#170 A Universal Solution & The Rocket Man

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  • What we know is that a “Universal. Basic. Income.” is an impossible trinity in the Indian context. The government can at best meet two but not all three of its elements—a basic income that won’t be universal; a universal income that will be way below what qualifies as “basic”; or something that is universal and basic but not in the form of an income.

  • This trilemma arises due to two reasons. One, India is just not rich enough for the government to fund a full UBI by taxing citizens at reasonable rates.

  • The Economic Survey estimated that even a non-universal basic income for 75% of Indians would cost nearly 5% of the GDP. For context, the total expenditure incurred by the union government including all its portfolios was approximately 13% of GDP before the pandemic.

  • Two, some proponents of UBI argue that the government can stop existing implicit and explicit subsidies, and use the savings to fund a UBI. The UBI would eliminate leakages, obviate the need for complex delivery machinery, and reduce incentives for corruption, they explain. But in a democratic setup where every political party finds it imperative to give individual handouts before elections, this is a leap of faith. It’s more likely that taxpayers will foot the bill for all current subsidies in addition to the UBI.

  • In a 1961 book titled The Growth of Public Expenditure in the United Kingdom, economists Alan Peacock and Jack Wiseman observed the patterns of government spending in the UK between 1890-1955. The dominant view at that time was that government spending as a proportion of the overall economy keeps rising organically as citizen demands grow with rising incomes.

  • In a 1961 book titled The Growth of Public Expenditure in the United Kingdom, economists Alan Peacock and Jack Wiseman observed the patterns of government spending in the UK between

  • 60 years ago. In a 1961 book titled The Growth of Public Expenditure in the United Kingdom, economists Alan Peacock and Jack Wiseman observed the patterns of government spending in the UK between 1890-1955. The dominant view at that time was that government spending as a proportion of the overall economy keeps rising organically as citizen demands grow with rising incomes. In a poor

  • In a 1961 book titled The Growth of Public Expenditure in the United Kingdom, economists Alan Peacock and Jack Wiseman observed the patterns of government spending in the UK between 1890

  • In a 1961 book titled The Growth of Public Expenditure in the United Kingdom, economists Alan Peacock and Jack Wiseman observed

  • In a 1961 book titled The Growth of Public Expenditure in the United Kingdom, economists

  • In a 1961 book titled The Growth of Public Expenditure in the United Kingdom,

  • In normal times, the level of public spending is capped by the acceptable level of taxation. Even if citizens might find a higher level of government spending desirable, they won’t accept a higher rate of taxation in return. This equilibrium is shattered by a crisis such as a war, where government spending and rates of taxes increase to manage the immediate difficult situation at hand. However, once the crisis recedes, new ideas of tolerable taxation levels emerge, and government spending does not go back to its original position. This conjecture came to be known as the Peacock-Wiseman Hypothesis (PWH).

  • Are we seeing PWH in action in India, because of COVID-19? If one were to look at costly expenditure policies such as UBI, speculations about a GST rate of 8% replacing the 5% rate, and the high fuel taxes, it does seem that we are moving towards a new normal in government spending.

  • In a 1961 book titled The Growth of Public Expenditure in the United Kingdom, economists Alan Peacock and Jack Wiseman observed the patterns of government spending in the UK between 1890-1955.

  • Expenditure in the United Kingdom, economists Alan Peacock and Jack Wiseman observed the patterns of government spending in the UK between 1890-1955

  • The initial euphoria of it providing a voice to ordinary citizens, getting rid of the gatekeepers and the hope of many more Arab Springs have been replaced by a cynicism that it is a platform that can be abused by those with more resources for their political ends. And into this chaotic world, now we will have the king of chaos, Musk, himself holding the reins. This could get really bad. Or will it? At the heart of this issue is that old question that Plato tried to answer in ancient Greece. Who should hold power in a society and how should the use of that power be regulated?

  • Elon Musk couldn’t have existed at any other time in human history. Because at no other point in our history would it have been possible to simultaneously be the richest person in the world, run the most innovative and bold business enterprises, troll powerful politicians and colleagues, show a fine disregard for the law (esp SEC’s laws), smoke a joint on live web TV, create asset bubbles with just a single word and also be seen by millions as a messiah. A thousand years from today just studying the life and times of Elon Musk would be enough to understand the 21st century. A

  • Elon Musk couldn’t have existed at any other time in human history. Because at no other point in our history would it have been possible to simultaneously be the richest person in the world, run the most innovative and bold business enterprises, troll powerful politicians and colleagues, show a fine disregard for the law (esp SEC’s laws), smoke a joint on live web TV, create asset bubbles with just a single word and also be seen by millions as a messiah. A thousand years from today just studying the life and times of Elon Musk would be enough to understand the 21st century

  • Elon Musk couldn’t have existed at any other time in human history. Because at no other point in our history would it have been possible to simultaneously be the richest person in the world, run the most innovative and bold business enterprises, troll powerful politicians and colleagues, show a fine disregard for the law (esp SEC’s laws), smoke a joint on live web TV, create asset bubbles with just a single word and also be seen by millions as a messiah.

  • If the platform encourages click-baits, reinforces biases and tribal loyalties through the like button and optimises for your attention, the solution to it cannot be to solve for human nature. That is an unsolvable problem. This is an engineering problem. Sure, as history has shown once you think you have solved it, the problem will shift. This is an ongoing process in science and every technological innovation has evolved in this way over the centuries. The solution to human mobility has over time gone from horses to cycles to cars to aircraft with each solution bringing with it newer problems. Nobody has ever contended that the real solution is for humans to develop wings.

  • Should he be allowed to run a platform like Twitter to the ground because he has the money and the power? Well, maybe not. But the truth is that he has the power and the money because he has been proven right many times over. There is no divine reason for his magic. He commands trust among his millions of followers because he makes the seemingly impossible possible. Were he to take advantage of that trust to the detriment of his followers, he will begin to lose that power. Musk takes long-range bets – electric vehicles, space travel, EV batteries, hyperloop – and his credibility is the only reason why investors trust him to pull these off. He should know the perils of short-term gains at the expense of that credibility. He will not take a punt on that.

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