).

Poverty in America is more about culture and lack of education. Give any amount of money to many of the poorest citizens in the country, and they'll be no better off after a week of frivolous spending.

It's ridiculous how all this is not based on the motivation of allowing us as a species to progress, but on that of ensuring the leading (?) place of the US in international politics and economics. I wonder, will I live long enough to see nationalisms and nations leave their places to more reasonable groupings, more granular, less impeding, less based on made up shit (race, nation, whatnot...). We don't need to live to become the best predators, if we are the social animals we beleive to be.

Even if we act to erase material poverty, there is another greater task, it is to confront the poverty of satisfaction - purpose and dignity - that afflicts us all.

Too much and for too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product - if we judge the United States of America by that - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.

It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.

It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.

Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.

It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.

And it can tell us everything about America except why we are proud that we are Americans.

If this is true here at home, so it is true elsewhere in world.

~ Bobby Kennedy 1968

Yes, there is an old slogan, "Machines should work. People should think."

Or now maybe

"Machines should work. People should enjoy life."

Or, there is the old

"Machines should work. People should get a guaranteed basic income. If anyone wants more, then they can work for more."

All the ballpark US national arithmetic I did says that we can't yet afford a guaranteed basic income.

E.g., for something simple, supposedly Bezos is now worth $100 billion. But if divide that by the US population of, say, 333 million, then get just $300 per person, just once, and have confiscated all of the Bezos wealth. Point: Not even Bezos is rich enough to provide a guaranteed annual income for everyone in the US, not for a year and not even for just one month just once.

But, maybe when computing is doing enough of the work, then, for a simple solution for the needed revenue, tax the computing, processors and Internet data rates and nothing else. Maybe.

Or, maybe, people should manage computers that manage computers ... that manage computers that do the work for everyone. Okay -- apparently we're not there yet.

For the issue of housing costs, housing is expensive close to where there are good jobs. And there the costs are for the limited real estate close to the jobs and high taxes for K-12 schools, police, roads, etc. And the high housing costs eat up nearly all the income from the jobs because the jobs pay just enough to cover the most important employee expenses, e.g., housing.

But if get out to rural areas, then housing costs can be much lower. If people are going to have a guaranteed income, then they may want to live in areas without much in jobs and with lower housing costs.

But there is a flaw in Sam's proposal: People will still form competing interest groups, e.g., political parties. Then too many of the groups would rather fight for the interests of their group and not join for the good of all. That is, too many groups would rather fight for a bigger piece of the pie they like than for bigger pies for everyone.

In times past, such interest groups could fight in the streets. Then the ancient Greeks invented democracy: Do the fighting at a ballot box. Since a big winner at a ballot box would likely also win in the streets, it's in everyone's interests just to go with the results from the ballot box instead of shedding blood when the outcome is already known.

Basically, democracy is still important and for the same, old reasons.

This sounds somewhat like "Privatizing Social Security" that was a big topic under George W Bush. The part of your taxes that go toward Social Security would instead go into something like an IRA that is restricted to only buy relatively safe things like diversified funds.

It's not quite the same but there is extensive existing material to cherry-pick ideas from. E.g. https://socialsecurity.procon.org/

A proxy for product (as in GDP) is Income.

The way you get that income into a shareable pot is via Tax.

So the best way to do this is still good old "Income Tax."

Unfortunately those with the most income don't like to have it taxed. And national policy tends to correlate pretty reliably with whatever those people want. Anything akin to what he's suggesting would help even things out, but that is precisely why they won't permit it. The only way for the masses to assert themselves is through their brute numbers.

Who is to decide the direction of our shared, aligned economy and development? Why is this alignment preferable to a more competitive free market or a command economy (China)?

GDP is the wrong thing to peg UBI to. It's a pretty meaningless measure of economic activity.

If you support UBI, why wouldn't you support reducing the age requirement on social security to 18+? Social security already exists, we don't need to re-invent the wheel. Obviously we'd need to change the eligibility requirements so that you didn't need to pay in. Now we just need a story about where the money will come from to finance it for the long-haul.

It would be interesting to know what Altman means by "I’d like feedback on the following idea." It strikes me that (a) YC already has researchers working on this, and (b) there's a massive literature in political philosophy (the work of Philippe van Parijs is a good start) on the subject. So I'm not sure what feedback he wants from a short blog post, through whatever medium Internet people can communicate with him.

It seems like the idea of a universal basic income would achieve much of the same long term goals, while not getting things tied up in the complications of treating the US like a business.

The problem that's trying to be solved by this is legitimate, but I don't see much value here beyond it sounding a bit clever. There are ideas out there already that aren't making headway for the same reasons this idea wouldn't.

Those interested in these topics may want to research Robert Shiller's idea of a GDP-indexed "bond", which in some ways is more like equity.

Handing out 15k a year to every person is just diluting the value of the money, especially if they aren't putting any effort into creating goods or 'doing' services. Buyer: "Why is this phone 1000 dollars?" Seller: "Well you make at least 15000 a year right, it's only a percentage..." Now apply this to bread, gas, cars, healthcare, etc.

To turn a Nation-State into a "for-profit" for citizens will make US a weird version of Petro-State without Petroleum.

See, taxing people is not a solution to the problem, rich people will find ways to circunvent the rules and money will flow out of the country instead of being invested here. So the real solution is to stop taxing people and let them have their money so they can invest it here while also attracting capital from around the world.

Now, do you remember when the FED under Obama printed a trillion dollars a year for five years? Do you know where that money is? Is part of that in your pocket? I don't think so. Well, give that kind of money to 100 million americans in an installment of a thousand dollars a month and that would cover their basic needs while the whole country produces more with all the tax cuts to the producers. Of course much less regulation would do wonders to the economy, like eliminating patents, minimum salary laws, health and education regulations, etc. Go back to letting the individual produce with their own hands and minds without governemnt intervention and that will bring much more prosperity than any other idea. Except politicians won't like it.

So in short, while inflation (money printing) is a kind of taxation, we could easily print money (10% of GDP)to give it to the needy while reducing the size of government and regulations to increase production.

This is like a less thought out version of the carbon fee and dividend plan https://citizensclimatelobby.org/carbon-fee-and-dividend/ that has wide ranging support - though not from the people who currently matter.

To some extent we already have an equity share of GDP: we get to vote on our directors and some subsidiaries let us vote on specific initiatives. Furthermore, GDP is frequently taxed to spread dividends to everyone in the form of social insurance payments. This seems more like a framing device or motivation for UBI than a unique idea.

Just some data for the discussion https://atlas.media.mit.edu/en/profile/country/usa/

Note, they break out agriculture and animal products into a lot of categories

I have promoted among friends this idea in place of the guaranteed income proposals. While perhaps similar in operation, Guaranteed Income sounds like a handout, while equity or an inheritance promotes the idea that this is about owning and benefitting from this great American experiment.

I like the general idea. However, the problem with giving people a share of the GDP is that GDP is a terrible measure of useful economic production.

As a trivial example: GDP goes up if I sneak into a car lot one night and set fire to all the cars.

We need a better measure of "useful" economic production.

Start by re-defining what Government is.

Framed any other way, this has been done before. You could argue that Universal Health Care attempted exactly this but instead of providing money back, it went to a universal pool for care. Same for Social Security, Education and other endowment programs.

See "who owns the sky?" which is a book about a similar topic.

https://www.amazon.com/Who-Owns-Sky-Common-Capitalism/dp/155...

> if we don’t take a radical step toward a fair, inclusive system, we will not be the leading country in the world for much longer. This would harm all Americans more than most realize.

It would help most of the other 96% of humans, though. Nationalism is fucking disgusting.

> cost of living crisis

I know this is a major issue in CA, NYC, and probably a few other cities, but I'm not really well versed on how much of an issue it is elsewhere. Where could I learn more about this? Preferably sources with data and not just journalistic fluff.

I think this is the only model that makes sense in the end game where robots replace human labor.

Imagine we lived in a world where labor was unimportant because machines did most things better than humans could. These machines would still required time and natural resources (space, energy and matter) to produce goods and services.

For most people, "working" in this world would consist of going online, buying or trading an amount of energy, buying raw materials or spent matter that is ready to be recycled and pressing a "Start" button. Machines would produce some new goods or services.

Some people may also work on designing new better machines that produce finer goods. This would be mostly creative work as the technical part would mostly be automated. The machines could be specialized for maximum efficiency and quality.

People wouldn't have to go out to work. Machine owners could watch webcam feeds of their machines working in an industrial park somewhere. The finished goods, spent matter (trash) and the machines themselves, would be picked up and delivered by self driving delivery robots.

To get some variety, people would trade the production of different machines and they would trade excess spent matter. They would also trade the machine designs and the land or space to host the machines. The machines would sometimes have to be replaced when worn out or obsolete.

Now assume total energy production was constrained globally to a more or less fixed rate based on what could reasonably be captured from the sun. People would own shares in energy production capacity.

There could be a level of inequality in this society. This depends on how much governments would allow ownership of things to be concentrated, especially ownership of energy, useful space and natural resources.

A good way to prevent too high inequality would be for everyone to be shareholders in global production. Every day, shareholder would receive a dividend, an amount of energy/matter to be spent. They could use it in machines to produce stuff or services, trade it or maybe store it in a battery.

This is better than UBI because it aligns production incentives with consumption incentives and make the system naturally sustainable. If people vote for policies that are inefficient and reduce production, they will simply get a smaller dividend. I'm not making a value judgment either. What people collectively want might not always be a larger dividend. But at least the trade-off will be more explicit and sustainable.

If you start handing out money to every citizen just cause you change the incentive structure. Now the elites are incentivized for less citizens more so than they already are. That could exhibit itself in all kinds of interesting and cruel ways.

He could start with his companies giving out a much larger share of equity to their employees. I always find it fascinating when VCs advocate for things like UBI or this American Equity plan while at the same time being a major contributor to income equality. They could do a lot right now bit instead they make some vague proposals while keeping their money.

Guys? Wasn't sama supposed to be running the optimal capital allocation AI? Who neutered him with this egalitarian warm fuzzy friendly module? You've set interplanetary commerce back a decade.

Why not start with issuing equity for cities/states instead of a country? It would be nice to start small and it seems that finding a mayor that supports easier to make the President to support it.

<I think that every adult US citizen should get an annual share of the US GDP.

I am going to ask people i work with at my union and non union jobs and get their response to that sentence.

I'll report back what comments i hear.

If "American Equity" were such a good idea, then World Equity would be just as good or better an idea. All humanity contributes to the gestalt of civilization and so all should benefit.

American equality = Equality under law (Political and legal equality)...Guaranteeing any economic, outcome or opportunity equality by Govt. and institutions trample s on that and erodes freedom.

The idea, as phrased, makes no sense [to me].

However, the thing I think you want to do...

Well, do it.

Start ACME Ultra-Automation Inc., hand out shares, and sell widgets.

-----

edit: In case it's not clear, I'm serious. I want to do this, and would, but I lack hustle.

There is a converse question: Why do we continuously take equity out of our citizens and deposit it mostly into the financial sector, but also directly to big contractors?

Sincere question: how is this different from communism? UBI seems like the same thing.

I am not against communism or socialism, it just seems like that’s what Sam is describing here.

If we all get shares in the US, doesn't that mean we also get the debt? No thanks. The US govt doesn't know how to manage its debts.

If I can't get filthy rich, why would I even risk building a business if I can just stay home all day and play video games?

Is the US even making a net profit?

To make this seem less socialistic. Favorable tax treatment to mutual (customer owned) and employee owned companies would be a good route to go.

How would one go about testing such an idea beside implementing it? The context seems to be philosophical more so than a more rigorous model.

this is not Communist or Left wing propaganda. But once you understand the dynamics of how economies work, you can appreciate that Capitalism is fundamentally broken. For the US to work, they would've to break Capitalism as we know it. And bring forth a hybrid system. You can't have a functioning system when half the citizens can't afford healthcare.

This is just communism lite. Communism doesn't work and had killed hundreds of million s of people in the last 100 years.

This is a terrible idea.

I'm not a economist... But wouldn't turning all corporations into 100% worker owned co-ops be better?

American tech élite is funny... USA can't even a normal healthcare BUT the tech élite is all about Universal Basic Income, Transhumanism, the dangers of AI, going to Mars and saving the suburbs/car lifestyle.

Can't they just wake up and put their mental energy and money on something that actually make sense?

In short, no. While we should address the income and wealth gaps in America through measures to guarantee more to the people at the bottom, we should resist further attempts at quantifying human life and activity in economic terms.

(Also, in reality we all own in a share of the massive debt the federal government has taken on to fund wars and corporate welfare. So much for that.)

Yes why not. I can't remember the last time something like this was even tried at scale.

The problem isn't finding an idea for how to increase equity (we already have ideas for progressive taxation, UBI, tax credits for the poor, etc.). The problem is finding a way to convince the government to actually implement plans to increase equity, and limit loopholes and unintended consequences that may stem from it.

The United States is not a corporation or a startup and should not be treated as such.

That's an interesting twist. Obviously, it's Basic Income, but with incentives included.

+1

Take a look at any cap table. The wealthy and founders own the majority of shares.

I can just see it

Headline: Sam Altman Starts new Murica Token ICO

or maybe he hands them out daily for free given some proof of USA'ism similar to the Universal basic income token

-- Lee, founder https://bitbank.nz

Just make a UBI pegged to GDP. No need for stock/equity.

What's the difference between this and socialism?

So UBI but with the freedom to not cash out annually?

The moderators deleted my comment about socialism killing 100M people in the 20th century. Reposting because I won't let what happened in China and Russia happen here in my country.

Pretty sure we're already doing this today. Take a look at any cap table and note the disproportionate amount of ownership between founders/investors and employees.

All we need to do is just give everyone some bitcoins. Since they appreciate every day, all our needs will be solved within a few months.

jeez, make a joke and get downvoted right away?

So a UBI that gets smaller during recessions.

could help juice the birth rate.

more kids = more shares

This is remarkably short of specifics, justification, or data for such a massive undertaking. Sam, you'll make a fine politician. The lack of rigor doesn't bother you, though?

Hi Sam,

I hope you're ready for a wall of text. Had to break this into multiple posts...

I have several comments about what you're proposing, to the extent that I understand it.

> I think that every adult US citizen should get an annual share of the US GDP.

Right of the bat, you're starting with GDP, which is an inherently flawed measure of economic output. Namely, it gets imports and exports backwards. If you want to distribute incomes to people, it would be useful for the amount of the incomes to somehow line up roughly with the amount of stuff they'd able to buy with those incomes. The higher the potential imports, the more people can potentially buy.

As a thought experiment, we can imagine that foreign countries are analogous to firms that don't use any labor to produce what they produce. The output of the firms, of course, adds to total GDP. And the output of the countries subtracts from total GDP. This is despite the fact that the two are the same thing.

I've written a blog post about this: http://www.suncho.com/blog/20170616_gdp_is_wrong.html

> I believe that owning something like a share in America would align all of us in making the country as successful as possible

No. It wouldn't. The problem here is that you run into the tragedy of the commons. Everyone receives the benefit whether they happen to be contributing or not. This creates an incentive not to contribute because you're going to receive the benefit anyway. This is why communism doesn't work.

The good news is that we by and large don't need most people to contribute. So an incentive not to contribute might not be such a bad thing.

> the better the country does, the better everyone does

Yes. But the good news is that you really don't need to incentivize people to be involved in making the country successful. The innovations of the few can benefit the many.

> give more people a fair shot at achieving the life they want.

The idea that people should have to "achieve" the life they want is a little silly. We have to resources to give everyone an amazing life without them having to work for it. We're operating way below our productive capacity.

There's a Buckminster Fuller quote that I really like:

"We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest."

Figuring out how to embrace joblessness as a positive force for humanity is probably the most important social challenge we currently face.

I also wrote a blog post about this: http://www.suncho.com/blog/20150326_morality.html

> And we all work together to create the system that generates so much prosperity.

As I've said, we really don't need everyone to be working together. Furthermore, even if you really want people to be working together, your plan to doesn't incentivize us to do that.

> I believe that a new social contract like what I’m suggesting here--where we agree to a floor and no ceiling--would lead to a huge increase in US prosperity and keep us in the global lead.

When we distribute money to people (e.g. through a basic income), there's always going to be an amount that's optimal for social prosperity. I agree with you that it would be a mistake to put a cap on the amount of the basic income that's below what's socially optimal. I cringe every time someone says that the basic income should be exactly equal to the amount that pays for everyone's basic needs.

But it would also be a mistake to put a floor on the basic income that's above what's socially optimal. That being said, I think we have enough available resources that the optimal amount of basic income would be well above what most of the "basic needs" people are calling for.

> Countries that concentrate wealth in a small number of families do worse over the long term--if we don’t take a radical step toward a fair, inclusive system, we will not be the leading country in the world for much longer. This would harm all Americans more than most realize.

I mostly agree. If we flatten out the aggregate demand curve by providing an evenly distributed income to everyone, then that increases quantities demanded of many of the things we produce and allows us to scale up production. This gives more people more access to more wealth.

> Today, the fundamental input to wealth generation isn’t farmland, but money and ideas--you really do need money to make money.

Hmm. Sort of. Even today there are resources we use that are factors of production that aren't farmland, but that are analogous to farmland. And we still have farmland, of course. Technological improvement allows us to use such resources more and more efficiently with time. Our overall productive capacity increases with time. We also have financial resources and we can certainly make money out of money.

But then another important factor is demand. We're not going to generate (i.e. produce) wealth if nobody's going to buy it. Our technology can improve all it wants, and our productive capacity can go through the roof. If people don't have the incomes to pay for all this stuff, it won't matter.

As far as ideas go, I'm not sure how important they are. Ideas are a dime a dozen. There are no new ideas on the face of the planet (except of course for my ideas, which are unique and special). Execution on ideas can be great. Innovation can be great. But as long as we're constrained by demand, none of that is going to help. Demand is our bottleneck. By focusing attention elsewhere, we're prematurely optimizing a part of the code that isn't going improve performance.

> American Equity would also cushion the transition from the jobs of today to the jobs of tomorrow.

Huh? Are you saying that if everyone had an income it would give them the freedom to work on things that are actually going to matter?

> Automation holds the promise of creating more abundance than we ever dreamed possible, but it’s going to significantly change how we think about work.

It depends on us significantly changing how we think about work.

> If everyone benefits more directly from economic growth, then it will be easier to move faster toward this better world.

Yes.

> The default case for automation is to concentrate wealth (and therefore power) in a tiny number of hands.

Yes. If we rely on wages for people's incomes and production is constrained by consumer spending levels, then the result of automation is necessarily a reduction the amount of wealth we produce. And the people who do have access the the wealth are the ones who somehow still have sufficient incomes to purchase it.

> America has repeatedly found ways to challenge this sort of concentration, and we need to do so again.

Yes. But it's been pretty ugly so far. A lot of it involves contorting the labor market in an attempt to get somewhere close providing people with sufficient incomes through wages. I hope we can do better in the future.

The solutions are easy....nothing new under the sun...start here:

https://deanbaker.net/images/stories/documents/Rigged.pdf

Chapter 9 Rewriting the Narrative on Economic Policy

The standard framing of economic debates divides the world into two schools. On the one hand, conservatives want to leave things to the market and have a minimal role for government. Liberals see a large role for government in alleviating poverty, reducing inequality, and correcting other perceived ill-effects of market outcomes. This book argues that this framing is fundamentally wrong. The point is that we don’t have “market outcomes” that we can decide whether to interfere with or not. Government policy shapes market outcomes. It determines aggregate levels of output and employment, which in turn affect the bargaining power of different groups of workers. Government policy structures financial markets, and the policy giving the industry special protections allows for some individuals to get enormously rich. Government policy determines the extent to which individuals can claim ownership of technology and how much they can profit from it. Government policy sets up corporate governance structures that let top management enrich itself at the expense of shareholders. And government policy determines whether highly paid professionals enjoy special protection from foreign and domestic competition.

Pretending that the distribution of income and wealth that results from a long set of policy decisions is somehow the natural workings of the market is not a serious position. It might be politically convenient for conservatives who want to lock inequality in place. It is a more politically compelling position to argue that we should not interfere with market outcomes than to argue for a system that is deliberately structured to make some people very rich while leaving others in poverty. Pretending that distributional outcomes are just the workings of the market is convenient for any beneficiaries of this inequality, even those who consider themselves liberal. They can feel entitled to their prosperity by virtue of being winners in the market, yet sufficiently benevolent to share some of their wealth with the less fortunate. For this reason, they may also find it useful to pretend that we have a set of market outcomes not determined by policy decisions.

But we should not structure our understanding of the economy around political convenience. There is no way of escaping the fact that levels of output and employment are determined by policy, that the length and strength of patent and copyright monopolies are determined by policy, and that the rules of corporate governance are determined by policy. The people who would treat these and other policy decisions determining the distribution of income as somehow given are not being honest. We can debate the merits of a policy, but there is no policy-free option out there.

This may be discomforting to people who want to believe that we have a set of market outcomes that we can fall back upon, but this is the real world. If we want to be serious, we have to get used to it.

People already have a share in the GDP. That's what it is, the total domestic product, the sum of all the little parts. The problem is not that people don't have share in it (and this goes for every country, not just for the USA), but that they have a disproportionate share in it.

Bill Gates' (to name a random American citizen) has a far larger share in the GDP than most other Americans. If you want to solve that raise your taxes on the rich and lift up those that are at the lowest end of the scale. That will have a lot more effect than some fiction where you get to do a bunch of make-believe bookkeeping.

Of course in the current political climate this will not happen, in fact the reverse will happen, tax cuts for the rich at the expense of the poor and the middle class.

Coming up with utopian ideas like this are easy.

The hard part, which barely gets any discussion is:

* How do incentives work? How do you incentivize the production of new wealth?

* How does immigration work? You can't have open borders and mountains of free stuff.

* Does this replace or augment existing welfare programs?

* Does this actually make people's lives better? How do you know? What happens if it doesn't work out?

And so on.

To make this proposal make sense, we need to rephrase it in financial terms that Sam and HN readers would understand.

GDP is a revenue number. Roughly speaking, it's the aggregate sales of all American businesses. Or the aggregate spending of all American consumers.

Obviously there's no sense in which you can "own" a share of revenue. You own capital, not revenue.

So a workable translation of this idea into financial reality might be: every public company dilutes itself by 20%; the new shares are assigned to the government; the new shares are distributed to all Americans. Not unlike the voucher side of the Russian post-Communist privatization scheme.

Then the fun begins. Do the recipients actually own these shares? For instance, can they sell them? In theory, shares should produce dividends, but our tax system has made dividend distribution mostly a thing of the past. Profits are more likely to go through buybacks. You earn returns from capital by selling shares.

But if people can just sell the shares, what stops them from selling them all, and ending up right back where we started? A study of low-income lottery winners and their financial behavior would add a lot, I think, to our understanding of this and similar UBI schemes.

Here's my feedback:

100M people died of socialism in the 20th century. Can we just STOP with this madness please?