Luck, the Butterfly Effect, Capitalism, & Taxes

It’s always strange to realize how much a small instant can change our lives.
I think of many famous actors, and they probably don’t know the junior casting agent that advocated for them to be auditioned which lead to super stardom.

So many people’s life have been incredibly influenced by small actions of someone they may not even know.

I remember applying to Shopify in 2011. I was working in politics at the time so my LinkedIn was as plain and boring as possible. You don’t want to attract the attention of the other party’s “Opposition research” team. (Most “scandals” or most weird news you hear about a politicians past on the news was most likely fed to the media by someone’s Opposition research group).

At the time in my application I told them how they needed to integrate shopify with WordPress. I got an email back telling me they looked at my Linkedin and didn’t think I was a good fit. I hadn’t even thought of my LinkedIn when I applied. I focused on my cover letter and answering their questions. I didn’t even reply back challenging that either. A year later I was at WordPress VIP and was tasked with reviewing the new Shopify WordPress plugin for security and performance concerns. The very one I had essentially been told I was not good enough to write.

It’s strange because that tiny thing, my linkedIn profile has in a way had a huge impact. If I had been a Shopify employee at that time, I would have had stock options that would be worth millions. It’s interesting how tiny decisions can have huge impact. I know it’s the butterfly effect and it’s been “proven”, but still, thinking about it in actions in ourselves and for others makes it so mesmerizing. And just so we’re clear, I’m not hung up about not having gone to Shopify. I have had a great career and I’m financially comfortable.

Now, let’s imagine the flip side of this. A small action by someone else, or by ourselves could have incredibly negative impacts on our lives or the lives of others.

The wheel of chance is not just one of fortune. A chance encounter at a store can catch you COVID no matter how diligent you may try to be. A missed appointment for sickness can cause a spiral of debt.

This is something I’ve mentioned often, what chance has made yours is not really yours. But also, it’s all just chance. Sure the actions we do can help us spin the wheel more or fewer times. But it’s still chance.

As much as we as a society see folks like Gates, Bezos, Buffet, as smart folks. They aren’t really. There are thousands, if not millions of people who are smarter. What those people were was lucky.

You perhaps don’t believe me, so read this article. tl ;dr if 90% of an outcome is skill and 10% chance. If you have 10 000 people applying for 10 positions, on average only 8 of the 10 most skilled people will make it. If something is, more realistically ratio of 75%-25% then, the top 10 in terms of skill only have a 50-50 chance of getting picked. That’a not to say they aren’t skilled, just that their luck is what tipped the scale.

The ramifications of this are wide and should lead to far less inequity in the world. I’m not saying everyone should have exactly the same things and work shouldn’t be rewarded. But let’s face it, after 100 million in the bank….. you’ve received more than enough for your skills. The rest was just chance, OR, even more likely chance, skill, and taking advantage of others.

Now that I’m not in gov I can say random things like, The tax rate on capital gains should be the same as work income (I know I probably could of said stuff like this because of the way the policies are written, but I’d rather not).

It’s insane to be that someone making $500 000 from investments gets taxed only 1.5% more than someone making $45 000 from working (Federally [15% vs 33% / 2]).(1)Okay, it’s slightly more complex than that because it’s the income that is calculated at 1/2 and not the tax rate, but that should mean that it’s usually less than 1.5%. But again individual situations will vary. https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html

The investment is really just a bonus for having money. It’s a luxury of having been able to have early lucky breaks. I know all the alleged economics thinking behind this, but if there’s something that’s been proven true in the last 100 years is that economists don’t really know what’s going on.

Now after raising capital gains taxes and instituting a wealth tax for fortunes over 10 million (2)Yes yes, I know all about the alleged risks of people just moving money offshore, etc etc, we should just do something similar to the Americans and if you want a Canadian citizenship, you need to file Canadian taxes and you’ll pay a certain minimum % (over a certain amount, let’s say 250 000 a year) to keep that Canadian citizenship
If you don’t want to pay those taxes, you’re welcome to renounce your citizenship.

Of course, this wouldn’t be one of my blog posts with a sort of tie in to basic income. A guaranteed basic income (not universal) would enable people to weather those bumps and would help make it so people can keep spinning that wheel of chance. We need to decide what our values are as a country. I think the Pandemic has made it clear that not everyone starts on the same footing and not everyone has the same privileges, and we should greatly question the reasons behind that while still rewarding top talent.(3)Also, yes I know I only have enough Economics knowledge to be dangerous and just like folks who have no background in Computer Science shouldn’t opine on the future of AI I should probably stfu. But you know…. I’m human

Footnotes   [ + ]

1. Okay, it’s slightly more complex than that because it’s the income that is calculated at 1/2 and not the tax rate, but that should mean that it’s usually less than 1.5%. But again individual situations will vary. https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html
2. Yes yes, I know all about the alleged risks of people just moving money offshore, etc etc, we should just do something similar to the Americans and if you want a Canadian citizenship, you need to file Canadian taxes and you’ll pay a certain minimum % (over a certain amount, let’s say 250 000 a year) to keep that Canadian citizenship
3. Also, yes I know I only have enough Economics knowledge to be dangerous and just like folks who have no background in Computer Science shouldn’t opine on the future of AI I should probably stfu. But you know…. I’m human

Buying Toilet Paper / Poverty is Expensive / Financial Success as a Virtue

So I bought toilet paper recently, because it finally came back on sale (for context to anyone reading this in the future, for some reason there was a run on toilet paper at the onset of the pandemic). But all that to say, we hadn’t needed to buy toilet paper since January. Part of that is because when stuff is on sale I’ll just buy a ton. It’s not like we might stop using toilet paper, or that the toilet paper is going to go bad or there’s a new version of toilet paper that will make all previous ones incompatible until you install a new firmware on your internet connected toilet.

But there’s a big privilege in that. I’m able to wait until the toilet paper goes ~50-60% off and stock up. I can even wait for it to go on sale at Costco (which is why I end up with 100+ double sized rolls and don’t need to buy it for months).

In my early 20s, I wasn’t doing so hot financially(1)this is an understatement, it was a disaster, I remember once buy a 4 pack of toilet paper at giant tiger because well, there wasn’t any room on my credit card for any more. I couldn’t do the smart thing and buy it on sale in bulk. So I paid wayyy more per roll, which is ironic because I needed the money a lot more now than before. Poverty was very expensive.

Somewhat related, we have a belief as a society, one we hold onto dearly, that the world is a meritocracy. And don’t get me wrong, in some ways it is, yes, on average, if you work hard, you’ll on average do better than someone who doesn’t.

But the deck is stacked. Not only is the deck stacked, but we then use it as an excuse for discrimination / moral judgment. We don’t have as many people being outright discriminate, we kind of sneak it in via proxy, and often that proxy is an economic one.

We had (and still have) many systems in place that made it so certain groups weren’t able to build wealth, be it via underfunded schools (to say nothing of the residential schools clusterfuck(2)I don’t even feel like clusterfuck is a good enough adjective to describe that shameful history), racist or classist policies for housing(3)some of you might think this is mostly related to the US since we hear about their stuff more often, but no, CHMC also helped racist shit, unequal access to healthcare(4)I wouldn’ tbe able to make any money if I didn’t have my meds, and many other ways I’m not even aware of.

And this is going to sound like a broken record, but this is one of the reasons I support a basic income. It’s not going to fix all that shit directly or undo the damages of the past. But it at least ensures everyone has a floor with which they can build on and it’s a good start to fixing the race and gender wealth inequalities.

There is no reason we have poverty in Canada, as Martin Luther King said:

Now we realize that dislocations in the market operation of our economy and the prevalence of discrimination thrust people into idleness and bind them in constant or frequent unemployment against their will.
The poor are less often dismissed from our conscience today by being branded as inferior and incompetent.
[…]
The contemporary tendency in our society is to base our distribution on scarcity, which has vanished, and to compress our abundance into the overfed mouths of the middle and upper classes until they gag with superfluity.
[…]
The curse of poverty has no justification in our age. It is socially as cruel and blind as the practice of cannibalism at the dawn of civilization, when men ate each other because they had not yet learned to take food from the soil or to consume the abundant animal life around them.
The time has come for us to civilize ourselves by the total, direct and immediate abolition of poverty.

Footnotes   [ + ]

1. this is an understatement, it was a disaster
2. I don’t even feel like clusterfuck is a good enough adjective to describe that shameful history
3. some of you might think this is mostly related to the US since we hear about their stuff more often, but no, CHMC also helped racist shit
4. I wouldn’ tbe able to make any money if I didn’t have my meds

The Wellbeing economy

I’ve been thinking a lot recently about the future of work. I’m sure you know I’m a big advocate of a basic income and thinking thru the changes it can have to society is very interesting. The recent pandemic stuff I think will just increase societal change at an even greater pace.

One thing that has been constant and will increase is automation. Many of the jobs right now where people are being put at risk are retail jobs. Self checkout is probably going to increase exponentially as people want to distance themselves as much as possible. But I think those predictions are a bit banal at this point. Everyone knows that’s going to happen and the world will be changed. And while we do need a basic income for the transition, I’m not pessimistic about the future.

And the reason for that is that I think society / the “economy” will change once again. We went from agriculture, to factories, to services. The next step I think is the “Wellbeing Economy”.

It’ll be a great resurgence of soft skills. Everyone will have a counsellor / therapist, we’ll have more physiotherapists, nutritionists, massage therapists, “life coaches”, etc.

Basically, we’ll move from provide services to providing wellbeing. If that’s what comes next, I’d be okay with that.

Basically, we’ll move from provide services to providing wellbeing. If that’s what comes next, I’d be okay with that.

The economy is overrated

Someone once told me they didn’t bring back the cart at the shopping center because it “helps create jobs”. It’s a bit like we have accepted that there needs to be Bullshit Jobs.

A speech I’ve always liked is this one by Robert Kennedy:

It demonstates so well how the GDP and so many other measures of “success” are faulty.

Even the way we measure the economy is all wrong. This NYT article does a very good job of showing why even with a low unemployment rate and a high GDP we have so much inequality and suffering.

It reminds me a bit of vanity metrics (A metric that makes you feel good without telling you anything about your business). We have started to optimize our government policy for those vanity metrics. Instead of going to the root causes of what makes a great society we have metrics that, while initially well intentioned, have distracted us from the real goal.

Leaving behind the old metrics in search of better ones would be a good start. (until we end up corrupting those…)

The Federal Governement Should Take Over the Basic Income Pilot

The provincial governement has cancelled the basic income pilot in Ontario. This is sad news and similar to what happened with the Mincome experiment in Manitoba in the 70s.

I think this time it’s a great oppertunity for Justin Trudeau and the Liberals to take the program over. The pilot is all about capturing data to help inform social policy. The cost of the program, specifically the costs that are left now that it’s up and running are miniscule in terms of the federal budget.

Please contact your MP, especially if they are a Liberal and ask them to support this.

Read my other posts on Basic Income

Without a Basic Income, I’d be Living on the Street

I’ve just read the news that the provincial progressive conservative government will be cancelling the basic income pilot.

I recently joined the board of Basic Income Canada Network and will be getting more and more involved in spreading awareness and doing advocacy work for a guaranteed minimum income.

To that end, I wanted to start with an explanation. The story of why I believe so strongly in the basic income movement.

In my late teens / early twenties I struggled with depression and generalized anxiety. I dropped out of university and was trying to start a web development business by freelancing. The cost of my medication was $650 a month. I wasn’t covered under my parent’s insurance since I had gone to university and dropped out. For reference, that was more than my rent. I struggled to pay my rent. I actually paid one month with one of those credit card cheques. It’s not that I didn’t know it was a terrible idea, that the fees were ridiculously high, I just didn’t have any other choice.

One day I was at the downtown bus stop and a man approached me. He was clearly not well, he started talking to me about the medication he had to buy. It was the same anti-depressants I was on. He wasn’t able to afford them, and now, he lived on the street.

I was very fortunate. I had family members, particularly an uncle, who was able to give me money. I got a basic income from my family and I managed to pull thru. Now I’d like to think I’m a good contributor to society, paying taxes, volunteering etc.

The only difference between me and that man on the street was that I had family members with money. That shouldn’t be the determining factor in someone’s life.

A guaranteed minimum income is not a handout, it’s a leg up. It allows folks to keep working without all the benefits disappearing. Right now almost all Canadian welfare programs will stop if you find a part-time job. You want to try driving for Uber? Your benefits are cut, sometimes directly to zero.

A guaranteed minimum income like the one Ontario was piloting has a gradual clawback mechanism which encourages people to keep working. It helps people start a small business by having a safety net. It helps folks stay in school, and helps reduce hospital visits.

That’s why I’m asking you to support a basic income by:

1) Sharing this post or the BICN homepage on your social networks.

2) Reach out personally to one or two people and talk to them about basic income. The personal outreach makes a big difference in convincing others.

3) If you’re in a position to do so, consider donating to BICN. Be it $10, $100 or even $10 000, that money will make a big difference to our ability to reach folks and spread awareness of basic income.

If you have any questions feel free to post them in the comments or to email me at stboisvert@gmail.com.

Basic Income

I haven’t talked much about basic income here. But if you want to know if you should learn about it I’d recommend reading about the current trials going on in Ontario:

https://www.thestar.com/news/gta/2018/02/24/from-barely-surviving-to-thriving-ontario-basic-income-recipients-report-less-stress-better-health.html

If you’re interested in learning more: https://www.basicincomecanada.org/basic_income_primers

Has a great walkthru.