I’ve yet to actually see anyone overcome this problem. The answer that is usually given is that you just don’t go forward with it if there isn’t unanimous agreement. But this answer assumes there is an agreeable baseline for what constitutes not going forward. It requires a theory of the default, which is impossible to construct. At minimum, it is impossible to construct it without disagreement, and that disagreement then recreates the whole unanimous consent problem once again.

Consider the following real-life example. At an occupy encampment, a proposal is made to ban smoking inside the perimeter of the encampment. As many left subcultures are big on smoking cigarettes, this generates considerable opposition. Unanimous consent is not achieved, not even close, and blocks are made.

What follows from what just happened? Well, you could say that what follows is that there will be no action to ban smoking inside the perimeter. But wait a minute. There was never any proposal to allow smoking inside the perimeter either. Such a proposal would also have failed to get unanimous consent and elicited blocks.

So there is not consent to allow or ban smoking in the area. How do you proceed? Here is where the theory of the default is necessary. You’d have to have a theory of what the default rule is, i.e. the rules governing what is allowed when no proposal has been passed one way or another. What is the default rule though? Is it to allow or to ban?

I think one natural reaction is to say that you allow it. Everything is allowed by default before it is banned through a proposal passed by consent. This is the most autonomy-promoting or whatever. But this can’t be true. Surely, it is not the case that by default I can go around the encampment punching people in the face until we have a proposal banning it.

So now you have to modify the default rule. Instead of everything being allowed by default, the new rule is that everything is allowed except if what you are doing physically harms others. This ensures that I cannot just punch people by default, but it throws into doubt what the default position on smoking should be. Does smoking harm others? It seems that second-hand smoke does harm others. So shouldn’t the default rule have been that you cannot smoke in camp, and the only way to allow it therefore would be through a proposal passing with consensus?

This approach to the default seems alright, but it problematically turns on empirical assessments. We know now through studies that second-hand smoke harms bystanders. But what if we did not know that for sure? What if some folks just thought it harmed others, but there was not definitive evidence? How would you proceed then? This theory of the default will not be able to function because there will be disagreement about what harms others and there will not always be evidence to settle that disagreement. So you find yourself in another consensus bind.

More than that, even when you have evidence, members of the group might deny that it qualifies as evidence. All sorts of people reject scientific research for instance, which would include, I’d presume, epidemiological studies. The left in particular has its fair share of New Age types who have beliefs about harms that are not verifiable scientifically. What do you do if one of them says wearing blue in the camp harms them by throwing off their chakras, and neither a proposal to allow nor ban wearing blue can get consensus?

This is just the tip of the iceberg of course. There are more interesting questions in how exactly you could use this process politically, especially in deciding who belongs to the community of people from whom consent is required for approval. For instance, when you decide or don’t decide to build more housing in your area, that affects tons of people who are not in your area, e.g. those who would end up moving there to fill the new housing at some future date. Do they have to be included? If yes, how could you even possibly identify who they are in advance? It’d be impossible.

For the most part, I find it really hard to get that enthused about process stuff altogether. In a universe of physical scarcity like ours, it is impossible to avoid some kind of force on others absent unanimous consent from all people about all things at all times. Once you admit that bar is foreclosed by the mechanics of a universe with matter scarcity, it seems like substance shows itself to be of way more importance than process.

Krugman today summarizes an argument that Noah Smith put out a short while ago:

Elites, he argues, see economic distress as an opportunity to push through “reforms” — which basically means changes they want, which may or may not actually serve the interest of promoting economic growth — and oppose any policies that might mitigate crisis without the need for these changes

Let’s be clear on what this theory is and is not saying. It is not saying that “elites” (whoever they are) materially benefit from austerity. If this is your theory, you should be entirely clear in dismissing the hand-waiving conspiracies that when austerity happens, some set of high-placed people are making out big. Or if you think that is also true, then point out who those people are and explain how, something I’ve not yet seen anyone do persuasively.

It is also not saying that “elites” are simply mistaken about what will and wont bring the economy back to capacity. So as we move deeper into the discussion, don’t slip back into saying that someone supports austerity because they don’t believe it will have the impact it will. Some people surely do actually believe, wrongly I think, that austerity will be fine and not have any negative impacts. So they are not the “elites” we are talking about.

It is saying that there are “elites” who — despite fully knowing austerity’s harms to others and even themselves — want to inflict it to create an environment that makes it possible for political changes they want to happen.

This speculation is as good as the next I guess, although I wonder even among the ill-defined class known as “elites”, how many actually fall into this camp, as opposed to those who stupidly believe austerity wont cause problems (or will actually help things). Given what we know about motivated cognition, it would be strange indeed if someone who wanted to reach the austerity conclusion had not managed to convince themselves that austerity was good in itself. But perhaps this small subset of the “elites” are psychologically strong enough to avoid this cognitive bias.

Beyond that, we are still left open to the question of why the “elites” actually support it? They want political changes, but why? Is it because they think it will materially benefit them in the long run? Or is it because they just have political ideas that they think are awesome and should be how the world works? It is fashionable to imagine that everyone who has these right-wing views are secretly in conspiracy of some sort for their own gain, but I suspect a healthy number of them are just political people. If I had Koch brother type money, I’d probably pour it into left-wing causes for instance. The Koch’s are an interesting case because one of them actually ran for vice president for the libertarian party. That is not something likely to pay a lot of financial dividends. He is almost certainly just an ideologue.

Anyways, the point here is that it would be nice to flesh this theory out and explain whether this long-game approach of self-harming to achieve political changes is meant to deliver material wins or just ideological ones? Flesh it out. It’s too vague as it stands.

Finally, and perhaps most importantly, how does this strategy actually seem to be working? On the federal level, government agencies took a hair cut, presumably a score for the kinds of “elites” who are playing this complicated chess game. Military spending took a much larger cut though, presumably not a score for some of the “elites” who make their money on military contracting, the ominous military-industrial complex profiteers who I guess are powerless in this game? Oh and the rich got a tax hike.

If this is the game this subset of “elites” are playing, they aren’t doing very well.

Hoppe’s Argumentation Ethics
A performative contradiction occurs “when the propositional content of a statement contradicts the presuppositions of asserting it.” For instance, if I said “I am dead,” that would be a performative contradiction because to assert something, I must be alive.

Hans-Hermann Hoppe uses this idea to argue that it is impossible to argue against libertarianism without falling into a performative contradiction:

Now then, Hoppe claims that in order to justify something with propositional exchange, people must have exclusive control over their bodies; and they must have the right to homestead unowned property, and to voluntarily obtain ownership of others’ property, in order to sustain themselves in debate. In short, anyone who engages in a rational argument must be granted the full range of libertarian rights.

So essentially, Hoppe is arguing that you must have libertarian institutions in place in order to have argumentation at all. But he is making this argument right now in a world where he says they don’t exist. He is literally arguing, in the status quo, that it is impossible to argue…in the status quo. He is arguing that he can’t argue. When Hoppe makes his performative contradiction argument, he is involved in his own performative contradiction! If performative contradictions disqualify arguments, then his falls.

If we wander into the substantive content, Hoppe finds himself in even deeper problems. An argumentation ethic of this sort clearly entails welfare rights. Hoppe’s whole argument is that to debate you need to be able to sustain yourself, i.e. remain alive and such. But libertarian institutions are neither necessary nor sufficient for sustaining people. They aren’t necessary because we don’t have them now, yet people are alive (something Hoppe should know on account of being alive, but it eludes him somehow).

They aren’t sufficient because libertarian institutions alone don’t ensure that a given individual will be able to stay alive (John Locke himself realizes this and provides for redistribution and other provisos as a result). Hoppe also clearly realizes this. In one of his books, he gleefully expounds upon his libertarian future where, because everything is private property, the unwanted are exiled out of society altogether and into the wilderness to die. You can’t forward arguments in this nightmare world.

More than that, in Hoppe’s libertarian world, there is no reason to think there will even be a wilderness to exile the unwanted into. As Herbert Spencer pointed out:

Equity, therefore, does not permit property in land. For if one portion of the earth’s surface may justly become the possession of an individual, and may be held by him for his sole use and benefit, as a thing to which he has an exclusive right, then other portions of the earth’s surface may be so held; and eventually the whole of the earth’s surface may be so held; and our planet may thus lapse altogether into private hands. Observe now the dilemma to which this leads. Supposing the entire habitable globe to be so enclosed, it follows that if the landowners have a valid right to its surface, all who are not landowners, have no right at all to its surface. Hence, such can exist on the earth by sufferance only. They are all trespassers. Save by the permission of the lords of the soil, they can have no room for the soles of their feet. Nay, should the others think fit to deny them a resting-place, these landless men might equitably be expelled from the earth altogether.

When the entire globe has been snatched up as property, something possible in a libertarian regime, you may literally find yourself with nowhere to physically stand. You would not be able to exist on the earth whatsoever. Being able to exist on the earth is clearly a presupposition for making arguments on it, meaning that in fact it is a performative contradiction to argue for libertarian institutions.

I could go on, but I don’t think it is necessary. It is worth noting that Rothbard, an equally bad philosopher, thought Hoppe’s argument was genius. What you think that says about Rothbard’s intellect is your call.

I have always been curious about how such a firm can actually manage the worker ownership part. It is easy to imagine a group of people starting a business that they are the worker-owners of. But how do you handle the hiring and departure of workers from that point? When you leave, can you sell your part of the business? And if so, to whom? Presumably not to an external buyer, as that would make the business no longer purely worker-owned. When you hire someone, do they immediately become equal owner, which would cause all of the prior owners to have a smaller equity share in the business?

As there are actually-existing cooperatives in the world, obviously this specific management question has been dealt with. In the US, Employee Stock Ownership Plans are somewhat popular and have legally established mechanisms for dealing with this. But ESOPs are not really full-fledged cooperatives: they seem to function much more like an employee benefit plan than they do worker-ownership.

Hoping to answer this question, and many others (which I may write about later), I started reading Making Mondragon a few days ago. The way Mondragon handles this ownership issue is with individual capital accounts.

Neither members nor outsiders own stock in any Mondragon cooperative. Rather a cooperative is financed by members’ contributions and entry fees at level specified by the governing council [elected management board] and approved by the members. It is as if members are lending money to the firm. Each member thereby has a capital account with the firm in his or her name. Members’ shares of profits are put into their accounts each year, and interest on their capital accounts is paid to the members semi-annually in cash.
[...]
Members share in the remaining profits in proportion to hours worked and pay level. [...] From 1966 to the present, all shares in profits have gone into members’ capital accounts.
[...]
Those unfamiliar with accounting terminology might assume that a member’s capital account consists of money deposited for the member in a savings bank or credit union [...]. On the contrary, capital accounts involve paper transactions between the members and the firm. Real money is, of course, involved because management is obligated to manage the cooperative with sufficient skill and prudence so that the firm can meet its financial obligations to members if they leave the firm or retire. In practice, however, the financial contributions of members are not segregated from other funds but are used for general business expenses.

So there are no equity owners in Mondragon cooperatives. When you begin at a cooperative, you start a capital account. In that capital account, you have your contributions and entry fees. The money in the capital account collects interest, which is paid out in cash. The profits that flow to you based on your hours worked and pay level is deposited into your capital account. So none of the profits actually flow to you like dividends; they are all retained by the firm in this capital account.

The capital account is not set aside somewhere. It is simply a figure on a piece of paper that you are entitled to when you leave or retire. When you do leave or retire, the cooperative pays out your capital account to you from its general funds (it has a reserve fund set aside as well).

Thus, your ownership share in the firm is whatever figure is in your capital account. You own that much of the cooperative’s capital basically. Regardless of the size of your capital account however, you only get one vote in the general assembly that ultimately controls the cooperative.

Like every other cooperative scheme I’ve seen, this worker-ownership scheme has risk diversification problems. To have a bunch of your “capital” invested in the same firm that you work in means that negative shocks to the firm have the ability to harm you twice, once as an employee and again as an owner. If the firm goes under altogether, you would lose both your job and your investment. Ouch.

A cooperative complex of Mondragon’s size could probably mitigate some of this individual risk by internally insuring members of each cooperative against these catastrophic possibilities. If one firm fails, it could use funds from the umbrella Mondragon entity to make sure its workers are paid out and such. I have not read anything yet in Making Mondragon to that effect, but I’d be surprised if they didn’t have some internal system that deals with cooperative failures and the impact they have on members’ capital accounts.

In his piece, Konczal links to a post by Ingrid Robeyns arguing that a basic income is not so hot of an idea from a feminist perspective. I think she is wrong, and will resurrect my line-by-line rebuttal style in this post to respond to the arguments she advances.

Before I get into it, it is important to note that Robeyns is offering her arguments within the German context. Given my ignorance of Germany’s welfare state situation, I cannot comment on whether her arguments work in that context. I am approaching them within the framework of American institutions.

Which women will UBI clearly advantage?
Robeyns writes:

There’s only one group of women for whom basic income will clearly be a short-term advantage – women who would not (want to) be on the labour market, with or without a basic income. But for other groups of women the total income and labour supply effects are unclear and hard to predict.

Robeyn mentions two criteria to use in evaluating the effects on women: 1) total income and 2) labor supply. So she picks out not-in-labor-force (NILF) women as the only group of women that is clearly advantaged because 1) they are making $0 already, meaning their total income will necessarily go up, and 2) they are out of the labor force already, meaning the amount of labor they supply cannot go down.

Robeyn’s use of total income in this analysis is wrongheaded. As I understand it, she is observing that women making high enough incomes will actually see their post-tax incomes go down as a result of the UBI because they will pay more into the UBI system than they get out of it (relative to their market income). These women will be net income losers as a result of the UBI, and so they are weighed against the UBI in the feminist lens.

This is simply bizarre. Stripped down, the argument says that redistribution is, at least in part, not a feminist venture because high-income women are harmed by it (relative to their market incomes). A feminist lens that says inequality-reducing programs are partly anti-feminist because they reduce the total income of rich women needs to be trashed. This is especially true given the gender wage gap, which ensures women are much more likely to be lower-income than men are. Wasn’t intersectional feminism supposed to get rid of this kind of myopic take on things?

If we dispose of the “total income” part of the analysis, and we should, then only the labor supply disparity part remains. But these issues only really present themselves in women-men partnerships where women will be tempted to reduce their labor force participation at higher rates than their men partners. Therefore, there are actually three groups of women that are clearly advantaged by the UBI: 1) not-in-labor-force (NILF) women, the category Robeyns picks out, 2) single women, and 3) women in same-sex partnerships (SSP).

A single woman is not in a position to reduce her market labor supply relative to her male partner — thereby creating the gendered division of labor that Robeyn is concerned about — because she does not have a male partner. Same goes of course for SSP women. How many women do these three categories include? A lot. According to the April 2013 CPS, 41.2% of adult civilian women over the age of 20 were not in the labor force. According to my own calculations of the April CPS, 52.5% of adult civilian women are without a spouse, a figure which closely mirrors others produced on this topic. According to my own calculations of the April CPS, around 72% of adult civilian women in the US are either NILF or spouseless or both.

I don’t know how many SSP women there are, but you can throw them on top of that figure as well, and you start to see that — a least when we get rid of the total income argument — the vast majority of US women fall into a group clearly advantaged by the UBI. That is, the vast majority of women are not in a situation where the woman-man gendered divide of labor concerns really present themselves.

The gendered division of labor among partners
So again, we are only talking about a minority of women for whom this really comes in. But they exist. So what about those cases?

Robeyn writes:

Moreover, a basic income does nothing to change the fact that many (most?) women want to share care and unpaid work [with men], independent of the financial consequences.

Even if we stipulate this is true, it is not a point against UBI. A UBI will fail to accomplish all sorts of things, just like any other program. For instance, introducing a UBI in the US will not fix the Israel-Palestine situation. It doesn’t make much sense to attack the UBI for things it will not change. Robeyn goes for these kinds of arguments often.

Robeyn writes:

I’ve also increasingly come to question whether it will contribute to any serious revaluation of care and unpaid work. Since a basic income is given to all citizens, including those who do not make any positive contribution to society, how can it signal a positive revaluation for care work? If it is given to a 18-year old school drop out watching videos all day on the same terms as to a full time carer, how can it signal that society appreciates the work that this carer does?

This is a mean-spirited run at high school drop outs. Besides that, it is very weak. In the status quo, the high school drop out gets paid $0 and the full-time carer (i.e. someone doing care work) gets paid $0. After UBI, the dropout is paid $10,000 and the full-time carer is paid $10,000. How could the latter situation possibly be worse than the former? This is another of Robeyn’s “it doesn’t fix this other thing” arguments that just strike me as entirely irrelevant. UBI would give carers $10,000, but would not change our perception of them. Since our perception of them is a wash between the status quo and the UBI world, then how does that weigh against UBI? It doesn’t.

Robeyn writes:

But if a basic income is introduced together with a reform of the tax rates from progressive taxation on labour to a flat tax rate, and with the abolition of child care subsidies, then a basic income is likely to put mothers into a child care trap. The monthly cost of a full-time child care place in the Netherlands is over 1.000 Euro; so the basic income for children will not cover that cost.

US does not have child care subsidies, not that I am aware of. So this argument is inapplicable in the US context. In other contexts, the social wage described above could be designed to fix this problem.

Robeyn writes:

a sizeable basic income will take such a large share of GDP that there will be no public funds left for important goods such as public schools, physical and mental health care, child and elderly care arrangements, and so forth.

Social wage with conditional enhancers for children, for the disabled, and for the retired, fixes most if not all of these problems. If you really want to fund these things directly instead of giving out cash and having people pay for them, it’s just a matter of budgeting it out.

All in all, I don’t see Robeyn’s arguments here as very convincing, but then again I am not sure she does either. She concludes the piece by saying “the devil is in the details,” which suggests to me that she holds open that whether any of her cited issues arise will depend on the UBI design. The UBI would be a huge boon to poor women, which there are more of than men and which are disproportinately women of color; single parents, which are almost entirely women; other single women; and women who are NILF. The gendered division of labor problems that pop up in the minority of situations can be managed, and Robeyn’s main argument about those problems is not that UBI causes them, just that it doesn’t solve them. Fixing our misogynistic culture is important, but it doesn’t make sense to attack the UBI for failing to do so.