> I lucked into money.

The basic point is that he gets paid more whilst not doing more "work". For those whom "Work" is the only lever they use to convert into money, they see inequitable work:cash ratios as "unfair" (a morality statement).

Market economies do not function on work, but on value. He did the same work in a high value scenario. A glass of water provided in the middle of a developed city is worthless and thus free. A glass of water provided at the right time in a desert is invaluable and thus expensive.

My takeaway is this: Always meet the highest value need you can, and as well create additional value by helping others to meet higher values than they current do. Low placed people may not be able to "work" their way to upper echelons, but they can invent, intuit or otherwise create high value leverage of their's and others' work. I dont see it as unfair that a person making $1 a day is unlikely to become a deca-billionaire in their lifetime (total mobility); instead I want to ensure they have some mobility so that they can always better their situation, maybe by an arbitrarily selected 2x multiplier.

Wow I am astounded that all the comments so far are trying to tear down this person and what he is saying, and very transparently because there seems to be something threatening about this idea that he got where he has through luck. Why do people find this idea so threatening?

I got where I am today due to luck. I did work hard. But I know other people who work hard too. Who are just as capable. They just didn't get assigned to the class with the really awesome, motivating teacher. Or randomly picked out of the pile by a recruiter for a call. Or happen to wind up working somewhere where they made friends with a guy who was well connected. Etc.

To discount luck's role in how people get successful is a huge blind spot.

Gosh. OP made me sad with his thesis.

"1. For owners, work is optional."

... As an owner I wish this were true. For me and most owners I know work is mandatory, and its 60 hour weeks and a lot of sleepless nights. There is no safety net. There is no unemployment. I get no workman's compensation. I have no employment law protections. Its, as one HN comment said some time ago, "a suffering contest" a lot of the time.

"2. ...your stuff will keep on making money forever."

... Again, I wish this were true. Lifetime income producing investments are hard to find where volatility, fees, inflation, taxes and life's circumstances don't erode value. Sure, the truly wealthy are set. But most business owners are not truly wealthy, and the exit strategies just aren't there in many industries.

"3. We can get entrepreneurship without the enormous rewards to ownership we have today"

... Anyone whose dealt with the day-to-day grind of owning a business would be especially offended by this comment. A firehose of pain, suffering and risk flows to the owner in the form of litigation, regulators, employees, vendors, customers, bank officers, etc., etc. I've equated it to a "lazy susan" dispensing aggravation in every conceivable form. Its the reward - if you can get it - that makes it worthwhile. Try just getting divorced as an owner and you become an instant convert to rewarding ownership.

Yes, rent-seeking monopolies are bad. Yes, more needs to be done to create opportunities for wealth creation by employees - to give them the freedom to say "no". No, punishing ownership isn't the answer.

UPDATE x2: I'm really not confusing types of owners. The author's thesis is broad not only in the article, but in his works in general. Access to passive income investments (eg. REIT's) is among the few places small business owners can go to rent-seek. Rent seeking is bad under a few sets of conditions but doesn't deserve author's indictment.

Owning land is certainly a private basic income.

Consider that land prices (and therefore rents) basically reflect the surrounding economy. By buying land you are essentially profiting from the work of everyone else in that economy, forever, and only taxed minuscule property taxes.

IMHO https://en.wikipedia.org/wiki/Henry_George had the correct solution; tax land (though not the structures developed on it) at it's full market rental value. And the concept should apply to ownership in all resources.

> My first big lucky break happened in 2009 when Georgetown University hired me as a philosophy professor on their campus in Qatar

Apparently going to high school, studying and passing the SAT, applying and being accepted into university, studying, passing, and graduating university is just luck.

Have we we reached peak luck yet? Is there nothing ever we can do to improve our circumstances and our lives?

This is like a new age of economic predestination, where everything has been predecided for you by God and there's nothing you can do. Calvinist and BI proponents apparently have a lot in common.

> [in the US] people who don’t need their income are taxed less than people who do

I'm not American; I don't know the tax structure. But I can't even imagine that this could possibly be true, or what is true that is meant.

Without looking it up, I would assume that the USA subscribes to progressive taxation, under which the richer pay more tax in both absolute and relative terms.

Even if it has a flat rate of tax, (a structure, incidentally, that makes far more intuitive sense to me) the richer are still paying more tax in absolute terms, and equal in relative terms.

What Earthly metric is the author using?

Can someone clarify this piece for me? I don't understand how the author is able to completely avoid taxation on the rents.

>My wife and I don’t need the money we make from owning most of the business. We live off the salaries of our jobs, and reinvest virtually our entire share of the business. These reinvestments count as “losses,” and so officially we have never made any income or paid income taxes on our share of the business.

Ignoring the logical fallacies the author makes, one thing jumped out at me. He's not buying the average home in South Bend. If he's only paying $180/year in property tax, the assessed value of his average home is around $9K. A quick look at Google shows the median price (from Zillow, so a grain of salt is recommended) of $65K. If he and his brother are buying up $9K homes, his average mortgage is under $50/month. I'm sure that he's doing the socially responsible job of only charging his tenants just a little over his full costs...

TLDR

Guy in financially comfortable position feels guilty, decides his education, willingness to live in Qatar, etc shouldn't really be worth this much, completely discounts the idea that anything actually matters, it is all merely "luck" and that's it.

Sounds like an existential crisis, not really a good commentary on the concept of basic income.

Hey, South Bend made an article on the internet and it wasn't even about our mayor!

Rental income here is a bit weird because you have in general a very poor town, with a very expensive private university with old money funding houses for students. I bought my house here for a fair bit less than it would cost to rent something half the size.

Seems to state the obvious to me, but looking at the comments on the article, I'm in a minority.

He talks about the unfairness of "our economic system" but he makes his income from Qatar's economic system. Qatar likes to spend their oil money on western professors to give themselves an air of legitimacy.

As for renting out property, it's never effortless or risk-free. If it was, the rate of return would drop to that of other minimum risk assets (e.g. treasury bonds).

On some level, this is basically "capitalism 101." If I don't need my resources now, I can put them to work so that I can later benefit from them. This leads to me having productive assets, which pay me some return.

If I could not acquire productive assets, there would be much less reason to save. And it's unclear how one would save, as banks would likely not exist either. You can solve this problem somewhat by having a centrally planned economy. But then you have the problems that hit those.

Fantastic article.

Some takeaways:

* Our economic system claims to reward "work", but the reality is that it rewards ownership and extracting economic rents.

* Increasing value does not necessitate that being the result of one's "work". For example, land values rising are the result of other peoples' work (eg. neighboring properties, government policies, general economy). The landowner is compensated through the labor of others.

* Economic rents aren't taxed enough ("The business pays property taxes, but they average about $15 per house, per month – minuscule compared to the rent we make.")

* Labor is taxed too high relative to capital gains

* "Luck" plays a huge factor, and luck and hard work aren't mutually exclusive. If I'm born into a poor family in a ghetto, naturally I'm going to have less opportunities than being in an upper class family with enough funds to perpetually support me (eg. Mark Zuckerberg, Bill Gates)

* We need a Universal Basic Income, ideally funded by taxes on economic rent (eg. land value tax)

Our economic system is like a big game of monopoly where all the properties are already owned. You start off with whatever money/property you inherit from your parents, and have to work yourself up. Meanwhile, the rentiers are profiting off the backs of the laborers without doing anything. Sure it's possible to add "properties" to the board (ie. starting businesses), but that doesn't scale.

At least Monopoly had a UBI in the form of the $200 you get every time you pass "Go".

So this is the part 2 to the "how to retire at 34" article from a few years back..

The article is about something that should be obvious, capitalism: money goes to the capital owner.

Of course this has a lot of problems, but it's the best we have today. On this system, the rules of the game are: we need to work and spend less than we earn, and use the money to accumulate more capital, an not buying more things.

I agree with the author's points. There have been, almost certainly, Einsteins who have lived and died in poverty without ever having tasted a book. I feel like a basic income for everyone is supportable and would give people falling to an unknowable fate the lift they need to go beyond surviving. Less work seems to need to be done with tech advances today, but the only thing a job replacing robot seems to do is take the incomes of two u people and give it to the person who owns the robot. The slippery slope is that we will eventually do this for most jobs, if we survive long enough as a species, and I agree we need change to evolve as our society does.

I'm having a lot of fun lately thinking about everything in cryptotokens:

Everyone gets 3 basicMealTokens and 1 basicFun token.

However, in SF, there are only sfMealTokens which require 20 basicMealTokens.

In Vietnam, 1 vietnameseChickenPlatterToken is only half a basicMealToken.

Tech workers are paid in techWorkTokens which can be exchanged for 200 basicMealTokens each or 100 basicFunTokens, or 1/1000th of a Tesla token.

Token transfers have friction so it is advantageous to maintain a surplus of tokens most easily transferrable (least hops) to what you want.

To ease this, SF maintains a sfBasicToken and makes the market to transfer tokens from all over the world to sfBasicTokens. sfBasicTokens have an advantage in that you can pay for things easily instead of paying 67.34 redditStatusTokens.

Some old geezer is willing to sell his house for a legacy usdToken, a token so old it had a physical representation and no historical memory.

The basicFoodToken ideas doesn't pan out. SF starts giving out sfBasicFoodTokens instead. However large numbers of people realize an arbitrage mistake and live like kings in Thailand, taking advantage of the buying power of sfTokens due to the Thailand people wanting to make it big with their startup dreams in the Bay Area.

¯\_(ツ)_/¯

Its not two big lucky breaks it should be actually three big lucky breaks. Being born as a human is the first lucky break every human being on the earth gets. If you think about it 'merit' is man made. Nature most of the time works on pure chance.

> No one is going to give tens of thousands of dollars every year to some guy who owned a couple of houses and said he knew how to manage more,

Well, not no one. There are hard money lenders who will loan money to "some guy" to do more or less that.

I think it's awesome to make critics about how capitalism is bad by using Qatar where basically no freedom exists and everything is controlled by the state. Not even mentioning actual slavery.

What I got out of this was the suggestion to fund Basic Income by taxing unearned income. I'd like to read more on how the numbers would actually work out. If that were the only funding source of BI, then how much impact would that be on the rich, and how much benefit would that be for the people that could use BI?

Read this essay (which is, as it goes, pretty good), then go back and take a look at, say, the first book of Adam Smith's Wealth of Nations. In particular the prices of commodities, labour, stock, and rent, as well as the factors influencing wages of labour (chapter 10).

https://en.m.wikisource.org/wiki/The_Wealth_of_Nations

It doesn't hurt to consider Ricardo as well.

From Ricardo, we get the Iron Law of Wages, and the Law of Rent. Key to understand is that these move in opposite directions:

* Wages tend to the minimum subsistence level, all else equal.

* Rent rises to claim the surplus value afforded.

That is, wages are based on the input costs, whilst rent is based on the output value (use value). The third element, price (sometimes "exchange value"), is what's at question.

(I distinguish cost, value, and price as three distinct concepts. This is a long-standing question, and in my view, a grossly confused one, in economics. They're related, but not deterministically. In the long term, C <= P < V. Bentham's "utility" is an exceptionally red herring. More, very much in development: https://redd.it/48rd02)

Note that this means that rent is determined by the pricing behaviour. If you're a "business owner" but you're not capable of extracting rents, you're either selling commodities or labour, you're not collecting rent. The term here is in the sense of economic rent. Simply "owning a business", without the economic circumstances which give rentier power, isn't sufficient -- don't confuse what it is you're doing with the systemic construct in which you're doing it. Weiderquist emphasises this point specifically, several commenters here clearly haven't grasped it.

Another elided discussion: rents are associated with access control, and can be thought of as authority over some (virtual or physical) gate. They're a natural element of any networked structure, in which nodes and links exist, most especially where some nodes have higher value, or control more flows. I believe though can't yet show that all cases of rent involve a fundamentally networked structure, again, virtual or real. My concern is that this may be a reflexive definition, I'm trying to determine that it is or isn't.

Another element of this is compensation for labour. Smith lays out five elements determining this, and I find them durable and comprehensive. In the Widerquist's case, the combination of requisite skills, and comparative unattractiveness, of teaching in Qatar, allow him to claim both a high wage and favourable working conditions (including a lighter-than-typical workload). This falls straight out of Smith. That is, he earns his salary "by doing a job few others are both willing and able to do".

If you're looking at the macro view, realise that these don't scale. That is, the innate and acquired capabilities to teach at University level are not widely distributed through the workforce, and the lack of appeal of various sorts of work is sufficient to dissuade (or prevent, or disqualify) others from taking part in it.

There are other elements here as well: the complimentarity of time and skills, on the one hand, with money, on the other (the classic business partnership). Tax structures (and who they benefit). The relationship of wealth and political power. Smith again: "Wealth, as Mr Hobbes says, is power." One of the shortest and clearest sentences in WoN, incidentally.

"We have a basic income – a permanently growing basic income – not just for life, but forever."

Eh? Nobody has ever had this, and nobody ever will.

Well success is either based entirely on luck or entirely on merit, and I'm sure we'll figure out which of the two it is real soon now.

  nor is there a combination of bad 
  choices that could conceivably put 
  me in their position from my starting 
  point.

You'll all will talk and conclude absolutely nothing. IQ distribution is cancer and you're all getting confused with one another.

This guy sounds like a real shithead.

He makes his living teaching the children of totalitarian aristocrats at a faux university, is saving for the future on the backs of the poor back at home, and gets a kick out of having indentured servants at his beck and call.

I wouldn't shed a tear when his little empire of dirt collapses.

There can only be so many people at the top.

If you live in America you can do what you want. You can study hard and get a scholarship to college even if you are really poor as a kid. I know a poor Mexican immigrant who's kids all got college degrees for free. It doesn't really matter if you grow up poor (in America). There are many people who are very rich precisely because being poor as kids drove them to work hard. What does matter is if you grew up in a stable family. If you don't have that you get really whacked out paychologically, and it can affect people for their whole lives. People look to the government to tax and spend to solve social problems. However, oftentimes the government is the cause of such problems in the first place. For example, we see a huge number of people in prison today. Well studies show that 60% of people in prison grew up without a father in the home. The government today actively promotes divorce and children out of wedlock through paying single mothers. The "compassion" has raised a generation of young people who are lost. America has more money than ever but our families are falling apart, torn up by divorce and pornography, and our young people are paying the price. The government should focus on supporting strong families, and you would watch and see so many major social problems evaporate. I know that I am where I am today because of my dads positive influence on me. Without his support I would be nowhere right now. Every kid needs a loving family. It's time the government starts trying to promote that.

Of course in Quatar they have serious human rights issues that need to be resolved. I'm just talking about in America.

for the articles description: "how [the economy] rewards people who own stuff rather than people who do stuff"

i cant believe i never summarized my own feelings that succinctly. of course the reality is it does both, but i think its way out of balance towards ownership rather that doing.

Property tax is $15 per month in South Bend for a house? Wrong. Capital gains is taxed lower than income? Wrong -- sometimes it is, sometimes the other way around. Multiple factual errors.

Property tax is $15 per month for a house in South Bend, IN? lol. Capital gains is taxed lower than income? Wrong ("it depends"). I stopped reading there.