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Third installment, third day. Karelis

The quality of the Presentations dropped off on the third day. Charles Karelis was the best, and first, thing. At the end we went upstairs and had a new try at founding a real Basic Income group in Canada. I hope it takes, this time.

I have Karelis' book. I even thought briefly about bringing it and getting it autographed. It might make it worth more when whoever inherits my library tries to sell it. It is bound to become a classic of economic thought, we hope.

He went through his famous bee stings analogy. Suppose you were stung by bees and had nine stings, and only three drops of sting curing salve. You would likely not even use the three you have because you would still be in pain.

You would not even make much effort to get another three because they would still not get you out of pain. Only if you had enough of the things that relieved the pain of poverty to end the pain, would you even bother. At that point, there would be some incentive to work to get more things that cause pleasure; pleasers in Karelis' terms.

This really should not be a hard concept, but orthodox economists until now have never gotten it. That is because economists are almost always from the privileged classes. They cannot comprehend disadvantage.

They do not understand why poor people would refuse to work hard when working hard does not get them out of the pain of poverty. Karelis put the same concept in a different way. If your car had twenty dents and you got a voucher to fix one dent, you would not even bother because, why would you when you would still have 19 dents.

Another corollary is that if you were getting four stings per day and had two dabs of sting relievers, you might save them up and so be free of pain every other day. This is why people on welfare often have a party for the two or three days after cheque day, and go back into hibernation the rest. At least for two or three days a month, they can live. Attempting to make the money last a month does not relieve their misery for even a few days.

So, if you want poor people to start working, give them enough reward from working that they are not in any discomfort. If you want them to save, give some incentive to save by getting their basic income up to what Karelis calls "The Utility function." This is the point where having more actually increases pleasure and creates an incentive to try to get more.

If you are poor, you have no power. This means you cannot protect what you have. So if you get anything valuable, somebody is liable to take it away from you.

One aspect of Karelis I had not heard before was the risk of actually dying could be a positive incentive. This tied in a bit with the "Guard rails and Lifeboats" analogy heard earlier. One way a ruler class could incentivize poor people to work without relieving their poverty is to throw them in the water and make them either work to get out, or drown.

In various places welfare bureaucracies have tried something like that, although I think it would only work in the short term.

But also, giving people who are not poor a Basic Income really would actually create a disincentive to be productive. When you consider the consequences of over production and environmental depletion, this might not be a bad thing.

But the message here is that a very important consideration in designing a Basic Income is in setting the level of the income. Too much and the well to do treat it as free money, as well as create an inflation in luxuries, making leisure more expensive. Too little and the really poor will still not try very hard. And you do not want to give it to everybody; there must be some way of with holding it or withdrawing it from people who do not need it.

Another new concept was the Orwell effect. That is, how do you convince people they are less poor than they are, so they have incentives while at a lower income level. Yes, the ruling class would love to figure out how to produce the Orwell effect.

A propaganda campaign like that from George Orwell's "ministry of Truth" to convince people that what they have is the best possible, would directly conflict with another propaganda campaign that has been going on a long time. That is, to convince people that what they have is not good enough and to keep buying and buying in order to catch up and keep up with the Jones'.

Karelis threw open the floor to questions, and the wheelchair corps in the back of the room responded. They really do get it!

Some objected to third party academic talk. One asked what she should save money for? To put her surplus in the stock market? Others found it galling to keep getting free papers in the mail, advertising stuff they cannot afford.

Lots of "lazy people" in the room, who resent that stereotype. People do not get it that there is nothing to work for. It costs too much to work; transportation, child care, etc. That people's personal experiences validate what he says obviously pleased Karelis.

But what one woman in a power wheelchair said really struck a chord with me because I have had similar experiences in life. In her thirties she finally got out of an institution and got a half decent job. But her family, which got her in the institution and keep trying to get her diagnosed as schizophrenic, still keep trying to get her back into an institution.

I keep hearing stories like this and someone really should do some research into it. It is almost like there is an industry in eliminating or diminishing people that other people find inconvenient. I wish I had time to talk with her more, but she left early, had to make her wheeltrans appointment.

Ah, well.

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