I think Varoufakis is profoundly misled in thinking that basic income can be a left-wing policy.

It is a well-known fact that there are two versions of basic income out there: the right-wing version, where welfare is removed and replaced with a single allocation that isn't high enough to live of it; and a left-wing version, where the distributed amount is sufficient to live a decent life and thus gives "real freedom" to people.

Here is why I think the left-wing version is a fantasy: I start from the assumption that capitalistic economies like ours mainly relies on coercion. In other words, critical parts of production depend on people who would rather do something else, if it wasn't their only way to eat. Under that assumption, any policy that gives people a real choice between being employed in a factory and doing the things they really want to do removes in fact the coercion — making the economy collapse.

The form collapsing would take could for example be the following: low-paid, exhausting and low-considered jobs are not taken anymore, and yet society depends on them. The only way to make the workers come back is to pay them much better. But this can only lead to a combination of dramatic price rises and cuts in shareholder profit (and I am not an advocate of capital income, but sadly it is currently one of the main incentives for investment).

For these reasons, I am convinced that any attempt to implement a left-wing basic income will inevitably result in the right-wing version taking over, meaning less rights for the workers and a destroyed welfare.

Why do all discussions of basic income omit the best argument in favor of it?

I would think, especially on a site like HN, that people would realize just how valuable BI would be to entrepreneurs. Many people don't pursue business ideas for fear that they'll burn through savings or have problems paying for the necessities of life. With BI, that concern goes away. You may have to scale your lifestyle back a bit, but you basically start at ramen profitability.

And yet all discussions of BI tend to frame it as an extension of welfare given to people who can't earn enough to support themselves. I'm not against taking care of the poor, but when you frame the argument like that, you miss the benefits to society from all that extra entrepreneurship.

>The idea that you work hard and pay your income taxes, while I live off your enforced kindness, doing nothing by choice, is untenable. If a universal basic income is to be legitimate, it cannot be financed by taxing Jill to pay Jack. That is why it should be funded not from taxation, but from returns on capital.

Capital is savings is unconsumed income.

"Universal dividend" is another name for tax on investment which is another name for tax on income. Whether confiscating income to pay for leisure is "untenable" shouldn't depend on the name you give the act of confiscating income.

In the end, a corporation is a machine that takes investment now and distributes dividends later, and the reason why the investment occurs is the promise of dividends. A corporation has to distribute $100 in dividends to get $75 into the hands of its investors (given a tax on capital gains of 25%), or it has to distribute $100 in dividends to get $75 dollars into the hands of its investors and $25 for the government because the government confiscated 25% of the IPO... what's the difference? I guess in Varoufakis' model people can still buy, like, gold as an investment and enjoy preferential taxation.

The fixation on IPOs seems more than fishy to me. Corporations that already exist would get to pay 100% tax free dividends, whereas corporations that IPO after the watershed moment give the unnamed percentage of dividends to the "Commons Capital Depository"? What about private companies? This would just create uncalculatable incentives. Corporations are already going far too much for war-chest over dividends as it is.

So why not at least tie it to estate taxation? It seems so obvious to me that Varoufakis not mentioning the possibility looks like him being all too careful to avoid stepping on certain feet.

Seize that percentage when they are passed on from someone who (maybe) earned the capital to someone who by definition did not. Convert shares to special "dividends taxed for CCD" shares if you don't want to repeat for each generation and/or you don't want to mess up voting. It would certainly create an imbalance between public corporations and privately held ones, but according to the usual anti-estate-tax arguments that is exactly what you want: don't split up the family farm. But share portfolios are inherently splittable. If the next AT&T or Standard Oil turns out to be a private company due to abuse of this imbalance, forced IPO beyond a certain size might be an emergency hatch option. But that is one of the few problems where i think it is perfectly reasonable to not put too much thought into before they happen.

I do however like the idea of something UBI-like that is not defined by needs (with all their inherent negotiability and the destructive bickering that comes with it) but directly by the capability of the underlying economy.

(edit: removed concrete numbers which i somehow thought were inside the original article, but which i only accidentally picked up from a peer comment)

The only problem with this is that it would concentrate ownership of all industries in the hands of the government, eventually.