I've seen it said repeatedly that BI will save us money (or at least, not be so outrageously expensive) in part because we can eliminate existing welfare programs. "Just cut a single check, no more overhead from several agencies", they say.
But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food? Do you tell them "tough shit, you've exhausted all your social safety nets" or are there safety nets below BI, essentially recreating the welfare programs previously destroyed? If so, how do you prevent fraud without a department following up on Joe's twelfth "my car broke down" case of the year?
Personally, I'd hope the system would absolutely tell them "tough shit". There's got to be a line where the safety net gives out, because someone is too expensive to help.
That's where family and charity hopefully take over.
At the same time, I think your instinct is right, and it's something I've never heard mentioned before. It's almost inevitably that there'll then be the "food security" fund, and the "housing guarantee" fund.... and then we've just recreated the existing system.
That's the best argument against BI I've heard, and one I'd love to hear rebuttals to.
You'll find there are two voices for BI, the liberal and the liberatian. The liberal would prefer to keep universal healthcare and food programs and put cash on top, making the total distribution to the poor larger. The liberatian would prefer to simply move the complex paternalistic safety net into a simpler cash payment which doesn't disincentivize work while not increasing it's size.
As an aside, if you pay attention you'll see the two types of people will squelch their vocalizations in the interest of a short term alliance in support of BI.
Personally I believe the liberal position has both moral and practical superiority. It's going to be cheaper to make sure people have bread and vaccinations despite themselves than it's going to be to solve the resulting issues later.
>> "The liberal would prefer to keep universal healthcare and food programs and put cash on top, making the total distribution to the poor larger."
I'd definitely say I look at it from a liberal (non-libertarian perspective) but I don't agree with your statement. I believe universal, free health care should be available but not a food program. The money you get as your BI should cover basic living requirements - rent, food, clothing, heat. I come from a country which has free health care (NHS) which I think should remain in place. If citizens had no choice but to pay for health care then the BI should be higher to cover that cost (although I think cost of health care would rise and people would end up screwed - hence why we should have a free system). So put simply your BI should be enough for you to live 'comfortably'. That doesn't mean with a nice TV and steak for dinner every night - it means clean, warm shelter, healthy home cooked meals, adequate health care etc. The essentials for living. If you want anything more you can work. We're putting more trust in people by giving them the money without any conditions on it but I believe if there aren't extra safety nets and BI is equal to or greater than current welfare payments people will learn quickly. Their financial position doesn't change, just the trust put in them.
Health care is a fundamentally different kind of expense. Housing, food, clothing, basic necessities are pretty stable expenses in the short run. An income of a particular size could be judged to be more or less sufficient for the needs of that expense or not.
Healthcare is a lottery. If you're 30 years old, your healthcare needs for the year might be $0 or $1,000,000. Trying to make basic income cover that doesn't make sense.
Healthcare for an individual is a lottery. For a population, it generally isn't. In other words, the total expense to provide healthcare for everybody is a pretty stable expense, which is why it makes more sense to handle at the national level, with the individuals who 'lose' the health lottery being subsidized by those who do not.
The common complaint I've seen against this (aside from general complaints against redistribution) is that it forces the general populace to pay for the poor health choices of smokers and other such bad habits. I think this is a relatively minor issue, but if necessary, penalty taxes/fees can alleviate the concerns of people legitimately bothered by this.
A real lottery for a population isn't "a lottery" in that sense either. The lottery business is reliable just like the health insurance business and for the same reason.
The thing about having the government pay for healthcare at the national level is that it would also incentivize prevention of diseases, as a way to cut costs over the long term. At least that's what's supposed to happen without too strong Big Pharma lobbying that would prefer the population to be as sick as possible.
How does that happen? Doesn't this imply government interference in people's lives (eat this, eat that, exercise etc.,)? Given that such advice is frequently shown to be wrong, this is problematic.
The NHS doesn't seem to incentivize prevention of diabetes in the UK. To quote 'UK Diabetes': "Diabetes is the fastest growing health threat of our times and an urgent public health issue. Since 1996, the number of people living with diabetes has more than doubled. If nothing changes, it is estimated that over five million people in the UK will have diabetes.". This disease largely results from personal choices often made on the basis of misleading information.
Just keep in mind that we will likely never reach the ideal balance between the voice of the people and megaphone of money.
The impact of lobbyists and money is a necessary consideration in any discussion of political solutions to problems.
> I think this is a relatively minor issue, but if necessary, penalty taxes/fees can alleviate the concerns of people legitimately bothered by this.
It is not minor at all. Depending on how you look at it, smoking either costs the health care industry billions (in treatment of the living) or saves them billions (on premature death). Compound this by: diet, exercise, stress, and socialization problems and you see that the lottery has a lot of knobs and buttons, most of which will only be effective if people get effective health care their entire life.
>Third, Collins and Lapsley estimate the net costs of smoking, taking into account both those costs that are made greater and those that are reduced because of current and past tobacco use. For example, smoking increases some health care costs because of the higher prevalence of diseases caused by smoking (in smokers and ex-smokers who are still alive). These are the gross health care costs attributable to smoking. However, certain other health care costs are lower than they otherwise would be because of the premature deaths of many people who smoked over the past 40 years. These people did not live to use health care that they otherwise would have, so Collins and Lapsley subtract the costs that would have been incurred from the gross health care costs attributable to smoking in order to estimate the net cost. Similarly, in terms of labour (production) costs first costs that are made greater by smoking are estimated. For example, the time spent undertaking domestic duties because a home-maker is ill or has died prematurely is costed assuming domestic help will be hired. Then, savings due to reduced consumption—for example, household spending on food and clothing—are subtracted because these costs will be lower when there are fewer people in the household as a result of smokers dying earlier.
>Collins and Lapsley estimated that in 2004–05 the total cost of smoking in Australia was $31.5 billion
That would be an interesting analysis: savings of premature deaths from smoking vs long terms costs of people that smoke and don't die and costs of treating those early deaths before they die. Intuition says the costs probably outweigh the benefits there. Even so it feels pretty macabre (and species threatening at the extreme [1]) to consider someone dying before they need medical care a savings.
[1] Considering killing someone before they're born saves the cost of them and any children they would statistically have. So if we wiped out everyone we'd save all the money ever spent on healthcare.
The high taxes for cigarettes (and similarly alcohol) should also be taken into account when considering net gains/losses. According to this [1] in the uk at least the taxes more than cover it for tobacco
Here in the US the taxes are much lower for a large portion of the country [1] so it probably doesn't come out so much in favor. Though long term health care is also more expensive here so it might all come out as even or similar enough.
It creates enormous social pressure to increase cigarette and alcohol taxes. In Canada both are quite high and the general population supports it due to the public healthcare burdens.
For health issues I think this type of pressure is a positive social force.
How is [1] distinct from rational control of population (eg birth control by default), which will presumably be necessary to avoid food and resource waste (or war/starvation)? Health care seems to be just another factor affecting population cap.
[1] Differs from normal population control in it's extreme application of reducing costs by any means. Also population control has additional concerns beyond just reducing costs by not having people to deal with like sustainability of resource consumption and to me there's a large difference between a person never being born and dying early. Really my [1] wasn't meant to be seriously at all.
Another way to think about this is if a person comes into existence, then BI demands their immediate universal right to the resources to sustain their life comfortably without any contribution from that body.
So really, those who multiply the fastest win the resource war of the future? Or having kids is somehow constrained now through other hoops, like a "procreation license."
> Or having kids is somehow constrained now through other hoops, like a "procreation license."
Possibly, though better educated and better off people tend to have fewer children so there are other ways to limit population beyond strict China or Ender's Game style limits.
Or maybe asteroid mining will finally break and crash the whole materials economy making everything but space, food, and water extremely cheap.
My point is this: universal BI requires some level of population control (to prevent poverty and misery), and eventually some level of reproductive planning.
Really we'll need either population control or (more likely and) to drastically limit consumption (or the impact of it maybe more closed cycle recycling) with or without BI.
> The common complaint I've seen against this (aside from general complaints against redistribution) is that it forces the general populace to pay for the poor health choices of smokers and other such bad habits.
If you want your 21st century healthcare, you also gotta let go of outdated notions such as that addiction is a "poor health choice" (seriously kind of makes me angry typing that).
> For a population, it generally isn't. In other words, the total expense to provide healthcare for everybody is a pretty stable expense.
The one does not follow from the other. Just because it's predictable does not mean it's stable: you can modulate demand by, for example, making people jump through bureaucratic hoops or wait in long queues to get care.
> The one does not follow from the other. Just because it's predictable does not mean it's stable: you can modulate demand by, for example, making people jump through bureaucratic hoops or wait in long queues to get care.
...as we have seen in far too many countries with universal healthcare (leading those with the means to seek healthcare from other, more market-driven systems...which in turn leads to those without the means to receiving sub-standard care, or quality care subject to bureaucracy and long queues.)
In short, it's a self-licking ice cream cone. (But this is quite the tangent from the BI discussion - wherever your opinion falls on the matter, universal healthcare is an entirely different thing indeed.)
It's a lottery at most ages. Age 39 health care costs: $0. Age 40 health care costs: $45,000. Due to a single incident of slipping and falling on an icy sidewalk. I carry insurance because (1) you never know when something big might happen and (2) I have to just in case the Republicans ever get their wish to "repeal Obamacare" and suddenly my kidney donation to my dad becomes a pre-existing condition again.
#1 is a legit reason for insurance. I'm having a hard time with #2 though. You elected to have a condition that others might have to eventually pay for. Now this was an extension of your dad's condition, so really his insurance company (pool) should pay for your condition's expenses, but with the help of Obamacare, all insurance companies are going to share in these expenses and raise their rates, and they can raise the rates more than their actual costs, because with all the new regulations, how many plans can you really choose from? So we now see healthcare providers laughing all the way to the bank, and a new form of guaranteed income for the insurance workforce. #1 and #2 shouldn't be in the same system. That's what needs to be repealed.
The rules around "pre-existing conditions" are completely asinine. Under the old rules that Republicans would like to go back to, I'm covered as long as I don't have any period that I didn't have insurance since donating the kidney. However, if I temporarily lose health insurance and then get health insurance again, that kidney donation 16 years ago magically becomes a pre-existing condition again for a period of multiple years. Even though nothing at all happened in that short period I went without health insurance.
The kicker is, health insurance companies will use any pre-existing condition to get out of paying for just about everything. So, for example, if I wound up getting poly-cystic kidney disease, my insurance company would use the fact that I donated a kidney as a pre-existing condition to get out of paying for it. Even though it's completely unrelated and can't cause PKD. It's an out in their mind and they're going to take it.
Health insurance and medical care in the US is absurdly corrupt. That's why I wasn't allowed to leave the hospital without buying a walking boot from their provider. And their provider billed my insurance company $700. And the insurance company paid them $400. And then the provider billed me $100 and threatened to send me to collections if I didn't pay them. All for a walking boot that didn't fit, that I didn't use, and that I could have purchased from Amazon.com for $53 with free shipping.
> but with the help of Obamacare, all insurance companies are going to share in these expenses and raise their rates, and they can raise the rates more than their actual costs
Only if they are below the maximum premium profit-to-cost ratio (20/80), otherwise, they are going to have to refund the excess anyway, due to other provisions of the ACA.
I really think the MLR cap was the biggest improvement Obamacare brought. It means keeping a genuinely expensive patient might mean your shareholders get to take home more money, so the incentive is "keep their business" rather than "treat them well enough that they can't successfully sue you for more than you'd have spent on them anyway."
Except that, on the whole, an individual in the US who 'loses' that lottery is going to cost themselves/their insurance significantly more than an identical individual in another country with the exact same condition, due to multiple levels of negotiation, backroom dealing, 'in-network', overcharges, etc.
That 30 year old individual with the $1m healthcare bill for the year in a for-profit system might well have only cost a public system (e.g. in Canada) $200k for the same standard of care, but with less additional financial stress impacting their ability to recover from their illness, and with no bills, phone calls, rejections, negotiations, and arguments after the fact.
It's just another example of how a uniform, public system works better.
Disagree. I had a valve replaced, and researched extensively what my experience was like vs. that in other countries. I received an unquestionably higher standard of care. I had my choice of valve, doctor, hospital, I had nearly zero wait (a few weeks from diagnosis to surgery, and only because I asked for the time -- in my circumstance there was a double digit chance of death, and I needed to ... process), and the nursing care that I received after surgery in the ICU was literally one-on-one - there was a nurse assigned to me. I had a bed that massaged and hammered the goop out of my lungs, I had tasty food (when I could eat again), and I had some say in when I would be discharged. The only thing that wasn't absolutely first-class was that I had a shared room with two beds post-ICU, but even that's becoming uncommon in the US.
After reading on the experiences of people from European countries and Canada in the 'OMG I had a valve replaced' forum (yes, there's a site just for that -- valvereplacement.org), the level of care that I received was significantly better than what is typical of public health systems.
Oh, and last week I needed to see the doc for a sore throat, and I was in the same day. Queues are a regular thing in public systems.
I think there are a lot of data points missing in this anecdote.
What do you pay for health insurance? How many people in the lower levels of society could afford to pay what you pay for healthcare? Do you have an employer that provides you with healthcare benefits?
I agree that healthcare in many countries could be greatly improved, but at least in many of those systems you could just walk into an hospital to start the process.
My employer offers a few options for health insurance. At the time I was a young and healthy 29 year old (or so I thought) so I was enrolled in the low cost high deductible option. It costs less than $200/month between both the employer and employee portion of the contribution for that plan today -- at the time (in 2009), it was less than $150/month, but our costs went up significantly with the advent of Obamacare. Total medical bill came to about $350k, down to $250k with insurance co's negotiate rates, of which I was responsible for approximately $5k. I was sitting on a pile of cashed earmarked for a mortgage downpayment at the time ... so I didn't have to go into debt over it, but even if I had, for most people $5k isn't a bankruptcy event type debt.
For a significant number of Americans, a $5k bill might as well be a $200k bill. A lot of people are living month-to-month on far less, and I wouldn't be surprised if most people couldn't actually afford that, or couldn't even manage to acquire $5k in debt, let alone pay it off.
The reality is that you're in a privileged position, and it may not seem like it to you but there are a huge number of people out there for whom your situation would be effectively a bankruptcy trigger. And that's even assuming that their company lets them off work long enough to get treatment and recovery, which, in at-will states, doesn't seem like a thing that's likely to happen for a lot of the working-class.
I'm from Europe and I know of a lot of people who wouldn't be able to front a $5K bill. With the US system I would still think there are many who would fall below that line as well. Free healthcare as exists in some european countries actually helps those people.
More anecdotes: every single urgent care center I visited is 2hr+ wait; then I opened my Blue Shield CA online doctor registry and called some — do not accept new patients or available in a month.
For rich people/folks with wonderful insurances the other countries with public healthcare have private care in private hospitals, and it's of the same class — with one-on-one nurses and good food.
Sure, but, like, changing the fundamental cost structure of our health care system seems like a pretty big add to the already absurdly big policy change of a basic income.
(Which is not to say that I disagree with you, though I do think that there are actually three different cost categories of health care:
1. Routine/preventative/minor care. Probably best dealt with as out-of-pocket costs.
2. One-time catastrophes, like "I broke my arm" or "I got pneumonia." Probably best dealt with as insurance.
3. Long-term or lifelong large expenses, like "I have HIV" or "I have MS." Probably best dealt with as a government program.
But then you'll have a lot of problems with the boundary cases.)
Just want to point out that making routine/preventative care an out-of-pocket cost is probably one of the worst things you can do. I expect there's a reason many companies emphasize and encourage their employees take advantage of 100% free preventive care under their insurance plans. You can save a ton of money later by catching and treating issues early, and even a small personal cost can encourage people to ignore warning signs and not seek aid until the problem has become severe and expensive.
Yeah, this is deeply off-topic, but my reading of the evidence is that preventative or diagnostic care is typically not cost-effective or even outcome-enhancing, with a few specific exceptions like vaccinations.
I have heard this as well, but I think the point still stands. Things like annual physical's might not be a net positive, but you don't want to deter people from going to the doctor when they think something could be wrong.
Interesting. I'd love to see support for this view. Everything I've heard suggests the opposite. Especially if you consider worker productivity in addition to healthcare costs.
It's a complex subject, and a few articles aren't the final word one way or the other. My opinion is based on various things I've read over the past couple of decades (most of which I can't summon up right now) and conversations with various medical professionals in my family and social circle, and my overall worldview (as anyone's must be).
Ok, this is interesting. Some of this fits my intuitions, and some was a surprise to me, so yes, this does modify my view, but only slightly.
It seems there are preventative measures that are cost effective, and there are others that are not. So really, this indicates a need to determine a threshold. Perhaps we determine that we can afford to pay up to $50,000 per QALY, and cover any care that falls within that limit. So, we'd have coverage based on its efficiency rather than whether it is considered preventative or treatment or maintenance. The idea being to get the maximum amount of healthy years of life out of whatever amount of money we as society are willing to put toward healthcare. This could also be extended to programs outside of direct care, like some of those articles suggest, which encourage and support healthy activity in a way that still falls within the $/QALY target.
Of course, I expect it would be a bear to fairly study every possible treatment and program to determine its efficiency, especially factoring in a changing environment which is bound to change the efficiency of any given treatment from year to year.
Still, at a minimum, we should be grabbing those low-hanging fruits, where we can gain healthy years for a very low cost.
I'm going to say this because I'm in a similar situation now.
For weeks, I've been having pains in my chest, back and sides. I know for sure something is wrong. And I fear I may be dying.
But being unsure where my next meal will come from, I can't even visit a clinic to get a test done.
I keep praying to get some money so I can go check myself before I leave my young family without a caregiver.
So yes, whatever you guys argue here today. Make sure people like me in future can be cared for. And that they don't have to worry about food, shelter, Healthcare.
However, that small personal costs may very well help not fill up a queue to the doctor for mundane, trivial crap that would have gone away in a day or two. Care quality is improved when the doctors are less stressed and can spend more time with their patients.
Free-as-in-beer health care ensure more people going to the doctor for more crap, reducing availability and quality for the average person.
I expect there's a reason many companies emphasize and encourage their employees take advantage of 100% free preventive care under their insurance plans.
Yeah, it is called brainwashing. I worked in insurance and was all tickled to see them offering "wellness" benefits. I was all "Oh, yay, the world is turning into a better and more clued place!" Then I went to the meetings. These were purely a sales gimmick. That's it.
You encourage people to go to their annual check up and they feel like you actually care. It breeds employee loyalty. It mostly does very little for actual health outcomes. If you actually want better health, you are better off promoting exercise, healthy eating, sanitation, etc. in place of preventive medical screenings.
> 1. Routine/preventative/minor care. Probably best dealt with as out-of-pocket costs.
This is a pretty terrible idea. Even programs in the current day that are trying to make consumers feel their healthcare costs (like HSAs and their required high-deductible PPO plans) often or always cover preventative care at 100%.
Preventative care is precisely the kind of care that people are most likely to skip to save on some money, and at the system-level this just means much more costly healthcare. Regardless of how you structure your healthcare system, increasing the cost of the actual care itself is a horrible idea.
> Sure, but, like, changing the fundamental cost structure of our health care system seems like a pretty big add to the already absurdly big policy change of a basic income.
We already have a national individual mandate for health insurance with specific coverage rules which has made decisions about this; essentially, a mature BI would cover expected out-of-pocket costs plus insurance premiums in that system.
(That's not to say further reform of that system isn't possible or desirable, with or without BI, just that, given the existing system, there seems to be a fairly natural way that healthcare within that system fits into BI.)
Sorry, I misunderstood your previous comment to mean that you thought we should go to an India-like "out of pocket" system plus (optional) health insurance to handle catastrophic costs. Rereading, your intent is clear.
(Not sure why I jumped to that conclusion, except that perhaps a basic income system appeals to the same economic minimalism that an out-of-pocket health cost system does.)
> Routine/preventative/minor care. Probably best dealt with as out-of-pocket costs.
This seems like a terrible idea. If someone, for example, notices a new mole, they are much less likely to get it checked out if it is an out-of-pocket expense. Obviously, most of the time it'll be fine, but it could also be skin cancer that was easily treatable but has now metastasised and will be hugely expensive to treat.
I would suggest the idea of private insurance is actually completely non-functional without such heavy regulation that you might as well just institute public provision — which also has the benefit that it does not heavily incentivize over-provision.
With a competitive insurance market, you charge people a premium related to their expected healthcare costs. Some people have chronic diseases, and their expected healthcare costs are way beyond what they can likely afford.
However you regulate, insurance companies will always try to find a way to cream off the lowest risk customers to offer them the cheapest deal, progressively chipping away at the idea of collective insurance until it breaks.
Private health insurance is broken not only in practice but also in theory.
For sure - it's kind of absurd because healthcare costs are an inevitability.
With car and home insurance, the products can go their entire lifecycle without burning down, being robbed, or smashing into a tree.
With healthcare, a person is going to need it, and it incapacitates them when they don't get it. Personally I'm for treating healthcare as we treat most regional monopolies that everyone needs - make it a public utility. You'll need healthcare just like you'll need water and electricity.
> With healthcare, a person is going to need it [...]
Not really, at least not at the current stage of technology.
During most of your life, healthcare is more like a lottery, ie you might never need it.
When you are old, something will eventually get you. And a lot of health care costs are spend on these end-of-life conditions. Alas, our massive spending at the end doesn't actually help very much: they mostly give you a few more month of suffering. (For things like cancer etc.)
For a lot of people hospice care is both cheaper and provides a better quality of life. (Some in-law of mine went from hospital care to hospice care when the cancer treatments got worse than the disease.)
So you're saying that you don't eventually need healthcare, except for when everyone needs it then it's the most expensive?
That's like saying you don't really need electricity until later in the day, when it's more in demand for everyone. Should we treat electricity use as a lottery?
In fact, people should be using healthcare more, as a preventative measure (for reasons you just said), but because we treat it like car accidents and house fires and lotteries it's stuck in remedial mode.
>When faced with a terminal illness, medical professionals, who know the limits of modern medicine, often opt out of life-prolonging treatment. An American doctor explains why the best death can be the least medicated – and the art of dying peacefully, at home
To be clear, there are a few different kinds of health care along multiple dimensions, like
- price
- expected mean utility (as measured in quality adjusted life-years gained)
- variance of utility (which I am ignoring here)
I am saying that at current state of technology, if we exclude the expensive stuff with near zero or even negative utility, the remaining demand for big items fits an insurance model rather well.
Yes, I agree that we should probably do more preventive interventions---like exercise, decent nutrition, vaccinations, etc. These are mostly cheap.
And even though they are good for people already, the insurance company might very well decide to just pay for them (and perhaps even pay people extra on top with discounts etcs to nudge them even more) to save itself money in the long run.
EDIT: There's of course also expensive treatments that provide a lot of quality adjusted life years, but the need for these are more like a lottery. (Eg treatment after a car accident or massive burn, or certain treatable cancers.)
So why not explicitly pass a subsidy (e.g. through the tax code) for the chronically ill? Disguising such transfers through regulatory costs is both inefficient and dishonest. It's also very unclear whether society would choose to subsidize all sick people. For example, those who are sick and rich enough to afford their insurance premiums (or who were lucky enough to obtain long-term coverage before they got an expensive medical condition, so their premiums are low), might not merit such transfers. If women have higher expected lifetime health costs due to pregnancy-related care, society might or might not want to have healthcare-related subsidies that amount to a transfer payment from men to women.
The proper way to make these sorts of decisions is by passing laws that make the transfer payments explicit, not disguising them in byzantine insurance regulations.
The system that exists now in the US is broken and already exactly what is described.
Those with money pay too much for insurance because those without insurance are only covered at the last stages, when it becomes inhumane (by anyone's definition) to deny them care (which is also the most drastic and expensive level of care for a problem) which is then 'written off' and padded in to the 'prices' asked for other services.
A LOT of medical costs are actually sunk fixed op-ex. Big expensive machines that cost deferentially little to use or not (but always coast a lot to have the option of using), drugs and other supplies that have shelf lifes, etc.
Labwork presently requires a lot of humans, but much of it could also be converted to automation and human review, lowering the per unit cost; if there were incentive to make such technology.
It's also a major bit of administrative overhead to have to haggle with different insurance companies, hound patients for billing, and in general worry IF someone will pay and how much.
Sorry to basically just negate your post but I do believe that you missed answering the last question in explaining details.
The poster asked, how would the provision of basic income further turn healthcare supply in the US to a negative sum game as compared to private insurance supplemented with corporate and government benefits?
Your response does a fair job of detailing some of the current issues with the US healthcare system but does not mention how basic income would make these issues worse. Would you kindly link the two for those of us who are not making the connection?
You're correct, I was explaining why it was /already/ a negative sum game.
I suppose the closest parallel is what I recall hearing happened to auto-insurance rates when those became mandatory.
Another close parallel would be what would happen if everyone in the San Francisco Bay Area were to suddenly receive an additional 500 USD/month housing allowance for living in the area. I would expect occupancy prices to go up by ~500 USD and the general quality of housing anyone current has to remain the same otherwise.
(And incidentally, that's a great argument for replacing almost all taxes with taxes on land rent: any extra money people have left over after paying taxes etc goes to bid up housing costs. Lower taxes and you get higher housing costs. A land tax can recover the lost revenue---and it's really hard to hide land and evade the tax.)
and looking at the After-tax Lease & R&D adjusted margin, The software industry is at 24% (8th place) and the Insurance industry is at 11.51% (37th place).
You can drive the cost of healthcare up without having large margins
Just like Hollywood never makes a profit, you can't use profit margin to measure what the cost savings would be in moving to national healthcare system.
Healthcare can be universally provided via BI w/o having single payer government universal healthcare. Individuals can choose (not) to buy health insurance with their BI payments. Thus getting coverage or not as they see fit. Its a bit of a gamble because it turns everyone into an actuarial (do i feel lucky this year? should i buy insurance? Am I higher or lower risk than the cost of insurance?) .. But, it also allows market forces to drive down the cost of insurance and healthcare provision.
The problem with that is that it requires not treating people who are uninsured and unable to pay for care. "Sorry you got hit by a drunk driver, but we think that the risk is too great that you and the guy who hit you won't ever pay the $100,000 it would cost to fix you." That's pretty unpalatable.
Also people with pre-existing expensive conditions would need to pay a lot more.
Either, because insurance companies charge them more.
Or, if insurance companies are not allowed to charge them a special price, healthy people will be reluctant to pay for (now) overpriced (for them) insurance.
One clever technical way out is to have your parents buy insurance for you before you are even conceived. This way, because neither the buyer nor the seller of insurance knows what's coming, it's not a market for lemons. (And if the parents genes make this kind of insurance too expensive, because it's expected that you inherit some defects, perhaps they should rethink their decision to procreate with each other. (Just like couples with sickle-cell-anemia on both sides are already advised.))
But of course, people will not be that farsighted, and we don't want to penalize people for their parents making stupid decisions, like not to buy insurance, more than necessary.
So in actual life, a basic version of an NHS like system plus optional extra insurance you can buy seems like the most sensible policy.
I see what you're saying, but how can one get a market forces involved so that the price of care isnt super high and that users have some choice.
I have lived in a country with universal healthcare. Its not that cheap, my portion of taxes that went to healthcare was about the same as the highest cost Kaiser plan. But Kaiser (thus far) is leaps and bounds better than the care received.
Where I am from you make an appointment with a doctor, and they will almost certainly be 30-60 minutes late for it. Then when you do get in the room with them, they will give you 15 minutes max because thats all the government pays for. Similarly every person I know who needed something done is on a waiting list. For months and a small number for years.
People complain about the cost of US healthcare, but if you can pay for it then it does seem excellent.
I disagree on this. BI is not supposed to solve the healthcare issue. Right now most people have some money, but some of them still gamble with their life, or healthcare cost is still too high for them. That won't change if they have some extra money every month.
You can make the same argument about almost every government benefit/wealth transfer; food stamps fall under this category, as does a housing allowance, etc.
Even the world's crappiest healthcare plan protects against the worst case. I know - I had a major health event at age 29, and I had absolutely garbage insurance. $350,000 in hospital bills later, with approximately only $7k out of pocket, I was all fixed up (as well as current medical tech allows, at least) and my heart was a click-click-clicking away. Insurance with deductibles in that range for a single (and ~double that for a family) is really relatively cheap.
The thing I'd like to see is government services that will optionally replace portions of your Basic Income.
If you're having problems feeding yourself, I would like to see an opt-in program where you can receive food, in exchange for $X out of your BI. If you're having problems housing yourself, an opt-in program for housing in exchange for $Y out of your BI.
The same options should be available for all the necessities (clothes, food, water, shelter, communications, and savings). The sum of these government services should sum to your total BI grant, so if you opt-in to all government services you have the basics of survival totally covered but receive no direct BI.
This makes sense to me because I have a feeling most people who would need to rely on BI also have a problem managing money.
As an example, I once had a homeless guy ask me for money outside a grocery store. I suggested that we go inside and get him whatever food he wanted, and he said he'd wait for me outside. Sure enough he was gone by the time I returned. I'm fairly certain he only wanted the money for alcohol or drugs. That kind of person doesn't save money for food, they beg for food and use the money for other purposes.
If you made the program automatically adjust your BI down when you started accepting food from government programs, that would basically act as the government stepping in for people who just aren't able to handle money.
As a counter-example, I had a similar experience with a mother and her daughter, except that they were still there when I came back out and were thankful for the food. I'm not saying that they're not bad at managing money (maybe they are), but there are more than one group contained within the label "that kind of person".
I've had other experiences with homeless men turning down food when I offered it. I know that my father-in-law would be (and has been, in the past) happy on the street, using his money for cigarettes and gambling with his friends. There are a lot of different kinds of people that would need to be accounted for and different motivations.
But the alcoholic might need the drink more than food, and the drug addict might need the drugs more than a place to live. Perhaps not being sick for a couple more hours is the best thing for them at that moment. I'm not suggesting that you are under some moral obligation to buy them drugs, only that not giving them anything is not a moral position in itself.
So what if he did buy booze with it? I buy booze with my money and there's nothing wrong with that. If someone asks me for money, and I feel inclined to give it, the money becomes theirs, and why shouldn't they spend it on whatever seems like the best choice for their circumstances? And what gives me the right to decide what that best choice would be? I'm not living that life. Maybe a bottle of whiskey really would offer the most comfort per dollar. That's pretty sad, but why judge the person making the choice? Judge the situation offering them that choice instead.
I don't want them to destroy their bodies. I don't want them to fuel black markets with my money, and this is speaking as an occasional consumer of mind altering substances not available in pharmacies.
Further, I don't have much money. I cannot afford a lot of stuff for myself. So I can only help with necessities. And I don't want to judge whether any given person is lying.
In conclusion, I never hand out money. But I've bought quite a few bags of groceries for strangers.
Well, that seems reasonable. I'm just not OK with the whole "deserving poor" idea that seems to be baked into American political philosophy when it comes to homelessness and poverty support, because I don't want to have control over other people's lives any more than I want them to have control over mine.
Freedom isn't freedom without the option to fuck up.
The problem is that the US system has such incredibly low social mobility that it prevents any alternative to fucking up.
The mythology of personal choice applied to situations over which hardly anyone has actual personal control is perniciously misleading.
The "undeserving poor" - feckless, addicted, irresponsible - is just as much of a cliche as the opposite.
In fact, BI research shows that most people don't waste the money. They use it to improve their lives - sometimes by starting small businesses that wouldn't be possible without BI.
Your response is phrased in the form of a rebuttal, but I think I agree with everything you are saying, so far as I understand it, which leaves me to wonder if I didn't explain myself clearly.
I believe that the concept of "deserving" or "undeserving" poverty is not just unhelpful but actually misleading, and creates a great deal of unnecessary confusion. It is more useful to ignore the personal details and look at the systems. We can't change other people; we can rarely change ourselves; but we can certainly change systems, because they are human creations in the first place. So that's how we should approach poverty.
I am in favor of basic income as an improvement on and replacement for other forms of social support, for a variety of reasons: it seems like a more efficient way to move money around, it seems like a more effective way to distribute resources to people in need of them, and it seems overall like a more egalitarian, less judgemental way of dealing with a whole complex of problems which currently create a great deal of suffering. It is simple enough to feel like good engineering. It is fair enough to feel sustainable. It is non-ideological enough that I feel reasonably sure it would be difficult to use it as a mechanism of social control against weirdo outliers, like I am, but who aren't fortunate enough to have access to the same resources I do.
By "option to fuck up" I mean simply the freedom to do something other than mainstream opinion thinks you should. In these examples, people clearly believe it would be a bad idea for someone begging on the street to use the money they earn to buy alcohol. Well, on average, that's probably true. But just because someone is in a desperate way, I don't believe that gives me (or you, or anyone) the right to tell them what choices they should make. It's still their life. If I am willing to hand the guy on the street corner my spare $5, I have to be willing to accept that he's going to do whatever he thinks best with that money. If I can't be happy with that I shouldn't give him the money. But I believe that each person generally is the best judge of what is best for themself; I'd like it if the society around me would leave me free to make my own choices, not because I'm successful enough not to have to beg for money on the street, but because that's how I think we should all treat each other all the time, regardless of circumstances.
In general, I favor freedom of determination; if your randomly selected person wants to spend their BI on drugs or alcohol, fine. But the persistently homeless are not at all a representative sample population. There are a number of intersecting problems, especially mental health and addiction, that place them among the least credible cases for self-determination. We can argue about where the cutoff is, but there will always be people out at the end of the bell curve that need more active intervention.
And that's without even getting into the problem of perverse incentives involved in giving money to people for asking for it.
Then why all the philosophy about what "kind of person" he was and whether he would use the money "for other purposes"?
If someone asks me for money, and I give them money, it becomes their money, and it is none of my business what they choose to do with it, any more than it is any of their business (or yours!) what I would have done with it if I kept it.
Otherwise, you're not really giving them help, you're taking some amount of control over their life.
"If someone asks me for money, and I give them money, it becomes their money, and it is none of my business what they choose to do with it"
It isn't if your idea of help is unconditional donation. But is there anything wrong if I see donations as investments (in society) with expected returns on the same? Would I be wrong in trying to maximize my returns?
Where did I mention that my objective was maximizing my influence? The objective is improvement in the society. My influence has nothing to do with it.
The point is, just giving money does not absolve us of our moral responsibility. If I donate with an objective of social good, not just with the idea of dispensing my spare wealth, it is my right and duty to see that my investments give the maximal return, i.e. maximal social good.
Of course I can be wrong/ suboptimal in my investment strategies but then I can improve.
On the other hand, if you were paying part of the bill for his treatment, you'd also be incentivized to help him out in ways that might prevent that fate. I believe that, at the end of the day, we're all in this together. So to me, clarifying that economically is a feature of public healthcare, not a bug.
This has always struck me as one of the stronger arguments against the idea of public healthcare, which otherwise seems like a good idea. I feel quite certain that this tool of social control would be used against me, to dissuade me from engaging in some of the dangerous activities which give me great pleasure, and am therefore extremely reluctant to accept the argument that this is a legitimate use of power against other dangerous activities I don't happen to prefer.
> I have a feeling most people who would need to rely on BI also have a problem managing money.
I think this depends on what you mean by "rely on". I could see many people who are very capable of managing their money relying on BI to allow them to take behaviors that would be risky in the absence of BI. For example, a college student who is choosing between starting a small business or interviewing at larger companies may significantly rely on the BI when deciding to start their business.
However I agree that, when viewing BI as a safety net, those who would need it are disproportionately likely to also need help managing the money.
> dozens of high-quality evaluations of cash transfer programs spanning Africa, Asia, and Latin America and including both unconditional and conditional cash transfer
The richer the society you live in, the more it becomes lbhe snhyg[1] that you are poor. Imagine how hard you would have to work to be homeless in the world of Star Trek TNG, for example.
[1] I rot13'd that text because it's not the best expression, and it might knock some people off, but I don't have time to euphemize things for adults.
Yeesh just put it in scare quotes next time. Rot13 doesn't make it any less offensive to those who would be offended and just makes it more annoying to read for everyone.
Understandable point of view comming from a man selling books how to change your behaviour towards money :p In general I can't even begin to take the statement serious though.
Dave Ramsey has ascribed to an unbelievably unrealistic view of peoples' responsibilities for their financial outcomes, as well as what they should sacrifice to be solvent. All this coming from a huckster who sells rainbow snake oil.
We live in a world now where we get half the porridge our parents did, and he's teaching us how to starve and hide porridge in our pockets for rainy days. He's part of the problem and a distraction.
The thing is that with Basic Income these no longer need to be Government Services, they can be private services if the government just guarantees private organizations opt-in access to a piece of the paycheck prior to its distribution.
Essentially, allow people to pre-commit to paying for a specific expense to a private organization which has to provide that service. They can opt out later on, but only before their next basic income check.
Also, I think there should be some sort of auto-enrollment system. So if you're found homeless, having blown all your BI check on booze, you'd be automatically enrolled in the top housing provider.
"Top" is relative, you can be at least given the choice of provider, but I am absolutely certain in a UBI scenario offering your UBI for simple living provided for you would be a huge industry, and would also account for anyone who cannot manage money like OP says just fine.
The problem with this is that it negates one of the biggest benefits of BI -- getting rid of red tape and bloat.
Printing and mailing checks can be done almost fully automated and would close down millions of welfare buildings, and give people back dignity.
There's a stigma that you get when you're on public assistance or welfare. It creates a feeling of less self-worth. This causes you to believe that the best job you'll ever get is McDonald's - so why even try to better your circumstance.
GBI on the other hand goes to everyone - even the wealthy. The message is that we're all equal and it's basically a reverse citizen tax on the government to ensure everyone can live and grow in nurtured environments.
The world I see in the next 20 years - there will be no more truck drivers. Fast food restaurants will be run by 1 manager alone. Gas stations will be ran by self-serve kiosks, and be fully automated, as will be grocery stores - including re-stocking. Other jobs that will be gone: Surgeons / Doctors (probably not fully but the need will be a lot less because of AI like Watson, where you once needed 30+ doctors in a hospital you might need only 3 or 4.), construction workers, trash trucks, oil rig workers, fishing, pilots, military (replaced by drones / droids), manufacturing, etc...
We will move from a society where it's expected that everyone work 40+ hours and sometimes two jobs to meet basic needs to a society where work is optional, and 20 hours is the norm. More focus and time is spent with family and having experiences that truly enrich one's life. GBI gives people the freedom to also pursue entrepreneurism, startup ideas, music, art, writing, and any other number of hobbies and past times that could enrich society in general. Studies have shown that truly happy people aren't the ones who have the most 'stuff' it's the people who experience the most that life has to offer (i.e. traveling, events, concerts, etc...)
For us to get to GBI we need to hurry up the automation revolution -- I'm a Bernie Sanders supporter, and progressive democrat who's FOR robots at Wendy's and McDonald's as well as a $15+min wage... I see it coming. 40% of jobs will be gone by 2030 and never replaced. The faster we tip the scale and hit the dirt the faster government will need to respond or there will be riots when people are starving and losing jobs left and right. It needs to get worse before it can get better essentially.
If you think that a McDonalds will be run by one person in the next 20 years, I would wager you haven't worked at one. Unless you develop a robot that can scrub build-up from a urinal, unplug a toilet that was overflowing with feces and toilet paper, scrape ice off a sidewalk, wash a window, test a burger patty for the correct internal temperature, scrub built up scum off the inside of an ice machine, and dust off the plants in the lobby, all at a reasonable price, then no, we won't have robotic fast food with 1 employee. There are a world of single role task that robotics can handle, but there's also innumerable tasks that a human is better suited to handle, despite being menial jobs.
This fantasy that AI/robotics/self-driving vehicles is just around the corner is like fusion power - perpetually 15 years in the future. It'll happen, eventually Moore's law will make it possible, but it's not as close as people think.
And your comment about "The faster we tip the scale" is almost inhumane considering the impact. It needs to get worse before it can get better? I suppose that goes with "Never let a crisis go to waste..."
I think the McDonalds of the future may look more like a vending machine than a restaurant. Of the the things you listed, only "test a burger patty for the correct internal temperature" is actually related to producing McDonalds food, and that is certainly automatable.
But that aside, if all that's left is basic cleaning then McDonalds could simply contract a cleaning service. I'd guess that a single team could service at least 10 fast food restaurants a day. And then how many years before running the cleaning service only requires one person?
<We will move from a society where it's expected that everyone work 40+ hours and sometimes two jobs to meet basic needs to a society where work is optional, and 20 hours is the norm.>
"We'll lose a bundle on each recipient, but we'll make it up in volume."
> More focus and time is spent with family and having experiences that truly enrich one's life.
i guess if someone is on basic income then he will not be able to afford a family of his own; raising kids is quite expensive. A basic income receiver will also be out of luck if he has to support a member of his family who got into trouble, if your family is unable to be a potential source of security and everyone is alone on his own then the concept of family will become more brittle.
To me basic income sounds like a way to create a dependent underclass - very dependent on the state for that matter (and will probably vote for the party that is most likely to continue with the basic income policy - so it will likely be a politically agitated group).
And that's not quite conductive to the idea of personal happiness...
Basic income is an attempt to deal with a growing number of people who are unemployable in the modern economy. I think a better way would be to find meaningful work for these people - maybe in such areas as caring for disabled and elderly or in education (i think we are out of luck with automating these tasks). This approach would be harder and costs more to implement than just dealing out the welfare checks, so it will probably not be adopted...
> To me basic income sounds like a way to create a dependent underclass - very dependent on the state for that matter (and will probably vote for the party that is most likely to continue with the basic income policy - so it will likely be a politically agitated group). And that's not quite conductive to the idea of personal happiness...
We already have that - and it's currently very hard for people on welfare and/or disability to ever pull themselves out of it. With basic income it becomes possible to start working 1 hour a week, then 2, then 3..., without having to worry about losing your benefits or getting in tax trouble.
> Basic income is an attempt to deal with a growing number of people who are unemployable in the modern economy. I think a better way would be to find meaningful work for these people - maybe in such areas as caring for disabled and elderly or in education (i think we are out of luck with automating these tasks).
If people find those things fulfilling to do themselves, they will do them (and basic income allows them to do it unpaid). If other people want them to do those things, they will pay for it. If no-one wants them to do those things, there's no value in them doing it.
> If people find those things fulfilling to do themselves, they will do them (and basic income allows them to do it unpaid). If other people want them to do those things, they will pay for it. If no-one wants them to do those things, there's no value in them doing it.
So it will bring down salaries - why bother with paying a salary when you can get volunteers on basic income for free?
Unpaid work by basic income receivers is an interesting question on its own - on the side of the employee there would be the question of motivation; on the side of the employer there would be questions of reliability - can one trust an unpaid employee to appear at work reliably and in time ?
I think it's not a source but a removal of distortions. If there are a lot of people with PhDs but what society really needs is a few ditch diggers, then it's right that ditch diggers be highly paid. If theoretical research is "difficult" but fun and rewarding and ditch digging is "easy" but boring and stigmatized, it's right that ditch diggers be paid more than researchers - and note that this will also mean more effort is devoted to automating ditch digging than automating research.
I don't think that the same number of people will still feel motivated to acquire a PhD if they know that in any event ditch digging will get you more money to begin with.
If people don't want to get a PhD, and we don't have much need for people with PhDs, then reducing the number of people who get a PhD sounds like mission accomplished.
Why would it be better for the government to provide this than the existing food distribution and supply chain?
Not unlikely scenario: some department is created to handle these necessities, they hire a bunch of people for terrible admin jobs, and they still sub-contract a bunch of the specific work to private companies.
> Why would it be better for the government to provide this than the existing food distribution and supply chain?
It probably isn't, but one possibility is that the government would be such a huge customer, that they have significant negotiating power. Per-unit costs would consequently be much lower.
The agencies required to maintain all these services will come at a cost though; and I bet that removes the "Well, we won't have to maintain thousands of agencies for giving these specific kinds of aid" argument in favor of BI.
That having been said, I personally like this idea a lot. Maybe the balance between the two can be adjusted by cutting out (the market rate + agency cost) out of your BI – i.e. If a month's cheap food is $200 at cost, if you participate in a food stamp program, it takes $250 out of your BI (since a bunch of people have to be employed to verify things about it).
That way, people will be more motivated to not use the government agencies since they get a better deal by just saving that amount out of their BI.
Hm, except that this seems to penalize people at the bottom who cannot adequately manage their own finances and I'm not sure I'm completely comfortable with that.
In the UK currently, we do that by things like having pre-pay meters for electricity - but the pre-pay electricity costs more even though you paid for it up front! (there are other similar scenarios, where poor people are penalized because they haven't a positive credit report)
I don't know the answer though; I think what ncallaway suggested was to provide it at-cost which seems fair (also, the bulk-buying power of a food kitchen means that it should not really cost any more - in fact it may cost less than doing it yourself)
People who can't manage their own finances also tend to do badly at acquiring program support when aid comes in other forms too. However, it might be an improvement in overall effectiveness for charities to operate in models which charge part of the money from a basic income stream to administer aid (it greatly simplifies effort for charities which would normally have to devote a lot of attention to just getting together funding).
On the other hand, being able to 'sign over' a portion of one's basic income might open up all sorts of other abuses. (e.g. some sort of payday loan company that says, sign over your Basic Income for a year and I'll give you a lump sum right now...)
I would make it illegal and unenforceable for BI to be used as collateral for any financial transactions. Much in the same way that your IRA cannot be used to secure a loan [1], I would prohibit BI funds from being used to secure loans in any way.
I think BI definitely presupposes adequate management of your own finances. At some point it is a bit of a carrot and stick approach – maybe something like if you are on the food program for more than 3 years, then you start paying more for it, or something of the sort? I'm not sure.
> In the UK currently, we do that by things like having pre-pay meters for electricity - but the pre-pay electricity costs more even though you paid for it up front!
Given this information, I don't see how it is similar. It seems more like stupidity of the part of British Gas or whoever. Are the prepay meters used by poorer families who get subsidies paid directly into those meters or something?
No, they are often present in properties where the tenants have had trouble paying the bills in the past for whatever reason. As I understand it, they are very difficult to get rid of even for new occupants.
The electricity supplier gets more for the same electricity at no risk. Thats not actually stupid.. but in my opinion, it is in some way evil.
> The electricity supplier gets more for the same electricity at no risk. Thats not actually stupid..
Yeah, I meant stupid as in, 'No person would take that "deal" if they could help it.' I guess the people who are taking this deal are forced to take it, and that does make it pretty bad (especially if you are a brand-new tenant who isn't actually connected to the previous one who had trouble paying).
Here in the US, my electric coop offers a pre-pay plan for those who can't afford a deposit or who have had their electric shutoff (or anyone else that wants it). I don't think it is any more expensive than the post paid service, though. They also offer a budget billing where they average your last 12 months of service and bill you the same amount each month.
> I would like to see an opt-in program where you can receive food, in exchange for $X out of your BI.
Doesn't this already exist? You can exchange $X for food at stores, restaurants, etc. Why make a program that just turns the government into a grocery store?
The difference is that this comes out the BI before it is given to you as cash. $X is a fixed-price out of the BI, that provides a fixed amount of foodstuffs.
That is, if my monthly BI payment is $800 I can opt to receive a monthly BI payment of $600 and also be guaranteed to receive enough basic foodstuffs to survive for the month.
I would also set these up to draw off the next month's BI payment, effectively allowing you access to short-term credit for groceries. If we are in mid-june and I've run-out of money, I can start the government foods program immediately, taking the funding out of my July BI check.
These services would be intended for people who are having a hard-time managing their finances in a responsible-way. Grocery stores neither help people manage their money or provide short-term credit solutions.
> That is, if my monthly BI payment is $800 I can opt to receive a monthly BI payment of $600 and also be guaranteed to receive enough basic foodstuffs to survive for the month.
This is not necessary. Just distribute the money weekly (or daily) and let people figure out what to spend it on. If they would rather buy cigarettes than food, let them. When they're hungry they'll buy food.
That sounds like asking for trouble. Like payday loans - starts as a good idea that can help people, ends up as a system with the effect of luring people into massive dept.
Sure. The problem with a PayDay loan is that it replaces future capital with capital today.
For the small percent of people who have serial problems managing their capital, giving them capital is the worst thing you can do. This causes people to get trapped in a cycle.
The key difference here is you replace future-capital with the goods or services directly. It's much harder to turn food and/or rent back into capital, and then mismanage it.
I see what you're saying, although... Based on that explanation, I'd expect to see a much more diminished frequency / intensity of the PayDay loan issue, but...
...if Something Happens and you run out of cash this month, why would you expect to a) not have Something Happen next month or b) have enough surplus next month to repay the "loan"?
Well, I guess you'd want to peg the BI at "average cost of living plus buffer", so that the person always has enough liquidity to cover, say, a standard deviation of Oh Shit over the course of N months. Or, keep safety nets as nets (rather than traps) so that Oh Shit, Something Happened events don't cause this issue.
At what point do we stop? Current safety nets aren't enough, so let's try basic income, but some people will mismanage their money, so let's do their shopping for them.
The way I see it there will always be some percentage of people that mismanage whatever capital they have (be it earned or given), and have financial hardship that leads to a lack of food and housing.
With current safety nets, we have perhaps 15% [1] of Americans that for whatever reason lack the capital to have an adequate supply of food.
With Basic Income, perhaps we reduce that number down to 1%, but we still need to take care of that 1%.
With the government services program that I suggested (and there are many other models, and I'd be happy to discuss other models), maybe you get that number down to 0.3%. Yet, as a country, we still need to take care of those people.
Personally, when it comes to feeding and housing people, my answer to "At what point do we stop" is: Never.
UBI does have the advantage of making every single government program funded equally by everyone. An alternative to any government cost is a higher dividend cheque to all.
To use your idea though, you could join a voluntary mutualized/cooperative consumer union that buys food in bulk discounts to distribute to members, or pools 5-20 peoples UBI to buy a very large house.
How funny, we have the same idea, but I think it's going to be market driven, but kind of like obamacare, where its opt-out with a basic provider given to everyone.
The two types of people might squelch their vocalization when writing arguments in support of the BI. But both would vote in favour of the status quo against the other side's proposal if given the opportunity: liberals don't want a meagre BI to replace most of the welfare state and most existing low income tax credits and libertarians certainly don't want high taxes to pay for a generous BI in addition to most existing programmes.
It's a serious problem, no doubt. I would still probably vote for a meager BI because I feel it's easier to turn the knob up later than it is to get everything done at once.
I appreciate your candor. But for the libertarian side of things (where I see it myself), I think there's a real fear that this would happen: we're being sold on a promise of greater efficiency, less space for corruption, etc., but in the end, we wind up bringing back in all that baggage anyway.
Frequent libertarian here too – as I've started working with low-income populations in my day job, I've had many of my fundamental assumptions challenged – at this point, I'd say, more than sticking to ideals, I want to see data – if these programs solve well defined problems, there's a case for them. If not, then what are they doing and how can we fix or eliminate them?
> If not, then what are they doing and how can we fix or eliminate them?
That's part of the problem. Government programs don't need to fix or eliminate problems. Once they've been launched, it's virtually impossible to get rid of them. We're stuck with the War On Drugs, the TSA, ethanol subsidies, and on and on and on.
Fixing bad programs is very difficult, and once we've set something in motion, even if it was a really bad idea, it's all but impossible to pull it back.
EDIT: freudian slip - I typed "government problems" in my first para, where I should have written (and have changed to) "government programs".
All three of the programs you name are untouchable because they are funnelling money directly to powerful political stakeholders. Being real blunt here, poor people don't make political contributions and they hardly even vote. For the most part, they are easy political marks and cuts to general-population social programs happen regularly.
There are notable exceptions, like senior citizens - which is why we haven't done anything about the unfunded expediture on the Medicare prescription coverage.
While I won't discount your claim about hidden agendas behind much bureaucracy, I don't think you can really apply this to two of my three examples. For ethanol subsidies, sure. But it'll be much more difficult to make the same argument about the War on Drugs or the TSA. In these two cases, how is money being funneled to powerful political stakeholders?
Police departments and corrections officers of all types. The TSA is a giant jobs program for workers no one else will hire, and the body scanners are produced by a company owned by the Secretary of Homeland Security that mandated their purchase.
It should be obvious that government agencies lack the incentive (generally profit and the competitiveness necessary to maintain it) to meaningfully address and/or eliminate problems. Nor do they experience any significant downside to failure. They aren't legally accountable to shareholders and it certainly isn't their life savings that they stand to lose. Worse-case scenario, they're reassigned.
Government agencies aren't expected to innovate, they're legally required to carry out the will of Congress and do absolutely nothing else but the will of Congress.
Most of the "failures" you see are the result of a dysfunctional political system. For example, the Post Office was looking to branch out into services like bill payments, identity verification, banking, etc but Congress forbid them from doing it. Not to mention the crazy requirements Congress set for pre-funding their retirees. No private company has to do that - most of them are pushing their funding obligations off to the future. Underfunding retirement isn't a good idea by any means, but the playing field is most definitely not level here, both in terms of responsibilities or ability to pivot.
It's wildly unfair to blast government agencies for not innovating. They don't have a CEO or a board, they have Congress calling the shots. Of course they aren't agile. And even worse, half of Congress thinks the entire concept of government services is illegitimate and is actively engaged in sabotaging and defunding those services. There's not really a parallel in the private world where a CEO is destroying a company because he thinks it shouldn't exist.
As a left libertarian I fall firmly in the camp you call "liberal", for the reason that provisioning about universal healthcare is not just about cost, but about liberty.
If one sees protection of life as a moral imperative - because without life there can't be any liberty - then allowing someone to purchase priority over those who need healthcare most is already morally dicey; allowing them to do so without ensuring there is a well funded alternative a big problem (and no, doctors etc. are not an infinite supply that just grows to handle an increased demand).
To me, the right libertarian property centric view does not maximise liberty because it guarantees a resource distribution that deprives a lot of people of essential means. BI could help somewhat with that, but it would likely always be a bandaid - the bare minimum that keeps people quiet.
Being taken care of is security. They are completely different concepts.
If you are given liberty you can still make foolish choices that lead to a loss of life or shortening of your life.
Also, if someone else is forced to provide for the other person they definitely don't have liberty, they are basically a slave to another person.
A basic income system like that proposed by Georgists,Geo-Libertarians, and I think Thomas Paine (Agrarian Justice) is compatible with both left and right libertarian views.
The right to life is a moral imperative, but the protection of life is something completely different and is a slippery slope.
> Being taken care of is security. They are completely different concepts.
They are different, but closely related. The lack of security, health and life drastically reduce your choices. It is meaningless to have the right to make a choice, if the means and abilities to make that choice is inaccessible to you.
We can not give everyone the means and ability to be able to make every choice, but that does not mean there are not certain choices that are so basic that they are essential if we are to not make a mockery of claiming to want to ensure liberty.
> Also, if someone else is forced to provide for the other person they definitely don't have liberty, they are basically a slave to another person.
I would fuly support your ability to "secede", so to speak, from society. As long as you then were to accept that society can choose not to deal with you, as forcing rest of society to deal with you would equally deprive them of liberty, and as long as you control no more than an even proportion of land and other scarce resources.
Ultimately, if you truly want to maximise liberty for yourself as well as others, it means choosing to give up some of your own to integrate into wider society.
> A basic income system like that proposed by Georgists,Geo-Libertarians, and I think Thomas Paine (Agrarian Justice) is compatible with both left and right libertarian views.
It's compatible with some left libertarian views. More widely, it is compatible with the views of many left libertarians that even so see it as undesirable because it's basically a repeat of Bismark's "state socialism": Bismark created the first relatively modern welfare system explicitly as an attempt at pulling the rug from under the revolutionary movements in Germany at the time (at the same time as he outlawed dozens of parties and newspapers). His goal was to reduce the appetite for revolution, to prevent the socialists from going much further.
Basic income, similarly, is a half-assed measure at guaranteeing a bare minimum in the face of mounting fears that automation will in the coming years sooner or later make demands for larger reforms grow stronger (basically we're seeing mounting fears that Marx description of end-stage capitalism was correct when he assumed that capitalists will essentially run out of new markets to expand into and find that ultimately their only way of driving down prices is to drive down employment costs, and thus at the same time reduce their markets).
As such, it is "compatible" in the sense that it is - subject to issues about provisioning of scarce resources, such as healthcare provisioning - not worse than most current systems. But it is also not all that much better.
This is the reason why you tend to see far more support for basic income coming out of classical liberal groups than left libertarian / socialist groups.
Agreed. It does not address the high concentrations of wealth which allow a small minorty of people to be in direct control of the majority of our resources and economic activity.
> You'll find there are two voices for BI, the liberal and the liberatian.
Actually, I think the two main groups are both libertarian, though there's a left-libertarian and a right-libertarian viewpoint, with the libertarians that aren't strongly left- or right- splitting between them.
I personally prefer keeping the existing means-tested programs but counting UBI as income when considering eligibility, such that with growing UBI [0] you eventually reach the point where the income floor is above the eligibility level for the means-tested programs, allowing them to be discontinued.
[0] I also prefer basically tying UBI to a tax stream that should grow with economic growth, with mechanisms to provide reserves so that you don't have UBI drop with cyclical recessions.
This whole thread is odd to me. My understanding of libertarian philosophy is that welfare in any form (BI or not) is not within the state's jurisdiction. Where does that view go on the right/left spectrum?
> Where does that view go on the right/left spectrum?
Its a not-uncommon libertarian view that's probably more common the farther right you go (but you'll also find some left-libertarians who believe it; heck, you'll find left-libertarians that are almost completely opposed to the existence of the state as such)
"left", "right", and "libertarian" are all pretty broad groups within which there is lots of individual variation.
Consider: a world where everyone is entitled to a basic income (and hopefully also guaranteed healthcare) has a lot to offer for libertarians:
Fewer desperate people means you have the liberty to walk streets at night without the fear of being mugged. You are less likely to be panhandled by homeless people missing body parts because they couldn't afford their medical bills. Assuming BI suffices for the myriad of society's problems and replaces government solutions, it is an effective way to contain the state's scope and ambitions, since any "deserved" welfare scheme rests on the ideas that there are "correct" ways to live and "incorrect" ways that require welfare to fix. Basic income does away with that idea by providing what people need as the basis for life, liberty, and the pursuit of happiness, while not mandating a particular way to live (such as drug testing for food stamps or work/-searching requirements for the unemployed who would be shown the door if they preferred to live as an unpaid community volunteer). This is why BI is often attributed as a conservative idea.
There is a completely valid subset of libertarianism (which includes social libertarians) that would argue for economic liberty, and how your liberty can be impeded by finances just as much as by the gunpoint of the state.
It is often modernly invoked in the exclusive context of when taxes or state programs harm people enough to put them into financial insecurity, but it applies to private finance as well, and is principally rooted in the hierarchy of needs, which can also be considered a growing degree of freedom - if you are stuck at the bottom of Maslow's hierarchy, you are prisoner to it.
Agreed. Right-leaning libertarians strongly value the non-aggression principle. If the BI is to be funded via coercive means (e.g. income tax) it is morally impermissible and utterly incompatible.
However I don't doubt that some will accept it on a pragmatic basis, with the hope or expectation that it will lead to an overall reduction in violations of the NAP.
> I personally prefer keeping the existing means-tested programs but counting UBI as income when considering eligibility, such that with growing UBI [0] you eventually reach the point where the income floor is above the eligibility level for the means-tested programs, allowing them to be discontinued.
It might be better to directly subtract the benefits from any such program from the UBI. Then the only people who will even bother signing up for the other programs are the people whose total benefits from the existing programs exceed the UBI, which should be almost nobody. Then having demonstrated that fact in practice, those programs can be discontinued for lack of any real use and the savings can be used to provide slightly more UBI.
> Actually, I think the two main groups are both libertarian, though there's a left-libertarian and a right-libertarian viewpoint
That's an interesting distinction, I think of myself as pretty liberal but maybe I'm more of a left-libertarian after all.
I generally support UBI (at least for now, I'll certainly re-evaluate my position as more studies like this one are done). And there are other traditionally "liberal" ideas that don't sit right with me, like supporting the old guard of e.g. taxi medallion owners, hotel owners, landlords & property owners (by opposing market-rate housing development), etc. even when the new alternative is actually better for the average lower/middle class citizen.
Healthcare != food. As a liberal and a libertarian, I'd like to see BI replace welfare for basic living expenses like food, shelter, and transportation. Healthcare is different. It can be very cheap, or suddenly very expensive.
Part of the motivation for BI is that it's the least expensive means to the end of not having homeless people starving in the street (among other ends). Likewise, universal health care is the least expensive way to keep working-age adults from dying or being crippled by treatable health conditions.
I mentioned "cheapest". The American private insurance model is clearly not the cheapest. Americans pay about twice as much as other industrialized nations for health care, with the added bonus of many people not being covered. Worse, because the insurance system is employer-centric, many people are trapped in jobs they hate for fear of losing their insurance, starting your own business without a spouse who provides insurance is incredibly risky and maybe impossible, and small businesses are at a massive cost disadvantage relative to big corporations because of the administrative overhead of health insurance.
The current American system is completely idiotic. It's incredibly expensive, it's inconsistent and unreliable, and it undermines the basic American value of working where you want or starting your own business.
"It's going to be cheaper to make sure people have bread and vaccinations despite themselves than it's going to be to solve the resulting issues later."
The limited research so far seems to show people generally make good decisions when given money without stipulation, and the idea we need to tell them how to spend their money "despite themselves" is probably very misguided.
Of course, more research is needed, which is exactly what the YCombinator program is planning to do.
People can make good decisions, but one health care provider (e.g. the government, in most countries) can provide health care and purchase supplies more efficiently than individuals can.
Specifically, the American system is flawed because 'shopping around' between different providers whose sole purpose for existing is to make and maximize profits just results in you picking someone who's taking the least advantage of you. A single payer, for example in Canada, you go to any doctor, clinic, hospital, pharmacy, etc. and you get the thing. The health authority pays a fixed amount to the provider (and they make a good living, make no mistake), and the health authority attempts to maximize the value it gets from every dollar without compromising patient care, and following the mandate that everyone should have the same access to care.
> As an aside, if you pay attention you'll see the two types of people will squelch their vocalizations in the interest of a short term alliance in support of BI.
I don't think so, replacing one with the other sure, but adding a basic income atop all the other programs is a no-go for most libertarians. Otherwise you're just feeding the beast.
I agree with universal healthcare being separate from BI. I would also favor all of this being a kind of hybrid federal-local system. I'd also be receptive to having minimums. Like a minimum amount of basic healthcare (rather than unlimited). Also, for housing, give people a fair chance at finding a job wherever they got laid of from their previous longest term relevant job, but if they fail, move the resources to a more affordable area (after say, two years). Food, provide very basics (avoiding starvation) anything above these minimums would be covered by BI.
Why? Because some people will succumb to bad decisions and I'd rather the consequences be softened by a set of minimums.
> the liberatian would prefer to simply move the complex paternalistic safety net into a simpler cash payment which doesn't disincentivize work while not increasing it's size.
I dont think all libertarians are partisans of BI.
Universal healthcare is simply more efficient. The NHS delivers the same outcomes (longevity, infant mortality, etc.) as the American health system at less than half the cost (healthcare spending / % GDP).
Fully private provision of insurance for any events that follow a non-normal distribution (as most, but not all healthcare costs do) simply does not work, has never worked and will never work.
"Universal healthcare is simply more efficient. The NHS delivers the same outcomes (longevity, infant mortality, etc.) as the American health system at less than half the cost (healthcare spending / % GDP)"
This is completely false.
Both 'longevity' and 'infant mortality' are absolutely not measures if the quality of the healthcare system.
I've lived in Canada, US, Germany, France.
The best healthcare system is by far the US - however - it's very expensive, and it doesn't cover everyone, which are both big problems.
The quality of care for those who are covered in the US is unrivalled.
Of course, don't get the wrong insurance, you could be out o luck, and out on the street ...
Whenever anyone proposes universal healthcare in the US, I tell them two stories:
1) My aunt is an oncology nurse in a major city. A high percentage of her patients are from Canada, because they can get treated here for their cancer, and are unable to get those treatments in Canada (or can't get them in a timely manner). Of course, these are only the patients who can afford to pay it out of pocket or have supplemental health insurance.
2) My dad developed a rare lung disease and was treated by the VA (which is government run healthcare for veterans of the US Armed Forces). They determined he needed a lung transplant to survive. It took them 18 months to run the tests necessary to determine if he was a candidate for a transplant, and due to the progressive nature of the disease, by the time they were done running their tests, a panel in DC determined he was no longer a viable candidate for a transplant, and sent him off to die[1]. As a last-ditch effort, he reached out to Mayo Clinic, who agreed to see him. They ran the same tests in 3 days, and determined that he was a candidate for a transplant. He got a new lung, and lived for three more years. I strongly suspect the delay in treatment cut his life short, but I'm not a doctor.
I do not want universal healthcare.
[1] People make fun of Sarah Palin and her "death panels", but they're a very real thing no matter what they're called.
RE: #1 so a system that works similarly to ours today (if you can afford better health care, you get better health care) that ALSO helps those who can't afford even basic healthcare... is somehow worse than what we have today? You lost me.
Also, I don't think a person on the face of the planet has suggested that the VA would be a good system to model nationalized health care on.
The cost of US healthcare is also what made it possible for the rest of the world to afford cheap healtcare. The US does the vast majority of the R&D and everyone else benefits.
> The quality of care for those who are covered in the US is unrivalled.
I would be interested in more specifics about this. It's hard to find statistics that provide a clear comparison of quality between healthcare systems.
You're cherry picking. You've presented one stat where the US system comes out well ahead of the UK system (which is far from the only socialized health care system). But so what? It's true that the American health care system is not literally the worst at everything. But yes, when all is said and done, if you look at the data in aggregate [0], socialized medicine provides far more bang for the buck than the American system does.
The US usually does quite well: often times somewhat better than some countries with socialized health care, usually somewhat worse than some others; it's rare that there's a dramatic difference between it and other first world countries. But, of course, where there is a dramatic difference is in costs: the US often spends twice as much per capita [1].
Moreover, the way those costs are distributed is socially destructive in the US in a way that they simply aren't in any other country. No one in Canada goes bankrupt due to medical bills; in the US, roughly 2 million people do a year, and another 56 million struggle to pay their bills [2].
in the US, roughly 2 million people do [bankrupt due to medical bills] a year, and another 56 million struggle to pay their bills
This is misinterpreting the data. The vast majority of this is the problems caused by lost income - an inability to work while ill, not because of the medical bills themselves.
I guess I should knuckle down and look at the survey methodology to see for sure. But given my time constraints, I'll just note that while I acknowledge the ambiguity, I read that statement as closer to "we don't count people that missed out on a better job or promotion" (emphasizing the word "opportunity", I guess), rather than saying "we discounted all foregone income".
The study cited by your CNBC article is simply flawed and doesn't measure what innumerate reporters think it measures.
To measure the number of bankruptcies due to medical causes, you compute P(bankruptcy|medical cause) - P(bankruptcy|no medical cause). The study measures P(medical cause|bankruptcy).
Here, "medical cause" = "spent $1001 or more on medicine out of pocket". The classic example of a medical bankruptcy is Michael Vick, the NFL quarterback who went bankrupt after going to jail for dogfighting (due I'm sure to his medical bills).
The study cited by that CNBC article is not the PNHP study criticized by McCardle [0], although its bankruptcy numbers are derived from it (it also uses numbers from the CDC and the Commonwealth Fund). I encourage you take a look at the original press release [1] (also linked to in the CNBC article), which has any number of other damning statistics besides the bankruptcy numbers that you and McCardle take issue with.
Without getting into it here, I don't think McCardle's "debunking" is very persuasive, but you're right that the PNHP study (and thus at least the bankruptcy numbers in the NerdWallet Health report) has serious problems; I hadn't read it, and just as you point out, the PNHP authors conflate numbers to get them as high as possible: around 62%, whereas "when asked about problems that contributed very much or somewhat to their bankruptcy [...] 54.9%
cited medical or drug costs". But while 54.9% is lower, it's...not a whole lot lower. Even if the numbers were halved, say, by taking the 29% of people who wholly attributed their bankruptcy to their own medical bills (not their family's), that's nowhere near an order of magnitude different: a million people going through bankruptcy due to medical bills is better than two million but is just as disgraceful, and simply not going to happen in countries with socialized medicine...so I think my original point still stands.
The nerdwallet article directly copies their medical bankruptcy numbers from the article McCardle cites. Since they added no value to this, criticizing the original source is adequate.
whereas "when asked about problems that contributed very much or somewhat to their bankruptcy [...] 54.9% cited medical or drug costs". But while 54.9% is lower, it's...not a whole lot lower.
So what? This number is again not the true figure. The true figure is #bankruptcies in real life - #bankruptcies there would be absent medical causes. The study doesn't compute this.
Nearly 100% of people who went bankrupt could cite that they paid at least $1001 in taxes and could attribute their bankruptcy to that in a subjective survey if they wanted. Does this mean that it's a "damning statistic" and "disgraceful" that most people pay $1001 in taxes?
Furthermore, bankruptcy for medical reasons (like being unable to work - which the study does include) does happen in countries with socialized medicine. These numbers - and the implications innumerate reporters drew from them - are simply indefensible.
Yes, the bankruptcy statistics are from the PNHS study. What about the other numbers from the CDC and the Commonwealth Fund? They also damn the US private healthcare system, and so far you've been ignoring them.
It's impossible to determine "#bankruptcies there would be absent medical causes", because it's impossible to determine a number that only exists in a counterfactual. Absent this, subjective surveys give us an approximation that's broadly useful; literally anyone can lie or misattribute just about anything on any subjective survey, but that hardly makes them useless. There's no sense in being interested in "the true figure" exactly unless we have reason to believe that it varies dramatically (say, by an order of magnitude) from our best approximations, and outliers like a criminal millionaire football player are hardly that; what matters is an idea of the impact of medical costs on people's financial security, and the study absolutely provides that.
Exactly what realistically obtainable data could persuade you that medical bills contribute to financial instability and bankruptcy in the US?
The PNHS study showed that among medical bankruptcies, people on average paid ~$17k out-of-pocket on medical bills. Would those people have gone bankrupt even without having to drop that much money on bills? Maybe! It's impossible to know for sure. But here's a study that says 76% of Americans live paycheque to paycheque [0]; what happens when you drop an unexpected $17000 bill on them? You're fighting an uphill battle against common sense, here.
And from the other direction: a blog post with some numbers showing that people do indeed go bankrupt in countries with single-payer or socialized medicine [1]. Based on the blog title and the writing, this is, I suppose, is supposed to be a rebuttal against arguments for the public system, but the actual numbers - exactly as imprecise and subjective as the American PNHS numbers, mind - are 5%-15% instead of 30%-60%. That's still too high and still disgraceful, but a dramatic improvement nevertheless.
I'm disputing only your claim of causality: No one in Canada goes bankrupt due to medical bills; in the US, roughly 2 million people do a year
It's impossible to determine "#bankruptcies there would be absent medical causes", because it's impossible to determine a number that only exists in a counterfactual.
If you were correct that calculating counterfactuals is impossible, then the study in question would be trivially wrong. So would all claims of global warming (earth warmed relative to a counterfactual), all macroeconomic claims about alternate policy proposals (bigger stimulus would have been better), VAM for teacher evaluation, pollution impact studies, etc.
Exactly what realistically obtainable data could persuade you that medical bills contribute to financial instability and bankruptcy in the US?
I'd like a model that accurately predicts bankruptcy probabilities in people who had no "major medical cause" (i.e. medical expenses under $1001). Then I'd apply that model to people with major medical cause and compute #actual bankruptcies - #predicted bankruptcies for the group that did have medical expenses in excess of $1001. This is basic science.
You are right that causality is hard to measure. That doesn't mean we take a totally wrong quantity and pretend it's the right thing. We just admit ignorance.
Now your turn. What evidence (if any) would cause you to believe that taxes in excess of $1001 cause at least 90% of bankruptcies and that this is "too high" and "disgraceful"?
It's impossible to precisely calculate "the true figure" of a counterfactual, which is what you appeared to demand. It's obviously not impossible to estimate it or approximate it, particularly when we have things like physical laws, historical correlations, basic reasoning, or even self-reported data to guide us. None of these are "the true figure", although physical laws tend to work pretty well, and despite that are not necessarily totally wrong, within some margin of error. (I'm not sure if macroeconomic claims are the best way of demonstrating the possibility of calculating counterfactuals, at any rate!)
Anyway: if you showed me a study that interviewed a statistically appropriate number and distribution of bankrupt debtors and found that over 50% claimed that a high tax bill was the cause of or contributed to their bankruptcy, I'd agree that taxes probably needed to come down.
Still, a tax bill is fundamentally different from a medical bill, in that your tax bill is ultimately a fact of life: it's something you're aware of ahead of time, and the assumption that you have to pay it is baked into the salary you take, and, in principle, into the rate chosen by legislators. You can plan for it and account for it in a way that you can't catastrophe, and outside of extenuating factors, failure to do so likely indicates pretty severe financial irresponsibility if tax rates are at all reasonable. That's probably why people wouldn't be too likely to claim that tax (or groceries, or rent...) caused their bankruptcy - even if a person is living paycheque to paycheque, they might be scraping by, and then wham: suddenly they get diagnosed with cancer or get struck by lightning and half their annual salary goes to the hospital in one moment, they're going to say that those medical bills caused the bankruptcy, not the expenses that they'd already accounted and planned for. Which I don't think is necessarily wrong: if I knock a glass off a table, in terms of blame, my action is what caused it to fall and drop, and chalking it up to gravity or the glass being in the way is somehow wrong, in terms of our understanding of the idea of fault.
A better comparison might be a tax hike causing bankruptcy. And yeah, if the federal government declared that a person with an annual income of 45k (the average of the people in the PNHS study) suddenly owed 17k more in taxes and people went bankrupt trying to pay it and blamed it on the hike, I would 100% be on their side (and yours, I'm guessing). You wouldn't even need to show me a study, to be honest. I would probably also say that instead of taxing these people just scraping by, they should tax the rich instead, who can easily afford it, and use that to subsidize for the poor, which is incidentally how I think health care should work.
No, but they may be a good approximation. P(B|A) is not a good approximation to P(A|B) - P(A|!B), no matter how much you wish it were.
Anyway: if you showed me a study that interviewed a statistically appropriate number and distribution of bankrupt debtors and found that over 50% claimed that a high tax bill was the cause of or contributed to their bankruptcy, I'd agree that taxes probably needed to come down.
So subjective preferences matter more than objective figures (like costs in excess of $1001)? Interesting.
That's probably why people wouldn't be too likely to claim that tax (or groceries, or rent...) caused their bankruptcy - even if a person is living paycheque to paycheque,...
Yes. The person doesn't want to admit that their spendthrift ways are cause of their problems. They instead choose something that they can nominally pretend is not their fault.
I've seen this in action. I know a guy with a $100-200k/year income, gigantic home, second home, third investment property, spendthrift wife, 2 cars, and living "paycheck to paycheck". He's in serious financial trouble, hundreds of thousands in debt. He also blames unexpected medical expenses (probably under $20k) for his troubles - certainly easier than blaming himself.
You seem to be defending this claim, by saying that Warren's criteria are reasonable.
The fact an expense of 40% of your annual compensation should be easy to handle - a 10% savings rate will get you there in 4 years. Americans prefer a risky financial position in order to have high consumption. That's a choice.
I suppose it is disgraceful that so many Americans behave irresponsibly and then expect others to pick up the tab.
> The UK also has dramatically worse 5-year cancer survival rates than the US - in some cases, almost half what the US provides[0][1].
5-year survival rate is an extremely misleading statistic. Much of the increase in the US is simply attributable to the fact that we detect the cancers earlier, so that patients pass out of the 5-year window before they die.
>5-year survival rate is an extremely misleading statistic. Much of the increase in the US is simply attributable to the fact that we detect the cancers earlier, so that patients pass out of the 5-year window before they die.
This does not make sense. The earlier you detect cancer, the higher is the likelihood that treatment is effective.
5-year survival rate absolutely correlates with 10-year survival rate and 30-year survival rate.
Though it is undoubtedly true that in the long term, we're all dead. That is however not a meaningful indicator of health care system effectiveness.
If you detect cancer earlier AND CHANGE NOTHING ELSE you cancer survival rates will look better. So you can't just look at cancer survival rates.
I meant what I said about AND CHANGE NOTHING ELSE but experience tells me I have to repeat it. Merely detecting it earlier, BUT DOING NOTHING ABOUT IT, will improve your cancer survival stats.
<If you detect cancer earlier AND CHANGE NOTHING ELSE...>
That is a meaningless population unless you are suggesting that providers are working hard to detect cancer and then, having found cancer, choose to not treat it at all.
Ugh, no, I'm not using that as a population to compare to.
Here, let me put it into a story.
We're comparing the health care of two countries, A & B. The survival rates of cancer are better in country A.
So researchers study what country A does to get better results. They find that it has a system of early detection followed by slathering people with chicken blood.
Well, you aren't sure if the chicken blood is the right thing, but surely the early detection means people are healthier, right?
No, because . . . ahem, "if you detect cancer earlier AND CHANGE NOTHING ELSE you cancer survival rates will look better."
In fact, country A and country B may be exactly the same when it comes to treating cancer. But because of very real statistical artifacts like
https://en.wikipedia.org/wiki/Will_Rogers_phenomenon, it leads to statistics showing the country A is better when people have the exact same outcomes.
Perhaps you think that rubbing with chicken blood is an unfair comparison of the US health care system, because it uses science-y stuff. But measuring outcomes
is hard. Lots of things that people naturally assume improve health outcomes (see other discussion on this page about annual checkups) don't. Some things
that we assume improve health care outcomes actually worsen outcomes. Radical chemotherapy is the go-to example. And insurance companies were required to pay
for it, too, following expensive court cases. (Health care costs were held nearly flat in the US under HMOs, which put a lid of costs but had no noticeable
negative impact on outcomes. This pretty much broke their cost containment. They were also unpopular because they said no a lot.)
So figuring out if the US has better cancer outcomes is hard, because the US really puts a big emphasis on early detection, but it might be just early
detection which makes the stats look good.
I'm not trying to push a narrative right here. There are a bunch of different health care systems in the world, and the one thing we know about the US
system is that it costs more. This is not necessarily a bad thing, because it's possible we are getting more benefit (by pushing new treatments) but it's
also something that the US has not explicitly decided to do, neither by policy nor by the invisible hand of a bunch of individual actors in the market.
I don't understand what you're getting at. It is completely pointless to talk about "detect cancer earlier AND CHANGE NOTHING ELSE". Nobody does that. Even if the health care system did nothing but detect - which is an absurd idea of course - the patient in question would surely do something.
If you don't detect cancers, that will not stop people from dying to cancer.
The U.S. health system is expensive because it uses a lot of money for some cases that would receive less attention somewhere else. Some of these are difficult cases that other health systems even cannot treat; others are trivial things where the private insurance system spends a lot for some people while there are uninsured people who get no attention for things that could be cured or prevented relatively easily.
The priorities are not necessarily right; at least they are not producing optimal "bang for the buck" in national health - U.S. spends a lot but still people suffer from preventable diseases.
But early cancer detection is one of the undoubtedly good things.
(Infant mortality rate in the USA was lower than in my country in 1950; now it is more than double. Cuba is better than United States, if we can trust the statistics. However, I'm surprised that Canada is not that much better either.)
> It is completely pointless to talk about "detect cancer earlier AND CHANGE NOTHING ELSE".
No it isn't. I'm trying to ram home the statistical point with a counter-factual. I have to say this extreme because some people Just Don't Get It and keep on trying to talk about something else.
A system that ONLY detects cancers earlier will show better cancer survival numbers even if actual outcomes don't change at all. No, seriously.
Let's lay out an actual example.
Alice, Bob, Charlie, and David exist. Charlie has a minor cancer he won't die if. David has a major cancer he will die of.
In Country B, since detection is heavily correlated with the seriousness of cancer, they detect David has cancer, and David dies. Cancer survival rate = 0 of 1, or 0%.
In Country A, they detect Charlie and David have cancer. David dies, Charlie doesn't. Cancer survival rate = 1 of 2, of 50%.
> If you don't detect cancers, that will not stop people from dying to cancer.
No one said this.
> But early cancer detection is one of the undoubtedly good things.
This is wrong. I know your gut tells you this is true. Your gut is wrong.
Increased detection sometimes helps and sometimes hurts. There are a lot of people, like Charlie in the above example, who would never die of cancer, but because of increased detection they now undergo risky cancer treatment. All treatment involves risk, and for cancer treatment this is particularly true. Again, look up the history of radical chemotherapy. The people who underwent it had worse outcomes than people who had nothing at all done to them.
Researchers usually find that people in palliative care do better than people in active treatment. This isn't enough to say that no treatment is always better, but it is enough to say that some treatment is often worse.
Because so many people have your gut reaction, though, "early detection" is a popular way of throwing money at the problem in America.
> Infant mortality rate in the USA was lower than in my country in 1950; now it is more than double. Cuba is better than United States, if we can trust the statistics.
Here's good questions to ask yourself when looking at infant mortality.
1. What's the difference between a miscarriage, a stillbirth, and a dead newborn? Particularly, what does it mean when this answer changes between countries, and even within countries?
2. How do the numbers change if you compare white Americans to white Canadians and black Americans to black Canadians?
There isn't such a system, anywhere. Even if you could have a public health care that detects and tries not to treat, you still cannot effectively forbid people from getting treatment themselves - if you make a law against it, people will try to escape the country to get treatment. So if you have a better detection rate, there will be actions to treat.
>Increased detection sometimes helps and sometimes hurts.
Perhaps the fallacy here is the belief that the helps/hurts ratio of treatment is 50/50? It isn't.
Of course there are cases where the treatment actually made things worse. There are more cases where the treatment has no significant effect.
But it is rather silly to assume that cancer treatments would have a net negative of zero effect.
Regarding the infant mortality rate, the definitions of miscarriage, stillbirth and dead newborn are not so different between developed nations that it would change this. Where IMR is lower, also stillbirth rate is lower, so it's not really about moving the boundary between these.
Stipulating that five years is the wrong period to use, what would the right period be? Intuitively, there must be some period of time over which different nations could be meaningfully compared on this basic health result.
> Stipulating that five years is the wrong period to use, what would the right period be?
The short answer: Whenever death rates plateau for the 99th (or whatever) percentile, relative to progression of the illness. If you wait XX years until the effect of moving around the diagnosis date is largely mitigated statistically, then the error begins to fade.
The long answer:
This isn't quite the right question to ask at all, because it assumes away the possibility that the naive "years from diagnosis" is a flawed metric in the first place. The point of the comment you're responding to is that "n-year survival rate (from diagnosis)" as measured is a flawed statistic in general, because the baseline from which the counting starts can be different for people with the exact same outcomes. An illustrative _reductio ad absurdum_ thought experiment here is that of taking two people with the exact same cancer, detecting one earlier, and giving both exactly no treatment (or treatment on the exact same schedule). Despite having identical quality of care and outcome, the person whose cancer was detected earlier will show up as having a better 5-year survival rate, simply because we started counting earlier and her 5-year mark came earlier in the progression of the disease.
This can be mitigated to an extent by controlling for stage of cancer or whatever, and that's probably a good idea, but this is necessarily brittle and hard to scale and study.
You've proved too much. This same argument could be used to show that we can't decide e.g. which drugs or lifestyle choices make death due to cancer more or less likely, or indeed which behaviors make death due to any long-term illness more or less likely.
Congratulations I guess, but you've just put a bunch of medical researchers out of a job. They had to study a long time to do that job!
> This same argument could be used to show that we can't decide e.g. which drugs or lifestyle choices make death due to cancer more or less likely, or indeed which behaviors make death due to any long-term illness more or less likely.
I won't hazard a guess as to which argument you're imagining I made, but I'm not seeing how you jumped to this conclusion at all. As Dylan16807 points out below, "deciding which drugs or lifestyle choices make death due to longterm illness more likely" has approximately nothing to do with an apples to oranges comparison of time intervals starting at different points.
In fact, to the extent that attempts to figure this out do involve comparing intervals, they tend to be ages, which by definition are measured from birth. That's pretty much the highest standard for having a reasonable, stable beginning point when comparing time intervals across people's lives, in a way that "years after diagnosis" doesn't approach by a long shot.
> Congratulations I guess, but you've just put a bunch of medical researchers out of a job. They had to study a long time to do that job!
I'm assuming the juvenile tone is an attempt to cover up your lack of comprehension with bluster. "Congratulations I guess"
I don't see how you reach that conclusion. If your detection is the same, it's easy to see which treatments or lifestyles work better or worse. This seems to me to be a problem unique to measuring the value of different kinds of detection.
If the argument is that detecting cancer at year four isn't worse than detecting that cancer at year zero, then could we specify a year at which it would be worse to detect cancer? It's a deadly disease, so presumably if you wait too long the patient will have died already?
If I've misunderstood this complex and sophisticated argument and we're all ready to admit that detecting cancer later is worse, then the original point that USA is better than UK in this one tiny respect stands.
The argument is that while detecting cancer earlier is usually a good thing, you have to be careful how you measure the effects. Looking at survival X years from detection can give you false positives about what is best.
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I'll lay out a particular scenario where this happens:
Currently we detect a cancer moderately far along, and aggressively treat it. The five year survival rate is 50%.
We figure out how to detect it two years earlier. We use the same aggressive treatments, and the five year survival rate is now 70%. Hooray! But looking closer, if we wait another two years to correct for the early detection, the survival rate is only 45%. Only some of those tumors would have continued growing. Of those, attacking early is only marginally helpful. In others, the tumor wouldn't have killed the patient, but the radio/chemotherapy killed a quarter of them.
In this case, we magically know we detected everything two years earlier, so we could look at the seven year survival rate instead of five year. But the real world is not so clean. It's very hard to figure out a timescale and normalize everyone to it.
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Catching cancer earlier screws up your ability to measure survival. A naive analysis will see higher survival rates when smaller/earlier tumors are detected. A sophisticated analysis that corrects for this is actually hard to do.
Even when you do save lives by treating earlier, it's very hard to figure out how many lives are saved, and how much of a confounding factor your detection method is.
The UK also has infinitely better healthcare-related bankruptcy statistics.
I suspect it would be easier to improve the 5-year cancer survival rates in the UK than it would be to eliminate healthcare-related bankruptcies in the US.
The NHS has also become increasingly inefficient over the last couple of decades, as managerialisation and stealth privatisation have diverted funds away from front-line patient care towards administration costs and third-party profits.
I hate to break it to you, but the libertarian ideology isn't a philosophy and it isn't "anarcho-capitalistic" either. It's a umbrella term meaning that a person prefers a more liberty-minded government versus an authoritarian one.
Anarcho-capitalists are a subset of libertarians, and one which may not overlap much with the subset that sees UBI as a preferred alternative to current programs.
But "anarcho-capitalists do not..." is not a basis for any generalization about libertarians.
It's unfortunate that the word liberal is used for the position you describe. And conversely that the word libertarian must be used to describe liberalism, literally.
I read your "personally" sentence and immediately thought "this person has not lived in chicagoland where purposeful manipulation of such a system has famously been an artform".
If you're worried about the public good, there are nonviolent and consensual means of cooperation that I believe would make all of us far more prosperous than today.
I think it becomes even more clear; when children living in poverty are living in a society where their basic needs are sufficiently provided for, you take away a great deal of the social stigma associated with engaging child protective services.
If a parent can't function when the basics are provided, then teachers, neighbours, and family members will be less inclined to use the excuse "but times are tough, and that person is trying hard to be a good parent".
IDK - I am inclined to think, having come from a broken home and having done community service for shoplifting food for me and my brother, if $parent (father in my case) can't get their shit together, the children would have been better off without them.
Given your experience, what are your thoughts on being provided 3 full meals a day within the public school system?
Context, I see arguing over the cost of various food programs that public schools provide. I come down on the side of "Yes, you should be guaranteeing kids are fed (minimally breakfast & lunch and if I had my way dinner too). Otherwise there's no way they're going to be able to focus on school." While the counter argument exists and is usually made from a financial standpoint, "Why should I have to pay taxes for other people's kids to get fed?" Which is, in my opinion, a short sighted viewpoint.
Socially, children are dependents. If guardians cannot feed their dependents adequately, they should lose their dependents. In the same way we find people guilty of animal cruelty all the time for the same reasons the same must be made of children.
The unfairness in the system emerges from when parents have kids through selfish motivation only to force society as a whole to pay the cost of raising them, when we may or may not have macroeconomic desire to have more children at any given time (and that desire changes, at the society level, all the time).
It is much more important to fix the actual problem - providing sufficient adoption and relocation systems to get kids out of dysfunctional households than to give them awful school cafeteria food and hope the problem goes away while ignoring it. Hunger is just a symptom of broader abuses that we should not just use state dollars to make go away temporarily. Having mentally and emotionally healthy fresh generations is probably the most valuable investment anyone can make.
What you're saying is that we should provided more robust child protective services. Those services would have the authority to determine if dependents were malnourished. If found to be malnourished those dependents would be forcefully relocated into a state (or private) run system that would feed, clothe, and educate them in the interim before they were placed into an adequate adoptive or foster home. At which point the state would pay the foster parent(s) a daily stipend which would be used to continue to feed and clothe the dependent until the point at which they reached adulthood. The state would also provide healthcare and continue to send child protective workers to the foster home to evaluate the home and verify that it meets the standards of an adequate home.
I agree that the solution you presented has the potential to help "break the cycle" so to speak. But inherently the cost of a program the magnitude of which was described is likely to be a large investment. Which, would suffer from the same perspective of economic unfairness as society would end up paying even more than now to raise other people's children. Due to the economic impact, those opposed would likely spin it as a government program to "Steal away and indoctrinate your children with agenda of the state." A subset of the population gets angry when any mention of taking their guns away occurs. How do you think people would act if it was their children? It doesn't matter if you're a responsible guardian, any talk of the state increasing its power to "remove your children from your home" is bound to strike an instinctual part of your brain.
Proposing "free breakfast and lunch" to solve the immediate small term problem of hunger within the school system to help reduce behavioral problems has a direct positive impact. The only real negative is the cost.
> If guardians cannot feed their dependents adequately, they should lose their dependents.
If they cannot, then they should be helped to be able to. If they can but do not, then I'd agree that they should lose them. You're describing two problems with different solutions: Extreme poverty and outright abuse.
Adoption beyond infancy is rare, and I've never heard good things about the foster system, and I'd be loath to put kids into it, except as a last resort.
> The unfairness in the system emerges from when parents have kids through selfish motivation only to force society as a whole to pay the cost of raising them
Financial conditions for families change all the time. A parent looses a job and has difficulty getting a new one. The bread-winner in the family gets hurt, and the family has to limp along on a lesser income. You can't just ascribe unfairness to selfishness. Things aren't that simple.
I grew up poor. Subsidized school lunch made sure I ate at least one decent meal a day (to be fair, parental mental health was a bigger factor than income at times). A lot of people grow up a lot poorer than I did.
> "Tough shit" sucks when parents blow their handout on lottery tickets and drugs, leaving their children in perpetual poverty.
Seems to me that with a universal unconditional benefit that is sufficient for adequate support of both parents and children (which, incidentally, I don't see as likely in any early-phase UBI, though over time it would hopefully grow to that level), failure to provide adequate support for children is, without exception, culpable neglect; interventions to address such neglect exist and are outside of the scope of the public benefit programs UBI would replace (though, if children are counted as beneficiaries with the benefits flowing to their legal guardian, you've dramatically simplified some aspects of the administration of those programs, as well, with a UBI.)
In my very limited experience of these matters, there is rarely a clear line between 'bad but acceptable parenting' and 'culpable neglect'. In the UK, a recent report suggested that child services spend so much of their time chasing the former, that the latter cases (which are much more serious) don't get the attention they need. As a result, children die in horrible circumstances.
So the question is a good one, and can't be answered with 'tough shit' quite that easily.
> In my very limited experience of these matters, there is rarely a clear line between 'bad but acceptable parenting' and 'culpable neglect'.
With a mature UBI, there's still certainly room for cases where there is ambiguity over whether culpability of the form represented by a criminal prosecution for abuse/neglect exists, but a lot less room for ambiguity (at least, compared to now) over whether there is a sufficient failure of basic parental duty to justify intervention to ensure the material adequacy of care for children.
> In the UK, a recent report suggested that child services spend so much of their time chasing the former, that the latter cases (which are much more serious) don't get the attention they need.
That's definitely true in the US as well. I don't disagree that these services need to be reformed and reprioritized, independently of the nature of the public benefit system.
But the problem with beneficiaries (parents or otherwise) blowing or trading their benefits without meeting their and/or dependents material needs exists independently of the nature of the public benefit system -- its quite clearly a feature of the status quo system -- so its not really an argument for or against any particular public benefit structure.
> You're taking on a whole new rat's nest of complex problems if you propose to push a much larger set of children into "the system."
I don't propose that, both because I think the size of the problem that would be addressed this way is no larger under a mature UBI than it is today (even if UBI makes the responsibilities more clear), and because I think a mature UBI would reduce other sources of children entering the system (both by reducing the social problems which result in children ending up in the system, and making it more likely that alternate, extended-family placements which are generally preferred could be found to keep children experiencing the kinds of problems which could result in them entering the system out of the system.)
The US has a separate set of social services that deals with protecting children from abuse and neglect, which handles such cases. Basic income can't fully replace that because not all of what it does is about poverty, so don't expect them to go away if basic income is adopted.
Most proponents of UBI see it as, at least eventually, replacing some range of existing government means- and/or behavior-tested benefit programs and, possibly, some age- or disability-tested ones (in the US, most advocates would probably include, at a minimum, EITC, General Assistance programs, SNAP, TANF, Section 8 housing subsidies; some would also include Child Tax Credit, Tuition and Student Loan related credits and deductions, Medicaid, Medicare, and/or Social Security.)
I've never heard any advocate argue that it would replace all social services.
OF course not. Money can't stop adults from abusing children, or each other. Money only fixed money problems. We don't have Child Protective Services because parents are poor; we have them because some people are assholes.
Personally, I'd like to see us end the welfare programs for the rich.
> Personally, I'd like to see us end the welfare programs for the rich.
What welfare programs for the rich? The rich pay for everything. The bottom 60% net a negative ten thousand dollars. The next 20% break even (~$1000/year paid), and the top 20% pay out the nose.
For example, Walmart makes so much in government subsidies and tax breaks, and they pay their employees so little that their employees have to live off food stamps. The Waltons (owners of Walmart), are one of the richest families in the U.S. Pretty easy to see the connection.
Child protective services are not social welfare, they're law enforcement. If they were merely social services you could turn them away at the door. You can't. If you try that, they come back with the police and a court order.
I think there is not any one set of concepts that can be called basic income.
Anyway, if people really are proposing that the state should give money away because then there is no need to protect children from bad parents, that's pretty stupid.
I'm a foster parent. BI will most certainly NOT eliminate the need for me. It's not about being poor. It's about not taking proper care of your children.
All payment social services, but not those that are doing enforcement activities. Replacing college loans, food stamps, welfare, etc. will save quite enough particularly if you pair it with actual fraud prosecution and verifying identity.
For example, providing free breakfast & lunch in schools addresses malnutrition of poor children much better than providing the same resources indirectly through their families, especially in various cases of dysfunctional alcoholic parents.
Subsidized housing, day care, etc? Food stamps aren't a great example because you can sell them. You can't sell the $800 you save in subsidized housing. You can't sell a service.
> You can't sell the $800 you save in subsidized housing.
People sublease housing units without permission (and even outright illegally, even before considering rental contract limits) all the time. This includes units that are subject to one form or another of public support, whether its rent control or section 8. So, yes, you absolutely can sell (as for Food Stamp benefits, usually at a value less than the subsidy) the benefit you receive from a housing voucher.
Food stamp administration has gotten better over the past 10 - 15 years, but as someone else in this discussion pointed out it is still fairly easy to turn food assistance into cash if you want to.
After-school programs only work if the kid actually goes to them.
The payments could be made weekly. That way if someone was irresponsible and blew their basic income on non-essentials they would only need to survive on whatever they had left for a week.
Also, there would still be a role for social services in getting kids out of harms way if their parents couldn't look after them, but basic income would be sorted out separately, without using means-based testing.
Michigander here. AFAIK, you can't just turn your Bridge card into cash. How does one purchase lottery tickets and drugs with welfare payments? The one way I can think of is hanging out with the high-school kids outside the liquor store and saying "I'll go buy you X if you go buy me lottery tickets and alcohol/go to your dealer and get me an O"
The market for trading benefits for cash/services/products is quite robust in communities where it is the norm to be on them.
I think you would be quite surprised - it's a very well developed shadow economy that has pretty well known "rule of thumb" exchange rates, money changers, runners, etc.
This will pop up in any market that offers non-cash items of value.
I think I would be too, which is why I asked. Do you have any concrete examples of such a market? I mean, I put one right in my comment. How else do you do this sort of thing?
EDIT: I'm not trying to call you out, I just want to know how these things are done. Being on HN, I've seen stolen credit card marketplaces and things like that. Do people put their welfare payments on something like that? Do you have resources like that?
What would a concrete example look like to you? They don't do these things on the internet or with apps, it's all face-to-face and word of mouth. I wouldn't bet on there being any academic studies of it either. Likely all we'll ever have is personal anecdotes from people who have been involved in these communities and somehow ended up spending much more time on the internet than is the norm there.
Someone else pointed out googling "tide as currency", and that opened my eyes. It made me realize that people doing this are working with pointers, not values.
> on HN, I've seen stolen credit card marketplaces and things like that. Do people put their welfare payments on something like that?
Sometimes, yes, people sell EBT cards online (a quick googling finds numerous reports of this being done on Craigslist and Facebook.)
Othertimes, they convert benefits to concrete goods, which are then sold at below-market prices to convert into cash to by things that would not be allowed by the benefit program (or traded directly for other goods, with the seller of the other goods either using the traded goods or selling them for cash.)
Here in Baltimore, the usual benefits fraud method involves small shop owners willing to claim false purchases to a given value, then disburse an equal value in cash partly to the benefits claimant and partly to themselves as a profit - so, yeah, you actually can just turn your SNAP card into cash, albeit at a sizable discount. No doubt the same is true of a Bridge card.
They can simply sell the card at a discount to what it's worth. The buyer can then use it to purchase goods that he needs and pocket the difference, or resell them at normal retail or more. It's a huge problem.
I've brought up this idea before. Have part of the UBI of children go into a fund that they can then access at 18 to use for schooling or whatever they please. With CPS helping with neglect cases while they are young, the child then isn't stuck in perpetual poverty, because at age 18 they will have savings and full UBI in hand to make their own life. The money not in the fund either is used responsibly for child rearing by the parents, or foster parents if it comes down to that.
It's a laudable goal, but giving a bunch of (mostly) naive, uneducated kids a lump sum of cash is a recipe for disaster. There would instantly be an industry focused on parting them from that money, one that would be extremely profitable and mostly not related to education.
You weren't given cash, but today kids are given an essentially unlimited amount of government backed loans to pay for school - the availability of which has caused education costs to skyrocket.
Just thinking of this on the fly but could you have certain things that you cannot spend BI dollars on like this? Or after layering all these restrictions you've essentially recreated the previous system?
So you just give money to people with no strings attached, and when they spend it however they like, you take their kids away. That is pure evil mastermind, a bit like imperial British did with Aboriginals in Australia.
I don't see how you can possibly consider that evil. What's evil is taking money to gamble instead of making sure your children have food.
If they have the means (thanks to basic income) to provide for their children and still choose not to, how can you possibly argue that person is a fit parent?
We theoretically already have Child Protective Services to take children away in that case. Child abuse includes "[failing to] provide adequate food, clothing, shelter, medical care or supervision."
On the other hand, there's the darwinist approach...
>It's almost inevitably that there'll then be the "food security" fund, and the "housing guarantee" fund
Seems like basic income allows for this issue to be resolved by private organizations easier since cash is much more liquid than welfare/other government benefits.
So basically what I'm getting at, is if you can't manage your own life, there will be a corporation that provides shelter, food, and basic necessities for you in exchange for 100% of your BI (cue comparisons with the for-profit prison industry).
Those that are unfit for even this model (their special needs require more service than their BI can possibly cover) would be a small minority (assuming BI could cover basic but adequate care for the majority of the elderly) and I suspect they would need to be institutionalized if there were no family or charity organizations that could support them.
Well that's my off-the-cuff zero-research opinion anyways.
Just as a tangential addon to this - I think if this were to happen, a computer with internet would have to be part of the basic necessities package. Maybe it's because I'm a nerd or the internet has had such a huge effect on me, but I feel with the internet and proper guidance to get tutorials, search things online and so on can really help those people produce things and learn. Without it, they might end up just roaming in the streets, doing drugs, maybe watch TV. Not to be cliche but I really feel like if people aren't introduced to the more "intellectual" side of life, they may never seek it themselves.
> I'd hope the system would absolutely tell them "tough shit"
So the more vulnerable you are, the more likely the system should fail? A critical system is poorly designed when it is more likely to fail when its function becomes more critical.
Most people don't have problems because they are lazy, but because they have serious problems. Consider people with mental health issues, costly diseases (e.g., alcoholism), disabilities, people who are old and not functioning well, etc. If an elderly person is scammed out of their money, I don't feel 'tough shit' is a good response.
A "payday loan" usurer would be all too happy to lend someone $1000 in cash, and then take $50 out of each of the next 52 weekly BI checks.
I don't see a way to BI without significant buy in from Dept. of Agriculture and Dept. of HHS to provide some of the value of benefit as actual food and as gratis-rent, subsidized-utilities housing. Moving 100% of the benefit as cash leaves too much opportunity for middlemen to take a cut. The ways to do that range from straight-up charging you interest on advance loans secured by the benefit to charging slightly more for the goods and services typically consumed by poor people.
So I don't see the same magnitude of cost savings as the idea-evangelists do. If anything, government payroll would probably expand in the short term, as it builds the infrastructure to provide non-cash benefits to citizens. The existing food aid programs use EBT cards that act like debit cards and just leverage the same grocery stores and farms that everyone else uses. BI would have to assemble 300 million fungible daily ration packages and truck them to distribution centers sized and located appropriately for the needs of the population. It would be like building the postal service all over again, except shipping identical 3000 kcal packages to somewhere within a 1.5 mile radius of every person in America, every day. (Then also ship the older, unclaimed packages to the pork farms.)
The upside is that those jobs would be real, actually-do-something jobs instead of the bullshit, pencil-pusher, bureaucratic jobs that typically suck up some of the welfare budgets. The post office may have a bad reputation, but at the end of the day, they do have something to show for their work. Eventually, those jobs get replaced by robots, too.
Just moving the money around is not going to be enough to satisfy the need. If all you do is cut checks, it may take decades for the supply chain to adapt, if ever. Food stamps have existed for a long time, and we still see "food deserts" in lower-income neighborhoods. Even the promise of having a local monopoly on rent-seeking the free government money has not motivated food distributors to set up shop in otherwise unprofitable areas.
> I don't see a way to BI without significant buy in from Dept. of Agriculture and Dept. of HHS to provide some of the value of benefit as actual food and as gratis-rent, subsidized-utilities housing.
HHS doesn't provide gratis-rent, subsidized-utilities housing without BI. Section 8 is subsidized-rent (and even so has long waiting lists and behavioral controls, so that many people that are income qualified for it don't receive it.)
> Moving 100% of the benefit as cash leaves too much opportunity for middlemen to take a cut.
Actually, it eliminates lots of the opportunities for middle men to take cuts (starting with government bureaucrats and government contractors.)
> The ways to do that range from straight-up charging you interest on advance loans secured by the benefit
So, just make contracts to secure loans by UBI benefit void as contrary to public policy. You can pay people from the benefit, you can contract to pay people from the benefit, you can't provide a lien on the benefit to secure a loan, because the benefit cannot legally be seized from you.
> to charging slightly more for the goods and services typically consumed by poor people.
Price increases are an expected market effect that drive increased quantity supplied. It's not a bad thing.
> So I don't see the same magnitude of cost savings as the idea-evangelists do. If anything, government payroll would probably expand in the short term, as it builds the infrastructure to provide non-cash benefits to citizens.
Yes, in a phase-in approach that phases out other programs using eligibility calculations (where UBI counts as part of income) rather than a slash-and-burn implementation where UBI immediately replaces other programs, in the short term you'd have an additional program office with only caseload related reductions in the administration of other programs, until the UBI reached a level that entire programs could be eliminated because it became impossible to qualify for them.
> BI would have to assemble 300 million fungible daily ration packages and truck them to distribution centers sized and located appropriately for the needs of the population.
No, the whole point of BI is that its just money. "fungible daily ration packs" are not being built and trucked, monthly fixed-amount benefit checks are delivered (or electronically deposited.) [0]
People use the money to buy services in the market.
> Just moving the money around is not going to be enough to satisfy the need. If all you do is cut checks, it may take decades for the supply chain to adapt, if ever.
If you use a ramp-up UBI and phase-out of other programs (which is the only way you get the short-term surge of government workers you talk about), the supply chain can adapt slowly, and its not a program.
> Food stamps have existed for a long time, and we still see "food deserts" in lower-income neighborhoods.
Arguably, the restrictions around food stamps and the administrative cost of dealing with them contributes to that problem.
> Even the promise of having a local monopoly on rent-seeking the free government money has not motivated food distributors to set up shop in otherwise unprofitable areas.
Food deserts typically do not have no food stores, or even no food stores that sell some things that qualify for government food benefits. There are lots of specific concrete definitions used to identify food deserts, and they tend to focus on local availability of particular variety of selections or prices of particular options.
Most food deserts have some (often small) food-selling stores, including ones that accept government food benefits.
[0] Incidentally, a universal basic banking service would be a useful side-program along with UBI, reducing the problem of the unbanked.
A loan shark can introduce a pipe wrench to your kneecap regardless of whether he can officially record a lien against your BI income or not.
My personal opinion is, like the ancestor post, that BI is unworkable as a cash-only benefit. People forget that money is an economic lubricant. It does not make the gears turn. Possession of cash is economic shorthand for being able to command the disposition of real goods and services.
Having cash is a symptom of providing value to the economy, not the cause of it.
If you take a big chunk of cash from rich folks, and dump it on poor folks, that does not alter the underlying structure of the economy. The real-world supply pipeline for bringing popcorn from a field in Indiana to a bodega in East L.A. remains the same size. You have to divert a lot of cash for a long time before anyone will even consider upping the bandwidth of that specific food channel. Until then, popcorn is just $N more expensive at the bodega.
You're not providing anyone with anything more than a temporary illusory benefit if you don't build some actual infrastructure. Giving cash for rent does little good, unless someone actually builds more houses and apartments as a means to getting some of that cash, or to more of it than their existing landlord competitors.
The same amount of cash, spent on eminent domain compensation and general building contractors, can directly generate a permanent reduction in the local monthly cost of housing, rather than as a potential incentive for someone out there to maybe try to get at it.
If you do not build the economic infrastructure required for the benefit to exist, the amount of cash you have to throw at the free market to provide it can increase without bound. The economy is currently structured to funnel property and luxuries towards the rich. Screwing on a bypass pipe from a rich person's consumption endpoint to somewhere further back in their existing cash flow structure does not accomplish much.
If the holes of a safety net are large enough for a person to fall through, than it's not a safety net at all is it? If a tightrope walker is learning the skill, you want a safety-net that will catch them 100% of the time, until they don't need it anymore. A social safety net should be the same - relentlessly available.
Personally, I'd be fine with overlooking what I would assume to be the small number of people who would shamelessly exploit it, because I'd like to think that basic dignity and self-respect would prevent that number from ever being very large. In other words, the system would need some functional slack and it should be funded adequately so that it's not considered a "scarce resource" and the slack can be generous.
Myself, I'm ok if a system like this existed so that if I did have a problem family member, it wouldn't be assumed to be my responsibility to take care of them, and further, I don't like the idea of charities because it presumes benign wealthy people are available to fund them. It seems better, with social programs, to socialize the cost so that I can pay into a general fund so that it can be another-person (aka a professional)'s problem.
"Someone being too expensive to help" ... that makes no real sense today given how much money is swirling around. It's just a matter of what you prioritize.
But then you get a bunch of people who complain that high schools shouldn't be teaching that stuff. Of course, I feel that those who espouse that viewpoint are doing so because they benefit from having a large group of people lacking these skills.
It's not actually that hard. People who prove they cannot manage their BI are required to participate in a managed BI program. The individual can chose from any/all licenced managers (or an individual/family member willing to accept the responsibility) who provide varying levels of service for a specified Percentage of your BI.
Maybe an efficiency apartment with groceries delivered for 80%. Maybe a bunk in a dorm and a meal ticket for 50%.
Even an individual who can't manage their own money can still chose a service based on their needs.
> Personally, I'd hope the system would absolutely tell them "tough shit". There's got to be a line where the safety net gives out, because someone is too expensive to help.
How about if they get a grave disease and need urgent treatments and related resources for that? Is medical treatment supposed to be free in the scenario of BI as well ? Because, THAT, we know how well it works (free medical coverage) in several countries where it's already applied.
"Personally, I'd hope the system would absolutely tell them "tough shit". There's got to be a line where the safety net gives out, because someone is too expensive to help."
But see, that's why his is a trick question ...
If the answer is "tough shit" then it's a concession that implementing BI (or anything like it) is simply adjusting the "tough shit dial" to a relatively different value. There's still a benefits ceiling, beyond which it's "tough shit".
At that point it becomes difficult to justify any particular point on the tough shit dial - especially when todays tough shit was, four generations ago, essentially heaven on earth.
No benefits at all is a rational position. Endless benefits, cradle to grave is also a rational position. Neither of them are self-contradictory or loony. You may disagree with either of them but neither of them are crazy.
It's all of the bullshit in-between that is totally unworkable - both practically and theoretically. His question - and your answer - illustrate that very well.
> It's all of the bullshit in-between that is totally unworkable - both practically and theoretically.
No. In most countries of the world, including the United states, limited social benefits exist.
It is sometimes messy, it is sometimes unfair. But they are reality.
"No. In most countries of the world, including the United states, limited social benefits exist. It is sometimes messy, it is sometimes unfair. But they are reality."
Yes, that is exactly my point and it is from knowledge of the US systems especially that that point is informed.
It is my contention that they don't work - not just practically, on the ground, but even theoretically.
But it doesn't mean that they don't work at all. You are dismissing them because they aren't working perfectly. And I am saying that it is wrong to dismiss something just because it isn't perfect, especially if there is no better alternative.
> At that point it becomes difficult to justify any particular point on the tough shit dial - especially when todays tough shit was, four generations ago, essentially heaven on earth.
I don't see how this follows.
You are arguing that perfect is the enemy of good?
This tough shit dial be as low as is acceptable fiscally and to the contemporary standards of society.
> It's all of the bullshit in-between that is totally unworkable - both practically and theoretically. His question - and your answer - illustrate that very well.
By this logic do current US welfare programs count as the "bullshit in-between?" Those are very much workable practically in the sense that they are currently in effect and are not planned to be dismantled. For that matter doesn't any level of government support for disadvantaged citizens count as the "bullshit in-between?"
This would lead eventually to the system we have now, only larger (because it's not means tested). It also has huge supply-side economics problems:
If you stipulate that every family can spend an extra $1000 on housing, rent will go up by $1000 pretty quickly, and housing prices will go up by whatever $1000/mo in mortgage payments will allow.
In consumption-based positional goods, rents will always go up by whatever the basic income is. Because people are entering a zero-sum rat race for status. That's irrelevant to whether it's doled out as BI or as housing voucher.
But in normal markets, people will still try to supply the good at the lowest cost and consumers will still try to gain it at the lowest price, and the market will find some midpoint.
Moreover, if you can't make "universal housing vouchers" work, how are you going to make "universal basic income" work? The former is a much simpler problem.
I suspect that the problem would not be huge (but it would need addressing). The key would be making accessing the emergency safety net sufficiently unpleasant/inconvenient as to dissuade casual fraud. (The welfare equivalent of being put on hold.)
The key questions in my mind are:
(a) how do we prevent people borrowing against it?
(b) what to do about kids of people who squander their basic entitlements, but it's not like the current system handles this issue well.
While I tentatively agree, I don't think BI in this manner could succeed without first setting people up for success. Financial education and the ability to manage finances is a crucial prerequisite skill that many who would qualify for BI might very well lack. We can't throw people in the deep end of the pool and say the ones who didn't drown learned to swim.
My knee-jerk reaction is to agree with you. However the problem with "tough shit" can be seen with the homeless today. The safety net doesn't give out, instead they fall onto the emergency services net, which does not have the option of not helping them, and is possibly the most expensive net of them all.
First, Unconditional Cash Transfers (UCT) work better than most people expect (http://www.economist.com/news/international/21588385-giving-...). As noted in the article, UCTs work surprisingly well in scenarios where lack of capital is the primary problem. A UBI (at least as usually is discussed in the US) is a de-scaling UCT.
Second, most proponents of a UBI see it as more efficient because of the savings on administrative overhead. So dollar for dollar the assumption is that your social safety net with UBI is larger than current welfare.
Which finally brings us to the observation that current welfare is not an all-inclusive safety net, so opposing UBI because it isn't either seems a bit of a distraction.
A more interesting question, raised by the Economist article linked above, is where do UCTs break down? This is a question whether or not UBI should be _entirely_ UCT or if there should also be some Conditional Cash Transfers (CCT). This would be like providing incentives for going to college.
CCTs are better at correcting deeper issues that contribute to the cycle of poverty.
Ultimately I feel like a UBI is a good first step, but ultimately a combination of UCTs and CCTs are needed to really combat poverty.
You completely side stepped the question. I find it absolutely amazing how naive BI supporters are. I grew up poor in a ghetto in New York. Studied, went to university, became an engineer and am no longer in that socioeconomic bracket. However it is very apparent that the people in my current bracket (the one's that support BI), have no idea about the issues of the poor. Poor people are mostly poor because of the decisions they make. At least that is my experience. Drug addiction, gambling, alcoholism, poor budgeting, mental illness, etc, etc, etc. Thinking back I do not know anyone in my neighborhood who was genuinely a hard working person with no vices. Hard working people with not vices don't live in the slums and generally can support their basic needs. Yes there are those occasions were an acute emergency happens and support is need but that is an atypical story. Giving $1200 check to someone without food and shelter most definitely isn't going to provide them food and shelter. It will more likely go to a stamp bag, scratch off, 40 ounce, etc.
Yes, we need to help these people. Mental health, substance abuse, etc do not make people "bad". But giving someone a months worth of rent/food/utilities/clothing in cash is going to be disastrous
In my experience, your characteristization of why people are poor is wrong and ignores the daily struggles the working poor faces. I agree that most people are flawed but that's because we are not taught in school how to deal with adversity or how to live life. People in general have poor critical and analytical thinking skills, and get trapped in a vicious cycle with no hope for a better life.
I grew up poor and my mother worked to get us into the middle class. As an adult, I have been poor and wealthy, and have good friends that are decent people but are trapped in a system of poverty, or a community of gangs and a cycle of jail. Life is incredibly hard and it's not as easy as saying that poor people have vices.
Last year, I'd buy breakfast for homeless friends on Hollywood Blvd. then go eat the free breakfast on the 28th floor of the Ritz-Carlton Residences. I lived there and I can assure you, wealthy people are as crazy, addicted and ignorant as any poor person. The amount of criminality and corruption within the 1%, and how the police and even retired high-level government officials protect them, is astonishing.
I wrote a previous comment on why I think if rich people were smarter then there'd be less poor people. We need a society with better systems where there's less friction and challenges for people to overcome. And for many reasons, I see Basic Income as one of those better systems.
Assholes aside, since turning an asshole into a non-asshole is an incredibly complex issue, people I've known who are like the ones you're describing tend to not like their situation, dream about and periodically pursue having a better life, but are utterly incapable of making a chain of steps towards that better life when it's so much harder to climb than it is to stay down in the ditch. The level of competitiveness in our world also means there's many people above them who have it in their interest to keep them down and dependent (as their livelihoods depend on it).
One would hope with a lessened burden and greater freedom for the millions of Americans who aren't like that, social support and community would increase. MOOCs and the like would get more support. More people would pursue experimentation. More people people would do it right instead of getting shit done. More people would be free to stop giving themselves to processes they know are unethical.
These people you're describing are only a problem to kill off / suck dry in the world we live in now. In a world of basic income, they'd at least have a chance of getting help from the people around them that do care, have a well-developed sense of empathy. Having said all this, I totally agree that giving a lump sum of money to the people you're describing is indeed a terrible idea, will have bad outcomes.
> Thinking back I do not know anyone in my neighborhood who was genuinely a hard working person with no vices.
You're mistaking correlation for causation, which many do and is why this debate is so polarizing. Many people develop vices because they are neglected, as a coping mechanism/self-medication for their hopelessness. With more resources, they have more opportunity and don't need to self-medicate as much. This effect has been studied.
> Poor people are mostly poor because of the decisions they make. At least that is my experience.
That's the crux of the question. It might turn out that you were in a pocket of the poorest decision makers around, and that most people will do a lot better than they did. Or it might turn out that you're exactly right, and all we're doing is funding drug dealers and lotteries. That's why we need studies like this.
If you are an engineer I would expect a better capability of root cause analysis than that. Your list of things there is entirely comprised of things that are largely outside of the control of individuals.
"Poor people are mostly poor because of the decisions they make."
* Drug addiction
Yes, a person can choose to use drugs. Usually the choice is made under intense peer pressure and at a young age. We won't let children under the age of 18 be bound by contracts, but we still stigmatize them with poor choices made when they were often younger than that. Once drug use becomes drug addiction, it is no longer a choice and is excruciatingly hard to break out without external help.
* poor budgeting
Yep, budgeting is important. It's a shame that this isn't given top billing from about grade 4 on. Budgeting isn't just about managing monthly income and expenditure, it's about forecasting, and understanding financial risk management. Unfortunately, at least in the US, the education system is pretty abysmal, and it appears to be difficult to actually get students through school in some parts of the country.
These are actually all tightly linked to the word "illness". Gambling is often a learned behaviour that is linked with poor risk management and financial planning knowledge (see previous section on budgeting). Alcoholism is learned behaviour, that like gambling depends on poor impulse control, and addictive tendencies which are both physical and mental illnesses (or just illnesses once you get past the labelling stigma).
"Hard working people with not vices don't live in the slums and generally can support their basic needs."
Turn on the news, or better yet, read a couple of socio economic studies -- especially ones whose conclusions you find distasteful (it helps break your personal filter). This is flat out false - it is hard to support your basic needs when minimum wages are too low, finding full time work is hard, and there is a glut of skilled professionals who can't find work in their field, so they take up all the entry level jobs.
If you are actually an engineer you should be capable of composing a better comment than what you wrote here simply by thinking it through first.
Wow, this is extremely condescending with no actual backing information.
The fact of the matter is, people make bad choices. People who make bad choices are more likely to be poor. Lack of impulse control is extremely prevalent in poor communities. Like the GP, I was poor, I know poor people, and 95% of them are just shit at thinking long term.
The educational system fails people sure, but why does that mean we should give $1200/mo to people who do not have the necessary discipline to use it appropriately? CCTs have been used extremely effectively, and do combat this problem on a structural level.
There is actually a huge lack of skilled professionals in blue collar fields. We import mechanics at a ridiculous rate. This is true throughout a large portion of the world -- a SKILLED mechanic in Mexico can earn roughly the same wage as a skilled mechanic in the U.S...
It is hard to support your basic needs because you need to budget appropriately and you don't have extra money to spend -- but a large portion of poor people spend it anyway. I can't tell you how many of the people I know will drop $30 on some alcohol, drugs, club cover, concert, when they know that they'll be struggling to pay rent at the end of the month.
If you're actually an engineer you'll realize that most problems are multi-faceted and flat out telling people who have lived in a situation that some poorly researched secondhand analysis (i.e. the joke that is modern Sociology) is more relevant is absurd.
> The fact of the matter is, people make bad choices. People who make bad choices are more likely to be poor. Lack of impulse control is extremely prevalent in poor communities. Like the GP, I was poor, I know poor people, and 95% of them are just shit at thinking long term.
This is true of most Americans and is incredibly condescending. The poor are better with the money they do have than the middle class by a huge margin IME. The poor by and large don't blow their money on "fine dining" or new cars. They change their own oil. They don't spend over $100/month on cable TV packages. You can find exceptions to all those of course, but they prove the rule IME.
You're right, they blow their money on not-so-fine dining (my poor friends think McDonalds is cheaper than "Real Food").
Saying that it's true of most Americans obscures the systemic problem of scratch-offs and 40s on the weekend. And there is clearly a difference when you're doing these things with disposable income and doing it when you do not have disposable income -- one indicates a problem, and I don't think that it's an economic one.
I know middle income people spending their money on craft beer on the weekend and not participating in their company 401K. Or living effectively paycheck to paycheck. They may have "disposable" income, but only in the sense that they can float emergency spending on credit.
So yeah, there's a difference, but it's one of privilege.
Bad long-term financial decisions aren't exclusive to the poor.
You grew up poor. That doesn't mean your new middle-class peers had to learn the same lessons you did. They aren't middle class because they're smarter, more disciplined or have a better work ethic. They're middle class because they were born middle class.
Wanting to improve class mobility is one thing. Blaming the poor for not doing so on their own is another.
No. I don't. I mean that they had the most important safety net of all: Family with the will and ability to help financially.
I'm genuinely curious what financial life lessons you think a middle class kid is learning that a poor kid doesn't understand at a much deeper level.
My own experience is that (some) middle class kids succeed despite their own failures (dropping college classes before the grade becomes part of record stands out in my mind), and then attribute their success to their superior work ethic and intellect.
If most poor people fail to move up the class ladder, then in their same situation you're just as likely to fail. It's either that, or believe yourself somehow innately superior. I can't really think of a third option. It's like the adage about being surrounded by assholes.
You're right. Life isn't fair. But that doesn't mean the person cleaning my house isn't entitled to financial stability. I'm not religious, but I can't think of a secular version of "but for the grace of God".
The impact of poverty is more than just being poor, it can also affect your state of mind. There are studies that show people who have grown up in poverty have (on average) less self-control than those who grew up without experiencing poverty. I'll dig up the study so you can see it for yourself.
EDIT: There are a bunch of studies related to poverty and self-control in this article:
Yep, I too came from a poor background, went to university, then became quite successful and left that economic bracket behind. I work in software and security engineering, and coupled with good investments am in a very solid financial position. I have also spent a good chunk of the last decade studying and learning about the root causes of poverty and it largely cured me of my "I pulled myself up by my bootstraps" mentality I had as I started to escape from the mess that my childhood was.
I've been poor, too (spent years in my youth in a family on public assistance and in public housing.)
I too got an education (mostly in public policy), now work in software, and am now in far better socioeconomic status.
I don't find the GP's description of the causes of poverty accurate -- or even internally consistent, nor do I see GP's background (or my own) as some kind of privileged position to comment on the issue from.
> Giving $1200 check to someone without food and shelter most definitely isn't going to provide them food and shelter. It will more likely go to a stamp bag, scratch off, 40 ounce, etc.
At first, absolutely, for some significant percentage of the homeless. Anyone would be a fool to think otherwise. And yet I still strongly support the idea because I think think a bit farther than that, and not just because many will rise up to the opportunity.
You can't even casually approach the issue without considering the cycle of poverty. It's equally foolish to doubt that; higher-income areas don't magically produce harder-working, more responsible kids.
A UBI allows more opportunities for those that do want to rise up. A UBI provides drastically more stability for kids, taking away the major dragging force that causes so much violence, homelessness, and instability. So many low-income parents are away all the time working shitty jobs. You can ignore it all you like, but these people are in shitty situations from the beginning.
And ditch the personal narrative. It doesn't help. I grew up poor (rural, not urban) and got educated, etc. Yet, looking back, my situation wasn't too bad; my mom was always around, education was a priority, government programs offered a lot of help, and ultimately the state paid for a lot of my education. I am very much the exception that proves the rule, and almost without fail, any time I meet someone like you describe yourself, I find they had lots of advantages, too. Sure, not as many as someone from the middle class, but not nothing.
> But giving someone a months worth of rent/food/utilities/clothing in cash is going to be disastrous
San Francisco used to give out cash to homeless, and realized that it didn't work well. So Gavin Newsom (previous mayor) started the "care not cash" program, where cash was replaced with services.
True or not, it doesn't matter for the purpose. If somebody is mentally ill, it doesn't matter what the cause is or who we can blame it on, it's still the case that cutting them 4 figure checks monthly is not going to magically get them out of their situation.
No, it's the reason the bad decisions get made. Same as alcoholism, drug addiction, and other "vices". Some may stem from initial poor decisions in the past, but they're all good contexts for why continued, daily bad decisions are made that serve to keep the person in poverty.
We ought to support NAMI (http://www.nami.org/). They're a large, slowly growing non-profit organization of doctors, families and researchers that is trying to get the US to shift the way it deals with mental illness from the bottom up: identification, treatment, support, public perception, everything.
Protip: This would also help with our mass shooting problem, too.
None of the things in that list were themselves decisions. They were causes of poor decisions. Do you dispute that mental illness can be a cause of poor decision making?
What about inverting the status quo and deducting UBI for each child you have (with a grandfather clause of course)? The problem would solve itself in a few generations. You've gotta work and plan if you want to have kids. If you want to party for your entire life, go ahead, but you don't get to leave kids behind for the rest of us to deal with.
At which point CPS intervenes. The other piece of the puzzle would be high quality orphanages, operated with expectation that the chidren will not be adopted, instead dedicated to providing the best possible environment for development.
Our current system tries to fill the role of the orphanage as best it can without taking the children away from their parents, and I don't think it works for anyone involved. Bad parents are enabled, poor kids rarely overcome their upbringing and continue the viscious cycle, well adjusted kids from stable homes have their education disrupted and often violence inflicted on them by the poor kids, and it only gets worse as time goes by.
Can the cause and result be (at least partly) reverse? That is, poor people is poor not because of their poor decisions, but being poor let them make poor decisions. Or maybe it's a feedback cycle. I don't have first-hand experience, though; just an impression from a book[1].
If being poor is a part of a cause, then guaranteed safety net may break the malicious cycle. But yeah, just blindly betting it seems too naive. That's why we need social experiments, right?
>But giving someone a months worth of rent/food/utilities/clothing in cash is going to be disastrous
If the poor can destroy our society because we cut them a check, we're fucked as it is. Who knows if BI is implemented "no strings attached cash", but it's not impossible to imagine outreach groups to get people to spend their money more wisely.
And despite the help, some of them will continue to buy vices. You cannot help those people until they decide they want to change. But this small waste of BI is not a strong argument against BI.
I mostly agree with GP, but "disastrous" as meaning destroying our society is pretty over the top all right.
People spending their BI money on vices instead of food and shelter isn't by itself an argument against BI, but it does call into question the supposed advantages of BI. We're supposed to be able to eliminate cumbersome, complex, admin-heavy welfare programs in favor of BI, thus making it an overall savings of taxpayer money. If many people spend all of their BI money on vices and are still starving on the streets at the end of the day, then we need the old programs back again to feed them, and we're just spending money on nothing.
I don't believe many people will be buying vices to the point that they also can't eat, but I also don't think BI's adoption will shut down soup kitchens and other benevolent places (nor stop people panhandling, but it certainly may change everyone's opinions on giving to panhandlers).
I don't mean to sound cold, but it sounds like the person your describing is at such a point that they simply can't care for themselves and need to be hospitalized.
BI is will certainly stop them from starving if the payments are very frequently (weekly or even daily). If they blow it, they will soon learn their lesson until their next "paycheck".
> Drug addiction, gambling, alcoholism, poor budgeting, mental illness
I come from a middle class background and I know a number of people, in my extended family and in my middle-class community, who have made the same choices (BTW mental illness is not a choice), and it didn't put them in poverty.
I don't think there's a strict cause and effect relationship there.
Some of that is due to the traditional monthly nature of payments and expenses, which is beyond some people's planning horizon. How do you think it would change if everything (both BI deposit and rent payment) were weekly, or even daily?
I've seen London rental advertisements list weekly prices as a way to conceal their cost, but I've never heard of anyone taking payments weekly. Do council-provided flats have weekly bills?
New Zealand also calculates weekly. For example, a landlord can only ask for two weeks "up front" (aside from a bond). Weekly is common outside the US, whether advertising-only or otherwise.
Well, it's a study... I can totally see giving someone $1200 once will not going to food and shelter. But just maybe, over time, it'll relieve what may be a sense of hopelessness, or other complex social factors that leads people to poor decisions. And it may not help for 100% of people in that socieconomic bracket, but optimistically I think it could help a large number of people get out of a bad cycle.
No, it's literally called enabling, and it doesn't help people's problems. There's a reason why you're told to cut off funds to people who have problems like this.
> Drug addiction, gambling, alcoholism, poor budgeting, mental illness
I come from a middle class background and I know a number of people, in my extended family and in my middle-class community, who have made the same choices (BTW mental illness is not a choice), and it didn't put them in poverty.
I don't think there's a cause and effect relationship there.
Somebody else suggested that payments should be divided into smaller amounts and disbursed more frequently. So instead of getting $1200 one a month (or whatever the amount is), you would get $20 every morning and $20 every evening. How do you think that would work in the neighborhood you grew up in?
You might have a point there, daily payments could turn the best of us into daily drunks.
Personally, I learned being moderately frugal from having a large (for a kid) stash of cash in the bank (piggy and otherwise). "Do I want X more than I want to keep the money?" is a very different kind of question than the two separate "Do I want X? Do I have the money?" that I observe in people who never had that chance.
Maybe something like annual/1460 a day (for not starving) + annual/24 a month (for regular bills) + annual/4 once a year (to keep that long term thinking sharp) could be the best pattern. Somewhat foolproof, but not unnecessarily fool-creating.
> Drug addiction, gambling, alcoholism, poor budgeting, mental illness
I come from a middle class background and I know a number of people, in my extended family and in my middle-class community, who have made the same choices (BTW mental illness is not a choice), and it didn't put them in poverty.
Serious question... By this logic have I plateaued in the middle class because I like to pay for and watch Netflix while having a few beers on the weekends instead of managing an investment portfolio for better returns or working on another startup idea?
I didn't at all, you just wanted to read that I did.
To recap, UBTs work better than most people expect. Within the extreme poverty bracket there are many people who actually use UBTs better than we anticipate. UBTs aren't a silver bullet, CCTs better address poor decision making and the deeper rooted issues which cause a cycle of poverty.
You, and many current welfare proponents, cling to the belief that the _majority_ of those on welfare would poorly allocate their funds, but again, this has been shown to not be the case (at least not to the degree we expect) time and time again.
I encourage you to actually read the Economist article...it is quite good.
I will also point out that while I cannot comment on the psychological benefits, I believe there to be strong economic benefits to a UBI over current welfare.
And finally, UCTs aren't the answer to everything. A UCT/CCT combination I think is inevitable to address the deeper decision making issues of poverty.
If most people born in poverty remain in poverty, while most people not born into poverty do not enter poverty, then it is self-evidently not the fault of the born-poor that they remain poor.
Thanks for your comment, I also grew up in a poor immigrant family (non academic parents) and was able to move to the top 0,5% and fully agree with you.
My personal experience is that the problems poor people face (at least here in the West) often originates in their own lack of self control, impulse control, ability to cooperate and ego.
I fear if we take away all outside pressure to be productive and yes, to some degree conform to society, we will create a disaster for all of us.
Giving free stuff to someone is the worst you can do for anyone. Giving opportunities helps.
Delivering the money in small chunks might help. Instead of 70$ every week, make it 5$ twice a day. So no matter how broke you were yesterday, you'll have enough money to eat in a few hours.
Another "make it easy to get food even if you really screwed up" option might be to give grocery stores 'first dibs' on the money. Basically, let people spend the money a couple days in advance if they do it at a grocery store. A foodstamp micro-loan.
The really tricky stuff is probably cases involving debt, where the debt-collector wants to pressure the person into paying them before buying food.
Solving this debt is not that tricky, it has known legal solutions - e.g. when you have a court order to collect debts from you, where your wages are garnished, it has a floor limit of monthly income that's untouchable and that monthly amount will be available on your bank account no matter what, and there are no legal ways to recover that from you. Threatening to break your legs may work, but that can be handled by the police.
Set this floor equal to BI, and that's it. On the other hand, it will mean that payday lenders will likely not lend to you at all if you have no other income, since you can easily never ever pay them back with impunity; but that might be considered a good thing - people won't get stuck with predatory loans en masse because they won't be given them.
I agree with that one. It is probably worth it to deliver the money each day or at least each weekday. You could handle the food stamp microloan via and debit card that only is for small food purchases which deducts payment from future daily payments over a certain period of time.
It would also stop the amazingly timed police checkpoint on the first day of the month.
Handling the debt-collector issue is probably going to take something like a law to force payments in very small amounts until legitimate debts are paid off.
> It would also stop the amazingly timed police checkpoint on the first day of the month.
I've never heard of this. Do you have a link or something? I assume it's like a checkpoint they set up in poor areas so they can get money from the welfare checks or something?
So, its the first of the month and people got their welfare check (or EBT these days), and need to drive into town to buy food. Amazingly, a police checkpoint appears and pulls every driver (well, not semis or high priced vehicles or well those without reservation plates) over. Of course the cars aren't well maintained (poor rural - got a grant based on those stats) so tickets fly. But I'm sure everyone feels safer now.
I am having one heck of a time finding the articles.
Ah so it's not to catch them while they have money, it's to catch them when they know the poor people with poorly maintained cars will be heading to town. That's quite shameful.
This is about the tiny daily portions of money, not about BI.
It's hard to make long term plans with that, because instead of putting aside $100 at the beginning of the month, now you need to save $3 a day. With amounts that small, it's easy to accidentally overspend.
Plus sometimes sudden unexpected costs happen, and you cannot wait another week to slowly save up for it, you need that money now.
Not all poor people are poor because they're drug addicts that cannot handle money. Poverty is hard to escape. I'd rather not humiliate these people any further and make it even harder for them to lead a dignified life just because some people might waste their money in the first week.
> Plus sometimes sudden unexpected costs happen, and you cannot wait another week to slowly save up for it, you need that money now.
If unexpected costs happen currently, you either have the money or you don't and have to wait - the situations are the same.
(Upfront payment - Have the money? Great. If not, wait until next payment. Daily payments - Have the money? Great. If not, wait)
> I'd rather not humiliate these people any further and make it even harder for them to lead a dignified life
(FWIW, I live on benefits due to medical issues) How is this undignified? If anything, it's one less thing to worry about (I've occasionally forgot about payments and ended up having ~zero money left just after a payment. A rolling income would at least mean I get money for essentials pretty much immediately)
I feel like it's undignified because it sounds to me like saying "You can have money, but since you are poor and don't know how to handle it, we give it to you in small daily portions so you don't waste it all at once.". Like parents do with their young kids.
If it's basic income, then you should be free to choose how and when to use it.
For your example about forgotten payments, the result would be that you did not pay, so potentially you may lose your insurance, or you receive a fine or something worse. That's a decision you should be able to make yourself.
If you don't have control over your own money, that's not very dignified.
I'm not sure how that is relevant at all. We're talking about how a BI system could work and whether it could be a good idea to split the money in tiny daily chunks. I stated that I believe that is a bad idea because I believe it's generally harder to put aside a dollar a day than $30 a month at the beginning of the month. So far I haven't heard any counter argument, just "How would that be worse than what we have now".
Plus that question has so many answers depending on which country you live in. I can tell you for example that in my country you are expected to save part of your welfare money for those cases, which does not necessarily work very well since it's often not enough money to really save it.
> What if your washing machine breaks or your kids need new clothes or your car needs gas?
paying out nightly would be better for the "car needs gas" and really no worse of the other two. Many families are going to take a hit on major repairs.
I assume we are talking about the same amount of money as the single monthly check divided up my payment days.
If you get all your money at once you can always have a buffer for these unexpected things. You also have more freedom to waste it all at once, but I don't believe most poor families are really that wasteful. It's just hard to get by. If you get your monthly check divided up, you can't first resolve the situation and then figure out how to deal with it financially. You have to wait. That might be the difference between making it to a job interview or not, or buying medicine for your kid when it needs it.
If you start coming up with extra cases for when it's urgent and you can get a bigger payout, you're again complicating the system and adding extra bureaucracy where part of the idea is that the simplicity of the system compared to classic welfare systems is what makes it more affordable and allows to give bigger monthly payouts.
> If you get all your money at once you can always have a buffer for these unexpected things.
That doesn't work in practice as people are really poor at budgeting thus the big trip on the 1st of the month to buy groceries.
> That might be the difference between making it to a job interview or not, or buying medicine for your kid when it needs it.
If I'm paid daily, its more likely I can buy that medicine or make that job interview. The actual difference is the big payments and frankly sucking up a chunk of the monthly is going to hurt pretty badly. We're talking about the same amount of money distributed differently.
> If you start coming up with extra cases for when it's urgent and you can get a bigger payout, you're again complicating the system and adding extra bureaucracy where part of the idea is that the simplicity of the system compared to classic welfare systems is what makes it more affordable and allows to give bigger monthly payouts.
I don't think I understand what you meant by this paragraph.
This has got to be the most pathetic strawman argument I've seen on HN in a long time. "BI doesn't work because it can't perfectly protect the most pathological outliers"? Ok. Did anyone say it would solve this scenario? And I'm sorry, but what existing agency currently helps people back on their feet after their 12th car accident in the first place? I'm really struggling to see the unequivocal BI take-down you tried to set up with your "riddle me this" quip.
They're asking how bad actors will be handled by the system. It's using an analogy to ask a question, not propping up a straw man and knocking it down.
The question is utterly hyperbolic, that's why it's a straw man. Phrasing your answer in the form of a question does not magically grant rhetorical validity to your line of reasoning.
The idea for Basic Income was that people have a better idea of how they need to apply money then one-size-fits-some programs government makes. This is the same argument that a market economy is better than a command economy, precisely because there are too many hidden variables for a mega-organization to understand.
What happens now, if someone has a financial emergency in our current system? Well, you're just fucked. Unemployment doesn't start until 2-4 weeks after you've been laid off/fired, and that's assuming they didn't fight it. Medical bills just linger, whilst the bill harassers keep calling. Your car broke? Well, too bad.
At least with BI, if money was disbursed every 2 weeks, then the crisis would be averted partially by that. Unlike now, if your car dies, you lose your job, and then no way to get a job or pay for a car.
The best solution I can think of to counter people blowing all their money is to trickle the money to an account, instead of giving it to them as a single fat paycheck every month. So if instead of giving them $1500/30days, give them $50 a day or maybe $25/day and a $750 "rent stipend" bulk at the end, so that they can't blow more than a certain amount a day unless they've been actively saving. This encourages the behavior of saving which is the biggest missing skill for the poor (because they are not used to having anything to save).
As for what happens when that gets blown out because of an emergency, I think addressing the cost of health care in a place like America is an independent and arguably more important challenge than providing BI. The system built around insurance policies and over-priced hospital procedures is ridiculous to say the least. You shouldn't need insurance to afford simple checkups, prescriptions and treatment, which would prevent most overcomplicated health conditions for the financially constrained.
Every other financial emergency I believe can be responded to with "tough shit you've exhausted your social safety nets," and it's probably ok. BI won't solve everything (or even anything) magically overnight, the intent is to build a culture long-term where people manage their lives around it and don't have to be told "tough shit" from birth.
If you've ever played "idle games" (e.g. bloodrizer.ru/games/kittens/#) they've effectively taken this concept to the extreme. Everything is earned and paid for as a rate of $/second. This strongly encourages you to leave your system in a state of positive rate before letting it idle, else you'll return to a ruined society.
Back in the real world, I think people might have a better understanding of their finances if they could view their position as a continuous function rather than only seeing the discrete transactions as most of us currently do.
Isn't 'a $750 "rent stipend" bulk at the end' an essentially direct redistribution of social wealth into the hands of those who don't necessarily need it?
It (and the rest of basic income) is a direct redistribution of social wealth into the hands of everyone, some of whom don't necessarily need it.
One of the things that distinguishes basic income from welfare is that the former is an unconditional transfer payment. That means that some of the folks who receive it don't actually need it. But it gains a lot of advantages over traditional welfare plans in the process - it is much simpler to administer, it doesn't require making politically fraught judgments of who is worthy, it eliminates disincentives to work that come from income cliffs, and it's easier to gather support since everybody sees a benefit.
Presumably those who don't need the basic income will end up funding a greater portion of it through higher taxes.
Well the money is generally earmarked. Your Section 8 voucher goes towards housing, food stamps go towards food, etc. That creates a limit on how the money can be spent.
That's fair. I guess part of the question is whether it's unacceptable to have any way people can fall through the cracks, or whether it's about relative improvement. The original comment felt more like the former, but that's just what I got from it.
Social Security is not a give away. People have paid into SSI for years and they are getting their money out of it. No one is giving them free money and they free to blow it as they see fit.
Social Security started out paying benefits to people who never paid in. The money you pay to Social Security is for your parents and the money they paid was for their parents.
You are splitting hairs. I pay into SSI and there is an expectation that I will get a certain amount out of it based on when I retire and when I die. It is known today what I will get out in the future. Also, since the Social Security fund holds a ton of T-Bills (Think savings account), the argument that people who are retired now are getting someone else's money is technically wrong. If the Social Security fund held no T-Bills and young people were paying into a fund that was then immediately paid out to retirees, then I would agree with you.
> I pay into SSI and there is an expectation that I will get a certain amount out of it based on when I retire and when I die. It is known today what I will get out in the future.
It isn't. Congress can change it whenever they want, and they have more than once already.
> Also, since the Social Security fund holds a ton of T-Bills (Think savings account), the argument that people who are retired now are getting someone else's money is technically wrong. If the Social Security fund held no T-Bills and young people were paying into a fund that was then immediately paid out to retirees, then I would agree with you.
The Social Security fund doesn't hold enough T-Bills to satisfy its "obligations" and the shortfall (and then some) is made up for by current payers. The only reason it has any T-Bills at all is that the population has been expanding so more people have been paying into it than collecting benefits, and the government promptly loans the extra money to itself and spends it on F-35s and gifting tanks to ISIS.
Moreover, T-Bills in the hands of the government issuing them are not money. The government can't redeem them to itself to get money because that action would only cancel out. The only way the Social Security fund can actually convert a T-Bill into money that came from somewhere other than current-year taxpayers is to sell it on the bond market. But that has all the economic consequences of the government issuing new debt.
In other words, the only place the money paid out to Social Security recipients can come from is either current-year taxpayers or by selling into the bond market. Which is exactly the same as any program that isn't holding any T-Bills. The trust fund is an economic no-op.
> But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food? Do you tell them "tough shit, you've exhausted all your social safety nets" or are there safety nets below BI, essentially recreating the welfare programs previously destroyed? If so, how do you prevent fraud without a department following up on Joe's twelfth "my car broke down" case of the year?
I think you're comparing BI to a different standard than the existing programs.
The question isn't "Is BI perfect?", but rather "Is BI better than what we have today?"
The exact scenario you laid out can easily happen with the various programs that exist today. If BI reduces (but not eliminates) those scenarios, that would be a worthwhile improvement.
Depends which BI fans you ask. The ones who want to completely eliminate other welfare programs are generally right-wing and/or libertarian - they're opposed to existing welfare programs for all kinds of ideological reasons. Left-wing BI fans (like me) are not so gung-ho about eliminating other welfare systems for the reasons you described, and I at least am totally willing to accept that BI will cost money.
That said, I do think there are some welfare items that can be eliminated, namely those that provide an income guarantee rather than a safety net against catastrophic expenses. So for example, section 8 and food stamps might be phased out under a BI system (they're always going to get next month's or week's deposit), but I think government-subsidized healthcare should not be.
WRT things like the car breakdown case you described... I think that's a gray area? With a few very big exceptions (people with disabilities or living in rural areas) the lack of a car is mainly a catastrophic issue because it endangers jobs. If the person has a basic living standard guaranteed, the urgency goes down, and I think you can just say "tough shit, save up until you can afford the repair". But I do think that there has to be a social safety net for people for whom a greater variety of big-ticket outlays are essential.
> So for example, section 8 and food stamps might be phased out under a BI system (they're always going to get next month's or week's deposit)
But my point is, when you hand someone a check and they must in turn be responsible for spending that money on food and shelter, they might not actually do that and then what? At least with Section 8 and food stamps you're earmarking the money for a particular purpose so as to make it much harder for the money to not be used the way it was intended.
> WRT things like the car breakdown case you described...
Keep in mind "my car broke down" is a metaphor for any unexpected event that impacts someone financially (and commonly as an excuse for "I spent my money foolishly and now I'm broke"), so I didn't mean for that to be some single concrete case I wanted a specific answer for. But again, if we decide that we need to help someone on BI who had some particular financial hardship beyond what their check allows for, how do we police that?
To be fair, if the disbursements are frequent enough, you don't need to worry about food. It takes quite a while to actually starve, and a hungry enough person will buy food.
Shelter is another story, but as long as you provide a means to assign some of your BI ahead of time to a provider (landlord), this should also be a minor issue outside of the very mentally ill, who are going to be screwed in any system (including the current one) that doesn't take them under involuntary managed care.
When I say assigning your BI, I mean being able to go through a process on the spot that guarantees a landlord $x over y weeks from your BI in exchange for y weeks of tenancy, possibly with additional penalty fees the landlord can claim for any damage to the property. Essentially, a lease without the need for a security deposit or credit check. I'm certain you'd have quite a few places willing to take in renters with guaranteed rent coming in at regular intervals.
If someone has that much difficulty managing money, I think social services need to get involved and take some control over the person's decisions away from them. I just don't think that should be the default.
Keep in mind that, under many current programs, you are not allowed to have savings. If you do not use all of your welfare money, then you get your benefits cut. If you have too much in your savings account, then you get your benefits cut. So it's not so simple as to say they have difficulty managing money, it's that they are not allowed to do many of the things you'd associate with successful money managing.
Under many current basic income programs, or just under other welfare programs? My impression of basic income schemes is that they are universal - they don't care if you're a millionaire, you still get your $30K per year.
Yeah. My attribution of these issues to saving skills only applies in a UBI context, iff the scheme doesn't force people into particular spending patterns as some current welfare systems do.
My personal idea of a solution is to make basic income a "stream" of income instead of a lump sum once or twice a month. We have the technology to make a transfer happen hourly, or even minute by minute. By apportioning the income in that way it becomes impossible to "blow all [your] money" to the point where you can't afford food, because if you just wait half an hour or whatever you'll have enough on your card again for a decent meal. Rent is a little more complicated because with our current system you're typically expected to pay a month or more up front, but there could be an opportunity to come up with new rent contracts and payment methods at the low end that are paid hourly or minutely instead of weekly or monthly, removing the need to save up to pay a lump sum.
There's actually nothing in this scheme that's tied to basic income either -- we could do this reform with existing entitlement payments today in a totally revenue-neutral way.
There is a problem with that though. For instance, if you're on foodstamps right now, and gas is not cheap, or it's very time-expensive to make it to the grocery store too often, then you're making single large trips. A continuous stream doesn't gel as well with that situation. You'd need a more comprehensive solution, like getting rid of food deserts in poor areas.
Or at least, if you're going to do this, you'd have to be very careful to not overcorrect for the 1st of tha month problem.
Not to ding your overall idea, I like it, think it's very cool. Just, to implement it with current infrastructure it would require a lot of care.
(Actually also I think rent or other large payments are less of a problem in your solution than you think - for anything on contract like that, you could simply reduce the rate at which continuous income is obtained. If your basic income is 100 units per whatever, and your rent is 43% of your basic income, you just reduce the stream down to 57 units)
> For instance, if you're on foodstamps right now, and gas is not cheap, or it's very time-expensive to make it to the grocery store too often, then you're making single large trips. A continuous stream doesn't gel as well with that situation.
Sure it does. Just save up for the 3 days before you go or whatever. There's nothing forcing you to spend every cent as it comes in, and a financially stable and responsible BI recipient would do well to save up, buy in bulk, and have a rainy-day fund anyway. Making the income into a stream would just save you from being kicked out on the street hungry if something unexpected happens and you hit 0 at some point.
To solve many corner cases, you could maybe have a kind of voucher application at the grocery stores, gas stations, car mechanics, etc., which would provide a temporary advance (or just money from a designated separate emergency or unusual circumstance pool so that it isn't like a credit card) which would need various rules that would guarantee that the service provider would always see the money, but also ensure that the applicant would be registered and held legally liable for misuse of the voucher system.
There's a fascinating idea presented in a webcomic (that I totally cannot find right now) that really explores this idea.
Aside from what all else is going on in the society, everybody has a banked amount of money that is their steady-state; that amount is pegged to living costs (either civ wide, or locally, I don't remember, probably something in between). If you currently have less than that amount, your account gradually fills - if you current have more, it drains. I also don't remember if the rates are fixed, or are curved (further from baseline, higher the fill/drain rate is).
Time-based costs and payments - rent, salary - are then taken as a rate, while one-off payments (meals, events, items) are paid for normally.
The goal of the system is a more matured BI situation, /plus/ an incentive structure to keep producing. If you make a shit ton of money off something, it'll last for some amount of time, but you will have to eventually re-contribute to society in order to maintain the "rich" standard of living.
Yeah I wanted to address this in my comment above but didn't want to get down in the weeds. There's a couple decent solutions to this problem. The liberal/socialist approach would be to make a contract garnishing future basic income illegal. The libertarian approach would be to make bankrupcy laws so frictionless that you could declare bankrupcy three times a week without breaking a sweat, causing payday loan companies to stop offering their services to the least financially responsible sector of the population.
I think either of these solutions could be made to work in general. Certainly better than what we have right now.
I can't speak for MOST BI fans, but I can tell you my own answer to that question.
I believe that (like the rest of the world, but NOT the US) medical care ought to be provided to all, so I'd take medical emergencies off the table.
I also think it is important that there not be a way to confiscate one's basic income for the repayment of a debt -- everyone gets to keep their basic income no matter what.
Furthermore, we need to continue (as we do today) to allow governments to run programs intended to keep the price of food and housing low, like zoning laws requiring developers to produce a certain amount of low-income housing. We also need to continue to provide government sponsored care for those incapable of caring for themselves (for instance, those who need institutional care due to severe mental or physical handicaps).
And after that, if we create a basic income that is sufficient to cover basic living expenses, I think we DO get to eliminate much government aid for poverty. Eliminate unemployment insurance (or rather, the mandate to provide it). Eliminate aid to the poor. Eliminate social security. Eliminate a minimum wage.
You ask "what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food"? I think that yes, you DO tell them that. You example is someone who says "my car broke down" and I think we, as a society, could leave that person stranded without their own automobile. (Today I know of no government programs to help people whose cars have broken down, so I'm pretty sure we can all agree to live with that.)
Basic income should be subject to garnishment, just like any other income. There are limits to the amount that can be garnished (In WA state its 25-35% of total income, depending on type of debts) that would protect them from having it completely taken away.
Doughnut holes in benefits always create odd distortions where people would turn down a small raise or increase in hours because they would actually loose money due to the loss of benefits at the higher income level. In this case, it would be people not willing to work as the extra money they would make would go mostly to the debt rather than their pocket.
What sort of emergency do you envision? Most of today's financial emergencies hinge on either losing your job or incurring extreme debt due to uninsured medical care. I can't speak for all BI proponents but I, personally, support universal health care in addition to BI.
With health care taking care of medical expense emergencies, basic income is left to take care of job-related emergencies. Your example of "my car broke down" would seem to fit that category. So what then? Joe loses his job but basic income will make sure he never goes homeless and always has enough food to eat. Instead of having a major crisis he can take a break from working and maybe upgrade his skills.
Yes, of course. Universal health care coverage (read: insurance) can't be used to buy groceries or pay rent. Basic income will never be enough to pay for somebody's cancer treatments.
Neither one is a substitute for the other; both are extremely beneficial.
Currently under the PPACA you cannot be denied insurance for prexisting conditions, and it is reasonable to expect pegging UBI to just poverty + cost of bronze single person plan in your area rather than implementing universal healthcare.
Not trying to argue it isn't cheaper to cut out the insane middle men in the healthcare industry, or that the current insurance system works at all (deductibles cost society incredible amounts of money and time because people won't go to the doctor until they are dying because of the unsubsidized costs) but if your goal is to have everyone insured, fed, and sheltered you can do that with just the cash payments while just enduring a disastrously inefficient and harmful healthcare system besides it.
Right now you can blow all of your food stamps money on bottles of ketchup if you want. Nothing is stopping you. And there is no fall-back. And food stamps don't fix your car, section 8 housing doesn't fix your car, even if you have SSI, it's not really enough money to fix your car.
So all of this is a straw man and completely irrelevant to anything related to BI. Once you expend your welfare, you don't get more just because you asked.
> But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food?
In the simplest case, the same thing as when someone on existing cash benefits has an emergency or blows them all (and, yes, that happens even with restricted-use benefits like food stamps) -- there may be public and/or private emergency shelters, charity kitchens, etc. that operate at a level below the benefit programs that exist now that would be replaced eventually by UBI, and the transition to UBI doesn't really affect the use case for those.
There may be ways to improve the handling of those situations (or mitigate them) within a UBI by adding new public systems that leverage the UBI infrastructure, are voluntary, and don't change the basic nature of the UBI. But those are factors beyond the basics of a UBI -- in the simplest case, that's an issue that exists in the status quo and is not among those addressed by UBI.
A lot of the people who are going to be on BI in the next ten years are adults who are in good mental health and perfectly capable of spending within a budget. Uber drivers. Servers at restaurants. General hospitality workers that are getting automated out. Ordinary white, working class Americans who lost their factory jobs to China in the last recession. People who are voting for Trump.
These people should be allowed to make the trade-off between using their BI to live in the city and use public transit, or to live in a cheaper, more rural town and having a car. Similarly, they could choose between eating chicken for dinner every night, or eating ramen all week and splurging on a box wine on the weekend. BI lets adults do this. It's embarrassing to stand behind someone at the grocery store trying to buy a bottle of wine with EBT.
It's worth noting that BI does not, by itself, solve mental illness, drug addiction, medical emergencies, or fraud. However, a homeless person that receives BI could rent themselves a small apartment somewhere -- which could reduce the number of 911 calls that person causes as a homeless person, and in turn free up cost savings for e.g. a social worker visiting them at their new apartment.
> A lot of the people who are going to be on BI in the next ten years are adults who are in good mental health and perfectly capable of spending within a budget.
Of course there are safety nets, look I can only speak from my perspective living in Sweden but it's my perception that we already have a sort of basic income through the various social services available.
I never understood BI until you said "cut a check", so that's the difference between BI and what we have today in a welfare state.
Because today you get a grant for your rent and you get a basic minimum income from social services. All of which is designed so that you should be able to survive but not in excess.
It's two sums of money that is essentially a BI but instead of cutting a check it's calculated based on your standard of living.
For example if you're keeping a 3 room apartment without a job then the public insurance company that issues the housing grant will require you to move to a smaller apartment to keep your grant.
There's also additional money you can request if you're sick or old. And of course some people have a disability so there's money for that too.
The problem with having many small creaks like that is most people don't know about all their rights, or are just too lazy to pursue them.
>The problem with having many small creaks like that is most people don't know about all their rights, or are just too lazy to pursue them.
That's why it's better to just cut EVERYONE a check. Everyone starts at the same BASIC level of subsistence, and there are no welfare cliffs, administration overheads, frauds, tricks, etc. etc. etc. Then we work to improve our situations - as we ought.
There's been a lot of research into this, particularly around the concept of savings as the big obstacle towards independence and freedom. The poorest people who struggle to achieve even a basic income (think participants in microcredit) face a difficult task of building enough savings to live past one catastrophic flood, one bad recession, one big purchase/investment (a new car that doesn't always break down vs. crappy money pit of repairs and bills).
IMO, research into developing savings capacity is arguably more important, and a much broader problem. But the wisdom of saving pennies is not a sexy idea. The people doing the most progressive work in this are orgs like Grameen.
It seems that a large portion of the very poor / homeless is caused not directly by poverty, but indirectly by poor decisions caused by mental health issues.
Obviously BI is not a fix for the health care system, but how do you propose that BI should address people that don't really have "legal capacity" to make decisions on their own ? Do you support paying BI to some dedicated caregiver instead in such cases, or is it beyond the scope of this initial experiment?
Poverty can also cause mental illness. There are plenty of studies on how children raised poor and hungry have developmental issues both physically and mentally, and how even adults who transition into poverty can become trapped in it and have their thought patterns altered through it.
How do we deal with this now? If you have a job, and you spend all your money before you pay your rent, how do we help those people out? I'm not aware of any government institutions that will pay your rent for you. If you spend all the money you have on food, I suppose you can get food stamps, but most likely you go to a soup kitchen.
I guess I'm wondering if there is any data on how many people "blow all their money and now can't afford rent and/or food", and how we help them now.
If you paid it weekly, or even daily electronically, this would be a non-issue. Joe doesn't have enough cash to buy food? Tough shit; he'll get $20 in his account tomorrow and can buy breakfast at 12:01am if he's hungry.
Every welfare or social safety net has a similar schedule. We would not give someone a $12,000 welfare check on January 1st and expect it to last very long. People reliant on welfare or BI have proven that they have very low financial literacy.
The way we solve giving money to people with low financial literacy is the same - don't give them their money all at once - spread it out over time to limit the financial harm they can do to themselves.
I'm actually shocked that someone would ask such a riddle. It's not clear to me if you actually thought that question through, or if you're just trying to take down BI from any angle you can.
As many others have pointed out - that's a straw man argument. The existing system doesn't cover your riddle either. Yes, people will abuse systems, and yes, systems will sometimes fail. But that alone is not a reason to stop pursuing it.
> But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food?
They still get the BI check every week which they can still use to buy food and pay the rent, so homelessness or starvation doesn't happen. Now they may have some other bills they can't pay, so their cable gets turned off and they lose their car and have to buy a fifteen year old one or carpool or take the bus.
I mean what happens now in that case? If wrap your car around a pole and don't have collision insurance the government isn't going to buy you a new car. If you rack up gambling debts the only thing Uncle Sam will give you is a ticket to bankruptcy court.
Insurance. There has to be insurance, and it should be part of BI. So Basic Income & Insurance. BII.
If someone keeps making claims, then they should be investigated for insurance fraud, and processed accordingly.
As for people wasting their income... This shouldn't be a concern for any BI system. The system distributes basic income. What people do with it should be up to them, just like they are free to spend their pay check as irresponsibly as they wish.
If there are specific cases where someone is mentally or physically incapable of responsibly converting income into basic necessities, we could let there be basic shelter and food (what homeless shelters are today) and have those expenses deducted from their BII.
That's exactly how existing welfare systems work. If you spend the money you must rely on charities like soup kitchens. BI changes nothing in that regard, what it does change is: it removes means testing and the huge cost, stigma, and unfairness that goes with it.
Many countries already pay for schooling, healthcare and military protection, why not do it for basic living costs?
For people with an income above the level where they can apply for assistance programs, what happens to them if they blow all their money? They're broke until their next paycheck. If they borrow too much and can't pay it off, they declare bankruptcy.
BI isn't a one-time payment. Presumably people would get checks every other week or every month like a paycheck. If they blow it all, worst case they will be stuck for a couple weeks. Not long enough for an eviction to go through or to starve to death. After being hungry for a couple weeks, they should figure out pretty quickly that they need to buy groceries before lottery tickets.
I know someone who blows his "bijstand" (the lowest welfare level in the Netherlands, about 1000 euro but you will also receive subsidies for rent (up to 350 euro) and healthcare). I can tell you that you will become homeless and live in homeless shelters when your parents can't or will not take you in.
GP understands this, I think. The assumption is that BI will replace food stamps and/or other social welfare programs. This being the case, the question is: what if the recipient carelessly spends their BI, and does not have enough money at the end of the month to pay for fundamentals (rent, food, etc.) given that the food stamp program has been replaced by BI.
I'd say you absolutely say 'tough shit'. Learning to manage a scarce resource effectively should be one of the goals of the program. It should not be the job of the state to take care of people who, of their own volition, regularly and repeatedly screw themselves over. That isn't to say that nobody should care for them, but I think that should fall to private charities, family, or other institutions.
If a person's issue is drug addiction for instance (probably the most common type of person who would blow all their money and not have enough for food), i'd like to see free treatment offered to those people. I would not, however, like to see more resources given to them other than that. They can keep getting their BI check and blowing it on drugs until they decide they're ready to stop, or they die. They will have their habit financed which will probably net to a far lower social cost than them stealing to pay for it or whatever else they may be doing.
The other major potential financial stress is healthcare. Healthcare is essentially a random high variance cost. For this reason, I think it makes sense for society/government to socialize high-cost healthcare problems for people. I think this is a true public good in the sense that it allows people to be untethered from their jobs and to pursue more risky enterprises without fear of harming theirs or their families health in so doing. This is ultimately a net good for society far above and beyond the health benefits that it gives to the actual end-recipients of the funds. Smoothing ultra-high variance, random inelastic expenses is critical to promoting innovation and keeping an economy running effectively.
As with current welfare programs: you get a check every <interval>, end of story. People are free to make bad decisions and get themselves evicted, but those situations will be because someone is incapable of managing their money, not because they're incapable of making it.
Likewise, landlords will be more willing to give people a chance because they know you're not going to 'lose your job' so to speak. That said, the idea of a basic income seems like it should also include free courses on managing your money – best practices, techniques, ways to work around impulse buying, how RRSPs/401k/etc. work, and so on.
Also, welfare programs as currently implemented aren't a safety net below existing incomes; they're not a line of credit that you fall back on when your car dies again. They're programs which are paid in lieu of an actual income, which is frustrating to apply for and be on, and in most cases they pay you so little that you can't afford e.g. child care and rent, but which also force you to prove that you're out there applying for jobs even though you can't afford someone to watch your kid while you do.
Just because someone isn't going to lose their "job" (BI), what's to say it will end up in the landlord's hand? They can still default on payments. I wonder if signing over all/some of the BI to the landlord so it goes direct could be a good upgrade. It comes with the creditworthiness of the state (in california that is less than 100% mind you).
Thoughts on the risk of someone not paying their BI to the landlord?
I hope BI just never flies because financial problems grow out of real problems. You cannot solve human problems by cutting a check to all the poor people. Poverty grows out of very real problems like chronic health issues, learning disabilities, abusive relationships, etc. These are not going to be magically fixed by giving all poor people a check. Furthermore, I have my fears that both poor people and the rest of society will put less effort into helping people with very serious, intractable problems to actually resolve them because "Hey, you have your UBI." And I think that is likely to cause far worse problems than we have currently.
I just hope to god UBI never is real. Pilot programs often go well. People who have the proverbial rich uncle to draw upon tend to do better than folks without such a resource. These pilot programs are more like that. When you actually try to guarantee universal support (a la communism), historically, it has always failed to work out well. It is a fundamentally broken model.
As a BI fan, this is a great question. While BI does simplify welfare distribution it does put more responsibility on the receiver. If we wanted to protect from misuse of funds we need a way to restrict how they spend their BI, like how food stamps work.
BI should be spent on life necessities while earned income should be disposable and/or go into savings.
> If we wanted to protect from misuse of funds we need a way to restrict how they spend their BI, like how food stamps work.
Except, of course, that food stamps don't work for that, despite the administrative overhead that trying to enforce specific uses puts, because people can (and do) find ways to illegally convert SNAP benefits, at a discount, to cash or non-covered goods and services.
Which is among the problems that UBI is offered to solve, by eliminating the ineffective paternalistic bureaucratic administration.
> Do you tell them "tough shit, you've exhausted all your social safety nets"
Yes it's the same thing on the current welfare. You can blow your bridge card (food stamps) on bad food and be out of it and you don't get more. It would be the same thing, you can blow your money and then you're gonna have to find something else.
I would think any basic income program would come along with available education on budgeting and counseling for how to get out of debt, etc. I think besides lack of opportunity, another big problem with social mobility in our country is lack of financial education. People just don't realize how many sharks there are out there trying to take advantage of them, and just how deep of trouble they can easily get into.
You can present all kinds of edge cases how basic income can fail in individual, specific cases, but those are the exceptions. And you shouldn't kill a great idea because of the exceptions.
I think as long as they don't get into debt, it should be okay if they blow all their money on drugs and alcohol or whatever once or twice. Maybe they end up sleeping on the street for a few weeks, but I think there's only so much you can to help people who are totally self destructive. There should still be addiction programs that would be covered by universal health insurance to help people who do this sort of thing regularly.
I think to prevent 'payday loan' types of scams, a good fix would be to make these payments totally unrecoverable by debt collectors. Maybe people might still loan 50 or 100 dollars, but they would just be throwing away money if they loaded you up with thousands of dollars worth of debt.
Also my concern. It's only justification is that it's a more efficient alternative to all other welfare. That would put a LOT of bureaucrats out of work. It'll never happen. Also, it's hard to buy votes with something that doesn't expand.
The way I see basic income (BI) is like when you get money back after doing your taxes only with a BI you get it up front and more of it.
It's not meant to be your only source of income but I can see how some people would chose to use it as such. At first it would be confusing since any social programs currently in place such as welfare, unemployment insurance would be phased out.
The current government of Canada is proposing to implement or at least look at a basic income.
The problem I see with your statement is that most Americans know that SS is not a retirement fund, but they treat it as such because they don't save. So, when you say "It's not meant to be your only source of income ... " I see millions of people using it as such if BI is enacted.
> what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food?
Pay daily instead of monthly. This way it is harder to "blow all their money" and not being able to afford food. Or a hybrid approach: 50% of the monthly income upfront and the other 50% distributed daily.
>> But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food? <<
What do we do today when someone with a job has a financial emergency or just flat-out blows all their money and now can't afford rent and/or food? You can't quit your job and instantly qualify for food stamps and you certainly can't instantly qualify for subsidizing housing -- in a lot of places it takes a decade or more to get public housing or a voucher.
Our current approach is telling them "though shit", so at worst we're back where we started. Most proposals protect UBI from wage garnishment so that people don't end up homeless because they are in debt. They also typically assume the existence of universal healthcare, not just treatment but also long-term care of the disabled. So I think the worst thing that can happen is temporary homelessness due to poor money management. Hopefully homeless shelters and social workers will still exist.
Most of our government programs are screwed up because they suffer from "over-fitting". Just like in statistics you can some up with a higher order polynomial that fits all your known data points but in practice it is going to be horribly broken if it is to be used to understand the nature of the curve.
The fact is:
1. We cant prevent all plane hijackings and incidents.
2. We cant prevent a lone wolf attack for whatever reason.
3. We cant help all people in all their difficulties
4. We can not come up with a government program or many programs that will help all needy
5. We can not prevent all frauds
Coming up rules like checking people shoes in TSA lines because of a past data point is overfiting.
The best way would be to come up with a very uniform welfare program that includes everyone without a racial, gender,handicap and any other bias.
Encourage private charity to help people get through exceptional situations.
Another problem with separate welfare programs is the massive wastage in overhead + the total lack of empathy among the people who actually run it. Encouraging private charity would solve that problem to a very large extent, a church group often achieves more with less money. Not to mention when there is more money in private charity companies like Watsi can come up which will bring in more innovative ways to help people. Currently federal government's welfare money will not promote innovation.
Additional safety nets would be needed. A transition wouldn't likely happen overnight. It would more likely be a gradual phasing out of old programs and a build-up of basic income as money is moved toward that program. At the same time, additional resources would need to be pushed into services to help people budget and manage their finances. A combination of traditional in-person financial counseling and software would work best.
I use Simple, and they have a good model for integrating budgeting into their bank app. A basic income program should follow the same principles, giving out a debit card with a budget along with a website and app to help people manage their money better. The first expense it can cover is a cheap smartphone for those that need it.
Analytics tracking the efficiency of the program should allow a lot of optimizations over time. There's no way to predict exactly what will happen without trying it, but data on a national scale should make beneficial adjustments to things like budgeting software pretty easy.
A basic income is not a perfect and ideal system, but I'd say it's definitely an improvement over the status quo. It does require having some trust in people to manage their money, but with a little assistance, I think people will be able to make better choices for themselves than a bureaucracy can make for them.
It would more likely be a gradual phasing out of old programs and a build-up of basic income as money is moved toward that program
Yes, this has been my conclusion.
I don't think a BI will ever happen. But I suspect/hope that in maybe a couple hundred years, we'll have something very similar to it under a different name ... probably still with some level of admin overhead to deal with the "poor people make bad decisions" issue that has been raised.
The welfare state has expanded massively over time just due to the increase in life expectancy and health care cost inflation. But if we assume that these things reach some sort of natural peak, then eventually as GDP grows and more taxes become available, a progressively more generous welfare state should be the natural outcome ... at least for governments that have got their debt levels under control.
Unfortunately the looming pension deficits mean it'll probably be a long time before we reach such a happy state. Our society is very obviously not rich enough to handle even the current levels of welfare (or put another way, our society misallocates resources). There is no realistic chance of a BI any time soon.
>Do you tell them "tough shit, you've exhausted all your social safety nets"
At that point we would need to investigate to see if this failure is being caused by mental illness. Treatment would be much easier if our current homeless shelters could use their infrastructure to help people like this. They take your UBI check and give you a place to stay, treat you for drug addictions, etc etc.
Either that or you end up in jail, because making homelessness illegal would not be so immoral under a UBI system.
If you're just blowing through money too quickly, then that's not really a crisis that needs intervention from the state, imo. You'll either learn to spend your money better or learn to like ramen.
I'd say if you blow through your money consistently to the point of having to eat ramen all the time, that is a problem. And it's caused by bad decisions your mind makes. So while it might seem like a bit of a stretch, it could be considered a mental illness.
BI means that BI is the major form of monetary welfare assistance, but it doesn't mean it's the only safety net. Providing emergency shelter and food assistance for those who might otherwise starve or be homeless is actually pretty nearly dirt cheap, and there's no good reason to simply discontinue doing things like that (both privately and publicly run) even with BI.
Also, who cares about fraud? You can't solve the free rider problem so don't worry about it. It's an equivalent problem to letting the guilty go away because we're so concerned about avoiding incarcerated people or protecting people's rights. Yes, murderers absolutely do go free sometimes because we have a robust (sometimes) system of civil rights and legal protections, but that doesn't make the system worthless. Similarly, there will always be free riders who take advantage of any system of welfare more than they should. But realistically those people are not a serious drain on the resources of a rich, industrialized nation, and the benefit to the public at large from providing robust welfare support is more than enough to offset that problem.
The system already tells them tough shit. If you're on welfare and spend it all, you don't just get more food stamps. Why should this be any different?
The vast majority of welfare systems in the UK are already just some form of giving people money directly but for various different reasons and with an enormous list of complicated rules about who is eligible.
Just giving the people one bit of cash rather than several, and without the strings, wouldn't add the problem you're describing.
Are there particular programs in the US that are different and you think would be broken if they were changed to just cash?
Add a way to restrict your own purchasing. Rather than have the social program give you X money for food and Y for rent, you get BI, and then you can assign X to food and Y for rent /yourself/, so that your card (because it'll probably be a card) rejects purchases that don't fit your self-assigned allotments.
Heck, that might even work for normal people who want a better way to handle their money. Does that exist yet?
I think there ought to be two different classes of BI proposals. One would be a cash disbursement, like an actual paycheck. The other would be a single, orchestrated way to get food and housing -- basically a single, unifies program that provides what the first form of BI would buy. I think which one you should support largely depends on whether or not you can trust people. If you can, the first BI alone would be sufficient. If not, the second form of BI would be the only practical option, unless you consider a drastic enlargement of traditional welfare without any oversight BI, but to me that's absolutely ludicrous. Additionally, ignoring other, more complicated problems like mental health, I believe that the first form of BI is sufficient and that a very, very small portion of the population would actually blow the money and perhaps they could be absorbed by the prison system, where they would get a roof over their heads, daily meal, practical job training, and even real experience they can take with them (of course they would be free to leave at will).
1) That's a major benefit already of BI: people actually have more financial means to develop a safety cushion.
> just flat-out blows all their money
1) They'll do that anyway if they have an addiction or some sort of character flaw. There exist underground economies for the benefits (obviously at a lesser cash equivalent) to enable them to convert benefits to what they really want.
2) If it's endemic, the current high-danger interventions such as substance abuse homes, child protective services are usually invoked.
The basic response to the general question you're asking that is usually given is private charity. And it's not so much because of some conservative political agenda, but because you're talking about edge cases, and there is no feasible system anyone's suggested to get people "emergency cash" without bureaucratic delays. BI (or negative income tax, I prefer) is not a perfect system. You should be asking whether it would be superior for the people by in large who most need it than the current byzantine, perversely incentivized, and corruption-prone systems.
Not an answer to your question, but I think it's ironic that some people are proposing basic income as a solution to reduce overhead. After all, if we only need basic income because technology is taking people's jobs, then surely technology can also be used to minimize almost all the overhead in government departments.
So I think we just need far better social welfare programs, and far better government software.
I'm imagining a new kind of welfare that provides good quality housing, healthy meals, sports and other kinds of activities, counseling and mental health service. All free, and available at any point during your life. We already have the foundations for something like this in countries like New Zealand.
I think the US has a long way to go, and there are a lot of old mindsets to change. I feel that basic income would be a short-term solution to a much more complex problem. I don't think it can be properly tested in the US until the general population views socialism more favourably.
> But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food? Do you tell them "tough shit, you've exhausted all your social safety nets"
That already happens with existing welfare programs. It's not immediately obviously why BI would be worse.
What I think the system(s) should do at this point is actually 'arrest' the person, take them to someplace that evaluates them for why this situation occurred and then addresses the malfunction.
Maybe it's a legitimate case of hardship; the individual is doing the best the can, but society and circumstances have simply doomed them to failure. Forgiveness (of various kinds) and moving forward are recommended.
Maybe they are in an area where the cost of living is too high or they can't find jobs to supplement the basic income and allow them to afford additional expenses. Find them a job and/or help them move to an area that society needs them.
Maybe they cannot manage their own life and circumstances: convert BI to paying for semi-managed lifestyle (E.G. a dorm and/or community food kitchen in their housing block).
You might have noticed a common theme here, instead of handling an exception with a punishment you handle it with identifying the actual cause and attempting to address it. Any 'punishment' as a result is a loss of freedom (in exchange for society helping you with your problems).
The best answer that I've heard to this question (when I asked it on HN a year or two ago) is that you give people their money on a weekly basis. If they blow it and have no money for food, well they are going to get another check in a week.
This doesn't totally solve the problem of course, but makes the "I blew all my money on a new car and now I can't eat" issue much more manageable.
I'm aware of some who are currently in prison, and others who have left the business (which has got a lot more competitive as legal payday lenders have got a lot more efficient). Like burglary or any number of other crimes, we'll probably never be able to eliminate it entirely but it seems to be in massive decline and a pretty poor way to make a living - and one would expect it to be even less common in a world with basic income.
One solution I've been thinking about is if we could hand out the basic income in a daily increment. I don't know the actual implementation details, but something like you get a government card that can work at any ATM or something, which has an account that increments every day.
That way, at worst, you end up hungry for a day, which is manageable.
We'd need "basic income compatible" housing, hence my answer[0] to a previous YC question about what they should fund at YC Research. If the housing is cheap enough to accommodate BI, and it accepted payments every day, then you can't really spend yourself out of accommodations. At least, if the feedback loop is close enough such that "I buy this thing and now I can't get back into my apartment tonight" works, then I think that could prevent homelessness in the "poor budgeting" rather than "mental illness" case.
I've thought about this as well.. It's certainly an interesting response to BI that I don't think is debated enough.
My thoughts on the matter is that regulation on how the money is spent is only necessary in the cases where it's being abused. Current safety nets pays for this overhead on every beneficiary, whereas it's only really necessary on the people who no amount of unsupervised aid will help them (something like addictions would fall into this category). At this point we could have a single regulation and if BI isn't enough for this person to survive, it can be deemed that this person isn't functioning as a responsible adult and can have other systems act as a sort of legal guardian until they can be trusted to survive on BI. Yes it sounds like house arrest, but we can just have this be completely optional and equivalent to the "next" safety net. It's not more money or more food or whatever, it's simply guidance.
No one is saying that the idea is to immediately and completely dismantle the current welfare system.
It seems to me that the general idea is that current welfare systems, at least in the US, are piecemeal at best. There are many, many people who slip through the cracks because they don't know help is available or are unable to navigate the various bureaucracies well enough to get the help they need. Many others refuse to even ask for help because they don't want to admit how poor their position is or they want to avoid the humiliation of asking for help and being turned down. Basic income eliminates that problem because it is applied equally to everyone. On top of that, it will create enormous social pressure for people to spend their money wisely.
I think the concern about people blowing their money is valid, and it will happen, as it has with our current system. There will always be a few people trying to get over. That being said, I think that our current system does a lot to create these people. Try genuinely asking for help, only to be told that you are an idiot, an incompetent, and a freeloader. It's not hard to see how that sort of humiliation can breed resentment, which can lead to people misusing their welfare benefits out of spite or hopelessness.
That being said, I strongly feel that BI can do a lot to minimize welfare abuse. For most working people it won't be too much of a stretch to build up an emergency fund, and, for many, the extra money would mean the difference between living paycheck to paycheck and being able to actually build a savings. Also, for many working people (i.e. walmart employees), 10k is the difference between self sufficiency and living on food stamps, with all the arcane requirements that entails. By filtering out these good people (for lack of a better term) it will be much easier to assess whether the people asking for further assistance are in genuine need, mentally ill, drug abusers, physically disabled, or just fiscally irresponsible. From there, it will be much easier to provide these people with more comprehensive assistance based on their needs, be it personal finance classes, assisted living, drug treatment, housing placement, etc.
From there, the idea is that we can streamline the current welfare system by eliminating more general programs in favor of more direct and targeted assistance. Obviously that's not going to be all that easy to do, given the quagmire that is our current welfare system, but I don't think it's an insurmountable problem.
Our current social safety net doesn't handle sudden emergencies. People blow their entire general assistance and/or food stamps budget in a few days all the time. There are already not enough shelter beds to handle the homeless population in most major cities. BI wouldn't make any of this worse than it already is.
I fully expect the market to take over in this regard, providing opt-out "BI services," which will provide people all basic needs that fit within the basic income stipend. That way people won't even have to think about taking care of their most basic needs (utilities, food, communication, transit).
>what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money
New startup ideas:
1. Create a BI Credit Union: Like all CU's it will be owned by its members (the people on BI are the shareholders). The BICU will extend credit to these its members (who likely never had credit before) and because members are on BI, the loans/credit would all be pretty standard limiting the risk of default. Maybe members could even take a more active role in voting on approving individual loans of its members as opposed to Bank underwriters.
2. BI Death Insurance: Say you are one of the first recipients of this initial YC BI Project experiment which I believe lasts five years. You can pay a premium and in the instance you die before the end of the 5 years, x% of the remaining BI for the period will be distributed to your beneficiaries.
I don't think you are doing this intentionally but your question is a bit of a straw man. I've never heard anyone flat out propose BI replace basic social services and safety nets. Those programs IMO would continue to exist and function but with a different set of external realities (since BI would change everything).
It is hard to imagine that welfare itself would continue as there would simply be no one who qualifies but possibly it would for extreme situations. If you assume universal, single payer, healthcare then you are talking about education programs, drug addiction, etc programs continuing to exist as they do now.
Anyway, what happens if you take your entire welfare check and blow it now? You turn to your family or you go on the streets. So not much would really change on that front and this isn't really relevant to BI or a flaw in it.
I'm not a "BI fan" and I'm curious what they think too, but I think it could be done. I think it depends on the kind of emergency.
For not-really-critical ones (eg Joe's car broke down), you could just do nothing - if Joe wants to he can wait and use his next BI check to fix his car.
For life-threatening emergencies like can't afford food or rent, that's trickier. I would say that if we can afford to give a BI, we should also have soup kitchens and homeless shelters that don't have means testing, so while that does create a kind of social safety net "below BI", it should be much cheaper to run and harder to abuse.
The biggest source of financial emergency for most people is unexpected health problems, and I'm not sure what a solution is. Maybe free insurance for everyone? What would insurance fraud look like in such a world?
First, we should provide BI in a half/half combination of monthly and daily deposits since money management is a skill that is often lacking in the people who need BI the most.
Secondly, the government should continue to provide what I would call "Critical Infrastructure" programs, such as funding public transit, the public roads, and public education, public EMS and Fire Response, and public libraries. (I personally think that public dental, vision and preventative care clinics should fall in this category.) What else qualifies as 'critical infrastructure' is something that can be determined by voters at the local, state and federal level.
The finally, we should continue to support the further safety nets that are provided by private charities. (Food kitchens, homeless shelters.
BI would be for everyone, so pensioners would get it too. They'd probably be better off.
Plus, people wouldn't need to save for retirement if they didn't want to. They could spend more which would provide a stimulus to economic activity. That's another benefit of BI.
What do we currently do when someone faces a financial emergency or spends their whole welfare check on drugs? Last time I checked there's no government program to fund your emergency expenses.
Basic income isn't a cure for all problems, it's just a massive step in the right direction.
I would lean towards the "tough shit" method. Although, if it was paid bi-monthly they would only be screwed for 2 weeks. Not long enough to realistically have any life threatening consequences. They would learn pretty quick. Maybe even do weekly.
This is already an existing problem with SNAP (food stamps), which I believe are disbursed once a month. You can totally use it all the first week of the month and be SOL for the rest of the month.
As for rent, the current "safety net" has no problem with homelessness.
>But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food? Do you tell them "tough shit, you've exhausted all your social safety nets" or are there safety nets below BI, essentially recreating the welfare programs previously destroyed?
It always bottoms-out somewhere. You pick based on how often these emergencies or "emergencies" seem to happen, how many of them we have the budget to handle, and how likely it is that a certain number of so-called emergencies represent real emergencies.
Given that the project is at the privately funded research phase, questions about possible problems related to government implementations at scale are probably at the who-the-hell-knows stage.
As I interpret the YC Research's statements, it seems to be more a matter of adding a private basic income to the menu of existing public and private resources. If I had to predict, I wouldn't be surprised if the most problematic financial situations involved health care issues...i.e. Joe having a stroke. What does "basic income" mean for a person in the ICU?
So I guess the answer to the question is, the safety nets below basic income are whatever if any safety nets already exist.
Given the that someone on BI has a guaranteed income, loans will be no problem and affordable. The risk being assumed by the lender is lifespan and capacity to live within your means.
And if you get to the point where your cost of living and debt repayments can't be met by your BI, I guess you need to get a job, be institutionalized or declared bankrupt. Just like today. BI isn't going to replace prisons, mental hospitals, or rehabilitation centers (although it may provide a way of funding them, if for example you sign away a prisoner's BI to the prison).
I would think it would be the end of the line, just as social welfare programs are today. For example, if you run out of food stamps for the month, you can't just go get more.
The attempt is at least made to earmark the money so it becomes more difficult to do so. There is a BIG difference between giving someone money earmarked for specific purposes and a check that can be used for anything. You will see a tremendous amount of that happening if BI is implemented in this country that way.
The private sector will be more than eager to supply assistance in converting BI to a reliable stream of minimal food+shelter for those who can't trust themselves to do it on their own.
Protecting troubled individuals from all too nasty excesses of a debtor's prison renaissance emerging from the combined forces of payday loan and prison industries will be quite a challenge. Best solved maybe by forming lesser evil versions of the same.
Do add to that point, how do you handle people who need more than just BI, because they have some disabilities and because of ths they can't work. Remember there are lots of people who not only have physical disabilities but also mental disabilties and as such need support. How do we handle people who are sick in terms of cancer at alike?
We exclude all those people who really need our help.
Do you think our current government safety nets provide for this already? If so you are living in a dream world.
Besides we already have the answer, payday lending, while often predatory in the current system, becomes easier when you consider everyone you know will have capital to loan you, and everyone already has a basic income from which the loan can be paid.
This happens now, all the time. There isn't a government office of "I need money because my car broke down". Soup kitchens will still give out food and the Salvation Army will still provide shelter. Perhaps even more so, because Basic Income will allow more people to donate time and money to charity in their communities.
I would propose BI based loan systems. Borrow from bank a large amount and bank will recover the money from BI over a very long period depending on the age of the person.
If a 80 year old person get heart attack he will get far less money and will probably die. But a child can get several thousand dollars as the bank can recover the money over 10 years.
Basic Income doesn't necessitate eliminating all other social programs, though. That'd be, perhaps, a libertarian ideal, but as the minister above and at least many people discus it, BI allows a reconstruction, not the destruction, of the social welfare apparatus.
If you're having problems feeding yourself, I would like to see an opt-in program where you can receive food, in exchange for $X out of your BI. If you're having problems housing yourself, an opt-in program for housing in exchange for $Y out of your BI.
My belief is that a society as rich as the U.S. ought to ensure that every person has access to basic healthcare, has enough food to live on, and a safe place to sleep at night. In such a system I'd say tough shit to a person who claims to be on hard times.
And how do you prevent this money from being siphoned off by the payday loan industry? Lots of people will be willing to trade their monthly government check (plus some usurious interest rate like 30% compounded monthly) for a lump sum today.
> just flat-out blows all their money and now can't afford rent and/or food?
I would hope we (not necessarily by way of government) still offer them help, but in that context it is clear the kind of help they need is not simply handouts.
To add to this, what about those unable to take care of themselves. Children, the mentally ill, those who are badly addicted, those who are easily taken advantage of (like in borderline elder abuse cases).
One way is to think about BI as insurance. Then the emergency cases are averaged across the entire population. Joe's twelfth car break-down can be classified as "insurance fraud".
I think tough shit works for everything but healthcare. When even the private solution (health insurnce) is essentially needs based, it's pretty hard to escape some kind of policy-driven rationing.
The other side of this challenge is that the "savings" will come from downsizing vast swaths of the public sector. That would be a political nightmare.
This is the wrong question to ask, based on the wrong premise.
The point of BI is NOT to save money but to provide income for the increasing number of people who wont be able to provide value for the labour market.
If someone has a secured income then there is also a better chance that they can get insurance, a loan and so one.
Yeah this is what I have wanted to say about Basic Income. If you support this program, you also have to be ready to watch a junkie starve to death on the street because they blew all their BI funds on drugs and could not afford food (replace drugs with porn, liquor, travel, whatever).
everybody will have emergencies and blow the money. BI just makes it simpler to get money back from society in general (where some individuals have plenty) to people in a more just way
The system does currently say "tough shit" once resources have been exhausted. They just come in a bunch of different forms, and are sometimes incredibly difficult to deal with. I got somewhat involved in activism and support work for homeless folks a few years ago, and it was eye-opening. So many of the chronically homeless are mentally ill; and so many of them find it impossible to navigate the system to receive benefits because of their mental illness. The process is horrifically complex; when I tried to help folks get through it, I also occasionally found it impossible to figure out which benefits someone qualified for and how to apply for them. This was especially problematic for people who'd been kicked out of their family home as a teenager, due to being gay or other conflicts, and had never had a government-issued ID.
So, I've come around to a basic income, especially for the people who have the hardest time making it through each month. The people I know who have had success getting out of homelessness did so only after they had some sort of steady income (whether that was a part-time job, or getting some sort of cash benefit from the state). Almost every person I've worked with had been through the system a few times; they'd been provided housing one or more times, but had lost it due to being unable to keep up with the requirements (regular paperwork, office visits, etc.). They'd had food stamps occasionally, but also found it hard to keep on top of the process to continue the service or restart it after having found some short-term employment that disqualified them.
Honestly, the more I've interacted with the current support services in place, the more confident I am saying that it has the opposite of its intended consequence. I think it further entrenches people in cycles of poverty. And, not because of the bullshit GOP rhetoric about pulling yourself up by your bootstraps or whatever. It didn't take long for me to realize that if there is no support infrastructure for the most in need, it is equivalent to saying, "If they can't support themselves, they should just die." because that's what happens when people completely fall through the cracks of the current system, which happens more than most people realize.
Anyway, what I'm trying to say is that you're arguing in support of keeping a system that doesn't exist. There's already a point where the system says, "Fuck off and die." And, from what research I've seen, and from what I've experienced among the handful of people I've been around as they've gotten out of homelessness and began to be members of society on an equal footing again, is that the most sure-fire way to help someone out of poverty is to insure they have a steady income that they can plan their life around. Mysterious and arbitrary benefits increase the uncertainty of being in poverty; not knowing if you'll still have food next month, or not knowing if any given medical problem will be covered, leads to lots of sub-optimal decision-making.
Basic Income won't solve everything; mental illness is terrible and often untreatable, addiction is a tough problem, etc. But, of all the options, I'm reasonably confident it's the least damaging.
There is a lot wrong with how things currently work. I don't think that fact proves that we would be better off with basic income.
I am currently homeless. While homeless, I started a website to try to help me keep track of services that were actually useful to me with as few strings attached as possible so that I could, in fact, work on solving my problems and not get trapped in a vicious cycle of poverty. There are some things that are currently being done that are useful. And I think we would be better off identifying those things and trying to grow those things and get more attention for those things than simply throwing it all and starting over with something entirely new, which tends to have the effect of fucking over the people who are familiar with the current system and managing to get something out of it without ever delivering the sweeping benefits that are always promised.
I am very much for finding a solution the terrible problem of "housing inflation" where new housing now is around 2500 sq. ft. The rise of homelessness in the U.S. is directly related to the rise in size and cost of housing.
I am also very much for developing more gig work that actually works. A lot of it is done very badly, but gig work has allowed me to develop an earned income of my own while still homeless and my problems are getting gradually better. I think this is a better approach than basic income.
I also think we are at a place where we can help people be physically healthier and where we can start to resolve the root causes of mental illness. Getting myself physically healthier has been a cornerstone of my plans to resolve my problems and get off the street. Poverty relief problems are terrible about not trying at all to actually help people improve their health status or mental health status. This helps make them more intractable problems.
Thank you for your excellent comment, and for the work you have done to help homeless people.
I'm interested in basic income, though I don't know much about economics or politics.
I personally wouldn't expect basic income to replace all of those other systems. I don't like the quote here:
> We think everyone should have enough money to meet their basic needs
I think it should be just "Everyone should have their basic needs met". The money is a means to that end, but only a means, and not the best one for all needs. For example, I don't think people should have to use basic income for medical needs. Healthcare should just be provided.
That's good because our healthcare needs do not fit a nice flat monthly allotment. Most months, most people don't need to spend much on healthcare. Then there are some months where, holy shit, you need to spend tons. Some people have chronic illness and will over their lifetime spend way more money on healthcare. At the same time, most people don't have enough expertise to really shop around and choose how to best spend their healthcare dollar.
In contrast, I think basic income is a good fit for the needs where some personal discretion makes sense. That's probably housing, food, and personal essentials. I think of it as sort of like food stamps, except everyone gets them, even the wealthy, so hopefully they have less stigma. And you can use them to pay rent.
Even then, there needs to be safety nets below those. Some people—probably a small fraction—have either enough mental health problems, temporary misfortune, etc. where they may not reliably use their basic income to secure their needs. Those people certainly bear some responsibility for misallocating their basic income, but I don't believe the punishment for failing to do that should be a slow death by starvation or exposure. I certainly don't think the children of those people should be punished in that way.
I don't look at basic income as "more efficient welfare", though it may have some positive effects there. I care more that it creates a more efficient society by giving people more security and freedom. If you aren't living paycheck to paycheck, you can try to find a better place to live, or find a job that's better suited to your skills. If you aren't terrified of ending up on the streets, you have a little more brainpower to devote to learning and improving.
No one is their best self when they are barely scraping by. I think something like basic income can help us all make the most of our potential. It's not a panacea, but I think it can help.
It may also be the case that with basic income that more people have the time to volunteer and provide some of the welfare and social services the government currently funds. That may not pan out at all, but it's a nice idea and a possible emergent property.
You just described the simple reason why BI fundamentally cannot work on a large scale. Since we will not be able to leave people on the side of the road if they spend their BI poorly, we will still have to have various programs to help them out. Hence, we might as well try to make those programs as efficient as possible if we are going to have them anyway and not worry about basic income.
> flat-out blows all their money and now can't afford rent and/or food?
Well for starters I'd imagine a future BI system to handle something like rent via direct transfer to the landlord. Food handled the same way, some prepaid debit card that only works at grocery stores, etc.
I don't envision a system where people pick up a stack of 20's with a post-it note on it that says "remember to pay your rent".
What you're describing is conditional cash transfers. We have that in the US already (public housing vouchers, food stamps). BI is an unconditional cash transfer. It really is more like a stack of 20s.
> Well for starters I'd imagine a future BI system to handle something like rent via direct transfer to the landlord. Food handled the same way, some prepaid debit card that only works at grocery stores, etc.
In other words, exactly what I said originally. You'd be recreating the administrative overhead BI is intended to eliminate (section 8 for housing, food stamps for food).
BI isn't necessarily intended to eliminate overhead. It's intended to acknowledge that we're rapidly approaching an economy where there aren't jobs for everyone (thanks to automation and a number of other factors that have been discussed) and to aid the transition to that point.
This doesn't have to be a government function. I do case management, and many of my clients receive social assistance in the form of unconditional cash transfers. They often have poor credit and incidents in their rental histories, so they don't meet the standards required to rent. However, landlords/property managers will grant exceptions if the social assistance is sent directly to a third party with an agreement that rent and utilities are paid first. Since this isn't a complicated or difficult role to fill, it's a competitive space with low fees.
The problem with most BI solutions is they just want to hand out money but not change how its used and where. There is certainly sufficient technology to track and even restrict the usage of BI funds.
So my idea is this, your restrictions on your BI lift as your income does to the point its just flat out money the ends up in your account. You could put forth some requirement that to receive BI you agree to have that portion of your income tracked.
So you get your BI. You are permitted to spend it at certified service and goods providers. A service provider could be your landlord, your mortgage company, or more, when it comes to residency. We already track food stamp usage so you lock down that too good healthy foods; no smokes, beer, or chips for you!.
With regards to medical. Catastrophic and preventative services are where government should look at for health care. Just play it out under similar rules to how most HSA based insurance plans work. You are subject to X amount per year and the rest is not your worry.
the danger of BI is that government fees which adversely impact the poor are just as likely to increase and worse knowing how many programs for the needy can work there are ample opportunities for fraud.
You don't get to decide what food or drinks other people can have. That's the whole point of a basic income - unconditional baseline support. Yes, many will fuck up and waste the money, but a majority is given peace of mind and leeway to improve their lives in ways not possible without it.
But at that point what you are describing isn't basic income. It's welfare+medicaid+food stamps+section 8 housing under a different moniker, along with all their administration costs and inefficiencies.
The most compelling case I've seen made recently for basic income is from Yanis Varoufakis (the infamous Greek finance minister who resigned after refusing to agree to the terms of the bailout that the Greek people voted against in a referendum): https://www.youtube.com/watch?v=BvgdtF3y0Ss
There were many gems in that talk, but this one stood out to me in particular:
"The right to turn down a job is essential for a well functioning labor market, and for a civilized society. And to have that right, a genuine right, to turn down a job, you must have an alternative: An outside option. Because desperate people will accept to do desperate things..."
"Libertarian economists, who claim that liberty is a driving force, define liberty in a negative sense, in the sense of an absence of constraints, of voluntarism: If you've said yes to some contract, that contract must be, by definition, a free contract, and therefore, it must be some act of free will... Well, it's not. The Mafia loves to give us options that we can't refuse, to make us offers we can't refuse. The fact that we say yes to them doesn't mean that they were chosen freely. The fact that the Greek government accepted the terms, last summer, of the troika, does not mean that it was a voluntary transaction. To have a free contract, to have a contract that is signed by both sides, representing and exuding the freedom of both sides, each side must have a capacity to say no. I said that before, and I am saying this once more: In essence, freedom in action requires a basic income."
"Take an IPhone - you find a variety of technologies - each one was created by some government grant... The collective production of wealth, which is then privately appropriated.. it's very easy to start thinking of basic income as a dividend that goes to the collective that was responsible for collectively producting the wealth."
"We need to create a system whereby society stakes a claim to the returns to aggregate capital, and this claim becomes an income stream that goes to everyone. I don't see why my children and your children have a right to a trust fund [or] why Paris Hilton has a right to a trust fund, when nobody else does, or very few people do.
Think of basic income as a trust fund for all our children - to be financed by dividends from our aggregate capital, which was after all, created collectively."
Except "collectively" is very misleading when you're taking the capital gains from say, 20k employees of a tech company and re-distributing it to 300M / 6 Billion people.
Generally I agree that being fed and housed will remove constraints on labor allocation - but its a slippery hill that ultimately leads to globalist communism. I'm not being hyperbolic - this is the system essentially described in the quotes above.
> its a slippery hill that ultimately leads to globalist communism. I'm not being hyperbolic - this is the system essentially described in the quotes above.
That's not correct. Communism is ownership of the means of production. Nobody has proposed that the technology company be owned or operated by the government.
What's being proposed is a reallocation of streams of income. While I understand there is some vague similarity, these are not at all the same things. The crucial difference being that market forces are still quite free to allocate capital.
In practice this doesn't actually work because the organization doesn't have freedom to re-invest. Once the government can come in and say "we deem all this money in excess, so we will confiscate it". What if that happened to Apple after the successful iMac in the early 2000's? We may have never seen the iPod or iPhone - as an example.
All the system needs to control resources is to define it as "excess capital or resources." You end up with a globally centralized economy, where the independent business owners are robbed when successful to feed the system.
> Try to dodge the tax man for enough money there will be gunmen at your door to take you to prison.
Eventually, yes. That's also true if you try to dodge your local restaurant, after availing yourself of their services.
Of course the practical inability to refrain from "using" government is a big difference! But it needs to be included in the analysis - it is not as simple as "if you don't pay, there will eventually be force; ergo it is robbery".
Probably not quite the same point - I think there's clearly some difference between paying for my meal and paying taxes, but I also think there's clearly some difference between paying taxes and paying a mugger (especially in a well-functioning society).
I just don't think the first difference is well expressed by pointing out that force is eventually involved.
Without wishing to take sides on the controversial issue of whether taxation is morally permissable, I would like to add that what I call "lawful taxation" is different from arbitrary confiscation. I call taxation "lawful" if it is collected according to rules that are knowable at the time is incurred.
In practice we have no idea if this will work. It has never been done before.
With that Apple example: For all we know, the industry could be in a much better position if it were not for the iPod/iPhone.
The stuff Apple brought with the iPod/iPhone (DRM and the App Store model) have arguably set the software industry back.
And an argument in favor of Apple: stuff like the RPi/VR wouldn't have been economically feasible since there was no pass production of ARM processors / high-density screens.
Point is, we don't know.
There's no way of telling if BI works without actually doing it. And that's what the point of this study is.
Unless of course the governing body deems the massive revenue the 20k employees generate as "excess" and is confiscated for Basic Income in Africa - the company employing these people will have practical upper limits on what they can pay their employees as exists today - but with the additional caveat that governments can just take the money for "the common good."
So what happens in the (potentially short) period before the government deems that as excessive? Assume for a moment that they costed it out and it's sustainable.
"I think it's important for a functioning society to value it's workforce over the profits of businesses" I agree. Corporate greed. That's exactly the issue being addressed in this article: https://medium.com/@LevelWorkingField/do-you-like-new-pricin...
This was the biggest move which Dr. King was calling for in his fight for civil rights, a year before he was assassinated.
>We must rapidly begin [applause], we must rapidly begin the shift from a thing-oriented society to a person-oriented society. When machines and computers, profit motives and property rights, are considered more important than people, the giant triplets of racism, extreme materialism, and militarism are incapable of being conquered. A true revolution of values will soon cause us to question the fairness and justice of many of our past and present policies. On the one hand we are called to play the Good Samaritan on life’s roadside, but that will be only an initial act. One day we must come to see that the whole Jericho Road must be transformed so that men and women will not be constantly beaten and robbed as they make their journey on life’s highway. True compassion is more than flinging a coin to a beggar. It comes to see than an edifice which produces beggars needs restructuring. [applause]
Australia has very strong safety nets. Currently welfare pays $250AUD per week for a single person or $225 each for a couple. There is also plenty of social housing.
My favorite welfare program they've created (called NEIS) is for those who want to start their own company. You get paid the above but get to build a company instead of having to search for a job (which is very useful when there are no jobs available in your area).
It's also building an educated workforce, at the end of this thing, these guys have developed more and deeper skills in a useful industry, and so what if the government paid for it instead of paying for school, during which time they also wouldn't be working?
What's the alternative, work at McDonalds and develop no useful skills in the meantime?
Additionally, _some_ of these companies will actually work out, so there's that bonus too!
Overall, it sounds like a pretty solid investment in the workforce to me. A lot better than paying people to sit home and "look for a job" in an area where jobs are hard to find, at any rate.
I'm aware its probably not an accurate portrayal, its just the kind of thing the UK/AU/NZ hears a lot from americans and we don't quite understand the narrow minded logic.
While you're right that the doll bludger should "just get a job", you thinking that isn't going to change the fact that they won't.
And if you can't find someone (=clients) paying you, you won't have a business. And if you can't make a case that someone would very likely pay you, they won't approve your plan.
Such programs aren't VC funds, they are a way to get tiny companies off the ground and to legalize under-the-table gigs (which are worse for both worker and state in the long run).
99% of people aren't in Tech. They are starting hair dressers, restaurants, selling products or doing a trade. You also have to have a business plan and do a monthly update with a trainer who guides you ensures you're working on it.
I'd way rather my tax dollars go towards people attempting to create something useful and improve their community than giving them food stamps and leaving them to themselves, which often leads to them sitting around home feeling useless and doing nothing with their lives.
if you loved austrailia so much, move back. you have to take the 'bad' with the good. we built a system that enables people with ideas to chase their dreams and succeed. that means companies have the ability to pay people with low skills and experience less than those with.
honestly, if you are being treated like a slave, move to another company. if you cant, you don't have skills employers want. get them.
during the recession, many companies used their position of power to their advantage. the smarter companies (and now more successful) used the recession as an opportunity to get the best workers.
the ironic thing is, to try and force employers to treat everyone like stellar employees would probably result in treating everyone poorly.
You sound like some kind of redneck with that "go back to your country" bullshit. Someone is making very good points and that's the best thing you can say.
no its not. its pointing the the strong point: gee my country was worse, i moved to this other country where my situation is better, but this new country should do everything like my old country because it was so great that I left it in the first place.
enabling entrepreneurs is what makes america successful. people like them want all the success while crushing businesses. it dont work like that.
Some people like to look out for more than their own interests.
I moved from Australia to the USA because it's the world leader in technology, but if I was in ANY other profession (including starting my own company) I would have stayed in Australia.
The USA is great if you're in the top 1% or work in technology, but other than that there's little reason to migrate. That's why he's proclaiming that employees are basically slaves, general quality of life and job happiness for everyone else is far better in Australia.
And business success rates and the economy is doing just as well in Australia as it is in the USA. You can have the best of both worlds, you just have to look at the data instead of being stuck in ideology.
It's totally ok if you think the USA should favour the rich and powerful at the expense of everyone else, but you're doing a disservice to yourself and your fellow Americans if you refuse to even look at the data or consider the possibility that there could be a better way.
person a says: i have a unique perspective into a part of this issue, here are my experiences and how they differ in two societys. I prefer society a's method of handling process x.
person b: go back to your own country if you hate it so much here!
yeah, we are headed for a really productive and intelligent debate here.....
But the topic of discussion at hand is a contrast of launching a business in the person's home country or their current country. In that context the response makes a relevant point that deserves a considered response (or acknowledgement).
The comment was phrased in a way that could be construed as a personal attack and that's not ideal, but it can equally be read as a genuine point if we don't jump to the immediate conclusion that it was a personal attack - The point being: if conditions are more favourable in the home country wouldn't a rational actor move back to their home country and launch there, instead?
I don't agree with the OP by the way, but I interpreted the comment first in the way I described, rather than as 'grr if you don't like it go home'.
non-sequitur. The whole topic here is about a Universal Basic Income. You're the only one who said all that nonsense about "force employers to treat everyone like stellar employees" etc. If you want to never learn anything, these sorts of straw-man statements are a good approach. Alternatively, you could actually engage fairly with what people are actually saying.
Because the implication was that the solution was allowing employees to more easily say no to employers (due to UBI), thus tilting slightly the balance in the direction of workers. A balance that has shifted in favor of employers for the past ~40 odd years or so.
No UBI proposal has ever said anything about "treating everyone like stellar employees" - it's an irrelevant point.
UBI is not 'tilting slightly the balance in the direction of workers'. its ripping the balance strait the f off the scale.
'treating everyone like stellar employees' is not irrelevant. we are not in the utopian world where technology has made resources so abundant that everyone can have what they want without working extra hard for it. maybe in 35+ years, but this PRECONDITION is necessary to even begin to think UBI would work.
SO when an employer is forced to pay all employees a basic income, they have to start paying uneducated / unskilled / low performing employees more. when revenue has not increased, this means taking pay raises / income / benefits from the other employees.
#2 if all of your needs are GUARANTEED you might be surprised to find nobody would be willing to do many jobs.
> SO when an employer is forced to pay all employees a basic income
Wait, I'm not sure what you're talking about here. Employers don't pay a basic income, the government does (so by extension we all do, through taxes).
I'm not sure how it will shake out, but there are pressures to both reduce and increase pay in a BI system. Everyone is getting a base level of income, so wages across the board will drop (but companies will be paying more in taxes, so it's offset somewhat). On the other hand, there will be less applicants for crap jobs, so the wages for those will likely go up. Then again, maybe a crap job isn't so bad if you don't have to do it 40 hours a week, and since people won't need the work as much as want it for increased spending power, maybe you can fill what was a single position with 2-3 part-time positions, and people will accept less pay because they aren't doing it all week long.
The biggest problem with moving to BI is that there are so many variables that are affected it's impossible to say with any confidence how it would settle. Experiments like this help with that, but even they can only go so far when the people are interspersed with others that are not on a BI system.
> BI is not paid by employers to employees. You seem to be confusing Basic Income with some kind of minimum wage.
Although, raising the minimum wage would be a good thing. Here is an article that shows how the lowest paying companies are effectively ripping off the rest of the economy:
The articles is written by Nick Hanauer who is co-chair board of Pacific Coast Feather Company, his families business.
Here is a excerpt from the article which explained what happened when minimum wage was raised to $15 an hour in Seattle.
In 2014, Seattle took its high-wage model one step further, passing the first $15 minimum wage in the nation. Restaurateurs and right-wing think tanks warned of ruin. Businesses would close. Workers would lose their jobs. The invisible hand would punch us in the mouth. But it never happened.
As the Puget Sound Business Journal recently reported in a front page story titled “Apocalypse Not: $15 and the cuts that never came,” six months after the first wage increase went into effect, Seattle’s restaurant industry is growing faster than ever. Even celebrity chef Tom Douglas, who had warned that Seattle could lose a quarter of its downtown restaurants, has continued to add restaurants to his local empire. “Douglas has now changed his mind about the law,” the PSBJ reports, “saying he was ‘naïve’ to think that restaurants would raise pay on their own.” That he was. And then on February 15, 2016, The Seattle Times reported that ADP’s national survey of economic vitality ranked Washington state number one in the country for both wage and job growth. And you thought higher wages killed jobs. Not hardly.
I disagree that basic income and minimum wage is about the same thing.
I would be interested in where you have got the data from for that assertion that it was because of a tech boom and subsequent real estate boom. At the moment I believe the person who actually employs people as a large manufacturer than what is mentioned here in a comment.
If you would like to give your sources, I would be interested.
let me get this strait kbenson,
you are saying: take money from (tax) people who are skilled / educated / work harder to better themselves and give it to those who don't. they will have increased spending power now and purchase things that the skilled/educated workers where buying so the skilled people will face a double whammy of both loss of wages and loss of buying power.
no (though I'm not kbenson), because your entire premise that wealth today is strictly correlate with "skilled / educated / work harder" is bullshit.
Yeah, I know some people think that we live in a meritocracy where if you have wealth, you deserve it, and there's no luck or dishonesty or cheating or inherent unfair inequalities — but it's obvious you don't come to that view by looking at the evidence, you come to that by something along the lines of reading Ayn Rand and just believing that nonsense or something similar.
In reality, lots of wealth is captured by those whose action provide no positive value to the world. Lots of success involves luck. And lots of people working shitty not-so-productive jobs have the potential to be far more effective and UBI would assist that in ways other approaches do not.
Anyway, even if we disagree about tons of things, you could have productive discussions with people if you didn't insist on bullshit implications like the idea that all the people in high-paid jobs are hard-working, deserving, productive folks while all low-paid people are the opposite.
so your idea of a productive conversation is having someone repeat your own opinions at you. I'm sorry you don't believe your success is in your own hands. successful people create their own luck, you are pretty old to have not realized that by now.
I LOVE learning new things by engaging with people I disagree with (and sometimes change my mind!) The way to succeed at that process is to avoid asserting nonsensical extremes. Of course there's a correlation between hard-work and success, but it's not a strict one. There are lots of cases where two people worked equally hard and intelligently and one succeeds where the other fails. That luck factor is separate from all the systematic things that put people at all sorts of different privileges already.
From everything I understand about the world (from personal experience and from reading and learning from others), there's a strong correlation between success and unearned privileged that is at least arguably a stronger correlation than the one about hard work. So, the most success comes from all three factors: luck, privilege, and hard work — put together.
It seems like you think even acknowledging luck and privilege is tantamount to denying the significance of hard work.
Speaking as a native American, I cannot disagree more. The spirit and very origin of our great nation is to never accept the bad with the good, but to doggedly pursue the very best in everything.
(assuming you mean the United States as "our great nation") Our country was founded on compromise. We baked slavery and misogyny into our Constitution. We have been explicitly accepting bad with good since day 1.
one who gives up nothing, loses. That's like saying 'i want to invest in riskless stocks but make huge gains'. you cant be the best at anything if you try and be the best at everything. But really this is a whole other conversation
Basic income has a whole host of pretty interesting self-reinforcing feedback loops that seemingly would improve things overall.
For example, people would be more likely to leave jobs that were unsafe, treated people poorly, etc. Including situations where employers weren't following labor laws and regulations (which is a huge problem today). Meaning that maybe it'd be more likely that the fire code, sanitary regulations, etc. were followed consistently. Additionally, people would be more able to have the flexability to be able to train for new careers (whether on their own or through a school or program). Shifting the balance of power in the job market to labor would also generally improve the wage situation, which has stagnated for the last several decades due to the growing power of employers.
Or, if the fire code weren't followed, there wouldn't be bullshit political pressure to keep the factory open because "Think of the jobs you're killing!"
Same logic is used in free market arguments: Workers leaving jobs to go to other companies creates an incentive for employers to improve work environments.
In both scenarios the workplaces become better off, but what really happens in practice is less than ideal.
Yes but what happens if you are poor and living paycheck to paycheck? And what if there are not enough jobs? You have no choice but to stay in a job no matter how bad it is.
BI supposedly will give you a choice. You won't starve to death if you leave your job.
UBI is not an alternative or opposite to free labor markets. It simply provides a baseline level of income so that at the bottom end, the driving force behind an employee's decision to take a job or not is not driven by things like starvation.
Scenario: You're married with 2 kids and live in San Francisco. Is an $8,000/year UBI going to enable you to quit your $100,000/year job without another lined up?
The more you make the more you can save. And the more you can own. People who make that much aren't the ones you need to target to improve their bargaining power or labor mobility, but UBI is still a benefit. Some cash flow is better than no cash flow. Even if it's only enough to pay the interest on their credit cards, that's still a big deal. And might be enough to convince people to leave jobs they hate.
You try tell that to the individuals who claim we live in a "voluntary" society. One "voluntarily" pays his/her taxes. Really, once you start peeling past it, it's a never ending stream of contradictions and state double-speak.
Or it could fall from the sky, or grow on trees...
I agree with one point: UBI will provide freedom -- the freedom of some fraction of society to live at a very low standard at the expense of the remainder.
Sure, a high-income family, burdened by UBI taxes and other monstrosities, could decide to leave their jobs, leave their home, schools, neighborhood, and live in a UBI ghetto. To pursue art...
I will meet your challenge head-on and say that that UBI is a worthwhile task, even presented worse than in your imagination. Humans have the right to dignity, food and shelter, and I think even those who are lazy, angry, worthless, deserve these as much as do any other.
But your argument relies on other
inherently problematic parts of the American system.
-You say that people would have to "live in a UBI ghetto". Sure, they won't be able to afford a six bedroom house or a downtown Manhattan apartment off UBI. But in cities with public transit, and with non-ridiculous building restrictions, why can't the answer be "downsize and move ten minutes away"?
-You tie high-performing schools to high-income neighbourhoods. This is true in the US, but for bad reasons. Public schools should, and already in many parts of the world do, accept people who want to come from any nearby geographic location. A particularly effective example is the city of Edmonton, in Canada. Kids can choose to go to any high school in the entire metropolitan region (of course with capacity preference for nearby students, which is rarely reached). And it works extremely well.
-You assume through the pejorative "ghetto" that life in a neighbourhood with many UBI recipients will be undesirable. But why is this true? Just because people are less monied does not mean they are worse. In countries which do not allow their poor citizens access to mental health support, sufficient food and education, etc., outcomes are worse. But a high enough UBI would allow these citizens to fix those problems themselves.
>But in cities with public transit, and with non-ridiculous building restrictions, why can't the answer be "downsize and move ten minutes away"?
if you are living off UBI, it literally doesnt matter where you live. Move to rural midwest - theres plenty of vacant housing at astonishingly cheap prices.
You could easily get a multi-bedroom house for under 500 a month
Or by reducing the financial excess/waste that goes to corruption, tax avoidance or rent-seeking companies (many of who oppose the very idea of a basic income).
... and now we jumped straight to utopia. imagining that ending corruption just like that to support this thingie... I wish to take BI seriously, but then the whole topic needs to be serious, and not start with these childish statements and assumptions.
All the simulations/proposition in Switzerland are heavily relying on increased taxation of work force. All spending saved on cutting of existing social systems is far from being enough to finance it.
Almost nobody is strictly against ideas of BI. What all opponents have against is the high potential for catastrophic failure once it hits reality. Like all other utopistic ideas that started with good intentions. or anybody considers communism a success?
I didn't say that ending corruption would "support this thingie", I identified corruption and associated crimes as an appropriate source of funding for a BI initiative, namely because there are economic studies that estimate losses to shadow economy practices to be as as high as 13% [1] to 26% [2] of a some countries' GDP.
> "Like all other utopistic ideas that started with good intentions. or anybody considers communism a success?"
I've said this before but it bears repeating, communism has never been fully realised because it got stuck at the 'dictatorship of the proletariat' stage:
"In Marxist sociopolitical thought, the dictatorship of the proletariat refers to a state in which the proletariat, or the working class, has control of political power.[1][2] The term, coined by Joseph Weydemeyer, was adopted by the founders of Marxism, Karl Marx and Friedrich Engels, in the 19th century. In Marxist theory, the dictatorship of the proletariat is the intermediate system between capitalism and communism, when the government is in the process of changing the ownership of the means of production from private to collective ownership."
"Marxism–Leninism follows the ideas of Marxism and Leninism, seeking to establish a vanguard party, to lead proletarian uprising, assume state power on behalf of the proletariat, and create a single party socialist state. The socialist state, representing a dictatorship of the proletariat is governed through the process of democratic centralism, which Vladimir Lenin described as "diversity in discussion, unity in action." It remains the official ideology of the ruling parties of China, Cuba, Laos, and Vietnam, and was the official ideology of the Communist Party of the Soviet Union (CPSU) and the other ruling parties making up the Eastern Bloc."
IMO this intermediate step was the biggest mistake of those who attempted communism, the transition from this centrally-controlled state to a decentralised egalitarian is highly unlikely to work.
UBI on the other hand is not an attempt to build a utopia, and does not interfere with the freedom for people to choose where to work and what to spend their money on. It's just a better safety net to prepare for an increasingly uncertain future.
> It's just a better safety net to prepare for an increasingly uncertain future
Honest question: when has the future not been uncertain? When times were good? I'm guessing that the collective outlook about the future has a lot to do with current conditions, which is counterintuitive. If current conditions are worse, aren't they likely to get better? Likewise, if conditions are fantastic, don't they have a greater chance of getting worse? That is, of course, assuming that there is some equilibrium we hover around, which history has suggested.
> "Honest question: when has the future not been uncertain? When times were good? I'm guessing that the collective outlook about the future has a lot to do with current conditions, which is counterintuitive. If current conditions are worse, aren't they likely to get better? Likewise, if conditions are fantastic, don't they have a greater chance of getting worse? That is, of course, assuming that there is some equilibrium we hover around, which history has suggested."
We were never able to predict the future with great accuracy, however the rate of technological change and societal change is faster today than it's been for a long time. We've already gone through a period of rapid change in the 20th century, if you compare life in 1900 with 1999 you can see that our society changed radically. The pace of technological change and societal change is not slowing down, along with increasing activity in AI, VR and synthetic biology which all have the potential to alter our society drastically, we will also have to address considerable challenges with climate change and the knock on effects on the lifecycles of the earth, political instability, economic instability, superbugs, etc...
Those are just the challenges we know about today. What we'll be facing in 20 years we do not know. However, with the challenges we face today the outcomes are too hard to predict, and aside from WW1 and WW2 all are potentially greater than the challenges we faced in the 20th century.
I think you need to review your history. After WW2 people were literally so worried about nuclear annihilation of the planet they ran weekly air raid drills in schools. Then it was the economic recession and malaise of the 70s. Then it was the rise of the powerful Japanese economy and the threat of globalization. Before WW2, well.. shit was way, way worse for most people in the world, and it just got worse the farther back you go. I really don't think increasing activity in AI and VR are going to threaten our security or way of lives in as significant a way as fascism or nuclear weapons did.
The threat of nuclear weapons is still strong. Look at North Korea, just this week we had another missile test. Thankfully it wasn't a nuclear missile, and the launch failed, but the intention to improve their missile capabilities is clear, and they've conducted 4 nuclear weapon tests in the last 10 years.
Considering the irrational leadership (and also considering the usefulness of North Korea to China if they ever wanted to conduct a proxy war), they pose a definite threat.
Another example is Pakistan. They're a country with clear links to Islamic fundamentalism, as well as one with nuclear weapons. The potential for something to go wrong in this situation shouldn't be underestimated, even if Pakistan doesn't launch the missiles themselves you could have a country like Saudi Arabia looking to get control over a nuclear weapon either by buying one or through underhanded means, and a desire to do so could be rationalised by the threat posed by Isreal and the US.
Lastly, we have the US. Despite rhetoric in line with nuclear disarmament, their continued military support of Isreal is pretty much the only thing blocking a nuclear-free zone in the Middle East, and Obama has started a program for a new nuclear weapons arsenal, one focused on a larger number of small weapons. The decrease in size but increase in quantity is concerning, as it implies the US way be aiming for weapons they can use strategically in war.
As for fascism, there's a very real possibility that Trump will be elected (he's currently slightly up in the polls vs Clinton, plus Clinton is under FBI investigation and could be indicted before the elections conclude). Trump is a known liar, but if he follows through with what he's claimed then he does lean towards fascism. We'll have to wait to see how things pan out after the election.
We also have other countries which oppress democratic change in their country. Whilst you couldn't call them fascist per se, I'd argue that this oppression represents one of the worst traits of what we know of fascist dictatorships.
I could go on. The point is just because those threats aren't as prominent in people's minds doesn't mean they've gone away.
> Marxism–Leninism follows the ideas of Marxism and Leninism
Well, that's the marketing PR of Leninism, which has been uncritically accepted by those who oppose both Marxism and Leninism without really understanding either. Leninist vanguardism, in reality, rejects a number of fundamental elements of Marxism in order to bypass essential preconditions -- such as the existence of a developed capitalist society to build on -- in order to develop a theory of how to pursue goals similar to those expressed in Marxism in places where the essential prerequisites Marx saw were not present.
I don't care whether it's Marxist, or Marxist-Leninist, or whatever you want to call their approach, the point is that both Marx and Lenin saw a dictatorship as a necessary intermediary step towards communism, and that's a fundamental mistake regardless of the window dressing that surrounds it.
I agree that good intentions can have bad consequences, but in this particular case I'd say the bad consequences were easy to predict before the attempt was made. It's possible to remove ideas that are obviously bad to make problems less likely.
That's like saying that the Mafia's protection racket isn't a form of coercion. You can choose to shut down your business, or move to a different city after all!
We need states to wield violence on our behalf, and the development of democratic republics has done much to curb some of the excesses of other forms of state (but democratic republics have their own uncurbed excesses). But we shouldn't fool ourselves about their fundamentally coërcive nature.
Steve Martin: how get a million dollars tax free. First, get a million dollars. Then when they haul you into court and ask why you didn't pay our taxes, say to the judge, "your honor, I forgot". What can they do to you?
I'm after your 'package' and your contractually guaranteed returns and your windfalls.
I'm going to reverse a 55 year trend of ever more wealth going to a limited number of people.
I'm going to crack off as much of that as I can and redefine how we play this game for the next round.
Defining this as 'taking money from your employees' is akin IMO to claiming you're replacing unskilled labor in your fast food chain with a robot because the minimum wage went up.
So, when someone with knowledge of the fast food industry directly states that robots will be implemented if the minimum wage goes up is somehow misinformed?
Exactly. His prediction was a pretty low number, only like double current minimum wage. The fact that he made that prediction is very scary. Think of how many things we've seen improve 2x in less than a decade.
Its a replay of something called "Enclosure" in Britain in the 1700s (actually for several hundreds of years) where the commons got fenced and contracted out. It meant laborers could no longer live for a while off the land - a brace of rabbits, a partridge for the pot. So labor had to work for an employer to live, at whatever pay the employer chose. Which essentially enslaved them. Or so the argument went.
I think it's an interest ebb and flow of history. The US had (and continues to have) a similar process related to grazing lands in the West (someone correct if I'm wrong).
But the broader theme of "in order to make more, we privatize this resource so that it may be exploited more efficiently" starts to become questionable in a hypothetical post-material scarcity, "we don't need more" world.
Let's say you have a person living in a remote area and they don't interact much with other people and they don't have a basic income. Are they free?
Let's say someone lives in the city without BI, is it fair to say that moving into the wilderness is an option for them, and therefore they are free? Does it change if they started in the wilderness?
Note that there is (virtually) no terra nullis any more, and likely not enough wilderness to accommodate today's world population living the kind of lifestyle one can live on without interacting with other people.
I've stated elsewhere, I don't think it is fair to say that moving into the wilderness is an option. As cheap as land is in some remote areas, it's still beyond the resources of the people for whom it would be an improvement from their current situation.
I kinda does answer the question. If there isn't any "wilderness" to live in, because it's all owned by people, then the question is pointless.
I live in Australia, where we actually do face this question. There are Aboriginal people living on their ancestral lands in the outback. They have dramatically shorter lifespans and worse health conditions. There are all sorts of reasons for this, not least that colonialist administrations have messed with their ability to live on their land. But the government now faces a choice:
- do we let them live out in the bush on their ancestral lands, where they have these measurably worse lives by all the standards we use to measure such things, or
- do we remove them from their lands and try to improve their life choices so they live better (in all the standards we measure such things).
This question basically comes down to: if a person wants to live free in the wilderness, but the cost of that freedom is a dramatic reduction in their health, life expectancy, education, and quality of life, should we let them?
We haven't really worked out an answer yet, but it is increasingly looking like the right one is actually "no".
So, to answer your question "if a person wants to live free in the wilderness, are they free?", the answer that we're discovering is: "maybe, it depends on whether they can support themselves and their children to an acceptable standard doing that, and there needs to be government inspectors who decide whether that's the case"
I think your answer here means that "freedom" is essentially a useless word in political discussions. Your definition is radically different than mine.
It's the same freedom we're talking about in the War Against Drugs. The freedom to kill yourself with narcotics is not something that governments are comfortable granting their citizens.
it isn't. It's a restriction on freedom imposed by governments because allowing people to kill themselves with narcotics is not a freedom that governments are comfortable with.
who gives a shit? The pedantic question of "is that freedom?" only applies to nincompoops who think that ethics or economics revolve around whether or not we achieve some singular dogmatic principle like "freedom". It's far more valuable to ask actually useful questions that have practical answers.
>"The right to turn down a job is essential for a well functioning labor market, and for a civilized society. And to have that right, a genuine right, to turn down a job, you must have an alternative: An outside option. Because desperate people will accept to do desperate things..."
i think it will bring downs the salary for a number of professions - why bother to pay when you can get volunteers on basic income for free?
Isn't it part of the point with basic income in that it doesn't disappear if you have a job?
The choices would be "basic income" vs "minimum wage + basic income".
There is also the fact that there is no inherent reason why toilet washers should have minimum wage. It's exactly because of economic uncertainty among the lower class that they can be coerced into accepting such sub-par situations such as doing an undesired job at low wage, when it's more logical that an undesired job should offer more pay than a desirable job.
I was just giving my two cents about why "undesirable" jobs usually offer low wages.
By the way, I see your point with devaluation. Personally, I'm in favor of offering everybody the possibility to study, without depending on the wealth of their parent.
We all want clean toilets and most of us want to respect the health and dignity of others. Therefore we'll continue to see technological advancement in cleaning supplies, dirt resistant materails, and eventually automation. That's the whole basis of BI, at least for the techno optimists. Most janitors will just retire early, but some might discover new applications for their know-how, and we'll all benefit.
Great, so we will see highly trained people cleaning toilets, because they happen to need some money and cleaning toilets pays better than the jobs that they were trained to do.
I see it as a net positive for society. If someone wants to clean toilets, they can do so. Right now, the people who clean our toilets might not want to do it. They are forced.
The "non-highly-trained" people can spend their time to get "highly trained", since they're not locked in to cleaning toilets anymore.
How is this a worse scenario than the one we have now?
The highly trained of today fear the devaluation of their training. They would like to keep their relatively advantaged position, they are the ones with something to lose.
> The highly trained of today fear the devaluation of their training.
Also the devaluation of training would create another disincentive that would keep some people from acquiring training in the first place. Don't know if society would benefit from this result, I think it wouldn't.
I don't see how this is different from the rest of society. "Cleaning toilets" sounds like it lacks dignity, but to an art history major "social media marketing" or "event planning" might feel like cleaning toilets.
What job is currently well paid that you would do for free?
and that includes the shitty parts of the job: commuting, paperwork, emails, on call rotations?, dealing with vendors, dealing with customer complaints, etc etc.
What a foolish analogy. The Mafia uses violence to force people to "agree" to things. If one "can't say no" to a contract because their pre-contract situation sucks and will be improved by adopting the contract, they have suffered no violence.
What difference does it make if the threat is actual violence or leaving you without an income so you end up on the street? What matters is not the particulars of the unpleasantness that awaits you if you don't accept the mafia's/corporation's offer, but the fact that the unpleasantness is a consequence of a situation that the mafia/corporation have themselves created.
> ... the unpleasantness is a consequence of a situation that the mafia/corporation have themselves created.
I don't understand how the corporation can be guilty. If someone offers you a job with a wage that you find modest, how is it his fault if nobody else is making you a better offer?
It's foolish, but that's not even the biggest reason.
It's foolish because he wants to replace one corrupt group of people that take your money and distribute it (the Mafia) with another corrupt group of people that take your money and distribute it (the government).
Contracts signed with the mafia are not free market contracts.
It's feasible to admit though that the mafia's own existence is a failure of governments in providing security for the population. Possibly a free market for police services would fix that. Otherwise, if the government would stop wasting people's money and its own time meddling with people's freedoms, it would be able to better deal with violent actions against individuals, one of its main attributions.
Regarding Greece, their lack of ability to say no is a direct consequence of their irresponsible actions of the past.
Free speech and freedom of religion demands nothing of your neighbors except non interference. Basic income, on the other hand, demands their labor (at our current level of technology). In the future automation may change this, but right now there is a big gap between demanding free as in speech and free as in beer.
It in fact does not require their labor. It requires effective taxation of land and distribution of said taxation effectively.
https://en.wikipedia.org/wiki/Georgism
"... revenues from a land value tax (LVT) can reduce or eliminate existing taxes on labor and investment that are unfair and inefficient. Some Georgists also advocate for the return of surplus public revenue back to the people through a basic income or citizen's dividend."
This is the second time I've seen"taxation of land" in this thread as if the dirt my house is sitting on has the ability to write checks to the local government. I might be missing something, but all tax revenue ultimately comes from profits, or the difference between our value of something and its cost. That difference requires someone's labor. Even if there's a ton of gold under my house, someone has to dig it up, process it and find buyers. You might not think I'm entitled to 100% of the profits, but it's naive to think you're somehow not taxing labor.
All taxes come from private enterprise. All of them. It may be displaced by time, so that money I made last year pays taxes next year, but there was labor. That's why money even exists - as a store of value.
I find it misleading that American enterprise can ever be wholly "private", when it depends so much on regulation, subsidies, and public resources. Taxation goes to support the common infrastructure that makes any work possible. Problem?
Unless private parties -- consumers -- buy stuff, there is no income. The government can intervene and distort things (and should -- I'm not a libertarian) but if there is no private commerce, there is nothing to tax.
In a society with no regulation, people still partake in commerce. It has lots of problems and I wouldn't want to live in, say, Somalia, but Somalis still engage in trade and the strongmen who run such places depend on that.
> I find it misleading that American enterprise can ever be wholly "private"
It can, but not if the government grabs control of resources and industries. Do you really think corporations would simply sit on their hands if government services and resources went away? They would respond by filling the demand.
What sort of organism is our society? As a group, we have granted the right to turn down all work to numerous individuals. Since before we picked up tools we have been driven to minimize unwanted labour. Perhaps we are evolving into the 0.01%
Much of the work we do is not paid employment, but rather parenting, caring, housework, slavery, unpaid volunteering, unpaid interning, etc. Even claiming welfare takes time and effort.
Comparing mafia and creditors is non-sense: mafia get their power from their choice to use unjustified violence, while creditors get their power from your choice to borrow in the first place.
Creditors get their power by virtue of the monopoly they have on the creation of money. This is a right restricted to an extremely small subset of people, which are basically the government and large banking institutions. This right is backed by violence. I think the comparison between Mafia and banking cartels has merit.
Creditors also get their power from the ability to jail those who do not pay debts (threat of force). These debts are often unknown to the debtors. This is becoming an increasingly large problem in the United States.
As a slight aside, there are strong proponents who argue, based on Ricardo's law of rent [0], that any excess income above the basic subsistence level will inevitably be swallowed up by landlords in the form of rents.
I'd be very interested to hear from the folks involved in this study if they have an opinion on such an assertion, and if you have any ideas on addressing that effect when it comes to instituting a basic income. Since, if you agreed with those arguments, it seems that a BI's long-term impact on disposable incomes would trend towards 0.
I am still studying the topic, but find the arguments compelling that say a basic income would need to also be paired with something along the lines of either a land-value tax or a community land contribution [1] (which, as the argument is often used, would have a dual bonus by obviating the need for property and income taxes) in order to have meaningful effect.
That assumes a fixed supply of housing, which is only true in deeply dysfunctional places like SF. In most of the US, housing cost is close to replacement cost, so if landlords try to raise rents, people can just move someplace cheaper, especially since they are no longer dependent on a job to support themselves.
I think the GP is referring more specifically to Henry George Theorem (https://en.wikipedia.org/wiki/Henry_George_theorem). The theorem has pretty solid theoretical backing, so I don't see why it wouldn't apply to basic income. At the very least it's a good question to research.
My understanding is that all owners of would increase the rents/prices of their unimproved land, not just housing landlords. Everywhere you'd move is now more expensive by the same amount, because unimproved land is (mostly) fixed supply.
No, it does not assume a fixed supply of housing. The law of rent revolves around the margin of productivity and already takes into account what you're trying to say.
The wages extractable from the least valuable land would rise by the same amount as anywhere else since basic income would affect everyone's incomes equally. Thus, there would be an excess over the basic level of sustenance and according to this law that excess MUST be swallowed up by rent. The status quo would resume for normal wage-earners, while land-owners would benefit even more than they already do, raising rates of inequality further.
There are plenty of 'dysfunctional' places just like SF. Plenty of cities have limited area to expand into. For example, Boulder local gov owns a ring of land around the city, making it impossible to expand outwards (or upwards).
Housing supply isn't fixed if you think people are willing to live in Wyoming - which they pretty much aren't.
"Horrible laws that cause everyone's disposable income to be swallowed by landlords" sounds like a problem worth solving, not an inevitable fact of life.
I've brought this up in the past, and am always met with arguments that just don't seem to dent the problem statement.
My simple question I always pose is this: "If everyone has $X dollars, then wouldn't $X become worthless?"
I fail to see how there won't be some kind of inflationary situation amongst the lower class, especially in the form of rents over the course of a year as leases reset. I also refuse to accept any argument that involves the majority of landlords "doing the right thing".
This would be the case if the X dollars were being printed from scratch every time they were distributed. They aren't, though; they are coming from tax dollars.
Yes, it would most likely cause some inflation of consumer goods, since poor people spend more of their money on consumer goods than rich people (so when you transfer wealth from the rich to the poor, consumer goods will become more expensive)
This increase in consumer good prices, however, will also cause more resources to go into producing goods for poor people (who suddenly aren't so poor anymore). Depending on the limiting factors for these consumer goods, this will most likely cause prices to stabilize at a reasonable place.
> This is clearly the worst aspect of our system and shows that it was designed by the mathematically uneducated.
The answer is no.
> I fail to see how there won't be some kind of inflationary situation amongst the lower class
Ignoring any potentially counteracting monetary policy intervention, there absolutely will be some price inflation for goods disproportionately in demand at the low end of the economic distribution. Reasonably, you expect both market clearing price and market clearing quantity of such goods to increase with a transfer of income to that group (and UBI funded by tax is a transfer, in effect). In short, nominal net beneficiaries will get more stuff, but by somewhat less than prices before the UBI would suggest.
Essentially, production will shift from things demanded by the net contributors to things demanded by the net beneficiaries.
My understanding is that money doesnt become worthless (inflation) so long as there is excess capacity. If a bag maker has 10 excess capacity at the $100 price mark, then the first 10 customers will not cause any inflation. Clearly there will be some inflation with BI as previously nonparticipants in a market begin to participate (homeless begin to rent for example).
Isn't that similar to what's been happening with collage tuition? Government helps you pay tuition and gives you some breathing room, so the collages raise tuition higher until you're back at the limit you can possibly pay, taking away your breathing room again.
Yes, in part -- though I'd say the better analogy there is home mortgages; in both cases, easy access to low-cost loans leads to risky debt. (Plus, college tuitions have gone up in part because government subsidies have gone down and in part because they have allowed their costs to go up, not necessarily because they have simply jacked up the prices.)
Exactly. What is also missing from the post on this test is any sense of if/how they plan on addressing this piece of the puzzle as it seems a rather large one. When your experiment group is small, it simply won't cause a big enough impact at a macro level to move the inflation needle, but that is what many predict would happen.
How can we measure that or get any sense of how realistic that outcome is before a large scale program goes into effect? Don't get me wrong, you have to start somewhere, so I commend this effort, but I have yet to see a good proposal for how to test and deal with this.
That's true, but making the basic income unconditional is going to change the population distribution drastically. There are a lot of nice, beautiful, cheap places in America where people don't live mainly because there's no work. If you have a basic income, that changes the calculus about where you can live. So those price increases will happen, but they're likely to happen in places where prices are already very low.
> The total money supply remains constant under UBI.
Well - it doesn't, actually.
A self-sufficient program would have to be self-sustaining via tax revenue, and unless the goal is to defeat the whole purpose of the program, the tax revenue will disproportionately come from the wealthy. However, the wealthy are less likely to spend every extra dollar that they have, which means that they're more likely instead to save (invest) it[0]. In other words, this proposal would transfer money that is currently being used for long-term investments[1] and put it towards consumption.
The velocity of money would increase, but the actual supply of money would almost certainly decrease, holding all else equal.
[0] Money stored in the bank is an investment; it is the source of capital for others who want to procure loans for investment and infrastructure projects.
[1] These deposits create money, thanks to fractional reserve banking
What you're suggesting would be true of all redistributive programs. Replacing means-tested welfare with a UBI which is equally redistributive would have no inflationary effect.
It's also not clear that it's true in general. Invested money doesn't stand still. You invest it in a startup and the startup spends it. You deposit it in a bank that loans it out and the borrower spends it.
So it could be that taking from the rich and giving to the poor causes inflation or, if startups and mortgage borrowers spend money faster than checkout clerks and bartenders, the other way around.
Depends what measure of money supply you're using. Under some measures the same "quantity" of money at higher velocity counts as higher money supply (which arguably better reflects the effect on the real economy). Under other measures money created under fractional reserve doesn't count.
> Under other measures money created under fractional reserve doesn't count
M1,M2,MZM,M3,and M4 are all affected by fractional reserve banking.
> Under some measures the same "quantity" of money at higher velocity counts as higher money supply (which arguably better reflects the effect on the real economy)
No, velocity is orthogonal to the money supply under all measures. Whether you use a constant velocity model or a variable velocity model, the velocity is a distinct factor altogether, the same way mass and acceleration are different concepts, even though they can be linked by an equation involving the sum of all forces.
In the US, probably. There are some other countries where the amount of money currently being spent on social security is already large enough that it could be reorganized to give basic income to the whole population.
But poorer people that receive payments will have a larger share of the overall wealth than they otherwise would have (even while everyone else receives exactly the same payment). BI is essentially about rebalancing wealth distribution.
Sure, it will increase the value of land, which will increase rents. But part of the rent was also the value of the improvements, which will not cost any more and should have the same ROI as before.
Especially in the US, land is cheap and if rents are too expensive in the cities people will move elsewhere.
Property and land is already taxed, and an increase in the value of property will eventually be converted into an increase in those taxes.
A basic income is supposed to provide enough to live on. So if rents rise, so should the basic income to cover that rise. And the landlords would notice their taxes rising also.
More interesting is what would happen to wages and salaries. If someone's on a wage that's equal to what the BI will be, if it's introduced they could have their wage halved and still have a bigger income. And their boss will have halved their wages' bill.
A basic income would be revolutionary and I doubt anyone has a good idea on how an economy with one will behave.
I'm in favor of a much higher land tax and getting rid of income and capital gains taxes.
Taxing income and capital gains seems counter productive to me as it creates a penalty for working harder and investing. Those are activities that make individuals and society more prosperous.
Another possibility I think is worth exploring is having the government simply print money each year and use that to provide for services and basic income. That way we can get rid of the tax system entirely.
> Another possibility I think is worth exploring is having the government simply print money each year and use that to provide for services and basic income. That way we can get rid of the tax system entirely.
What amazes me in this discussion about BI is that most people don't seem to realize that systems similar to BI have already been tried in Europe, and that they didn't work.
I come from the Netherlands, which has always had unemployment benefits. Nowadays you get those only if you meet a bunch of strict conditions but it hasn't always been so tough. In the early eighties, there were almost no checks whatsoever. The result was that many people started to see the benefit as a 'right', and that the choice to work or not to work was a matter of personal choice. So basically the same thing that BI tries to achieve. But the result in the Netherlands was that more and more people chose not to work, or chose to do work that didn't pay anything, or worked for black money and collect the social benefit at the same time. In the end the whole system just got too expensive and had to be adjusted to be much more strict.
Tl;Dr; BI is a very nice idea on paper but unfortunately becomes too expensive in practice.
What I've found here on HN is that there is an extremely large amount of "wishful projection" and selection bias, in that many people here are young and promising entrepreneurs-in-training, and they believe that basic income will allow them to work on their startup dream without having to worry about paying the bills.
While that may be true, they fail to realize that they are in the extreme minority of actually-motivated people who would make a good use-case of basic income.
The vast majority of the world will fall into other categories, such as non-productivity or black markets. Not everyone wants to go build the next great app, folks!
I personally believe that this is the most important decision that humans must make over the next half-century, as we automate nearly everything and have little need for cheap human labor:
What do you do with all of those idle hands and minds?
In my opinion, if you allow the masses to do absolutely nothing while providing them the necessities for life, society will collapse upon itself over time, as people vote themselves more and more benefits for doing less and less work, while ostracizing the working and ownership classes. Question is only how many generations it takes.
IMHO, humans are no better than they (possibly far worse, in fact), and I see no reason to believe how anything else will happen over the course of several generations of "free stuff".
Humans without responsibilities and accountability = chaos. Tell me it hasn't already begun.
> if you allow the masses to do absolutely nothing while providing them the necessities for life
Perhaps I'm underestimating the issue, but isn't there already today a sizeable chunk of the population in the world that does nothing or close to nothing, but still enjoys a good quality of life? Some people have the drive to work and create things, others are content with just consuming and making families; we have always had that, the only difference is that BI would make life easier for the latter group, but it doesn't strike to me as something that would radically change society as a whole.
The mice in the video bred rapidly and filled the space until it became too crowded. Humans however have contraceptives and entertainment systems and so the population stabilizes before that.
and with BI can 1) afford education which is related to lower childbirth and 2) wont worry so much about retirement, also correlated with lower child birth.
> While that may be true, they fail to realize that they are in the extreme minority of actually-motivated people who would make a good use-case of basic income.
> The vast majority of the world will fall into other categories, such as non-productivity or black markets. Not everyone wants to go build the next great app, folks!
The ratio of people who will find themselves something to do vs. people who will just veg and watch TV is unknown. You don't know and I don't know. Making an assumption either way is asinine, which is why we need things like this study.
Personally, I think we should introduce a small BI, gradually raise it until we find the sweet spot, then tie it to appropriate economic metrics, such as or median supplemental income. Ideally, this would be paired with a gradual reduction in the minimum wage so that number of economically viable jobs for those "idle hands and minds".
I am open to other suggestion for "What do you do with all of those idle hands and minds?", but you don't provide any. The only other solution I can see is to outlaw or limit automation.
> I am open to other suggestion for "What do you do with all of those idle hands and minds?", but you don't provide any.
I don't think there's any perfect solution, once automation is truly nailed. People don't want to be told what to do or forced into work, but I also think that they need something to work for otherwise we'll collectively go insane.
Ever watch Black Mirror? If not, go see the episode titled "Fifteen Million Merits". Something along those lines, sadly....
One of the reasons I like a boosted EITC is that it encourages work and particularly above-the-table work. If you are getting a $2 boost for your $6 job, you would make sure to report it.
Then instead of mowing your lawn and cleaning your gutters and dusting your furniture, you can do your neighbor's and vice versa and then make equal payments to each other and report it to the government to get free money.
Honestly, I don't see the problem with this. If you don't like "free money" then a UBI would be horrible.
An EITC keeps people engaged with the economy. So sure it starts with me hiring you to clean my gutters and you hiring me to clean your gutters, but eventually I discover that my comparative advantage is cleaning gutters, and then I can provide value to my neighborhood cleaning other people's gutters, and maybe even grow that into a business.
Sociologists and economists have measured what happens to people on unemployment, and while the overachiever population of HackerNews might be the kind to do more exercise and do more home repair, most people don't.
The problem with it is that it makes the restriction a waste of paper. Anybody can satisfy it just by formally accounting for the reciprocal favors people already do for each other. You might as well make it unconditional and save everyone the paperwork.
> An EITC keeps people engaged with the economy. So sure it starts with me hiring you to clean my gutters and you hiring me to clean your gutters, but eventually I discover that my comparative advantage is cleaning gutters, and then I can provide value to my neighborhood cleaning other people's gutters, and maybe even grow that into a business.
Which doesn't really work when your comparative advantage isn't cleaning gutters and you're only looking for some generic labor to use to claim the EITC.
> Sociologists and economists have measured what happens to people on unemployment
...which you lose as soon as you get a job, creating a perverse incentive that a basic income doesn't.
I think you miss the point of why we actually need BI research and one of the foundational reasons for it.
I know predictions could be off. But if in 20 years there are simply no jobs available to 60% of the population. What are they gonna do? Just all starve to death? BI is the inevitable step towards a post scarcity society. When majority of people not only don't want to work but that there are simply no jobs for most people yet there is plenty still to buy/consume because automation.
This has nothing to do with your 1980s example because there were still plenty of jobs to be had that needed doing.
The same researchers probably think there will be no oil either, just like researchers thought there would be no oil today.
20 years ahead projections are always wrong, sometimes VERY wrong.
It's just another case of "X will kill jobs" where X could be steam machines, electricity, robots, whatever... In the 80s my dad who worked in the automotive industry told me I should study IT because robots would eventually replace men. Today I'd say he was wrong: it's good to be in IT because of the Internet and mobile revolutions, which have nothing to do with robots.
The only sure thing is that we can't predict the future accurately.
Of course predictions can be wrong; that includes yours.
Betting tremendous amounts that 60% of the population will be out of work in 20 years seems foolhardy to me. But so would be assuming that it can't happen. Building systems (and our understanding of how we can build systems) that can help, in those circumstances or others, seems like a good move.
> in 20 years there are simply no jobs available to 60% of the population
Said people in the early 1800s. And early 1900s. Look, it's just not gonna happen. Jobs will change, but there will always be work for those willing to do it. You may not like the job - hell, you may not like your current job either - or it may be a better job than any that exists today.
Look around you, how many of the jobs you see people doing in your office existed 100 years ago? How about 50? 20?
> Look around you, how many of the jobs you see people doing in your office existed 100 years ago? How about 50? 20?
Close to 95% actually. Customer service and sales existed since the introduction of money; and 50-100 years ago, our company probably would have required many more employees to provide a comparable level of service that we do today.
Maybe that's not true for a silicon valley office, but for the vast majority of companies out there, the sales, customer service and management still comprise the bulk of the employee force.
> but there will always be work for those willing to do it.
No there won't, the past doesn't predict the future and post scarcity is a different problem than past automation. If you're looking to the past for examples, you don't understand the problem being discussed because the whole point is that automation is at a level that even white collar jobs are no longer immune and most people simply aren't going to be able to compete with machines at anything they're capable of doing.
"Post-scarcity" is nonsense and would end all problems if it wasn't. The problem is declining real value of most people's best laborer prospects without eliminating scarcity. Which isn't no jobs, just progressively crapper jobs for a large segment of these population.
Post-scarcity isn't nonsense, it's a distant future that will lead to vast social upheaval long before it's actually achievable. The problem is long term structural unemployment numbers that will continue to grow until our current economic system is no longer feasible.
> it's a distant future that will lead to vast social upheaval long before it's actually achievable.
Retrocausality -- something causing something else before it even exists -- is also nonsense. Increasing productivity that is more limited by capital than labor, such that returns flow to capital, will cause much social upheaval, precisely because even as this occurs, scarcity of goods valued by people will still be present as an unalterable feature of life.
As long as there is an opportunity cost to anything, you aren't post-scarcity.
> The problem is long term structural unemployment numbers that will continue to grow until our current economic system is no longer feasible.
Yes, and that problem has nothing to do with "post-scarcity". Employment is only important for welfare because people, in our current system, need it for money to buy goods and services, and money, which is ultimately a rationing system, is only a thing because of scarcity.
> Retrocausality -- something causing something else before it even exists -- is also nonsense.
It would be, if that's what I'd said or implied, but it isn't because something like post-scaricity isn't binary, it doesn't just occur at one point in time, we'll grow in that direction slowly and problems will arise long before we get there due to rising unemployment, but I think you know that and you're just being obtuse. We are not discussing post-scarcity, we're discussing the problems along the way there if/when it occurs.
You seem intent on pendantically ignoring points being made by re-framing them as strawmen. This is dishonest and not how to have a civil discussion. Since you seem unable to communicate rather than quibble over words you don't like, we're done.
> because something like post-scaricity isn't binary, it doesn't just occur at one point in time
It doesn't occur at all, and the problems you point to aren't problems that are even related to an absence of scarcity, they are problems stemming directly from scarcity.
> we'll grow in that direction slowly and problems will arise long before we get there due to rising unemployment, but I think you know that and you're just being obtuse.
No, we won't "grow in that direction". You seem to be be unable to comprehend the idea of someone disagreeing with your basic premise, so instead you assume that I agree with you and am being obtuse.
There's no route from here to there, and there's not even any there to get to.
We'll continue to progress toward greater abundance, but the basic economic problem that relative abundance does not alter the basic nature of scarcity will not be affected. Its sort of a perennial mistake to confuse greater relative abundance with the absence of scarcity.
You can't disagree with a premise you haven't demonstrated you even understand and your continued incessant pedantry leads me to believe you can't understand, so as I said, we're done; leave it at that.
The reason why they do specifically BI research, is because BI will prevent the Market from collapse since people will still have the discretion of buying things, instead of rationing. Otherwise, BI is not the simplest, not the most obvious, and not the inevitable way to provide for the unemployable. As long as there are human needs , there will be people willing to do those jobs, so it's not like the starving people will just sit there waiting to die anyway.
> But if in 20 years there are simply no jobs available to 60% of the population.
It means we are living in paradise. There is nothing to be cleaned. There is nothing to be fixed. There is nothing to be repaired. There is nothing to be trimmed or maintained.
I think you misunderstand market economics. There might be things to do, but the owners would not be willing to pay people a living wage to do them. People without a living wage can't afford housing, groceries, etc. etc. etc.
Like how Ireland('s landed gentry) was exported potatoes during the potato famine. There was plenty of food; the locals just couldn't afford it.
I dunno, this doesn't sound like what I learned in my official concentration at MIT.
Hey, how about a real argument, instead of one that doesn't rely on accusations of ignorance or appeal to credentials? That would be awesome.
> There might be things to do, but the owners would not be willing to pay people a living wage to do them.
The proper response is EITC or NIT. This takes the work that is below the worker's reservation wage and puts it above the worker's reservation wage.
Saying "there are no jobs available to 60% of the population" is a solution (BI) looking for a problem (no employment). If you were to actually come across this problem in the wild, where there was lots of work to be done but it was all below labor's reservation wage, the obvious answer would be to subsidize labor.
FWIW, I don't believe we're going to have 60% unemployment in the future due to automation (or any other factor), but I do think that unemployment, underemployment, and plain old poverty wages are a real problem now.
My living quarters could use a good sweeping, but I ain't doing it, and I ain't paying anyone to do it, even though I could easily afford it.
I guess I'm an armchair internet expert, but I don't see how a theoretical 60% unemployment or the 10-30% under-employment/poor compensation we have now means there's no work to do.
I keep seeing this repeated in discussions about BI, but I honestly have no idea how it would be possible. I get that everyone receives the same size check, no matter what their income, but who pays for the BI program?
I assume it is funded through taxes and that people that earn more income will pay higher taxes. So once you take BI received - taxes paid, people that earn more outside income get less from the BI program than those that don't. And we are back in the same situation where a welfare program creates disincentives for work.
This is easily solved by making the personal standard deduction higher than the UBI.
So your first $10k (from BI) would be tax free. If you don't work, you don't pay any taxes.
Let's say you have a part-time job which pays $20k a year and the lowest marginal tax rate is 30%. You'd then pay $6k in taxes on that $20k.
Thus, your overall income would be $24k, much more than you got from just BI. This works if your only work is a single $100 lawn mowing job. BI, when coupled with an adequate standard deduction, eliminates disincentives to work.
Let's start with just calling the personal standard deduction 'income tax'. Then, I guess your tax system needs to be progressive, because just having everybody paying $6k tax wouldn't even be enough to pay for non-BI costs such as schools, infrastructure etc. So the highest incomes would probably see their BI disappear to the tax office.
Such a system looks a lot like the systems which are currently used in the Netherlands and Scandinavia. True, there are some differences: BI is called 'unemployment benefit' for those who don't work. And for those with a low income, there is no BI, but instead there are subsidies on housing, health insurance etc.
The personal standard deduction is not "income tax"—it's the opposite of a tax. It's the amount of your income which is not taxed.
This system wouldn't even necessarily require progressive taxation (though I would favor it). A flat tax rate of even 40% could be more than enough to provide for BI and everything else (and everyone would receive their BI tax-free).
It's very different from unemployment insurance because unemployment disappears once you start working. So there's no incentive to take on jobs which pay less than unemployment, or even to take on jobs which pay less than (unemployment + opportunity cost of working).
It might be helpful to do some research on how taxes (particularly deductions and marginal rates) actually work.
> So once you take BI received - taxes paid, people that earn more outside income get less from the BI program than those that don't. And we are back in the same situation where a welfare program creates disincentives for work.
If you fund a UBI program by, say, eliminating preferential rates for capital income, and adding supplemental brackets above the current maximum brackets, and tie the level of the UBI to (because the former actually simplifies reporting in a way which prevents doing this exactly rather than by estimates) an estimate of the revenue resulting from those changes, there's no actual disincentive to work compared to the status quo ante due to the UBI except for very high income workers(this isn't no additional disincentive compared to those in other welfare programs from the UBI, its no disincentive at all.)
There's a disincentive compared to the status quo ante to generating income from long-term capital gains, but the practical effect of that is probably only in the upper end of the distribution (in the lower and middle ranges, the relative comparative disincentive to earning that form of income is probably more than offset by the having more surplus income to invest.)
Yes, it creates a disincentive to work. The hope is that it creates much less disincentive to work relative to a means tested program. I don't think the structural economic advantages are enough of a reason to implement a BI (you have to start looking at fairness issues).
Typical proposed implementations just increase taxes at higher income levels. So there is a taper starting somewhere above the basic income where people that are working are benefiting less than people who aren't working, and there is some income level where the basic income is effectively a pure cost. But all those people have a higher effective income than they would have from the BI.
And it likely would represent a massive increase in spending for most countries, even if it was more efficient than welfare programs. Especially if you make payments outside the tax code, which ends up with a lot of spending that is just accounting.
That isn't even strictly necessary. There is a difference between a "flat tax" (e.g. everyone pays 20%) and a "flat fee" (e.g. everyone pays $10,000). A UBI funded by a flat tax is completely unproblematic. People who make $80,000 pay $16,000 and this makes up the difference for the people who make $20,000 and pay $4,000 when they each get a $10,000 UBI.
So I gave an example of a liberal unemployment system which didn't work because it became too expensive.
And your reply is that it doesn't apply to BI, because BI not only pays to people who don't work, but also to those who do work.
Doesn't this mean that BI will be even more expensive?
"Expensive" is terrible when talking about programs like this. This is not military spending - it isn't money just sucked out of the economy to effectively be dumped off a cliff with no economic return on investment (yes, military spending has a tiny rate of ROI, that doesn't change how absurdly inefficient an R&D program it is compared to, say, NASA). In a zero-overhead UBI system where you used existing databases to model who to send money to, every dollar in goes immediately back out to another taxpayer to spend.
There is absolutely no associated "cost" of the program, and there is demonstrable evidence that the poorer you are, the more efficient your dollar is at stimulating growth, because you are much more likely to have real goods demand rather than capital growth demand like the rich, where inevitably the money for a UBI comes from.
Everything a government does has some rate of ROI on it, determining how much it impacts the economy and how well the dollars are spent. Infrastructure and education are known force multipliers where every dollar spent produces many times more economic growth in return, making almost any infrastructure or education worth it until you get particularly exploitative. Likewise, having a good healthcare system compared to the American one would produce significant returns in quality of life, and economic factors like time working and it would cost less to use more preventative medicine to mitigate problems before they are life threatening catastrophes that cost the state millions.
In the same vein of thinking, healthcare is certainly a net positive investment. You spend a ton on it, but the alternative is people getting sick and dying and lost potential productivity from that outweighs the money you spend preventing it. In the same way, if UBI prevents social unrest, crime, violence, despondence, and death, then it also likely offsets the money going in and then some as well, despite possible overhead, since unlike healthcare / infrastructure / etc money going in does not take years to get a return on - the people who get it predominantly will turn around and spend it immediately on goods and services to keep your consumerism strong.
I'm not an economist but I'm wondering what do you think would happen to technology research and science and such if the rich were taxed this way? Would the economy shift more towards what the poor buy, rather than shift to what the rich spend their money on? Or does it all grow together or equalize in some way?
Of course it would shift - the financial incentives to start business come from uncountable factors, but one of the most significant has to be simply "where the money is".
UBI, by its design, creates incredible demand for a standard of living equal to it. Even if your margins are razor thin, the market is still very desirable because the revenue is some of the most reliable money there is (government money) and it is insanely consistent (people will need housing at the minimum level).
Which should terrify you. Any shift in real market demand for necessities post-UBI just represents how many people were impoverished without it, who did not have their base needs fulfilled and how much human rather than fiscal demand for needs was going unmet. The kind of progressive taxes necessary to redistribute so much money on so regular a basis would of course be significant for the higher earners, which would of course significantly curtail their economic influence, because while innovation is not zero sum, the annual allocation of finite resources is distributed in accordance with capital allocation to it - and that of course includes the spending habits of the poor.
It is a simple reality of markets that the more money you have the louder your demands are heard. So if you take from the rich and give to the poor, their relative voices change, but everyone grows together insofar as progress is always being made somewhere.
We have progressive taxes today, and the only people working under the table are predominantly the poorest, who cannot afford taxes and have less to lose. The richer you are, the more you have at risk getting caught for tax evasion, and the less likely you are to do it, until you get so rich and the amount lost in evasion so lucrative you can offset the risk by buying politicians, courts, and police while also writing the laws and having significant fail-safes protecting your money laundering.
But that would happen anyway. If you are taxing the ultra-rich period, at almost any % of income, there are strong incentives when the taxable total is in the millions or billions to evade taxes.
There are already lots of people willing to work under the table at low end positions, to avoid having taxes taken out of their pay. There's plenty of incentive. Seems like the way to curb this is to target employers rather than employees. That's why it's generally harder to find an under the table job than a legal one, because it isn't worth the risk to the employer to pay you off the books.
It still happens, but I doubt a BI would significantly impact this one way or the other. Right now, people in the bottom percentiles of pay get most or all of their taxes refunded, but still like to have under the table jobs to maximize what they take home every payday, and under BI, they would still likely remain unaffected by tax increases. The middle class would likely be affected, but they tend to work jobs that aren't as easy to do for unreported cash, and have more to lose from an audit if they get caught, so its still safer to work legally. The richest would naturally get the highest absolute burden, but they are likely already doing all they can to avoid taxes, since they can have a lot of effort put into it relative to the potential gains, so I don't see a huge migration to illegal undeclared income there, either.
Unemployment insurance is not BI. BI goes to everyone, Unemployment insurance only goes to people who aren't working legally.
Unemployment insurance reduces the incentive to work because it pays people to not work. It similarly incentivizes black market labor.
BI does not do that. It does (if we get replace minimum wage with basic income) allow people to do work that pays nothing or very little. However, I would see that as boosting overall economic productivity since it allows a wider range of job and thus helps offset the loss of jobs to increasing automation.
As far as the expense. I would advocate scaling BI up as we scale the minimum wage down, allowing us to grow the program as we can afford it while boosting the economy (and thus tax revenue) with lower labor costs.
True, the very liberal Dutch unemployment insurance which I was talking about was not BI. It had some similarities, but also some differences. The liberal unemployment insurance became too expensive. So the question is: where is BI different so that it becomes sustainable for the tax payer?
> Unemployment insurance reduces the incentive to work because it pays people to not work. It similarly incentivizes black market labor.
I'd say that BI also reduces the incentive to work, but I agree that it does this less than unemployment benefits. Same for black market labor. So a win for BI here.
But there is one other difference where BI is far and far more expensive than unemployment benefit: BI is also paid to people who work. Maybe some BI advocate should try to convince me but to me it looks like this will far outset the advantage above.
Any BI advocate who pretends that BI won't require increased taxes is basically deluded.
Of course BI will require increasing marginal taxes on the people who work. This shouldn't be economically catastrophic though, because you can structure the system such that there aren't disincentives to work and the UBI everyone receives is tax-free.
You're unjustifiably assuming that BI provides less incentive to work than existing welfare and then doing math based on that assumption to prove a conclusion which is trivial given the assumption. It's begging the question.
Calculate the marginal tax rates people would pay under a BI funded by a flat tax vs. the existing welfare system when disqualification from benefits is calculated as a tax. The existing system has low and middle income people paying absurdly high marginal rates. BI would increase their incentive to work.
BI would have high income people paying somewhat higher marginal rates (but not necessarily higher taxes net of BI because they would receive the BI), but high income people are extremely unlikely to give up their high income in exchange for a subsistence level basic income.
In the blog post I cited, I only compared Basic Income to a Basic Job. I left existing welfare out of it.
The marginal utility changes from working vs not working in a BJ scenario are higher than in a BI scenario, almost by definition. Do you disagree that Utility(No Job, no money) < Utility(No job, money)?
BI would have high income people paying somewhat higher marginal rates (but not necessarily higher taxes net of BI because they would receive the BI)...
More words. Still no arithmetic. Why are BI proponents so averse to actually crunching numbers?
> The marginal utility changes from working vs not working in a BJ scenario are higher than in a BI scenario, almost by definition. Do you disagree that Utility(No Job, no money) < Utility(No job, money)?
That isn't the interesting question for a basic job. If you replace existing welfare with a basic job then the utility function for working is a binary value which asks if you want to starve to death. You can't actually say no.
But most of the basic jobs are going to be makework jobs with minimal economic value. Things that have economic utility approximately equal to (and possibly less than) sitting on your couch and watching Netflix.
The real question with the basic job is whether people will pick the makework basic job over an actually productive real job. The relevant utility function for a basic job is utility(Basic Job, $10,000) vs. utility(Real Job, $10,000), the equivalent of which for the basic income is utility(No Job, $10,000) vs. utility(Basic Income + Real Job, $20,000). But then the basic job falls on its face because people will too often choose the basic job which is easier to get, has more stability, may be easier to do, etc. The Basic Income doesn't have those problems because in that case the income from the Real Job supplements the Basic Income instead of replacing it, so you get compensated for the amount that getting a real job is worse than not getting one.
A basic income also does a much better thing in the case where people choose not to work for a private business. In the basic job case that person is digging ditches and filling them back in, whereas in the basic income case it can be taking care of their children or writing open source software or doing investigative journalism without a wealthy patron -- choices that are socially beneficial but the basic job doesn't give you.
> More words. Still no arithmetic. Why are BI proponents so averse to actually crunching numbers?
The math and the words both mean the same thing.
You want math, fine. Suppose the economy is full of Adams, Betties and Charlies in equal numbers.
In the hypothetical existing system there is a progressive income tax where you pay nothing up to $50,000 and 20% thereafter.
Adams make $20,000, pay no taxes and receive $6,000 in food/housing government assistance which the government withdraws at a rate of $.80/$1 if the Adam were to make more money.
Betties make $30,000, pay no taxes, are not eligible for any of the food/housing benefits Adams get but receive $4,000 in government college assistance which the government withdraws at a rate of $.50/$1 if the Betty were to make more money.
Charlies make $100,000, pay $10,000 in taxes (20% on everything over $50,000) and receive no government benefits.
Now we throw away the existing welfare and tax system and replace it with a $10,000/year basic income and a flat tax of 20%.
Adams make $20,000 but now receive a $10,000 BI and pay $4,000 (20% of $20K) in taxes. Their net transfers from the government are still $6,000 but now if they make another dollar the government takes 20% instead of 80%.
Betties make $30,000 but now receive a $10,000 BI and pay $6,000 (20% of $30K) in taxes. Their net transfers from the government are still $4,000 but now if they make another dollar the government takes 20% instead of 50%.
Charlies make $100,000 but now receive a $10,000 BI and pay $20,000 (20% of $100K) in taxes. Their net transfers from the government are still -$10,000 and their marginal tax rate is still 20%.
But most of the basic jobs are going to be makework jobs with minimal economic value. Things that have economic utility approximately equal to (and possibly less than) sitting on your couch and watching Netflix.
Really? Fixing our crumbling infrastructure isn't valuable? Providing childcare to working mothers is useless? Glad to know there is nothing useful the govt can possibly do with more labor.
But then the basic job falls on its face because people will too often choose the basic job which is easier to get, has more stability, may be easier to do, etc.
This can be resolved by making BJ suck and pay below min wage.
The Basic Income doesn't have those problems because in that case the income from the Real Job supplements the Basic Income instead of replacing it, so you get compensated for the amount that getting a real job is worse than not getting one.
On the other hand, you seem to be ignoring the third option: watch TV all day while collecting money. We already know that free money (typically in the form of welfare and unemployment) induces this behavior.
As for the arithmetic, the question is this: ...BI is far and far more expensive than unemployment benefit: BI is also paid to people who work. Maybe some BI advocate should try to convince me but to me it looks like this will far outset the advantage above.
Your calculations seem to work in your hypothetical society. Do they work on something approximating reality?
Building infrastructure isn't unskilled labor so can't be used as a basic job. Moreover, the fact that the government sometimes needs to hire people to do things doesn't mean they can't do that but only when things actually need doing, and then independently have a basic income.
> Providing childcare to working mothers is useless?
This is what I'm talking about. Let's take some mothers who need to provide for their children and give them jobs digging ditches and filling them back in, then pay some strangers to watch their children while they're doing it. Might it be better to allow mothers to be paid when they take care of their own children?
> Glad to know there is nothing useful the govt can possibly do with more labor.
This is the most basic flaw in the basic job. The government is not qualified to decide this. It's the fallacy of the centrally planned economy that the government is better at allocating labor than individuals.
> This can be resolved by making BJ suck and pay below min wage.
In which case you can't give people jobs doing economically productive things because you have to give them jobs that are more demeaning and loathsome than jobs doing economically productive things, and then they can't actually live on wages below minimum wage so you still need the existing welfare system.
> On the other hand, you seem to be ignoring the third option: watch TV all day while collecting money. We already know that free money (typically in the form of welfare and unemployment) induces this behavior.
...when getting a job causes you to lose the welfare or unemployment benefits.
> As for the arithmetic, the question is this: ...BI is far and far more expensive than unemployment benefit: BI is also paid to people who work. Maybe some BI advocate should try to convince me but to me it looks like this will far outset the advantage above.
If the average person pays $10,000 more in taxes to fund a basic income and then receives the $10,000 basic income, it didn't cost them $10,000, it's just a no-op.
> Your calculations seem to work in your hypothetical society. Do they work on something approximating reality?
Please specify what part of the calculations you find unrealistic.
Obviously the numbers there are chosen to balance exactly so that nobody loses or gains anything and in practice throwing out a huge system with complicated rules and then replacing it with something simpler is going to have winners and losers. But the general principle that wealthier people pay more taxes than they receive benefits and poorer people receive more benefits than they pay taxes will continue to hold and the result will be lower marginal tax rates on effectively everyone (or, if BI is large enough that the new system is more redistributive than the existing one, everyone other than high income people).
Building infrastructure isn't unskilled labor so can't be used as a basic job.
FDR did exactly that.
Let's take some mothers who need to provide for their children and give them jobs digging ditches and filling them back in, then pay some strangers to watch their children while they're doing it. Might it be better to allow mothers to be paid when they take care of their own children?
Or, lets have one mother watch 4 children - her own and those of 3 strangers. This is a common arrangement in most of the world. Are Americans just somehow less capable than Indians, Mexicans, Peruvians and South Africans?
Please specify what part of the calculations you find unrealistic.
Obviously the numbers there are chosen to balance exactly
So now take the actual distribution of income in the US (rather than a hypothetical one) and calculate what numbers would be necessary to balance exactly.
"Building infrastructure" is also not a long-term plan. We need it right now because we haven't seriously invested in infrastructure in three generations, but if we spent 10 years building all new bridges then we would be good for another three generations again. Which would be great, but then what?
> Or, lets have one mother watch 4 children - her own and those of 3 strangers. This is a common arrangement in most of the world. Are Americans just somehow less capable than Indians, Mexicans, Peruvians and South Africans?
Which the mother receiving the basic income can still do in return for money or favors or in kind services. But with the basic job, at some point the government says we have enough people providing daycare and you're digging ditches all day even if you would prefer to be raising your kids.
And notice how those arrangements work in other countries (and here for that matter) -- you watch all the kids today, someone else watches all the kids tomorrow. When you're not watching the kids you're washing clothes or doing errands or preparing food. And people tend to be much happier when they're doing that kind of work for their own families and communities than doing it for rude strangers at minimum wage.
> So now take the actual distribution of income in the US (rather than a hypothetical one) and calculate what numbers would be necessary to balance exactly.
OK, let's see. Mean household income is $72,641, there are 122,952K households so total income is $8,931,356,232K, therefore providing a $10,000 basic income for 245M adults would require a flat tax rate of ~27.43%. Or if you like a progressive tax then maybe a 20% bracket and a 30% bracket. And that rate is an overestimate because it doesn't include any revenue from corporate taxes.
A $10k basic income would require a flat tax rate of 27.5%. You realize that welfare/etc provides poor people with $20k, right? So either you are proposing a 50% cut in payments to the poor, or you are proposing 55% flat tax rates.
And that's ignoring taxes needed to fund a functioning government - e.g. roads, law enforcement, blowing up Afghani weddings, etc. So 65-70% flat tax rates? Or just a 37-42% tax rate, plus we've cut wealth transfers in half? Concretely, which one are you proposing?
(Incidentally corporate taxes are just taxes on people, merely hidden from view.)
> You realize that welfare/etc provides poor people with $20k, right?
No it doesn't. You haven't explained where you got your numbers but those numbers are presumably for a household rather than an individual (which would then receive more than one basic income) or some atypical edge case where a person qualifies for an uncharacteristically large collection of benefits.
A basic income is a pure redistributive program. It can't possibly cost more than a program which is more redistributive than it is because there is nowhere else for the rest of the money to go.
> And that's ignoring taxes needed to fund a functioning government - e.g. roads, law enforcement, blowing up Afghani weddings, etc.
All of that other than the military costs a comparatively small amount of money. And we could probably stand to blow up not so many weddings as we do.
> (Incidentally corporate taxes are just taxes on people, merely hidden from view.)
That doesn't mean including it wouldn't reduce the rate. US GDP is $16.7T. Total US personal income from above was $8.9T. That's quite a difference. An economy-wide flat tax would require a rate of ~14.7% for $10,000 per adult and ~29.3% for your unrealistically high $20,000.
And keep in mind that that is the marginal rate. The effective rate under a basic income is lower than that for everyone. If you make $60,000 and pay 15% but get a $10,000 basic income then your effective tax rate is negative, as it is at a 30% rate and $20,000.
It does allow people to do work that pays nothing or very little. However, I would see that as boosting overall economic productivity
That's a contradiction. Productivity is defined as output divided by hours worked. Output is defined roughly as "sales of things that people want".
Putting aside market failures for a moment, work that pays nothing is very often work that nobody wants done. There are lots of people who will happily churn out poems about their personal angst all day if they had the opportunity to do so and call it 'work' but if nobody wants to buy their poems then it's not considered economic productivity. And it must be this way as otherwise you could get idiotic situations like someone who just goes running every day and says they were "productive" because they did "work", ignoring that it was income free because it didn't help anyone else. At some level the notion of productive work must be tied to an exchange of goods or services or else the phrase becomes kind of meaningless.
> work that pays nothing is very often work that nobody wants done
I disagree, but I think this disagreement boils down to underlying problems I see with the ways in which we tend to measure economic output and GDP.
If I write a poem that brings me no pleasure and I sell it to you, and you write a poem that brings you no pleasure and you sell it to me. That "counts" as economic productions. However, if I write a poem that brings me pleasure and you write a poem that brings you pleasure and nothing is sold, the same value is produced but it doesn't "count" towards economic production.
You may not like poetry, but there are tons of other examples:
Grandparents who babysit their grandchildren, people who fix their own cars, people who grow and cook their own food, people who write open source software, people who volunteer with non-profits, the list goes on and on.
> At some level the notion of productive work must be tied to an exchange of goods or services or else the phrase becomes kind of meaningless.
While it is hard to measure productive work that isn't tied to the exchange of goods or services, that doesn't make that work meaningless, nor does it mean it has no value.
Conversely, I would argue that there is a large amount of "unproductive work" or "busy work" that doesn't really produce value, but does involve the exchange of goods and services. Specific examples are controversial, but some potential ones are: fighting frivolous lawsuits, political fundraising, defensive patents, and many types of advertising.
I think many of these many of these jobs provide "competitive advantage" in marketplace but produce little to no actual value to society. Every corporation needs someone doing these jobs so they can stay competitive, but it ends up becoming an arms race of economic waste.
My hope is that by reducing the necessity of work that get paid well, we are able to start weeding out some of the BS work and enabling people to do more of the less/un paid work that produces hard to measure value.
I think we should accomplish this by incrementally phasing in basic income pair with gradually phasing out minimum wage. Each increment should happen at the start of a recession so the the increase in government spending on BI paired with the availability of cheaper labor (due to lower minimum wage) can prompt growth and shorten the recession.
There are places in Europe [0] also experimenting with government-sponsored BI but the Netherlands is not one of those from what I understand, and what you describe is not at all what BI is.
Unemployment insurance (even if its not time limited, and the benefit isn't set by your income by previous employment -- which are typically the case with UI schemes) is not at all like BI, because unemployment insurance is lost when you are employed, whereas BI is not; avoiding the disincentive to work that comes with tailing off benefits rapidly with labor income is central to the concept of BI.
The idea is that we will develop such stunning abundance that living costs will be very inexpensive and a basic income will be a manageable cost for the government.
Net of the UBI? Sure. A UBI which is exactly as redistributive as the existing welfare system would reduce taxes (or increase the UBI you receive) by the difference in the administrative costs between the existing welfare system and the UBI.
And that's before the economic benefits of increasing the incentive to work for low and middle income people by not reducing their government transfer payments when they get a job.
Amazing how quick this jumped into extraneous "what-if" comments and liberal vs. libertarian and so on. It appears that the premise that YC is moving forward on is very simple: "give them the money and see what happens."
I would imagine it would be monthly because that is how our culture works on necessities like shelter and water. If they run out of the money on day one, or do a deal with a payday lender, it doesn't become "tough shit." It will be answered with a big silence. There won't be somebody to call and complain to.
Once a month money will appear in your account. End of story. The funders aren't also attempting to solve health care and pay day lending. They aren't creating a bureaucracy of people waiting by the phone to listen to sob stories.
What happens after the money hits your account is the focus of the research. Thrive or fuck up, your choice . . . and not the problem of the suppliers of basic income.
Many here are jumping immediately to the worst case scenario stories. Those will comprise a tiny minority. They're playing the hunch that basic income will be a net plus and they want to find out how and how much so they can tweak it and propose it to best impact the future.
This seems like a great use of some of the wealth that has been steadily trickling up.
Why not look at folks who have some variant of basic income -- retirees. Especially public sector. There's lots of data there to look at.
I have a friend who was a fireman who developed some health problems at 44 which made doing his job difficult without putting himself and others at risk. He's now retired at approximately half pay, with healthcare. He's now doing stuff that he is passionate about -- cooking BBQ for friends, family and events and gardening. (very serious gardening, like he can almost feed his family from a city lot).
There are many stories like that which are worth hearing. IMO, it would be a better population to study, as most retirees like what I'm describing aren't receiving subsidy for housing or food.
Great point! We want to see how the income affects younger people as well. They still have the option of working, but they may have the freedom to do other things.
True but almost no one actually does retire. You get about 1500-2000 a month as an enlisted retiree which most people would have to support a family with.
> In our pilot, the income will be unconditional; we’re going to give it to participants for the duration of the study, no matter what.
This is omitting one crucial detail: for how long will the basic income last. At least for myself, my decisions would be completely different if I was to receive unconditional income for e.g. 10 years (or less), vs. for the rest of my life.
So in other words, a long enough time to make people think they can draw reasonable conclusions about the viability of BI, when in actuality it's not long enough. You have to study the generational effects of this sort of thing. People are going to behave very differently when they know this will be around for a very short time versus the rest of their lives, nevermind how people behave when they're second or third generation BIers.
There's only one way to study something like this.. and that's to do it. 5 years is a pretty amazing amount of time and I'm sure some great data will come out of it. Some smart people will probably treat it as a short-term thing and treat it as such, but the majority of the population are probably short sighted and will treat it as if it will be there forever. You can do a lot in 5 years.
> There's only one way to study something like this.. and that's to do it
This is a dangerous thing to experiment with when you have a huge nation of 318+ Million population.
It's far safer to let smaller nations, like Finland (whose entire population is less than New York City), test this idea out for a few generations. It's far easier to "bail out" a city's worth of people than it is a large nation, if things don't go as planned.
I don't think a city in the US is a good sample, since people are more likely to move in and out of the city during a generational (or multi-generational) test case. In addition, city lines/boundaries are "fuzzy" a lot of the time, often with one side of a street being incorporated and the other side not, etc. City boundary lines may also shift over time, etc.
In addition, if it's known anyone with an Oakland address gets BI, some (or many) people will attempt to move there, which will cause other unintended economic consequences for the city, skewing the test results.
A [small] nation is a better sample, since it tends to have fewer of these issues over a long time span.
Well, it's difficult to see how this trial study is going to yield any useful information.
- The sample subjects are incredibly biased, in that they are already founders and presumably motivated individuals. Not a representation of the general population, not even close.
- The study has a time limit (5 years). So no test subject is going to make life-long or life-altering decisions based on this limited trial.
So, this study doesn't seem to accomplish any of the basic tasks needed to study ramifications of such an idea in practice.
All we will know after this study is concluded, is how founders treat monthly cash given to them for 5 years. In reality, it sounds a lot like YC is just paying them a salary to build their business.
YC is testing the outcome of paying their founders a salary in order to achieve greater gains down the road... something any business will attest to being beneficial. This is not a BI study.
I agree, start small, work up. This is why I said let a small nation conduct this test (such as Finland, who is already planning to convert into a BI economy full-scale, from my understanding).
> But you are just guessing at what the problems might be.
No, the issues listed in my previous post are clearly issues with conducting this test at a city level. Part of preparing a study is to examine complications that may impact the findings... and these are obvious complications.
In all honesty, I will be rather surprised if it really winds up being a truly random selection of the Oakland population. The political incentives for the city to find a way to put a thumb on the scales will be very strong.
> Participants will be randomly selected from the population of Oakland
So you are implementing a lottery.
Why not examine existing lottery winner stats? It's essentially identical to what you are doing.
I still fail to see what anyone gains by this "experiment", except for some good PR for YC.
Not to mention, you opted to use a brand new PhD, instead of (or under the supervision of) someone more established and experienced. For this work to be taken credibly, it must have weight behind the research.
If this thing was really just about gathering data, you would have just done it... not wrote-up a blog post about it, posted it to HN, and then spent hours defending it.
I think you are putting too much weight on this pilot. They aren't trying to find out if BI is going to work, they are trying to suss out basic, mechanical issues that they might not have thought of. If good BI data comes from it, great, but that's not the point yet.
Yes but it's a starting point. Conducting a generational study will take, well, generations, and that's too long. Unfortunately the longer term, multi generation study will have to be "done in production" so to speak.
It may work, it may not. But what we're (the US) doing now isn't working.
True but there's a lot of benefits that BI proponents (and I personally) believe will happen that will show up in subsequent generations like closing the educational attainment gap between the poor and everyone else. Also there's the question of if it's sustainable in case the fears of it just making everyone drop out of the work force are true. [1]
[1] Though from the same people you'll hear that work provides so much meaning to life that if people aren't working because they can live without it that they'll just be miserable. Which seems to contradict itself, either work is so meaningful that without we're miserable so we'll work even if we don't have to. Or it's not that meaningful and we'll be fine without it.
But did you read what they said? That's not the point of this. It's a pilot study to get their feet under them and get some idea of how the real, long-term study would go. The point of this isn't to draw conclusions about BI, it's to draw conclusions about how to study BI so as to help them set up the long-term version more effectively.
That's certainly an issue, but your demand stifles any effort to learn more by saying that you have to study "generational effects" (what, maybe a 50 year study before you can learn anything). Which will just be followed up by the equally valid criticism that you can only study this if everyone has BI (to see if it's the relative effect that matters).
Reasonable seeming concerns, but you have to start somewhere to learn anything.
> That's certainly an issue, but your demand stifles any effort to learn more by saying that you have to study "generational effects" (what, maybe a 50 year study before you can learn anything).
It's less costly than rushing into BI. It's one of those social programs that once introduced can NEVER be taken away.
You might think that, because no country has implemented BI, then considered it a failed project, then scraped that system for something better, yet. But one of the countries on this planet might be the first to try that. It's one of those "nobody done it yet thus it can't be done by anyone" ideas that reality so often find is false.
Did you miss the part about this being a small pilot? I sounds like they want to figure out the administration and reporting issues more than anything.
I'm afraid with such short duration you'll not be able to observe true effects of basic income on people's behaviors.
It will be more something like "sabbatical" in academia - you can devote a time to some side projects (whether career related or pure leisure), but everything you'll do you'll do with considerations of how your life will proceed once the sabbatical is over and there is no more safety net (assuming rational actors).
The actual study will likely run for 5 years. The shorter pilot will help us refine our research design and mechanics; we don't expect to answer any of our research questions with the pilot.
Five years is much better but fundamental issue is still there - "there is a deadline after which the utopia ends".
Did you consider maybe using fewer participants but possibly much longer time-frames (e.g. for the same budget 10x less people but 50 years of BI, or even 20x less participants and 100 years of BI to have safe margin)?
I'm aware this would be hard / impossible to personally see to the full fruition (see e.g. Up series [1]), but even just that 5 years window frame for the observation and research (which you already prepared yourself for) but with participants who could have "piece of mind for the rest of their lives" could radically alter the results of the experiment.
Most people will never abandon their job for 5 years of guaranteed income, even if they hate their job.
What happens after the money ends? They have to re-train, search for a job, apply, interview, explain a 5 years gap, climb the office/workshop ladder from the bottom again...
Situation changes radically if the income is guaranteed for life, if they are guaranteed to never have the necessity to work again.
Since a study limited to 5 years can't, by design, satisfy this last condition, it won't be significant at predicting how many people will leave a "hard" job.
What kind of results do you expect from this pilot? I imagine you could get some positive results (i.e. people change behaviour when they get unconditional income), but my expectation would be that not a lot would change. But the problem is that if the result is negative (the behaviour doesn't change), it will be invalid, but most likely misinterpreted by casual observers.
For the short-term pilot, we don't expect to see many behavioral changes--we'll just test the mechanics and refine our research design and outcome measures. We'll begin examining our research questions in earnest with the full 5-year study.
...aaaaand whether or not your children would be receiving it, right? We make many rather large financial decisions based on our choices to procreate or not. If I didn't know if my kids were taken care of, I would probably make different decisions than if I did. There really is no way to test basic income without simply implementing it.
Just because the government says it will be "forever" doesn't mean it will. When thinking about planing the multi-generational prosperity of your family (something few people do to any serious degree) you can't take the perpetual existence of this-or-that political institution as granted.
Which should be just fine under UBI, where you shouldn't be getting anything for children in the first place. Children are not adults, and are not treated like adults for the vast majority of social contracts, and UBI is certainly one of them - we have no expectation today of children to make any income whatsoever now, but to be provided for by their parents. If parents would only be on UBI, that is not enough to provide for kids, but that is a reflection of negligence on the part of the parents.
It is certainly an endemic problem we need solutions for in that the poor, the most promiscuous population, is also the one that cannot afford their own children, but we certainly do not want to give them any incentives to have more kids. Children should absolutely be an expense to the parents, because the parents decided to have them, and unless we need kids (at which point the state can start subsidizing procreation in almost any way they want) we need to maintain strong (and much better than we have) adoption and orphanage faculties, but not excuse bad parents in any way who make irresponsible immature decisions like reproducing without any financial means to care for their own.
> Which should be just fine under UBI, where you shouldn't be getting anything for children in the first place.
If you are going to replace present means-tested benefit programs and not adversely affect current recipients, you need to have a lot higher per-person level of UBI if children aren't covered beneficiaries.
The most sensible target population I see for a UBI in the US is probably "all US citizens and legal permanent residents (green card holders)", without respect to age.
> and unless we need kids
We do. Permanently greying population would be a serious problem.
You only need kids if your society is in a position where those with the wealth to afford children are not having them. Japan certainly has that problem, currently, the US does not. If you are in the Japanese situation, I would still argue opening up immigration is almost certainly cheaper an option than subsidizing child rearing, but we are no where near any problems stateside involving population replacement, and if we did, again, we can open our borders much more before turning to child subsidy.
If parents would only be on UBI, that is not enough to provide for kids, but that is a reflection of negligence on the part of the parents.
Scenario: Single mom of a child with special needs who is devotedly taking care of said child and does not have time to also work for money.
One of my fears with UBI is that I am hearing ideas posited that men will no longer be made responsible for things like child support or alimony because, hey, the woman gets a check anyway. And I think this is incredibly, seriously problematic.
Please do not make such sweeping statements about parents. Parenting is a very tough thing and money alone hardly makes one a decent parent. Studies have shown that there is as much neglect and abuse (and addiction) in rich neighborhood as in the ghetto. The best parents are typically middle class. They have consistently made choices to try to balance the need for money (which takes time) and the need to spend substantial time with their child(ren) in order to raise them.
> One of my fears with UBI is that I am hearing ideas posited that men will no longer be made responsible for things like child support or alimony because, hey, the woman gets a check anyway. And I think this is incredibly, seriously problematic.
Both child support and alimony are not flat basic-necessity calculations, but are income based. The availability of a UBI doesn't change the fundamental premises on which those are built, or even make any significant impact on the formulas -- under the assumption that a UBI paid to the adults would be counted as each adult's income, and UBI paid for the child to the custodial parent(s) would be treated as joint income when the parents are together and income solely of the custodial parent in the formulas after a split, there would be no need to even touch existing formulas.
That's a nice theory. But I have seen comments right here on HN where people suggested that we could stop providing child support payments if we had UBI "because men would be supporting the children via taxes anyway" or words to that effect.
Furthermore, I have read up on the history of the American welfare program. It was dreamed up as a means to "help poor, single moms" at a time when intentionally getting pregnant out of wedlock was essentially unthinkable, so most poor, single moms were widows, not women who had given birth out of wedlock. The design of the program fundamentally changed the social contract and actively promoted the numbers of poor, single moms in the U.S., in part by making it less stigmatizing to have kids out of wedlock.
So, whether it is intended or not, if you pass a UBI, an awful lot of people will feel like deadbeat dads are not such a big deal and you will further change the social contract. The indicators I am seeing is that many of those changes will be negative changes rooted in a presumed lack of responsibility for our actions.
Your argument actually generalizes to a broader one -- if people get money from the government then it weakens family bonds because family members don't need each other as much when they have government money. But it fails for the same reasons all the other ones do, which is that UBI is unequivocally better than the status quo of means tested welfare.
Welfare has the same problem with creating deadbeats but much worse, because if the father does actually pay child support or for that matter stays with the mother to raise the child, then the mother loses the welfare benefits. When you have two parents who are very poor but love their child it creates the unconscionable incentive for the father to leave so that the mother then qualifies for welfare while the father sends what money he can in cash under the table.
UBI at least improves the status quo by eliminating that.
> Scenario: Single mom of a child with special needs who is devotedly taking care of said child and does not have time to also work for money.
To have children without the resources to provide for them is a terrible offense to the child. The single mom you describe made a mistake. Good things can come from bad decisions without trying to sugar coat bad decision making. Your scenario implies she had the child out of wedlock though, because....
> will no longer be made responsible for things like child support or alimony because, hey, the woman gets a check anyway
Certainly not, by my perspective. UBI is for individual needs provisioning. Your children supplant your own needs, and if either parent is exclusively on UBI they are in the unique situation where there is justification for them not having a minimum standard of living even with a UBI because they have committed themselves to taking care of their children first. In practice, that will rarely happen on the side of the custodial parent - the child would just suffer instead - but at least the one paying support would definitely not get out of it.
That is, of course, given that the parents started in a stable financial situation and just divorced, and had the reasonable financial means to afford children. If not, I have no sympathy. You have no right to have society give you money for succumbing to baser instincts, and it is a strong indicator of selfish behavior unfitting of good parents to have kids in such circumstances. And like I said, if the parents had the means, and just got divorced, of course the non-custodial parent should be paying in accordance with their original budgeting for the child, though I would mention that you would often want to the kid to go with whoever has the more stable income rather than who has the vagina more often than we do now (I have experienced through siblings the hell that is custody courts, and it is certainly completely broken today).
> Please do not make such sweeping statements about parents.
If you buy lottery tickets rather than pay your rent, I will make sweeping statements about your financial planning skills. If you splurge on a fancy dinner to then go hungry the rest of the week, I will certainly criticize that decision making as well. If you have children without confidence in your ability to provide for them, I will criticize you for just the same reasons. That does not make you a good or even a bad parent, it just makes you irresponsible.
But it does not matter how much you try to balance time vs money for your children after the fact. If you had them without the resources to provide the time and money they need they are negligent. The best intentions are meaningless when presented with reality, and at the macro-social level your intentions mean nothing next to the millions of other disadvantaged parents who probably mostly also had the best intentions, but led to childhood poverty being at its highest in 50 years in the states because we do not hold people accountable for terrible decision making with some of the most vicious costs possible - the damage poverty does to children is becoming more apparent every year, and it is a travesty to excuse their parents for it because some peoples bad decisions hurt others beyond themselves.
> this could become an incentive for people to have tons of kids
Or, alternatively, to have fewer kids, if they were planning (as many parents in the USA do) to provide financial support for college to those children.
> Or, alternatively, to have fewer kids, if they were planning (as many parents in the USA do) to provide financial support for college to those children.
How's that? Every BI plan I've heard floated around starts paying out when a person reaches 18 years of age (absolutely college age). So, as soon as a child goes to university, they get BI, and parents don't have to afford a single expense. Seems to alleviate the burden of having a child in that age range.
> So, as soon as a child goes to university, they get BI, and parents don't have to afford a single expense.
Most near-term UBI proposals (and all plausible ones) wouldn't pay all living expenses in most college communities + the costs of actually attending college, so the idea that having BI available to college-age recipients would alleviate all parental burdens of college-age offspring is, well, sheer fantasy.
> So, as soon as a child goes to university, they get BI, and parents don't have to afford a single expense.
There are countries where university tuition is free, and the state also pays student benefits to every student, which makes it financially possible to study without receiving money from your parents.
Those countries tend to have lower birth rates than USA.
I can easily imagine plenty of state schools would trade UBI for room, board, and tuition for the brightest students.
For the rest? We need more trade schools today, and we are talking about something theoretical at least years away and probably decades, when we will hopefully be past the ancient university model of tremendous expense and most people are taking courses online or through trade schools at very little cost.
Tuition is due a few times a year (usually twice, but some systems are quarterly). If the student gets a BI every month, there should be no issue affording tuition, in addition to living expenses.
> Tuition is due a few times a year (usually twice, but some systems are quarterly). If the student gets a BI every month, there should be no issue affording tuition, in addition to living expenses.
Tuition, fees, books, etc., together at many institutions are, annually, is near or even greater than the total amount of annual per-person UBI in many proposals I've seen.
Somewhere between 10 years and the-rest-of-your-life, you need to start taking geo-political risk into account. Just because a government says it will be forever, doesn't mean it will.
Indeed, it would have to be guaranteed by some big insurance company (e.g. YC could simply buy annuities). If those companies fail, there will probably be bigger problems in the world :)
The 5 years they are going for just doesn't seem long enough for the reason that if you actually choose not to work during that time, you will very likely be completely screwed at the end of the study when you need to get a job again (similar to mothers leaving the work force for multiple years to raise kids). A person evaluating their options in this program is thus much more likely to use the UBI as supplemental income than as a job replacement like they might if it was guaranteed to retirement age. This is still great, but I don't think the results will be overly indicative of outcomes in a nation-wide rollout scenario.
There is another problem with such a pilot. I think that many of the positive effects of BI will only be borne out in a society in which everyone has it, where a culture exists around the concept of BI, and where the society as a whole is involved in a discourse about its optimal use. If you are an isolated case, you will run into all kinds of obstacles, practical and psychological, and you will not be able to make good use of it. It's like giving smart phones to Neanderthals, it's not going to work although smart phones are actually a good idea.
"We want to run a large, long-term study to answer a few key questions: how people’s happiness, well-being, and financial health are affected by basic income, as well as how people might spend their time.
But before we do that, we’re going to start with a short-term pilot in Oakland. Our goal will be to prepare for the longer-term study by working on our methods--how to pay people, how to collect data, how to randomly choose a sample, etc."
If you are really serious about Basic Income, I strongly encourage you to look at the Kollel system within the ultra-orthodox/yeshiva communities (i.e. Lakewood, NJ)
While their model is conditional, the framework for providing a stipend to cover basic necessities so the kollel members are free to study, is very similar.
You will see a glimpse of what happens. There is amazing achievement, and there is abuse of the system. There are unparalleled social services powered by the community (i.e. hundreds of lending "GMach's" which lend and share everything from baby strollers to expensive fertility meds.)
If you want a glimpse into how Basic Income will work, looking at the full spectrum of Lakewood New Jersey would be eye opening.
You will see some of the most amazing examples of selflessness and accomplishment and you will see outrageous abuse of the system.
All in All, people will be people and the only solution that is sustainable is focusing on solving for the cause, not subsidizing the effect.
For all the kollel stipends that are paid out, ultimately, peoples true nature wins out. The only thing we can do is work to improve that nature.
Better People make a better world, not better circumstances.
(for what its worth, I am a fan of the idea of basic income, after all...if people will be people, than lets at least make sure no one has to suffer from starvation or homelessness.)
However that is a small community geographically so I wonder how that would work on a larger more anonymous basis without the social pressures that certainly in Lakewood.
There are hundreds, if not thousands of Kollels throughout the world that work in much the same way.
I think what we see in those communities is that peoples true nature is the driving force (almost) regardless of circumstances or financial needs.
The social pressure is a fair point, but I am not entirely convinced that social pressure wont exist on a broader, more anonymous basis too.
Most social pressure is internal, not external (i.e. we tell ourselves that we are expected to conform, but in reality, that might not be true.) Not to say social pressure isn't reflective of the external norms, or that people aren't judgmental, but ultimately, someone getting Basic Income will likely feel their own social pressure, real or imagined, regardless of how anonymous it is. (IMHO)
Ultimately though, the Kollel system is a good place to start and study if Basic Income is being considered seriously, as they have 30-50 years of history and data.
I think it's great YC is funding some interesting research.
I'm a bit curious as to why they didn't partner with some established academics in this area (there's plenty of economists who have done excellent research here) rather than start a new program - but it's YC's money, and they can choose how to spend it.
How open do you plan to be about things like datasets/analysis plans and so forth? I think this would be an excellent opportunity to push forward open science http://osinitiative.org/about-osi/. Further, if you allow people who are skeptical of the minimum income to register the objections before you gather the data, you can address them before you proceed - at that point, post-hoc critiques are a lot less credible.
We did consider it, and we are working with some established academics.
However, I think it's a good idea to push forward alternative models of doing (and funding) research. Frankly, most of the existing institutions we thought about partnering closely with were somewhat bloated, and it would have made the whole study significantly more expensive and slower.
> Frankly, most of the existing institutions we thought about partnering closely with were somewhat bloated, and it would have made the whole study significantly more expensive and slower.
Some of that "bloat" is due to compliance and ethics: has YC engaged an IRB yet? SV tech companies (Facebook, OkCupid) have shown very questionable judgement with respect to ethical considerations.
I'll be interested to see if this actually works. As an established academic, we constantly interact with private companies that seriously underestimate how much research actually costs.
If the "actual cost of research" as you mention it includes some "overhead" amount which has some amortized portion of professorial salaries, departmental costs, university costs, etc, then I think you've just underlined Sam's point about bloat and expense
The problem is whether or not that's "bloat" or actual expenses. For example, at my university, the "true" cost of research, including all of those things, is actually lower than our overhead rate - the good people of our state are subsidizing the rest.
Companies often want a much lower overhead rate. I get why. But if things like the copy machine, our phone system, keeping the lights on, etc. aren't baked into overhead, then they need to be baked in somewhere. You'll just end up with agreements where you pay for itemized lists of expenses, and haggling over those instead of the indirect rate.
Universities are also often very flexible as to the indirect rate - we have several subsidized rates for specific groups or particular types of projects, etc. You just need a better reason for the lower rate than "I don't want to pay that much".
Like I said, I'll be interested to see if this works. But in my experience, companies that are newly "dabbling" in research are often shocked by how expensive research actually is. Calling something bloat because Sam doesn't want to spend the money doesn't automatically make it bloat.
> push forward alternative models of doing (and funding) research
> thought about partnering closely with were somewhat bloated
> made the whole study significantly more expensive and slower
Not to be obtuse, but these reasons sound an awful lot like the excuses Theranos gave when questioned why they didn't do things more correctly.
I mean, it sounds like ycombinator wants to help propel this idea forward, but you're attempting to minimize your cost and also rush it, instead of doing things right.
> it would have made the whole study significantly more expensive and slower
And so be it. This is a major paradigm shifting idea, and you're not going to be able to take short-cuts and come out with respectable results that hold up to scrutiny.
This is a real problem, and it sucks. By offering money with strings attached (about bureaucracy, overhead, etc) you have an opportunity to shape how things are done though.
What if there were a startup that partnered with science funders to help them distribute their money in a way that produced better models of doing science? That's the idea behind Thinklab: https://thinklab.com/d/38
Based on your tweet about 2 hrs ago, you seem to be in favor of equality of opportunity. What's your opinion about about parents who want to give their children the best opportunities in life?
They are not partnering with academia because they think that academia is a joke and needs to be disrupted. I'm genuinely curious to see how that's gonna work out.
It's such a huge topic - the modern starting point are papers by Galbraith and Tobin. Since then, there's been so much research/discussion it's hard to point to one thing in particular.
If you want good starting points for someone who isn't an economist, the Boston review had a good primer, followed by a public debate:
Honestly, I think any "Basic Income" research where the recipient classes aren't 100% of the members of some well-defined polity and where the policy is explicitly a close-ended pilot is researching something so fundamentally different from Basic Income (it is well-known that close-ended benefits have a different effect on behavior) that, while there may be some useful insights that have applicability to actual Basic Income, they should be called something else.
This. I can confidently predict that most people will be better off (vs a control group) for having their income topped up for a fixed period by wealthy philanthropists, in addition to any benefit entitlements they may already be eligible for.
But that's not Basic Income. Basic Income is replacing [most aspects of] the welfare state with a programme that redistributes portions of income from each according to their ability to each irrespective of their need, with all the complications entailed by the variable incidence of the increase in taxes required to balance the books and the likely reduction in state benefits to some needier citizens.
You might get some useful insights, but you can't say much about the viability of a programme from a study which only evaluates the bits that people are unlikely to be upset by.
The one thing that I never actually see any of the people who tout BI answer is why it won't just cause an increase in the price of low income goods. Why won't laundry detergent just cost x% more money, etc. I think that the effective spending power low income individuals have under BI would be practically around the same that they had pre-BI if it's used a supplement to our current programs, and lower if BI is used to replace current programs...
> The one thing that I never actually see any of the people who tout BI answer is why it won't just cause an increase in the price of low income goods.
It won't just cause that because of the way supply and demand curves for real goods tend to work. It will definitely cause an increase in the market-clearing price of many goods demanded at the low end of the income scale (because of how demand curves are shaped, and the influx of cash), which will increase the quantity supplied of those goods in most cases (because of how supply curves are shaped), resulting in people who are net beneficiaries (after considering where the funding comes from) affording more total goods, even though they are also paying higher prices for each unit of goods.
And things that lag with an increase in demand? Housing, etc.?
I don't doubt that it will have some benefit towards the TPP of low-income consumers in the long term -- I do doubt that in the model of replacement of current welfare systems that this is an effective approach, and I doubt that it will be effective in the short term as housing prices will skyrocket. The long term effects of the latter would be interesting if the short term shockwaves caused the policy to be repealed.
> And things that lag with an increase in demand? Housing, etc.?
The degree to which housing lags is a function of unrelated (to the benefit structure) aspects of public policy (particularly, local zoning and planning processes.) Places where the low-end housing markets are unresponsive because of these types of policies will remain problematic for the same reason under a UBI.
But avoiding major disruptions is one of the reasons I think a gradual ramp up of UBI and phasing out other benefit programs by just counting UBI in income when determining eligibility is, even though it defers the administrative cost savings of UBI, the best way to move to it.
There is a substantial difference between open ended with no guarantee of continuing, and being explicitly close-ended. (Its equivalent to the difference between cutting a tax -- which might in principle later be restored -- and issuing an explicitly limited-term tax holiday, to use a well-known example.)
Yes, it is substantially different. I guess what I thought of was that if the UBI were to be implemented while not being widely (as in by well over 50% of the voters) accepted, say by a far-left political party, barely winning elections, it could be perceived similarly.
Although I admire the intent here, my opinion is that it's focused on the wrong variable. Lack of "enough" income is not the root of the problem for why people get sucked into poverty and stuck there. The problem is that working people have become increasingly unable to turn their income into equity. And the number one expensive expense of "shelter" is why. So the poor people will have more money to pay rent ... woohoo. Landlords in Oakland are probably already salivating, factoring this into their next rent increase, maybe even planning to build a few more "brand new affordable housing units" in a complex that will increase both supply and price of rent. Are people ever motivated to work harder to pay their landlords more? Almost never... But give them an opportunity of ownership, and that truly turns the tables on not only what kind of work they can do, but how they spend their time and money.
I'm slowly building Ecosteader to go this direction of enabling ownership to build equity. My motivation was originally to build a land development network of people interested in green / sustainabile building, but the more I investigate this piece of the project, the more apparent it becomes that land ownership really does solve both problems in one. People who own land or homes tend to care more about environmental quality / NIMBY issues.
For the "property tax is just rent" crowd arguing that angle -- property tax on a small and undeveloped piece of land is almost nothing... build a small structure on that land and it doesn't go up by that much. In 90 percent of the US, I'd imagine that tax for the whole year is less than one month's rent in Oakland. It's when people who have massive square footage on massive acreage start complaining that property tax makes them poor that the perception gets skewed.
I agree with you on that a BI that ends in 1 year isn't a good test. However, from the article their goal with the sort-term pilot is "to prepare for the longer-term study by working on our methods--how to pay people, how to collect data, how to randomly choose a sample, etc". So...who cares if the short-term pilot isn't a good study on BI? That's not their goal.
I disagree with you that 10 years of BI wouldn't count as BI. That is a long time for an individual to be receiving an unconditional income.
The point of BI is that you wouldn't have to worry about supporting yourself for the bare necessities. If it's only 10 years long you still have to consider your career prospects after you lose BI. If you tell an employer "I've been out of a job for 10 years because I got free money and didn't need to work" they aren't exactly going to jump at the chance to hire you. Plus your skills will be out of date.
> you wouldn't have to worry about supporting yourself for the bare necessities
I know very few people who only work in order to secure for themselves the bare necessities of life. I suspect, even in an infinite BI world, many people would work in order to be able to have more than the bare necessities.
However, anecdotal evidence such as "people I personally know" is terrible evidence for making drastic changes to our social welfare programs. Which is why we need small scale studies and pilot programs in order to begin to assess the data of how people behave when they receive BI.
> If you tell an employer "I've been out of a job for 10 years because I got free money and didn't need to work" they aren't ...
No, but if you really didn't want to work, you could easily take 6 years off and then spend 2 years on education, and another 2 years getting back into the job market. It would be really good to have this kind of data.
Realistically a Basic Income wouldn't be guaranteed forever either, as it'd rely on a government, which tend to be replaced every 4 - 8 years. The main difference is perhaps that they know how long it will last.
Edit: rephrase because I didn't express myself very well
> Realistically a Basic Income wouldn't be guaranteed forever either, as it'd rely on a government, which tend to be replaced every 4 - 8 years. The main difference is perhaps that they know how long it will last.
That's like saying our existing welfare programs won't be around forever. But guess what -- they will. Handing out free money is an easy way to win votes and an even easier way to lose them if you take it away.
Welfare in the USA has been scaled back considerably over the past 20 years, and it has been done with enough popular support that the people working to reduce welfare continue to win elections.
So no, welfare will not necessarily be around forever. And the systems that exist rarely last long on an individual basis.
"We want to run a large, long-term study to answer a few key questions: how people’s happiness, well-being, and financial health are affected by basic income, as well as how people might spend their time.
But before we do that, we’re going to start with a short-term pilot in Oakland. Our goal will be to prepare for the longer-term study by working on our methods--how to pay people, how to collect data, how to randomly choose a sample, etc."
Does YCombinator have an Institutional Review Board?
Musing about this study, it feels like it could very much run aground with some of the ethical concerns regarding consent that have dogged some studies with high participation incentives, in that withdrawing from the study potentially represents a financial catastrophe, so participation in the study becomes less than fully consenting.
> Although basic income seems fiscally challenging today, in a world where technology replaces existing jobs and basic income becomes necessary, technological improvements should generate an abundance of resources and the cost of living should fall dramatically.
I am 100% for this experiment. But the assumption that technology will replace basic jobs seems naive. Throughout human history, we have seen rapid and accelerating technology improvements. In 1900, roughly 40 percent of Americans were in farming. Today, roughly 2 percent of Americans are in farming [1].
During that same time period we went from most woman not working to most woman working. We are currently in a period of prolonged, very low unemployment by historical standards with more people working on earth than ever before.
As much as it seems obvious that technology will replace all low income jobs, it may be obvious because we are limited in our imagination about what the future low income jobs will be.
Do not let my comment be mistaken for a lack of interest in Basic Income. Hopefully it will be a well thought out and great experiment. One that teaches us about Basic Income and its potential impact.
>I am 100% for this experiment. But the assumption that technology will replace basic jobs seems naive. Throughout human history, we have seen rapid and accelerating technology improvements.
Arguments from "but this is how it always have been" have a tendency to break down when significant societal/technological changes happen.
I use a different model than everyone else which I think gives insight on this. I split jobs into 3 categories (simplified here to make it easy to understand):
1) jobs that mostly create economic value (doctors, farmers, programmers): the percentage of these jobs is already small and keeps decreasing with technology.
2) jobs that mostly transfer economic value (marketers, lawyers): these jobs keep increasing. (Note: I'm not saying marketing and law doesn't create value but more marketers and lawyers mostly means more value transfers rather than more value)
3) jobs that arbitrage time and money (executive assistant, cleaning person): I call these arbitrage because the dollar value of time varies between individuals varies and so they trade time and both win economically. These jobs likely grow with inequality.
In a future where wealth is concentrated and more jobs are automated, job types 2 and 3 most likely grow, not shrink. That's what happened because of past technological progress and I don't see a reason to think it will happen any differently this time. In fact, I expect this to happen even more this time.
I'm not saying this is a great outcome. In fact, I think this is an argument for basic income. But I don't think jobs are going to disappear anytime soon.
> 1) jobs that mostly create economic value (doctors, farmers, programmers): the percentage of these jobs is already small and keeps decreasing with technology.
I really don't follow why job types 2 and 3 would grow instead of shrink; shouldn't job types 1 and 2 be the ones to increase with technological advances?
Technological advancements meant massive increases in output per farmer but farming itself does not require specialized skills, so the increased productivity lead to the drop in the farmer population. Contrast this with activities like programming and medicine which cannot be automated wholesale -- programming and medicine do require specialized skills.
For instance, we'll need more programmers in future than we have now since someone has to program/maintain code written for self-driving cars (for the rest of the population), precision farming (for farmers), telemedicine (for doctors) etc, and with efforts like Learnable Programming [1], more people will pick up programming as a career, so the ranks of people that identify with the programming profession would swell not decrease.
I believe the same increased productivity would eventually happen to the field of medicine -- if computers become really good at the basic stuff -- physical examinations that can produce an initial diagnosis that is fairly accurate, would-be doctors will spend a shorter time in training since they have less material to master. I think this will eventually lead to more people qualifying to become doctors.
So the point I'm making is that including farmers along with doctors and programmers as examples of job type 1 needs some rethinking.
Some of the categories type 1 jobs will grow and some will shrink. More programmers will be writing code for self driving cars, but fewer truck and delivery drivers will drive those cars. Both of those are type 1 jobs because they produce new value. Type 1 jobs will shift towards mostly consisting of job that require specialized skills.
Thank you. Although I haven't heard anyone ever use the same breakdown as me, I have heard a lot of people who want to "change the world". I always interpreted that to mean that they want to do type 1 work.
Well articulated. This is a very good way of describing the way I've been looking at things.
I might amend your description of 2) to be "Jobs that mostly transfer economic value and provide competitive advantage". The increase of these jobs is driven by arms race style competition among capital owners.
I'm curious if you have any ideas of ways to combat the constant increase of type 2) jobs as I see them as a drain on our economic output.
I my hope is that BI means that the low intrinsic value of type 2) and some type 3) jobs means that this shift will be slowed or possibly even reversed.
I think there is a lot of intrinsic value in many of the type 3) jobs as well as a lot benefits to be had from skilled people performing them, especially when the skilled people take pride and pleasure in their work.
>In a future where wealth is concentrated and more jobs are automated, job types 2 and 3 most likely grow, not shrink. That's what happened because of past technological progress and I don't see a reason to think it will happen any differently this time.
The thing is, contrary to other eras, job types (3) (and some (2)) will be also be able to be performed by "robots"/software/technology.
The argument is not an unconditional "this is how it always has been". The argument is that the signs that significant societal/technological change is happening right now are the same as we've seen before, many times, where decrease in jobs turned out not to be one of the changes that actually happened: https://timeline.com/robots-have-been-about-to-take-all-the-...
> But the assumption that technology will replace basic jobs seems naive.
I think its just misstated. What automation does (absent compensatory policy) isn't to reduce the number of jobs that exist, but rather to drive more of the returns of productivity to those who own the capital and a narrowing class of elite workers, and less to the large body of workers. That's been pretty consistently seen since the industrial revolution, producing occasional major outbreaks of social unrest leading to compensatory public policy to mitigate that effect.
But most of those measures have been short term measures optimized for a narrow set of circumstances that were current at the time they were adopted. A well designed UBI -- particularly one tied to a tax drawn largely from income on capital -- is a more general and long-term compensatory mechanism to address the sources of unrest (hopefully, this time, somewhat proactively, rather than reactively.)
The population of the US in 1950 was roughly 100m and it is now 300m. The participation rate has stayed roughly around 60% during that time. That means a lot more people are working than in 1950.
Globally, populations have increased dramatically as well. More people are working than ever before.
I am worried that this study will just confirm the local benefits of BI (which have already been pretty well documented, e.g. Mincome) without addressing the unanswered questions regarding BI.
The real unanswered questions mostly revolve around large scale changes to the economy, not localized improvements. Some questions I really want to see answered are:
- Will UBI create large price inflation for basic goods (which is what traditionally happens when you give everyone free money)?
- If so, do we think that this will still be net beneficial
for alleviating poverty? Often price inflation is regressive since it hits commodities harder than something scarcity priced.
- I would also like to ask this question slightly differently: What happens if we were to give everyone the equivalent of 6 months of unskilled labor each year? That's more or less what traditional UBI proposes, and phrased that way who is going to provide the labor (or goods/services)?
Money can be thought of (roughly) as debt owed to you by society. When you think about it that way, doing localized BI seems like an easy win. Doing universal BI seems like a potential catastrophe. Does this study address the latter?
Regarding inflation of prices - if feeding everyone leads to inflation of prices then in principle we can't feed everyone. That says more about resources than it does BI, if I understand you correctly. I think if we were to do this, we would need the capital and infrastructure to handle the increased demand, maybe outside the traditional economic system so that prices didn't increase so much.
Going from a system where everyone needs to generate $20k of economic value "to eat" (yes, oversimplification of benefits, but bear with me) to one in which no one needs to generate economic value may have some macro scale inflation issues.
Those are the issues a study of UBI needs to cover.
I'm really, really happy you're going forward with this!
That said, I have just one question to this experiment - how it's going to handle media exposure?
What I worry about is that the interaction with the greater world through mass media will blow the entire thing up and make it useless. I expect at least:
- prices going up for rent and some stuff in areas where owners know population is on BI
- people getting increasingly targeted by scams
- deliberate attempts to mess up with the experiment
Come to think of it, the first two could be solved by random enough sampling of candidates over a large enough population. But I'm sure others here could come up with several other potential failure modes that the huge attention and "uncommonness" of the situation could bring.
Part of me thinks that such experiments should be done in secrecy and revealed only after they're finished, but that's not how science is usually done, for obvious reasons.
This. So much this. Very few people seem to understand that rent is based on what the location gives you access to. Thus, most well-intentioned schemes to help the poor end up not working.
It is possible to avoid these traps, but only by first understanding how rents are set.
I've recently been researching the structured settlement (annuity) industry. It seems like as soon as someone has a guaranteed set of future payments, you will get structured settlement brokers reaching out, offering to buy out their future payments for a (often low-ball) lump sum today, and many will take it. Will you permit these kinds of side deals?
Right, often the guarantee of future payments can be treated as collateral to make getting a loan much easier. At a minimum it can be used to show proof of future income.
I wonder how to test controlling for reciprocity. I.e., If I receive a basic income as part of a pilot/experiment I will feel tempted to "give back" somehow, while if basic income is a baseline all humans receive, that reciprocity will not be present. How can you design an experiment so that somehow people don't feel they are receiving money in an extraordinary way, but rather that's just part of how the world works. Wouldn't that change their motivations and thus the behavior you want to observe?
I think the short answer is you can't. This study is probably less likely to be susceptible to another major problem with philanthropy experiments, which is recipients reporting what they think the survey designers want to hear because they believe they will be further rewarded as a consequence.
(which I think is present and very difficult to avoid in RCT trials in developing countries; a notable example was people reporting that they were less likely to have recently been subjected to domestic violence after their neighbours had received money.)
>If I receive a basic income as part of a pilot/experiment I will feel tempted to "give back" somehow, while if basic income is a baseline all humans receive, that reciprocity will not be present. How can you design an experiment so that somehow people don't feel they are receiving money in an extraordinary way, but rather that's just part of how the world works
FWIW, excepting the actually lazy (which I think comprises a vanishingly small minority of the population), I think most people will feel as though they have to give back. Sure, once everyone gets N dollars/month just for being alive, they will no longer be receiving money in an extraordinary way, but culture is hard to kill. The relentlessly inbred Protestant work ethic provably shapes a panoply of aspects of our society even now (8 hour work days that office drones spend half of on Reddit, etc); there's no reason to think that its influence will suddenly drop away with the advent of "free money". I have little to go on beyond the already extant Canadian study of 'mincome' [0] back in the 70s, but that was generally considered a success, with recipients putting the money to use in building their businesses and communities, rather than sitting on their asses (with the notable exception of new mothers and teenagers [1], for respectively obvious reasons (OTOH teenagers' HS graduation rate improved, possibly due to not feeling pressure to go get a job)).
It comes down to how much Basic Income one can expect to collect. I don't consider myself extraordinarily lazy, and thus do my part working to earn a comfortable living. Really though I'm the type who hasn't found my "dream job", so working 9-5, 40 hour weeks, is something I don't particularly enjoy, and it sucks the life out of me.
Existing social assistance where I am doesn't even cover the cheapest rent in the city, requiring you to live with at least two others who are also on welfare in a studio apartment that deserves to be condemned as being unsuitable for human habitation. So long as "basic income" means bottom-of-the-barrel minimum income that requires you to rent in the slums with roommates, while barely having enough money to eat... I will remain employed. If "basic income" ever provides more than that, I could see myself being tempted into joining the ranks. Particularly if you are allowed to keep income from a part-time minimum wage job without any clawbacks to the basic income.
Somehow this sounds like starting with the easy case. It may well be, that people who get basic income in a pilot study behave better than people who get basic income as a right, however this seems to accentuate the benefits of basic income, so that you can at least study one half of the argument. And the complicated parts can then wait for a follow up study.
I am not sure that is possible in an experiment. You can however eventually (or even now within society) create systems that lead to people becoming better humans, more compassionate; education and social interaction opportunities would be the main ones that come to mind. Basic Income is a better foundation to start from anyhow.
I find it very naive to assume that basic income will be implemented as a simple, straightforward, clean replacement of our current welfare systems.
Our current, messy, complicated, unsuccessful welfare systems is the result of many powerful political, social, and moral tendencies and forces, which will reshape basic income in the same way they shaped the welfare system in the first place. There will be many attempts to give some people more income than others -- and some of those attempts will be justified. After several years, we will end up re-creating our current welfare systems, for the same reasons we created them in the first place. Society is not a clean slate upon which any policies can be successfully imposed.
Unless those political, social, and moral forces change or disappear, basic income won't be very basic after the politicians, and the voters, get their hands on it.
Arnold Kling's opined on this point (the particular distortion of the US political process) in his interview with Russ Roberts on the EconTalk podcast:
Kling: Well, let me make another point before I get back to that. Which is a point I also make in the book. Which is that, it isn't that the political process kind of just makes random errors. I think it actually makes very systematic errors. What it does is it always seems to work in the direction of subsidizing demand for something and restricting supply for that same thing.
It's not just the US that is like this. Every country is.
Put another way: Things are the way they are for powerful reasons (which may or may not be justifiable). You can't just ignore these reasons when you create policy, otherwise those reasons will cause things to revert to the way they were before.
Proponents of basic income will have to overcome many peoples' moral intuitions about who deserves help, and who should have to work for a living.
If these moral intuitions remain the same, basic income won't be basic for long -- people will vote to give more money to the disabled, less money to felons, and so on. Should people receive basic income while incarcerated due to a criminal conviction? Someone will come along who suggests that members of certain racial groups should receive more money in the basic income program as a form of affirmative action, to compensate for past wrongs. Maybe people who choose to work should get more money under basic income, as an incentive for others to choose to work. Should people who inherit a lot of money have their basic income reduced?
I think it's pretty clear that the first time someone makes a change of the kind I listed above, the cat will be out of the bag, and basic income won't be "basic" income anymore. Then the argument that basic income should treat everyone the same will become useless to defend against further changes. You can't really preserve the purity of a policy design when the voters want to change it.
There is also the danger of everyone voting to increase their income, to the extent that the program runs out of money.
I think these moral intuitions can be changed, but only through a gradual phase-in of benefits over time. Of course, that's exactly what has been happening over the past century or so, and it's what led to the welfare systems we have today.
Can anyone explain how this can be implemented mathematically? Assume 300 million people @ $12k / year, you are spending $3.6 trillion. That is already more than current government revenue, leaving all current government services unfunded.
- To a large extent, it is expected to replace current programs like welfare and social security. So those budgets, in theory, would be reduced or eliminated and supplemented with Basic Income.
- It will be a taxable income. So a family including two adults would have an additional $24k on which to pay taxes. Those taxes help pay for the program by effectively reducing the additional funding that needs to be raised.
- Theoretically, it will increase wages and employment since there will be a lot more money spent, increasing economic activity. Increasing both wages and employment increases tax revenues, which would again offset some of the cost. I think this is really the biggest factor that needs studying, as it seems to have the most influence on the decision to deploy BI. Ultimately, it is a macro economic decision. It is also the most difficult factor to model and predict without actually implementing it on a large scale. The most important question, in my mind, is what is the extent of inflationary pressure applied by BI?
> The most important question, in my mind, is what is the extent of inflationary pressure applied by BI?
Agreed that this might well be the most important question. A study by the NY Federal Reserve Bank concluded that college tuitions skyrocketed when easy money became available from the feds. [0] The abstract says:
<quote>
The causes of the rapid growth in the price of college education have been the source of much debate in recent years, and the similarly quick growth in student borrowing, funded largely
through federal student loan programs, has also been of substantial concern. This paper studies the relationship between these twin increases, and in particular, the extent to which increased access to student credit has contributed to rising tuition. To disentangle the simultaneity of the education cost and credit, we exploit detailed student-level financial data and changes in federal student aid programs to identify the impact of credit on tuition.
We find that institutions more exposed to changes in these programs increased their tuition disproportionately around these
policy changes, with a pass-through effect on tuition from changes in subsidized loan maximums per qualifying student of about 60 percent, and smaller but still positive pass-through effects of Pell Grant aid and the unsubsidized federal loan program.
The subsidized loan effect is most pronounced for more expensive degrees, for those offered by private institutions, and for two-year
degrees or vocational programs.
> Theoretically, it will increase wages and employment since there will be a lot more money spent, increasing economic activity.
At a macroeconomic level, that money comes from somewhere (generally taxes), which means that it's also decreasing consumption and/or investment by an equivalent amount. You can make the argument that collecting the taxes to fund a program is still desirable in the end, but it's mathematically incorrect to say that it would have a net increase in economic activity.
To put it another way: what would the money be spent on if it weren't collected as tax revenue? Some portion of it would be spent on consumable goods, and the rest would be saved (invested). Money saved is very important to the economy, because that's how society gets access to capital for long-term investments (whether public works projects or private investments).
> "which means that it's also decreasing consumption and/or investment by an equivalent amount"
I am not sure about this, because the net amount is still new money in the economy, being spent for services, saved, or invested. Yes, a typical person is paying more taxes, but they will have net more money to spend or save: $BI - [Tax on $BI] is still > $0.
As a further example, let's say there is a salon that employs 2 beauticians before BI. After BI, they see an increase in business, and now can employ 3 beauticians, increasing employment by 1. The 3rd beautician is now paying taxes that were not paid before. Those taxes in part can help fund the BI.
> I am not sure about this, because the net amount is still new money in the economy
No, the net amount is zero. Unless you're talking about literally printing money (in which case the costs are spread about in the form of inflation). There is no 'new money'.
> Yes, a typical person is paying more taxes, but they will have net more money to spend or save: $BI - [Tax on $BI] is still > $0.
You're ignoring the number of people who will be paying more in taxes than they will recieve. Even if you make the moral argument for taking their money and giving it to others, you can't ignore the fact that, without the additional tax, the money would literally be used in some other way, either as consumption or as investment.
As a ballpark, if the payout is $5,000/person/year * 300,000,000 people = $150,000,000,000/year, that's $150,000,000,000/year that needs to be raised in taxes in order to cover the program. Every dollar that gets paid out has to be funded through money that would otherwise be in someone's bank account, and which they either would spend or would save (invest).
Debt. The government will simply pump more liquidity into the economy. Not that this will cause any side effects, right? This idea is all a non-starter anyways, at least in the US. As a "pure" form of communism, there's little to no real support once the details are actually discussed. Redistributing this amount of money is impossible; we can't even run a balanced budget in the US.
It goes against so much of the American ethos of independence and self-worth that I think we'll have self-driving flying cars before BI or UI.
What about a BI based on resources rather than the dollar? There already exists a renewable surplus of food, water, and shelter.
There are around 4-6 empty houses in the US for every homeless person and around 40% of food goes to waste.
So providing for the most basic physiological needs of the ~45 million impoverished people in the US is not a problem of production, it's a problem of distribution and waste management.
I read the first bit of Mises theory, which is full of fallacy from the start:
>The problem referred to is that of how to distribute resources rationally in an economy. The free market solution is the price mechanism, wherein people individually have the ability to decide how a good or service should be distributed based on their willingness to give money for it.
This is a catch-22. Normal people are given a highly limited amount of money, the supply of which is arbitrarily dictated by a handful of bankers. So the ultimate power of setting prices lies with them. This is explicitly outlined as one of the three main objectives of the Federal Reserve: maintaining stable prices.
>The price conveys embedded information about the abundance of resources as well as their desirability which in turn allows, on the basis of individual consensual decisions, corrections that prevent shortages and surpluses;
If this were true, there wouldn't be 4-6 empty houses for every homeless person, or starving people when vast surpluses of food exist around the corner. There is no such thing as a "free market" and yet the ideology of one persists as a way to prevent any such innovation.
>There's no way to efficiently allocate resources absent a price mechanism
Obviously math and science would be involved. However, the dollar is not created based on a mathematical or scientific standard, it is created by a handful of oligarchs based on closed source subjective speculation and confidence, "voodoo economics", and the broken window fallacy.
>how are you supposed to acquire all these resources in the first place?
The resources don't need to be acquired, they're already sitting there. They just need to be shared. So empathy for humanity is where the real deficit lies, and one of the main reasons for this is the fallacy of Malthusian-Darwinian economic ideology.
Pretty sure the number is significantly smaller than that. Children under the age of 18 wouldn't get money. People in prison likely wouldn't get money. I'm sure there would be other reasons to decline some people. Such as mentally disabled. (maybe parents or care giver would receive more?)
So it would probably be around 200,000,000 - 250,000,000.
Well, people in prison are the ones who need money the most, given that they're currently working for a fraction of minimum wage just to buy basic toiletries.
> I'm sure there would be other reasons to decline some people. Such as mentally disabled. (maybe parents or care giver would receive more?)
And then you get right back to the whole question of determining who is eligible, or isn't eligible, and having some means of enforcing that... and we're right back where we started, with a means-testing system.
We would also remove all _current_ forms of welfare. No more food stamps, low income housing, maybe even medicare. I think social security would even be on the chopping block.
The total costs for all of this is no doubt close to 2 trillion. This isn't that unrealistic.
"Total Social Security and Medicare expenditures in 2013 were $1.3 trillion". [1]
Setting aside whether or not redistribution is ever justified, I do respect the pragmatism of the UBI granted it replaces all other forms of welfare. Faced with a choice between the current welfare state and a UBI, the latter is a no brainer.
While not specifically a UBI, the negative income tax seeks to accomplish the creation of a similar safety net while still maintaining a strong profit motive for the people benefiting from it. A negative income tax is something I would definitely get behind.
I think it's important to some degree to be agnostic about what we mean by 'basic income'. We're planning to test the version coloquially closest to 'universal basic income', but something along negative income tax could make sense -- we need to find the answers (hence doing the study!), not just prescribe what we think is right.
But the study doesn't actually study UBI. The problems with UBI are heavily rooted in the U -- what happens when an entire society is now making (X + Income)? Using any reasonable economics we'd assume that the price of goods would scale accordingly, especially at the bottom of the curve.
UBI is barely distinguishable from negative income tax when you have a single tax bracket with fixed tax rate and a fixed amount of nontaxable income. Difference is in how you do accounting and usually frequency of the payouts.
When you have multiple tax brackets it's a little more complicated but I think still mostly the same.
"One reason we think it may work is that technological improvements should generate an abundance of resources."
This is already being seen in some contexts. For example, the portion of income Americans spend on food has dropped from 17.5% to 10.5% over the last 53 years. "Because of the overall rise in income, and the consistent shrinking of food prices adjusted for inflation, we actually have more disposable income than our grandparents did" [1]. It is likely that improvements in agricultural technology and food distribution have led to the 'shrinking food prices' contribution, seen in the US. This means that there is downward pressure on the actual threshold of what would constitute a basic income, and thereby supporting Sam's assertion.
Where are you getting figures that food prices have increased as a percentage of total income? I've only seen that they've decreased, and GP post gave a link supporting his position.
It's macro vs. micro. Over the past 50 years food prices have fallen, but since the great recession they've risen considerably (though still nowhere near what they were 50 years ago.)
Are there any papers addressing the issue "basic income increases the returns to owners of scarce goods" issue? I don't know what the correct name is.
Use case:
A 250 square foot apartment in a building with twenty annual homicides rents for $350 per month before basic income. After basic income, the same apartment rents for $1350 per month, because the rent on all the apartments in safer buildings has gone up due to the increased capacity to pay of renters seeking less lethal housing.
> Are there any papers addressing the issue "basic income increases the returns to owners of scarce goods" issue? I don't know what the correct name is.
The correct name is "inflation", the effect to which this is effect is present for suppliers of any particular good is measured by "price elasticity" -- both price elasticity of demand and price elasticity of supply play a role (in a real tax-funded BI, which is redistribution of returns, it is offset in part for many goods by the fact that increased money chasing the goods in one segment of the population is mirrored by reduced money chasing goods in another segment of the population.)
"Inflation" occurs when the money supply increases but the supply of things money can buy does not increase.
If basic income is funded by taxation, then the money supply does not increase. Every dollar distributed to the set { A, B, C ... } is taxed away from the set { A, B, C ... }, so the purchasing power of the set is unchanged.
> "Inflation" occurs when the money supply increases but the supply of things money can buy does not increase.
There are two different uses of the term "inflation" in economics: one is simply an increase in the money supply ("monetary inflation"), the other is simply increase in nominal prices in either the market as a whole or some segment ("price inflation"); the latter is what is being discussed in the grandparent post. Monetary inflation is a potential cause of price inflation (though there are other potential causes, and other factors can result in monetary inflation without price inflation, so there is no necessary direct relationship.)
You seem to want to restrict "inflation" to mean "monetary inflation producing price inflation", which is narrower than either of the usual definitions.
The price of lithium has risen. The price rise is often attributed to an increase in demand for batteries. Is it correct to describe this price increase as"inflation"?
That's how the term is most broadly used by people who follow financial markets. Central bankers are currently obsessed with inflation as they see it as an indicator of economic vitality (ie. people have such a thirst for creating/obtaining new wealth and new enterprise that they are willing to pay more for things like the batteries in your scenario).
Monetization is equivalent to a global tax on net dollar denominated assets; doing it to a major ongoing program is a good way to trash your currency.
It's not necessarily bad to use direct benefit payments as a monetary policy tool when there are monetary policy reasons (e.g., your proposed QE alternative), but unless you're willing to see BI go away completely when the traditional concerns governing monetary policy call for tight money, then you shouldn't call for it to be monetized unless your goal is to destroy the dollar rather than provide a stable public benefit program.
Since I am suggesting that BI be a major lever of monetary policy, it should follow that I am willing for it be tightened as necessary. Do you think it would go to zero? That would be more extreme than any of today's austerity programmes.
> it is offset in part for many goods by the fact that increased money chasing the goods in one segment of the population is mirrored by reduced money chasing goods in another segment of the population
>If the pilot goes well, we plan to follow up with the main study. If the pilot doesn’t go well, we’ll consider different approaches.
I'm excited that someone is taking the initiative to test the idea further. Any thoughts on how to tell if things "go well"? Is there a set of metrics that will published beforehand? Most of the claims I've heard about basic income tends to fall into the not-falsifiable camp. I am very interested to see what data/results would convince a basic-income proponent that it isn't a good idea. (I think the opposite would be easier, turning a basic-income skeptic into an advocate).
We believe transparency is crucial to the integrity of the research, and we’ll be sharing our research design and data analysis plan for the full study ahead of time. We will also share the data with other researchers. As for the success of the pilot, we’ll consider several metrics, including success of mechanics (payment, data collection mechanisms, etc.); whether the amount of money is sufficient to meet basic needs; and, through interviews with participants, whether the research design is likely to offer insight into how individuals would experience and respond to a basic income.
One thing I didn't see mentioned in the post was an attempt to understand macro economic forces are affected by BI. I understand there are limitations to what can be studied in a controlled environment, and teasing out cause and effect of macro forces can be very, very difficult, but any sort of R&D done at a company normally focuses on reducing the largest risks first, to determine if the project should move forward. Looking at how individual well being and happiness are affected by a basic income seems like an (almost) no brainer as to what the outcome will be - generally positive for those individuals. Maybe this is something that is also being looked at by the team, and just didn't get mentioned in a brief blog post, but I would hope this research is at least thinking about how to address and manage these largest risks first, instead of the opposite.
How basic income affects macroeconomic conditions (inflation, housing prices, demand for labor, etc.) is really important to figure out, but it’s honestly beyond the scope of this study. Unless BI is implemented on a macro level, we can't measure the macro-level effects. We’re focusing on the individual-level effects as a first step, but we'll be looking at more than happiness and well-being. We're using the pilot to help refine outcome measures, but we'll share those once they're finalized.
I wonder if you could get some interesting data about macro effects by giving BI to a whole neighborhood within Oakland, preferably one that historically has had low levels of migration and shops locally. Instead of sampling randomly from the population of Oakland, universally give everyone within a neighborhood basic income (or run a parallel study doing so).
That'd answer some of the biggest questions I have about BI. What happens to rents & housing prices when everyone has an extra $X to spend? What happens to prices in neighborhood shops? To what degree are people willing to travel to avoid high prices? What happens to the social fabric when everyone is richer? Do people engage more with their community when they don't have to worry about basic financial survival? Or do they isolate themselves and enjoy their new toys? If people choose not to work, what else do they spend their time doing, and how does that effect the community?
At the very least, you'd get some really great data about elasticity of rents, housing prices, and local goods which I bet economists would love to have.
I think tis is a step in the right direction, but I can't help but think that raising the floor still leaves people there on the floor. Won't inflation, as well as increased demand for the things people need just raise prices of those things out of reach of those on the floor negating any benefit?
It’s a good question, and how basic income affects macroeconomic conditions (inflation, housing prices, demand for labor, etc.) is really important to figure out, but it’s honestly beyond the scope of this study. We’re focusing on the individual-level effects as a first step.
> "Won't inflation, as well as increased demand for the things people need just raise prices of those things out of reach of those on the floor negating any benefit?"
Ideally you'd want UBI to increase with inflation. However, as the initial study is over 5 years the decrease in purchasing power by the end of the study is likely to be minimal.
There is a risk that companies that service low-income people will increase their prices faster than inflation, negating some of the benefits of UBI. The only guard I know of for this is strong competition and disciplined consumers, people have to be willing to express their dislike of price hikes by shopping elsewhere otherwise the system won't work. I'm guessing that monitoring price rises will be part of this YC-backed study.
There is a risk that companies that service low-income people will increase their prices faster than inflation, negating some of the benefits of UBI. The only guard I know of for this is strong competition and disciplined consumers, people have to be willing to express their dislike of price hikes by shopping elsewhere otherwise the system won't work.
There are places where people don't have enough mobility to be able to do this.
EDIT: One of the interns at the non-profit I volunteer at landed a job, but had to give it up because he didn't have transportation that could reliably get him to his job. (Late shift.) He lives in Oakland.
> "There are places where people don't have enough mobility to be able to do this."
That's where Internet shopping comes in. Ideally you want to support local businesses to keep jobs in the area, but if you need to fight against price hikes and can't do so locally then the best thing to do is shop online until the price hikes are reduced.
The irony here is that it's well-documented that the poorest are also generally the least equipped to take advantage of the best deals (online or otherwise). Lack of a credit card, inability to purchase in bulk ("bulk" to someone with meager financial resources might not appear to be "bulk" to you), no Internet at home, unreliable transportation, are all reasons people are not able to shop online or at places like Costco.
Traditionally yes, but there are options. If the individual is too poor to have any Internet-capable device (can use free WiFi to buy things, though I recognise this is a security risk unless you're tech savvy) then there are ways to save money through community action (pooling resources to buy in bulk, etc...). It's more a question of organisation and discipline rather than opportunity, though it's certainly harder than only having to rely on your own initiative.
there are ways to save money through community action (pooling resources to buy in bulk, etc...). It's more a question of organisation and discipline rather than opportunity, though it's certainly harder than only having to rely on your own initiative.
Sounds like a good project to benefit those lower on the socioeconomic ladder.
> The only guard I know of for this is strong competition and disciplined consumers, people have to be willing to express their dislike of price hikes by shopping elsewhere otherwise the system won't work.
Why would you need BI if that existed in the first place? Then people would have the discipline to not work shitty jobs and strong competition would provide them the work they want! What has BI solved, then?
> "Why would you need BI if that existed in the first place? Then people would have the discipline to not work shitty jobs and strong competition would provide them the work they want! What has BI solved, then?"
The desire to eat trumps the desire for a better job. If you tie people's choices to their need to survive, you are going to interfere with what people would choose that serves their best interests. Amongst other things, UBI tackles this issue.
Inflation is caused by a total increase in the money supply. That doesn't have to be the case with UBI.
The way that you get rid of the inflation caused by the money that is added to the system by UBI, is by taking away from someone else. Usually this is done through taxes.
That's what I imagine happening too. $1K a month sounds great until inflation renders it equivalent to $100 a month. Perhaps it could be adjusted for inflation in some way.
I'd hope you'd tie it to inflation, but that only helps so much if the rate of inflation it's tied to is even slightly "off" (say, by a tenth of a percent), and then you compound it annually...
We’ll consider several metrics, including success of mechanics (payment, data collection mechanisms, etc.); whether the amount of money is sufficient to meet basic needs; and, through interviews with participants, whether the research design is likely to offer insight into how individuals would experience and respond to a basic income.
One aspect of Basic Income that I am interested in is the idea of relocation - will recipients receiving Basic Income in this study have the ability to move somewhere where their dollars will go further? Or will they have to stay in Oakland where the study is being conducted?
It would seem like a good thing to have people try to maximize the impact of their payments and handcuffing them to a place with higher cost of living and increasing rents would seem like a bad thing.
edit: I see now that the post says participants are able to move.
I'll eat my shoe if they come up with any other result than "resounding success!" with a healthy dose of hand-waving around any negative issues. Basic Income seems to be The Next Great Liberal Cause and YC being a Valley firm, I've got a feeling they fall a bit towards the left part of the political spectrum.
Why is the underlying assumption always "as technology continues to replace jobs and generate massive wealth" in the world of BI? It seems like BI is an answer to a false dichotomy.
What if we fix our society instead? What if instead of massive seeking of profiteering we actually double down on our efforts to improve lives today, right now in this very moment instead of some far distant realization of "when all jobs are automated" which is a highly debatable premise, and if even true, a long ways away.
That's the thing that is so frustrating to me about my fellow people in tech. Driven to automate. Why? To what end? If you stop and think who really benefits the most from this endless pursuit to automate, you will see it really isn't your common neighbor.
I will say I feel this way with most fields of research and schools of political thought as well. So much is being done for theoretical problems in the distant future, when we could double down on current issues. Instead we fund obscure research that may or may not reach fruition, or the underlying assumptions might change under this hope that some future results will solve our current problems, meanwhile the status quo remains for those suffering now. And you wonder why people are becoming increasingly weary with science, and even technology.
Technology was suppose to make people happier and have endless opportunities, yet it is becoming increasingly obvious society is even more unhappy, more anti-social, more fragmented than ever before. More people are unhappier than ever before, more people are committing suicide, more people are addicted to pain killers and opioids than ever before, more people are addicts in general. Sure we are living longer, long enough to stuff our faces with all the processed junk our wonderful technology has created so cheaply, but we have missed out on the meaning, I am afraid.
Maybe I have just become so cynical I can't work in tech anymore.
> Driven to automate. Why? To what end? If you stop and think who really benefits the most from this endless pursuit to automate, you will see it really isn't your common neighbor.
So, the alternative is to pick a level of automation that society is comfortable with, and legally enforce that we never go past it? Maybe a jobs program where we take jobs away from robots and give them to humans, like repeatedly hammering sheet metal into certain shapes?
We'll need a one-world government to ensure that while we do all this, our neighboring countries don't just invest in robots and undercut us on price.
I sympathize with what you're feeling, but basically, there's no way to get to the idyllic world you envision without powerful totalitarian overlords.
Automation is an absolute necessity to end poverty. Do you really think stone age people could have ended their abject poverty by just "fixing" their society? It is the immense wealth create through increased automation which has allowed the general well being of most people in the western world today.
We can't simply fix the world today by some political decision. There simply isn't enough wealth in the world to create a good life for the whole worlds population. Growing the economy for the whole world to the point there there will be enough for everybody will take significant time. You can't just do it right now, as much as you like.
Then you have countries such as the US, which has at least the same wealth asa e.g. Nordic countries but yet has significant poverty problems largely eradicated in Nordic nations. In a sort of naive and theoretical way these problems should be possible to solve given that enough wealth exists. But in practice such a thing would be difficult to achieve.
If you just installed a nordic style system in the US today, it wouldn't cause an immediate solution to all social problems. The existence of the nordic style welfare system over many years has made sure that there doesn't exist a large poorly educated and dysfunctional class of people.
You can treat an illness much more easily if you tackle it early on. However if you let it fester for years as the US has done, you will need much stronger forms of medication.
E.g the years bad blood between blacks and whites in America can't be changed by merely passing a set of laws.
What you can do is starting with reforms today, but it will be years before one can reap the benefits. People's values, attitudes etc doesn't move that fast. That is why one needs a lot of patience for solving a lot of world problems.
It is likely much faster to develop an advance AI system than getting blacks and white American to trust each other e.g. Likewise it will take decades before Americans are going to think poor people aren't just lazy and caused their own predicament.
> There simply isn't enough wealth in the world to create a good life for the whole worlds population.
That is far from obvious to me. I have no idea if it's true or not.
But analagously, many people are surprised to learn that most countries experiencing 'famine', historically, have been _exporting_ food, and that there is, unquestionably, currently enough food produced on the planet to feed everyone adequately and enjoyably. And yet people starve.
It's not obvious to me that there isn't enough wealth in the world to create a good life for everyone, too. Now, today.
I would like to take the time to follow up to some of your points. I don't think you are wrong, or are invalid, just offering other thoughts to your thinking.
>Automation is an absolute necessity to end poverty.
I have found that the people who are biased towards automation being society's silver bullet are the only one's who think this.
> Do you really think stone age people could have ended their abject poverty by just "fixing" their society?
I suppose that's one way to look back at history, quite revisionist, however. Great nations were united under great causes. Alexander the Great build the most diverse empire on this principle. Russia is currently being (mostly) united under its renewal of it's Orthodox roots, that were suppressed during the Atheistic regime that crippled it prior. Value systems can be provably shown to improve the well-being of societies. Obviously the problems arise when different value systems clash, which is why I am against the current era of globalization, but that's another story. (I think it's okay that different people be different). The other side of your point here I think is the technology. Yes the technology helped the stone age folks, but so did education -- sharing knowledge. The tools, in my opinion, always had one purpose in mind: better the fellow man. Our current tools we are building have lost this purpose long ago, or it's ends are highly questionable, at best they are being built with this utopian view in mind, without considering the great tragedy that will happen in between then, which was my original point. The rich oligarch caveleaders didnt oppress the other lesser pleblean cavepeople when they invented the hammer or fire, or keep it to themselves. It immediately improved everyone's situation.
> It is the immense wealth create through increased automation which has allowed the general well being of most people in the western world today.
I am really glad us fortunate to live in the western world are benefiting. By the way, as it relates to the overall population, the "western world" is miniscule.
> E.g the years bad blood between blacks and whites in America can't be changed by merely passing a set of laws.
I would 100% agree. We have to get the people who promote this worldview of separation out of positions of power. Here's what some people will consider a cooky view: Both sides of that issue are financially incentivized to keep racisim alive and well.
> It is likely much faster to develop an advance AI system than getting blacks and white American to trust each other
I take the symbolism as us having a black president for 8 years with generally good favorability ratings, and an excellent impact on the country overall as a sign things can improve much faster than you give it credit for. Cognitive systems, on the other hand, I think is much further away.
>What if instead of massive seeking of profiteering we actually double down on our efforts to improve lives today, right now in this very moment instead of some far distant realization of "when all jobs are automated" which is a highly debatable premise, and if even true, a long ways away.
I would note that the "fight to prevent future catistrophic climate change" is exactly like this as well...
"We must immediately upend the existing social order because of some distant and uncertain threat that looms in the future!"
> It seems like BI is an answer to a false dichotomy.
[...]
> What if we fix our society instead? What if instead of massive seeking of profiteering we actually double down on our efforts to improve lives today, right now in this very moment
BI is usually presented as a right now improvement, that also gives more improvement as technology advances. So, the false dichotomy I see is yours: between "improvement right now" and "improvement as technology and productivity improve".
> BI is usually presented as a right now improvement
Not as far as I've seen, and not in this article this discussions about, or any of the articles it subsequently links to in it's body.
" Although basic income seems fiscally challenging today, in a world where technology replaces existing jobs and basic income becomes necessary, technological improvements should generate an abundance of resources and the cost of living should fall dramatically."
That is what I am questioning: what most view as an inevitability and BI is solution for.
I am happy to read BI articles about solving the current socioeconomic problems. The few I have read all make this "automated utopia" assumption. I read exactly one that talks about implementing it with today's constraints.
Amen. Honestly I think that the popular idea (in the technology world) that magical hardware/software are going to "replace all the jobs" is wishful thinking. I don't think that the very baubles that amuse and distract humanity will also be its doom or its salvation.
Basic income, unfortunately, is not a problem of economics. You can argue for month about its viability, but ultimately, I think basic income is a problem of politics, because I can't see western governments and their representatives agreeing to change their systems to implement it. Reaganomics are still alive and well.
Basic income really sounds like one of those socialist counter weight, that, just like new deal policies, can make capitalism viable again, but I feel it will criticized for being some socialist measure. The end of the cold war is still too near.
It's more a concern of political belief than anything else. Of course economists and administration can argue about it, but in the political scene, I'm very pessimistic.
From the vantage point I have in my union job and my part time job at a very large retailer with low wage hourly workers, there is no way rich people give away their money. At least without wanting something in return. That point is rock solid and not changeable. You don't get something for nuttin.
Having some that get BI and some not in a community will create a BIpolar environment. Real emotions exist.. I can only imagine when couple A gets 5 years worth of money and single person B living down the road does not. Or Whatever. There has to be some catch.
But this is real and not Trading Places. I wonder what the bet is and I wonder what the dollar will be?
Reading arguments for Basic Income makes me realize what it must be like to argue with a flat-earth proponent. I literally can't understand the frame of mind that leads to the belief that this would be a good idea, at least as proposed.
I realize this isn't a substantive argument about the issue at hand, and will be rightfully downvoted..but I think this might be the first time I've _ever_ been so daunted by the ridiculousness of an idea, that I can't begin to formulate arguments against it, solely because I can't tell how to frame the argument.
A lot of people around the world have been receiving old-age pensions for quite a while. Many are still healthy and able, with some of those working and some not.
Why will this study provide better data about how people will behave when given a basic income than the presumably huge amount of data available about how healthy people behave on a pension?
Working out how to plug a basic income into an economy, how to arrive at what it should be and how to transition an economy to include a basic income would be a better use resources.
Yes, but I think even `healthy' is not enough of a qualifier.
Ie healthy old people (who are well off enough) might be expected to go on cruises etc. I wouldn't count their voluntary unemployment for much, when I was trying to forecast what effects a universal basic income had on the general population.
(On the other hand, I would count their voluntary employment for a lot.)
I think we can assume those whose income is just a state pension or just a BI won't be able to afford cruises...
As with a pension, many of those receiving a BI will have other sources of income, so I think it is a good match. And if you look at my link about Denmark, you'll see that Denmark is to do away with forced retirement. Their pension starts at 65, while their forced retirement age was 70. "Current employment legislation allows companies to dismiss employees when they turn 70, but Frederiksen said the legislation should be changed to reflect the modern workforce."
So even in the country with supposedly the best pension scheme in the world, people still want to keep working beyond 65.
I don't see much point in small-scale tests of a BI. They'll tell us how a few receiving them will behave, but they won't tell us how businesses or the economy will behave when everyone's receiving them. And it's the latter we really should be wanting to understand.
What I mean is it won't tell you how a BI will affect the economy as a whole. Not that studying a pension scheme will either, but it can probably provide you with insights that are just as useful as YC's study will.
So is this basically "pure" communism? I guess historically, countries we called communistic didn't really adhere to its central idea; or they couldn't do so practically due to the accompanied political/economic instability following regime change.
Supposing the BI funding proposal doesn't include printing money (which is not at all clear), the price of inelastic goods (in particular housing) will rise to absorb the universal increase in income. There will then be calls to index BI to inflation, which politicians won't be able to resist, and the spiral will begin.
Not just tie it to inflation, but to location as well. After all, it wouldn't be fair for someone on BI to not be able to live in Manhattan or San Francisco.
> Not just tie it to inflation, but to location as well.
If it happens, I hope they do both, since the location adjustments will be even more rapid than the generic inflation adjustments, and it is possible that hyperinflation would just destroy the highest cost cities, rather than the entire US, before the program is scrapped.
I'm a complete armchair economist and realize that a lot of really smart people are tackling this, but, in my limited understanding of supply and demand, my concern would be that a new floor for basic goods and services would materialize due to the new buying power of those on Basic Income. Doesn't that artificially inflate the base price of those goods and services without ever having a natural (market-based) opportunity to decrease? I'm interested in any literature that might address this basic principal, because I suspect it may be more complicated than I am imagining. This is sort of tangential (from a healthcare perspective), but I'm also interested in any research from a historical perspective pertaining to adjusted price history as health insurance became more popular / commonplace within society (probably, in particular, American society as I'm sure it has been allowed to flourish for much longer here). Any help in pointing me in the right direction would be most appreciated.
There wouldn't be a problem delivering goods, because companies would still compete to deliver those goods using price signals.
The problem is that a lot of goods delivered to the poor are delivered by low-skill workers, and since demand curves slope there will be significant inflation here, along with a lot of things undone.
IMO the spike in demand will cause shortrun inflation, then suppliers will scale up production/competition in response. IDK if 5 years is enough time to see this all through. Depends on what they end up demanding most of. Food seems to be in good supply so minimal inflation there. Housing is tight in bay area so likely to see inflation there.
Very exciting! I wonder how the short-term nature of the pilot program might have some inherent biases compared to the long-term study? Presumably there would be less dramatic changes in behavior / lifestyle?
That's correct -- it's really not our goal though to try and answer the main research questions with the pilot; it's meant to help us figure out the mechanics of doing the larger study.
Here's a serious question. I'm like, 50/50 with whether or not I believe BI could work or not, but I really believe it can NOT work without being universal in nature.
By doing it in a small geographic area only, aren't you're already skewing your results?
These people have now an additional incentive not to leave the area, when otherwise there may have better opportunities for upward social mobility. Now you've got a closed system, so how do you handle the general move in and move outs in the area? Are new residents not welcome to it? If not now you've got a big income discrepancy. If they are welcome to it, how do you prevent a flood of new residents?
It seems like it's doomed to fail with a small sample size, for any number of reasons. Be very careful here, as this sample is a slice of real human beings, who could be impacted in real ways throughout their lives.
I'm not sure about your other questions, but regarding your claim that "these people have now an additional incentive to not leave the area", I don't think that's true:
>In our pilot, the income will be unconditional; we’re going to give it to participants for the duration of the study, no matter what. People will be able to volunteer, work, not work, move to another country—anything.
This is outrageous. Look at how this people lobby to the State to take money out of others pockets against their will and still appear to the media as a benefactor of some kind.
> Oakland is a city of great social and economic diversity...
Ok, here's an honest question. These days we often are told that increasing diversity is the responsibility of all successful healthy organizations, end-of-discussion (see: GitHub).
Under what conditions would increasing _economic_ diversity be seen as a good outcome?
Economically diverse areas have workers and capital living close together. It makes it easier to find employees, and easier to find customers. Poor and middle-class people don't have to commute as far to work, and middle class and rich people don't have to drive as far to access services--or pay for services to come out to them.
Cities are generally economically diverse areas. Suburbs, rural areas, and slums are not. Not coincidentally, economies tend to be most stable and dynamic in cities.
> These days we often are told that increasing diversity is the responsibility of all successful healthy organizations, end-of-discussion (see: GitHub).
The goal is not to increase diversity, but to better represent in a company's staff, the diversity of the society in which that company operates.
You can't increase total diversity, but you can change how it is distributed.
Few people complain when rich and middle class people start moving into historically low income areas (at least until the poor can't afford to live there)
When it applies to companies, I think it's pretty universally suggested that hiring people from poor backgrounds who've worked very hard to get close to the hiring thresholds and are probably being overlooked by other companies is usually a good decision. You don't get any additional "diversity benefit" from paying them less though...
> Few people complain when rich and middle class people start moving into historically low income areas (at least until the poor can't afford to live there)
You must not be following the news much. If you even begin to move into a historically poor area, people will cry gentrification and start throwing rocks.
> If you even begin to move into a historically poor area, people will cry gentrification and start throwing ro
Nah, when it's just one upper-middle-class you by yourself (how do you "begin to" move somewhere, anyway? either you move or you don't, the 'beginning' of moving is invisible to anyone but yourself), local people are confused or bemused or pleased or at most slightly annoyed. When a couple friends follow, and then all your peers follow because it seems safe and/or exciting now, and the people who lived there before realize that the neighborhood is finally getting safer and more amenities but _they aren't for them_, the amenities are things they still can't afford and the safer neighborhood is one they soon won't be able to afford -- that's when they start throwing rocks. Mostly metaphorically so far, but I'd expect literal physical rock throwing to pick up.
It seems to me that a limited, 5-year Basic Income experiment is fundamentally flawed and will, at best, fail to predict anything important about what system-wide BI would have on society and at worst will be disastrously misleading and have an incredibly adverse effect on public policy.
What I'm reading scares me.
Oakland is a city of great social and economic diversity, and it has both concentrated wealth and considerable inequality. We think these traits make it a very good place to explore how basic income could work for our pilot.
To me this screams complete lack of any meaningful experimental controls.
If the pilot goes well, we plan to follow up with the main study. If the pilot doesn’t go well, we’ll consider different approaches.
What does this mean? If the pilot gives you the results you want? What kind of science is this?
There needs to be some sort of action, though. Pondering all the possible effects has been going on for some time now, and simulating a perfectly spherical BI in a vacuum is not going to be any more useful than a 'fundamentally flawed' empirical experiment.
>What kind of science is this?
It's the normal scientific method. They have a hypothesis. They're going to test it in the real world. And the results will be analyzed. What's the alternative? If the pilot doesn't go well, and they take the same approach again, that'd be the very definition of insane.
Well, it's "not the normal scientific method." Although it's arguably a part of it. My objection may have been a bit strenuous, as the key word here is "pilot study." This is a pre-study study. Their only "hypothesis" here is "is a basic income experiment with real people even at all feasible"
They don't yet have a real hypothesis about basic income, at least not that they have presented. The questions here (https://blog.ycombinator.com/basic-income) are rhetorical and vague, which make for very bad hypotheses.
Personally I do not believe this study, as I see it described now, will yield any useful scientific knowledge. The results, if they seem favorable, will be used to influence public policy without regard to actual scientific merit and society will be subjected to the real experiment.
I would be much less concerned if I saw someone with a rigorous background in mathematics and economics developing an actual predictive model that could be falsified with specific tests. When the inputs are vague ("people") and the conclusions are subjective ("are people happy?") it is not scientific method.
It is funny to see such naïve attempt to ignore the basic laws of ecology and economics.
Any given ecosystem could sustain a certain limited population without being collapsed and destroyed together with its habitats. Everything evolutionary biologist will tell you that.
The no free lunch law, like every other law of the Universe, also cannot be gambled out, given that money is a measure of labor, and is like ATPs of a complex system we call local economy. Disturb the balanced flows and the whole system will inevitably collapse.
Economical perpetuum mobile is impossible for the very same reasons a physical one is impossible.
But who cares if it is such a brilliant scam for any politicians. When consequences appeared they would be very rich and very dead.
A lot of the discussion here seems to revolve around UBI as a solution for poverty and homelessness, but I would argue that that's missing the point. As I wrote this this morning in re: https://news.ycombinator.com/item?id=11807201
"""
Keep in mind when discussing UBI, especially in the context of poverty, that it is not a solution to poverty. It is a solution to automation crashing demand by throwing earners permanently out of the economy.
Robots take the jobs so people have no money to spend even as the robots make more stuff, cheaper.
What to do with the people? Throw them in a volcano? "Hunger Games"? Let's just give them money and see what happens, okay?
That's UBI.
UBI isn't for the bum. It's for you (okay, well, your cousin. You read HN, you're probably fine.)
"""
The thing that makes UBI make sense is that the economic order is being overturned by automation.
We simply no longer need to work to live. Bucky Fuller pointed this out decades ago. His estimate put the inflection point in the mid-seventies.
We are punishing ourselves.
---
I want to have UBI so I can devote myself to a program of research. It may not pay off, in fact, it almost certainly won't. But there is a small but non-zero chance that it will pay off handsomely in terms of benefit to society. It's also a very non-linear, meaning that there is absolutely no way I can predict when it might payoff, right up until the moment it does (or I die, whichever comes first.)
There is no one to whom I can honestly say, "Fund me, it's worth it." Maybe I could find an arch-angel investor, but it would be pure patronage (not to say charity.) But with a Universal Basic Income I can devote myself to gardening and research and be no trouble at all to anyone. And I'm not doing anything uniquely important at my job so no one would be harmed if I quit.
Why do you feel the need to distinguish between "the bum", and "you", a victim of "automation crashing demand by throwing earners permanently out of the economy."
Can't some portion of current 'bums', or the homeless, be victims of "automation crashing demand by throwing earners permanently out of the economy" too? I would think they are. Hasn't the process already begun, a long time ago, if perhaps speeding up now? Some of the present poor and homeless definitely seem to have been "permanently thrown out of the economy" to me.
Yes, in fact, this is exactly the point I was making. People are talking like the homeless are someone else when the rationale for UBI, in my opinion, is that we are almost all about to be homeless (unless we adjust our systems.)
Agreed, but you seemed to be suggesting that the current homeless or very poor are something different than that, and different from you and I. I think this is an inconsiderate and inaccurate suggestion, by and large.
if whole world would work on this BI, you would buy a coffee or two for it, nothing more. every single item we purchase and consume every day would be massively more expensive. there is a reason why all the stuff is made in china.
or you want BI just for yourself, your circle or your country?
once, in star-trekish future, this might be the best choice. in current world, it just doesn't make sense apart from nice intellectual exercise on what-if topic. what about we focus all this energy and money into directly fixing things like preventing wars, education, health care for aging population etc? or are these topics not cool anymore?
Unfortunately, the explanation most consistent with data on happiness/satisfaction is that the primary utility gain from wealth is derived from gains in zero-sum social status.
We can tell this even from the language of the post itself: "everyone should have enough money to meet their basic needs."
Basic needs? Everyone in America has their basic needs. Almost all of the _basic_ needs of a human, i.e. those that we received 50,000 years ago, could be provided for $1-$2k a year. We consider modern needs beyond these to be 'basic' because there is a nature in our humanity, or the humanity of most of us, that doesn't like it when people are so far apart from one other in power or status.
As such, it's likely that this study will find, entirely correctly, that recipients are happier, more productive, etc. What they won't discover is how people behave when basic income is the status quo, rather than being the equivalent of a lottery winner. I suspect the results will be vastly different.
A tent, a pair or two of clothing, and meals of rice/beans/vegetables can be provided for less than $2k/year. A life comparable to this, but requiring more work, has been and continues to be lived by hundreds of millions.
> [basic necessities] can be provided for less than $2k/year.
I'm going to assume that this means "provided for approximately $2k/year". In any case, the value of that number isn't an argument against UBI, but rather, the amount UBI should be set at. Maybe the right value is $2k/person/year.
> Basic needs? Everyone in America has their basic needs.
Given that there are adults in the U.S.A. who earn less than $2k/year, there must be people who are either not getting their basic needs met, or are getting them met only through welfare programs.
> A tent, a pair or two of clothing, and meals of rice/beans/vegetables
Assuming this was the minimum, you also need a plot of land in which you can legally stake your tent - a pretty big problem for homeless today. The rent on this land also factors in to the necessary price per person per year.
In my personal opinion, I'd say the full set of human needs includes food, shelter, hygiene, health care, companionship, and the opportunity for self-improvement/advancement. Food and shelter you've covered, companionship can be free, and hygiene doesn't have to cost much of anything.
In our current society, an opportunity for self-improvement depends on education, reasonable transportation to economically viable areas, and communication technology (such as phone or internet).
None of these things are necessarily extremely expensive, at the bare-bones, no-luxuries level. The overall cost might be a little more than $2k/person/year, it isn't necessarily as high as $10k/person/year.
In any case, I expect that providing someone who doesn't have these things (food, shelter, hygiene, and opportunity for self-improvement) will cause an non-zero-sum increase in happiness, and right now, there are people who don't have all of these things.
Well, 50,000 years ago, if you were hungry you could find some edible plants, or throw a stick at an animal and eat it. In today's society there is limited hunting and the land that grows food is privately held. And if you try to build a shelter anywhere on land that you don't own, it will get torn down. Not to mention the fact that you really can't own land -- property taxes makes it a rental at best.
Now one thing that would be neat -- what if most of the utility ground cover was actually directly edible by humans? Imagine replacing all the wild grass and weeds with edible vegetables. Of course they would have to be bio-engineered so that they are desirable for people, grow like weeds, yet not get consumed by vermin.
For basic needs, I'd say that encompasses food, water, and shelter (at least in colder climates). A decent number of Americans don't have these met. Feeding someone on $3/day sounds somewhat challenging to me, and throw in shelter on top of that and I don't think your $2,000/year figure is going to cut it.
If what you are saying is that a large part of happiness is related to your distance to the mean wealth, wouldn't you say a society with a 'normal' wealth distribution is going to be on average happier than a society with a 'bimodal' distribution? The technologist view is that automation is taking us in an increasingly bimodal direction, and that BI can "raise the floor" to pinch the two humps closer together. That doesn't seem zero sum to me - because the function relating happiness to distance-from-mean isn't a linear one.
Yes, generally speaking the flatter the income distribution the greater mean happiness. However, even setting aside moral concerns about methods (which are tremendous), it's not a given we even _want_ to optimize for mean happiness.
E.g. A society that possesses greater mean happiness may also possess more starvation, more work, or less robustness against future threats.
> Almost all of the _basic_ needs of a human, i.e. those that we received 50,000 years ago, could be provided for $1-$2k a year
Assuming people (a) have the skills and/or (b) are OK being cut off from modern society. The goal with basic income is to allow _everyone_ to live a decent life without going all survivalist (and risk dying). Even people who are very skillful (can do repairs, have their own farm, in good health, etc) often live on ~10x that.
Even if you disagree with the two above points, you've just argued for basic income being at a different number.
If the whole game is zero sum, then thats great! The solution to a zero sum game is easy. Redistribute wealth from everyone so that everyone is equally happy.
There is no need to worry about innovation or discouraging people from working. Its zero sum, so we may as well go with the fair solution of 100% income redistribution and 100% basic income.
If you were optimizing for happiness only and had no ethical concerns about methods, then yes, a very flat or close to flat distribution is likely optimal.
Like you, I believe that there are things more important from the perspective of society than mean happiness.
>As such, it's likely that this study will find, entirely correctly, that recipients are happier, more productive, etc.
I wonder what the right way is to measure happiness for a group. Say this test makes 20% of participants much happier, 70% about the same, and 10% overdose on heroine? And what metric can you use to quantify happiness on an individual level?
Exactly. Hence the 'almost', at the beginning of the sentence you quoted.
My point is we should acknowledge that the drive for basic income is driven by "people don't feel so great when other people have more significantly more shiny things than they do; people feel better when shiny things are more evenly distributed" and not "shiny things are a human right" or "it's an affront to human dignity that shiny things aren't distributed the way I find most preferable".
Not really. The biggest need that's expensive to make work is shelter - the cost has not gone down over time. There are millions of Americans either on the streets or living with toxic family members they need to be away from.
Tents or other very basic structures exceed or match the quality of shelter that humans lived in for tens of thousands of years. There is no innate need for modern conveniences, other than the innate need to not be so far away from the other guy.
Where do you put the tents? How do you prevent disease in a tent city without plumbing? How do they prepare food?
Basic Income wouldn't even be possible if it were not for modern society. Why try to divorce the standards of society from the implementation of basic income?
One important component that should not be overlooked is how BI is tied to basic occupation. People do need something to do, no matter how automated the future becomes, and that thing ought to be something they are well adapted to do.
It should not be entirely left to chance. Unoccupied people will find every avenue for their unspent energy, and too easily this becomes competition, and conflict.
Farming is a good example of a pastime that is historically maligned yet immensely rewarding and pleasurable when done right.
Along with BI ought to be a very carefully structured form of basic income that allows people cultural engagement that is productive and sustainable.
Why, groups of like minded people could collectivize their efforts and manage their kolkhoz according to the principles of self-management, democracy, and openness, with active participation of the members in decisions concerning all aspects of internal life.
We're certainly not trying to answer everything with this one study--we hope it will be an important piece, but it's going to take a number of studies, a number of different approaches to know if BI really could or could not work.
We hope us taking a first step will help push others in the US to do more of the research we need.
Even if the goal is to study how people act, it seems that actions would be very different depending on whether your community is isolated or not.
For example, if I'm part of a small study within a city, it's unlikely that most of my social sphere would also be part of the study. Thus I might be pressured to keep doing a job I hate to avoid the stigma of unemployment.
On the other hand, if I were in a small island community where everyone had UBI I think there would be much less pressure to keep working undesirable jobs.
Also, Oakland seems like a very expensive choice. Part of the reason I supported Give Directly's UBI experiment was because they are wisely choosing an area where funding can stretch to many more people. Obviously, there are some differences based on the country's level of development, but even choosing an isolated town in the USA would be cheaper and likely more informative.
I don't think how isolated the ecosystem is too important. I would be more concerned with the methodology of measuring how behaviour has changed- Are they going to follow around candidates before the checks come rolling in to establish baseline behaviours?
We're going to have a control group for the pilot that doesn't receive an income, and following base-line behavior is something we'll consider doing for the main study.
We are focusing on the individual-level effects (not the ecosystem), but it's a lot more than how people act and behave. We'll provide more details on outcome measures later, but we’ll be interviewing participants to understand their decision-making processes and the constraints they face. It isn’t enough to know that certain outcomes are associated with basic income; we want to know how cash transfers generate the effects and why outcomes vary among recipients (if they do). These insights can inform future research and policies.
What I don't understand with BI is this: if you give everyone the same amount of money, won't prices and rents adjust accordingly by exactly that amount, thereby nulling the effect ?
Yes. And then the BI payments will be CPI adjusted, engineering an inflationary spiral, or price controls will be introduced, engineering chronic commodity shortages.
1> Proposals for the institution of BI as a public policy do not create money out of thin air, they redistribute it from wealthier individuals to poorer ones. (So if you earn $2million per year, you might pay about 1million in taxes and then get back 10thousand in BI. If you don't work, you pay no taxes and get 10thousand in BI.)
2> This YCombinator experimental program is not a fully implemented BI system. They will be selecting low income individuals and paying them a regular no-strings-attached income to see how it affects their lives/behavior. Other people in Oakland who do not receive these payments will probably bear a cost due to inflation as more money ends up in Oakland.
I think that what you would see is rents exploding in certain places like SF, but if you don't need to be in a particular city for work or social services, a lot of people would move to places like Cleveland or Detroit that are much cheaper to live in.
Detroit is cheaper right now, but people aren't moving there. Post-BI, Detroit landlords will raise rent to capture any additional disposable income, so everywhere will still be in the same relative position.
Possibly (though many polities have some form of rent control). There's lots of opinions about what would or wouldn't happen. The difference is YC is going to test it empirically.
This one is easy. Just ask everyone in the town one question:
"We're going to provide a basic income for you and everyone else. Now, what are your plans for work?"
Basic income will manufacture laziness.
As a homeless teen, when I received charitable handouts, it was humiliating. "Why am I so inferior that I can't provide my own stuff, and rely on others to support me?"
- makes you lazy
- and paradoxically you begin to dislike the handout-givers -- "they probably think they're better than me because they're self-reliant and without them I have very poor prospects."
I turned things around by joining the military. Having handouts and not having to work was okay but it leads to resentment, and if you're not lucky enough to feel you're as good and worthy as the handout-givers, you start feeling worthless and stop trying.
Ever see signs in national parks warning "don't feed the animals" ? A lot of park-goers believe that's because human food is bad for the animals. That's only part of it.
The parks do not want the animals to become dependent on handouts. They want the animals to always get their food the normal way -- hunting for it, working for it. NOT getting handouts.
Once an animal (or a person) becomes accustomed to handouts, they stop working hard, or hunting/foraging in the animal case -- just wait for the handouts.
We have BI in Mexico for people over 65 years old since about 10 years ago. Nothing is different in general, but for some of those people I would think those few pesos are life changing.
This was practically the panacea of 20th century liberalism - the idea of state retirement income being unconditional was fundamental to post WW2 society in all western democracies and become a cornerstone of growth in the era. How could you fathom being successful in business while you had to care for your parents?
In the same sense, that will apply to basically everyone in this century in regards to technological unemployability. We could either stifle our society with the burden of social unrest involving the unemployable and underemployed, or we could just give them the money to take care of themselves so anyone who can still be productive will be able to.
Is this truly going to be a basic income experiment, or is it going to be a charity experiment? To me it's only a valid experiment if somehow it is self-sustaining (e.g. it's funded by the same population it's distributed amongst, not by external donors).
Taking Oakland's population of roughly 450k, presumably this experiment doesn't cover the entire city (guesstimating a minimum income to be ~$1,000/mo for that area to cover rent + all expenses, that'd work out to be a $450 million per month price tag). So right off the bat it probably is going to be limited heavily in scope, which diminishes it's value as a test of "universal" basic income.
Even if it ends up being self-funded (which I'd be surprised if it actually is), you have to figure out how to get people to pay for it. People probably won't sign up to voluntarily give up more than they'll receive, which makes it tough. And you don't have the same enforcement that the IRS does (e.g. you can't forcibly take money/property from people). And on top of that you don't have the power to truly create money, although you can approximate it by taking charity donations from folks in SF.
I guess I'm just really skeptical of what any results might actually mean.
Hey EVERYBODY, this topic is all what actual economists, you know literal big E Economists, study; so, while actual economists can disagree about this topic, they disagree from a basis of understanding some things.
People who have not studied economics--for which the prerequisite is calculus and also statistics so if you haven't taken those, you haven't taken economics--...people who have not studied economics, micro and macro, should read about this topic with avid interest, but don't debate it, you just have no idea what you are talking about.
Not trying to be a jerk, just trying to say, this discussion is like reading a debate of computer programming by non programmers speculating from the point of view how they imagine it might work, like the 5 blind men and the elephant...
The basic laws of economics have not been overturned. People respond to incentives; there is no free lunch; dead weight losses; transfer payments; too many dollars chasing too few goods; growth in money supply; water seeks its own level, tides, all boats; labor theory of value; national income accounting; trickle down, it's really a thing... I could go on, but what is the point.
A lot of big E Economics is pretty bad. Often because they try to use calculus and also statistics and statistics on human behaviour but humans don't behave that way.
big E economists are entirely aware of the pitfalls and the limitations of their field, they know it's far from exact, and they know it much better than people who don't study economics. Those who are ignorant of historical mistakes are doomed to repeat them.
and in terms of rational vs irrational behavior, the behavior of fluids is describable without deriving from the behavior of the particles that make up the fluid; and the limitations of the approach is understood, again, not by lay people but by experts in the field.
* The US Population is 320 million [http://www.indexmundi.com/united_states/demographics_profile.html].
* Our federal budget is $3.9 trillion [https://en.wikipedia.org/wiki/United_States_federal_budget#Total_outlays_in_recent_budget_submissions]. * If every dollar of the budget went towards BI (no defense spending, no infrastructure, etc), that would be $12,260 / person / year.
* If you limit it to adults, it ends up around $15,000 / person / year (about 80% of the US population is 15 years or older [http://www.indexmundi.com/united_states/demographics_profile.html]).
I wonder if there were a BI, if those at or near the poverty line would tend to get more efficient with their spending. For example, moving towards lower cost parts of the country.
I think of basic income as a venture capital firm that treats us all as individual startups. Lots of value can be generated by people doing what they find worthwhile on their own terms. Some people will sit around playing video games all day. Others will raise their kids. Others (like me) will build things. I'd wager we'd get more out of this then forcing people to work at McDonalds.
As a resident of Oakland, I am excited about YC running this experiment here. I'm sure there will be plenty of debate over whether it's the best location, but it is definitely a place that provides a microcosm of many the issues BI hopes to address. It also has a population, regardless of where they are on socioeconomic spectrum, that is relatively open-minded to experiments like this.
I look forward to learning more details about their program.
NO ONE has given me an answer to the question: what will happen when basic income inevitably raises the overall price of basic stuff because now "everyone can afford it"?
It will be back to zero, people with basic income will not be able to afford both housing/bills and food. Moreover the ones without will be totally fucked.
So, what gives? Run BI in a few small counties and call it a success? Gee wouldn't BI supporters love that...
>what will happen when basic income inevitably raises the overall price of basic stuff because now "everyone can afford it"?
That is the kind of question that experimentation like this sets out to answer.
There are a lot of theories. My personal theory is that, in general, stuff is not going to get more expensive because of basic income. Providers know that people have more money to spend but there is also still competition between providers.
There will be places where this generality fails, no doubt. Two areas that I'd be interested in looking at are businesses that require marginal employees to provide a small amount of value and cannot raise prices to cover the increased cost of enticing employees to work for them: fast food, for example. They may have to pay more or change what kind of employees they hire or they may even get to pay less since basic needs are accounted for. Who knows. That is why experimentation is needed.
My main concern, and you may be referring to it with your 'basic stuff' category, is what will happen to rents. Landlords know that people /need/ a place to live. I would not be surprised if there is a spike in rents because they hold more power over their consumers than, say, a fruitseller whom, if they raise prices to try and capture some of that extra cash sloshing around, might find their customers just buying a muffin or going to the movies or, really, anything else that is available in the overall market.
I thought this about landlords as well, but landlords are also subject to the same economic rules. Many landlords are just trying to cover the payments on the their property + a little extra. If the landlord has BI as well as the renter, then the baseline doesn't really move at all. The landlord doesn't have to charge more to cover expenses because they get BI too.
That's the theory, anyway. I really have been on the edge of my seat to see how this idea works out and what the details will be like.
My biggest concern with BI is the abolishment of state healthcare. With healthcare expenses as astronomically high as they are in the US, I think the only real path to a workable system would be universal healthcare + universal basic income, and then getting rid of welfare, food stamps, etc. I can't see this working if people have to spend all their money on health costs.
That's not how economics works! If the landlord can charge more for rent, they will. Look at how college tuition skyrocketed as schools became awash in student loan money. Do they need to raise rents? Possible, depending on how inflation hits there costs. But if they can, and the market will bear the cost, they will. That's how pricing of all goods works.
That's not what the previous commenter was discussing. College/Universities have no incentive to lower the cost of tuition because everyone can get a loan for what ever they charge.
The idea being, the government has removed financial competition and there is no "best for your money" because many students can get a loan for where ever. The way to change this, is to obviously not enforce/have the law enforcing the payback of all student loans. This will dramatically drop attendance at outrageously price universities, forcing them to either drop tuition (or just take more out of country students).
I see your point. Tuition costs is a good example and I have no doubt that they have risen to capture the money made available through loans and grants. But what makes that different is that student loans can /only/ be spent on tuition and related expenses (college textbooks have done a nice job of capturing that excess as well).
Yes, rent is needed and somewhat sticky (people don't like to move a lot), but when you are getting a cash infusion your choices are as large as the market. It is not 'captured money'. I think that if Basic Income is going to have a problem similar to tuition costs to student loans, rent and the housing market in general is where it will show up, perhaps with grocers, too, in constrained areas that have few choices, but I think it will be less of a problem because the 'capture' is very loose compared to tuition and student loans.
I don't oppose it, but this research will get skewed results. Because it's only in a small part of the state.
It would be like those people suddenly got a raise, which doesn't usually lead to landlords increasing rent for newly-freed properties and prices going up because they know everyone gets more money now.
BI applied country/state-wide, I'm pretty sure the results would be different.
Everyone basically gets the same small amount of money. What has happened? People desperately want to work and earn extra money. Some people can and do survive on just what they get from the government. Still, everyone has a hide hustle to earn a little more and live better.
With basic needs met, how many people will strive for more? Will we see an increase or a reduction in the workforce? Many people seem to have no idea how a free market economy works, or what is the role of government.
I believe that most people are in favor of the concept of "no taxation without representation". In other words, people want to have a say in how their government spends the taxes collected from them. How would this work out in the "basic income" system? Government taxes would be collected from those who were earning money (leaving out the fact that a large percentage of them may work for their government and thus are not actually adding value to the economy). The taxes then get distributed to the non-working, non-contributing people collecting their "basic income". As fewer people see the need to work, the economy collapses. (See "The Economic Collapse of the Soviet Union.") Aside from the honorable egalitarian intentions, how is this a good thing?
Per Malthus, the ever-expanding global population will probably prevent us from achieving a state of total abundance in the long run. We may (or may not) be able to rely on technological progress at times, but constant population growth is virtually guaranteed (barring any sort of population management or disasters).
I love the kind-hearted spirit of this effort, but it seems ill-informed.
I wanted to write a comment a la "Who is going to work at Starbucks if they don't need to earn their rent" - but then I realized that those jobs might go away very soon. And what then? I don't want to live in a world with 70% of the population losing a large portion of their growth potential (bc of unaffordable education, healthcare, even housing).
Something that is always surprising me when visiting the US, as a Scandinavian, is how many employees there are in a given shop (or coffee bar :). I don't think a Starbucks/shops/coffee bars needs as many people to operate as there often (in my experience) are in the US (at least in the 10 different cities/places or so I have been to on the east & west-coast/mid-west).
Assuming Scandi baristas are about as efficient as their colleagues over the pond, it is probably the time to complete a coffee-transaction that suffers, though, as with software development, I am not sure if throwing more people at the problem necessarily solves it quicker.
As an example, I remember one time, when I was waiting for a coffee (in the US) and there were no less than 5 employees more or less just hanging out discussing something more important than making my flat-white-double-soy-extra-machiato-caramel-coffee-like-beverage (which I could mean sarcastically, but I don't since I was waiting for a flight and not in a particular hurry) for a pretty good amount of time.
I suppose you could arrest me on this being my own experience (and you wouldn't be wrong), but I am feel confident that there must be some numbers that back them up because the difference is so flaggerant.
Apparently unemployment rates are as high or higher in Sweden for example, so there should be as high a demand for jobs at Starbucks here (in the case profits suffers from this). Intuitively I think that you'd rather hold off, take the well-fare and wait/prepare for a good job than taking one at Starbucks if you got a (good) education. This in turn (again my hypothesis), has made it the norm for that relative extra minute (or whatever) for coffees in Scandinavia, thus that job (as barista number 5) doesn't exist here at all. The price of a barista would also be higher, because it is harder to fill those positions. Which also makes changes the margins on how much more sales the barista number 5 would need generate for it to be profitable.
In any case, finally, commenting on the comment above :) I think that, in some places, many of those jobs do not exist (anymore) and it is still pretty OK to live here...
I think it is great to study basic income. While many people think it will work, many others are worried people will become unmotiviated and this will have bad consequences. An alternative thing to also study is a workfare program that gives jobs to everyone.
As mentioned in other comments, the HN readers are very motivated people. Most people in general are not. Many people may not work and either become lazy (such that they can no longer work) or worse occupy their time with something counterproductively, such as in gangs. Even without basic income I know people who didn't work for a while and eventually they became helpless with regard to work.
Using computers we can provide work for all people. This can be something like accounting, project management, or something as basic as rating movies and video games. There is always more work to be done, it just might not be economically viable. Where needed, these non-economically viable jobs can be subsidized as a form of welfare.
National Rural Employment Guarantee Act 2005 (or, NREGA No 42) was later renamed as the "Mahatma Gandhi National Rural Employment Guarantee Act" (or, MGNREGA), is an Indian labour law and social security measure that aims to guarantee the 'right to work'. It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.[1][2]
Starting from 200 districts on 2 February 2006, the NREGA covered all the districts of India from 1 April 2008.[3] The statute is hailed by the government as "the largest and most ambitious social security and public works programme in the world".[4] In its World Development Report 2014, the World Bank termed it a "stellar example of rural development".[5]
It is one thing to create a dependency, it is quite another to terminate the relationship. I hope YC has a really good plan on how they will wind this down if they decide not to go through with it.
Chinese proverb: save a mans life and you are responsible for him. This might very well end up with some horrific withdrawal effects if and when the project is terminated.
There's arguments on both sides of that. The truth is that economics are rough guesses at best and the only way to know if demand will outstrip supply leading to price increases or if supply will increase enough to make up a lot of the difference is to try and see what happens.
What's actually likely to happen is that some places supply won't increase as much because of external limits (a la zoning in SF or space in NYC) and other places the supply will increase enough that there will be only small effects. On top of that it's hard to guess how much more mobile people will be if they have a guarantee of income if they move to the midwest from a big city where their BI will go much further, which would blunt the demand increase in big cities.
It's a huge mess of interdependent factors and effects.
I think the idea is that there would be so much housing and food that there would be no way to compete (without the necessary manufacturing capital if/when BI becomes law) in the lower end market because the supply is so high.
People wonder "where is the money going to come from?" On a national level it could be newly issued fiat currency, which silences the "it's theft!" argument but then raises the crucial question: what about inflation?
Well, there are two issues here:
1) If the people are freed up to learn or take jobs (I wish minimum wage would be abolished in any jurisdiction that UBI is given out) then more dollars would be chasing more goods and services, so no inflation.
2) However, if there will be more money chasing the SAME number of goods and services, we would have to remove the money from the system by taxing corporations. And this is, in fact, something that raises questions of liberty (of corporations). Corporations can choose where to operate and they often choose tax havens.
What we should really be doing is recognizing the incredible changes that are coming because of AI and its effects on automation in the next 20-30 years. Demand for human labor will fall and experience massive shocks. Wealth creation will increasingly be done by ROBOTS.
This is a GOOD THING as it breaks countries' historic dependency on social security schemes working from having more and more children pay for the elderly. That leads to overpopulation and kicks the can down the road to the children.
Instead, we want to TAX THE MACHINES by somehow measuring the productivity gains from laying people off. Not enough to disincentivize R&D but enough to scale with the UBI and remove money from the system. The machines don't really need to keep ALL the money and the argument that "taxation is theft" starts to sound silly when you are taxing profits of corporations run largely by machines.
The other way, of course, is to redistribute the money to shareholders in the public stock market via dividends. This has been the "socialism" we've had so far in this country.
I accept that some people have this broad of a concept of "theft", and I have no problem (so long as it is clear what is meant) with using the word this way, however, once it is broadened this far, I fail to see any necessary connections with the moral implications of more typical definitions of "theft".
Normally I would say that printing more fiat currency isn't theft since it's usually done in a lawful manner. And since theft is by definition unlawful taking, then that wouldn't qualify. But inflating the money supply by 2-3 trillion dollars would be a generational transfer of money like we've never witnessed in the US.
I handled the inflation issue in my comment. In scenario #1 there is no theft from anyone even in your sense.
And frankly, when you open a store in a mall, it's not theft for the mall to use your rent money as it sees fit. It might build a toy train ride for kids that you disagree with, or spend on a promotion of itself. Same with a state you register your business in. We are talking about abstract entities here, but you are applying a word to equivocate with the visceral feeling one gets in a personal setting.
Simply stating that you've "silenced the" theft argument doesn't make it so. Anymore than the Church branding Galileo a heretic didn't refute heliocentrism.
Is anyone disputing that the purchasing power of one group/person is being increased at the expense of another against their will. This generally meets the accepted definition of stealing.
Newly issued fiat currency is an incentive to keep more money in circulation for goods and services.
You could just as easily make the argument that in a near-zero inflation economy, people who are ardent savers are also thieves of economic mobility, because they keep the vast majority of money out of circulation, which stifles economic activity (making it not just a zero-sum game, but actually a negative-sum game)
I mean, you have complete freedom of speech, so you can call an apple an orange for all I care, but labeling things like inflation as theft (and generally people like you also call taxes theft) just doesn't serve your argument and betrays a complete misunderstanding of basic economics beyond supply/demand.
Issuing fiat currency is a monetary policy tool, no more no less. It can be harmful or useful depending on the context it is used.
Assigning terms with a moral imperative like "theft" to a tool is alike to assigning the word "murder" to anything that can be used as a weapon.
There's keeping the monetary supply liquid, and there's pumping $2-3 trillion dollars into it with BI. Taxes won't pay for this scale of program, short of highly confiscatory rates, so the only way to fund this is to devalue currency by printing more money.
I didn't say "inflation was theft," I said forced inflation, with the goal of paying for something unsupported by government revenues is theft.
To be fair, you consistently call $2-3 Trillion theft, but I wonder why you use a phrase that anarcho-capitalists use for any amount of taxation? For them it is a matter of principle, not amount.
For the same reason that stealing a loaf of bread is usually a misdemeanor, and stealing a car, a felony. The amount definitively affects the conversation. If the Fed decides that 250 million $1 bills need to be replaced due to damage etc, and they print 251 million, that's not going to have a dramatic affect. If they decided to print 2-3 Trillion (annually, mind you), the effect would be horrendous.
As to phrases anarcho-capitalists use, I have no clue.
Intentionally devaluing currency is taking money from people's savings. It might not be considered theft by statute, because government, but it's still taking people's money. It's a great way to sidestep opposition to increasing tax rates.
I applaud the move to push this forward, but the cynic in me can't help but ask; is the federal government really willing to make a portion of their employees obsolete? Are the people who run these large bureaucratic departments willing to give up that power? How will AFEG & municipal unions react to this?
Perhaps I'm missing something, but how BI accounts for the fact that not everyone has the same basic needs or expenses? Someone will need expensive medications, another in-home care services, parents will need to spend money on kids, pay for daycare/schools, etc. Writing the same check to everyone might save you from bureaucracy, but it will put vulnerable groups in a relatively worse position, while single healthy people will profit from it. Also how do you avoid just deepening the gaps between the poor and the rest? Poor will still be getting approx. the same amount as they do now, but the rest of the population will get extra money they didn't have before, so the difference will be even bigger? Also wouldn't this extra cash flow create inflation, raising all the prices?
I can't respond to all of the needs and expenses you enumerate, but I'm of the opinion that you need to have a single-payer healthcare system or something similar that decouples medical emergencies from their costs, so that a basic income isn't needed to pay for those emergencies.
my main concern with this is that the working class will lose social status compared to those who don't work. In fact it could give those who don't work more status than the working class (my broad definition of working class would include anyone who does not have enough to stop working) because they have much more time. i don't think this is something we want to see. Although its arguably better than the current welfare system it still hurts hard-working people with little wealth. i would argue for a basic income in terms of food, shelter and some facilities, but not money. this will keep a clear class difference between the working class and dependent people. which means unemployment still means misery and work still means happiness. it would keep the incentive intact without being cruel.
Does your concern depend on the "dependents" receiving basic income, but the "working class" not receiving basic income? Or, does it depend on basic income possibly changing the signifiers of social status?
If it's the first case,
Most proponents of Basic Income want to implement either Universal Basic Income (everyone gets the same check, regardless of their means), or a Basic Income which drops off proportionally with earned income.
In a Universal Basic Income scenario, someone who chooses to work should always have more income than someone who does not work. Given how much social status is currently centered around wealth and income, a worker should have more social status than a non-worker.
If it's the second case, where we assume implementing UBI will change the markers of social status - I think this is pretty unlikely. For the foreseeable future, having more income than someone else means being able to buy rarer or higher-quality luxuries. Humans value rarity and scarcity.
Will recipients of Basic Income payments be allowed to move to somewhere with a lower cost of living where their payments will go further?
Handcuffing people to a location - especially one with a rising cost of living like Oakland - seems like it would not be in the best interest of participants receiving such payments.
> In our pilot, the income will be unconditional; we’re going to give it to participants for the duration of the study, no matter what. People will be able to volunteer, work, not work, move to another country—anything.
One of the big differences between the government writing checks and a private organization, are the tax consequences. Does anybody know exactly how that would work? Would it just be self employment income, with all the self employment taxes? Or would it be a gift (and tax free if under $14k/yr)?
I do not really know where I stand on BI yet, but my concern is that if the BI is coming from taxes, why not tax income less and tax consumption more? This will encourage people to still be productive members of society rather than trying to find ways to live off the BI forever.
> This will encourage people to still be productive members of society rather than trying to find ways to live off the BI forever.
It sounds like you have a fairly narrow definition of productive member of society. A lot of volunteer work has little or no monetary value (things like dog walkers at your city's animal shelter) yet still are good for society.
Volunteering full time on BI sounds like they are paid to volunteer, and my narrow definition is because I see people behaving similar to what I've observed with foodstamps.
finding ways to live off solely that and making little to no effort finding a job, simply finding ways to increase foodstamps by having additional dependants or otherwise.
these people are not volunteering more or what I would say are being productive members of society, yes they are likely a small percentage, maybe 1 out of 50 however, I see that percentage skyrocketing if something like basic income is provided.... I don't mind being totally wrong, I just find it very very very hard to believe people will still try to be 'productive' members of society ina general term.
not to invoke Ayn Rand, because I disagree with more than 50% of Atlas shrugged, but the whole concept of 'To each according to their need and to each according to their ability' does not work. people will abuse the system of BI just like SNAP or foodstamps or Dole are abused today.
just to add quickly, I do believe one day the need for many types of work will be minimized to almost nothing, so some solution will be required, but from what I've observed with proposed BI solutions I have very little faith in actually succeeding.
I dream of a day that was referenced in Star trek where all of these challenges were 'solved'. I do not see BI in its current infancy being a possible solution, it needs work and I'm excited to see more research on the topic because that is what it needs in order for a solution like it to be truly successful.
Landlords and colleges are likely to gobble up as much of that free basic income as they possibly can. Payday lenders stand to make an even bigger killing than they do now. If not done carefully, it could result in an even more quickly widening wealth gap than we have now.
I'm delighted this is moving forward and that the pilot program will be in Oakland! I lived in a cooperative house there years ago and experienced the sharp contrasts in wealth.
"We think everyone should have enough money to meet their basic needs—no matter what, especially if there are enough resources to make it possible. We don’t yet know how it should look or how to pay for it, but basic income seems a promising way to do this."
The bit about "how to pay for it" is interesting considering that Uber, AirBnB and other companies that are known to not pay corporate taxes and exploit their workers have been funded by Ycombinator.
Maybe Ycombinator should fund a startup that manages to have companies pay workers a living wage and pay corporate taxes. That would be a nice contribution to the world economy.
If the "pro basic income" people gave 5 mins of their time to charity for every hour they talk about being an online social justice expert, we would have already solved these problems.
BI fixes the symptoms, not the disease. The disease is that people think that they're being charitable by demanding social programs. Wrong. Being charitable means getting your hands dirty, helping people, educating them, physical presence. I dare you instead of typing hacker news comment, Google your local food kitchen, spend $10 on items they need. Show up in the flesh Saturday morning and actually do something besides flap your gums.
I think you're missing the bigger point that we have been giving out food for generations and it has not helped reduce poverty. You're basically telling everyone to go do all the stuff people have always been doing that never works.
We've spent $22 trillion (govt spending, not private) in the US fighting poverty since 1964, and arguably that hasn't worked. So lets spend even more money.
We're not sure how we're going to pick the participants yet, though we do know it will be a random selection process, in-line with randomized control trial principles.
If you know anyone from Oakland that has feedback though, feel free to have them get in touch! matt@ycombinator.com, or basicincome@ycr.org
I just hope they run this as a proper research study. The Millennium Villages weren't set up with controls and so there's very little research value to be gotten from all that effort.
Things to note:
1. Who is in and who is out is fluid. There are no well-defined communities and some people will get into the BI cohort purposefully (i.e. staying with a friend who is in the BI district or claiming to be family).
2. People move ... much more than one would think.
3. People are individuals but really, families are the core unit of society. Don't just measure individual outcomes, measure family outcomes.
From Sam's original post on BI: "We have some examples of something close to a basic income in other countries, but we’d like to see how it would work in the US."[1]
Why the focus on the US, exactly? Why not focus the research grant on the undoubtably massively larger data set of basic income / welfare programs in more Social Democratic style governments? Just from a scientific standpoint wouldn't that be a better study?
Wondering how long is this experiment going to happen ? Giving basic income to cover their existential expenses like a good food,water, shelter, clothing, education and healthcare is fine. However, the happiness depends on how much more can they save(to plan their investment) and also "invest" for their future to uplift from their current social living status to something higher.
Until and unless some time is given for the subjects to actually "act on their free will" I doubt whether this experiment would be successful.
I've got a question for the BI fans that I haven't seen addressed before: The U.S. is a huge country, with wildly varying costs of living. Will a UBI be adjusted for regional costs, or will it be a simple flat rate?
I can see problems with both options; with the former you'd encourage people to stay in (or move to) more costly regions, and with the latter you'd either be paying someone in Salina Kansas above the median income as UBI, or you'd have people on UBI in Chicago, Oakland, and NY still unable to pay their rent.
"We are living in a sick society filled with people who would not directly steal from their neighbor but who are willing to demand that the government do it for them." - William L. Comer
I just put in my YES vote for the upcoming Swiss vote on the topic. It won't get through mainly due to it being a very high-level proposal with too many questions open and a rather weak supporter camp. They could have done a better job of presenting models on how the economy would change which makes the financing part work.
Nevertheless, depending on what the share of yes-votes is it might trigger further discussion here and in surrounding countries.
Unfortunately, i'd be surprised if it gets more than 35% yes votes.
What impact does UBI have on technology and companies?
In theory I suppose more people will be able to afford a basic phone, banking, transportation etc so more eyeballs on ads and users of services. By getting out of the poverty trap, more people can be employed so even more expendable income on technology.
Will companies pay their employees less if their basic needs are covered? Then automation would be less of a cost advantage. Cheaper labour could mean a shift of manufacturing back to the US?
Though, on the contrary, you'd have to now pay people X amount above BI to get them to do menial jobs.
i.e. if you get $10k from BI or can get $12k from working building widgets, you'd have to decide if that time spent making widgets is worth the $2k extra vs the opportunity cost of leisure or painting or whatever.
> i.e. if you get $10k from BI or can get $12k from working building widgets, you'd have to decide if that time spent making widgets is worth the $2k extra
That's not how UBI works. The "U" in "UBI" is "unconditional", referring (among other things [0]) to the fact that it isn't means-tested; that is, it isn't reduced for outside income.
So, if you have $10k in UBI and there are jobs making $12k building widgets, you don't get $2k extra from working, you get $12k extra [1].
[0] It also refers to the absence of behavior testing, which is a common feature alongside means testing of public welfare programs.
[1] Before taxes. Income (including payroll) taxes will reduce this, but you don't lose UBI dollar-for-dollar (or, for that matter, at all) with outside income.
As a non-American, can I be a control group? We can research how basic income affects different cultures and stuff. Just send me free money and see what happens!
So the proposal is an expensive new social program to be paid for by governments that are already deeply in debt and unable to pay for their current liabilities?
Automation-apocalyptics forget, intentionally I assume, that new types jobs are created in the course of history, not only lost.
While that is no guarantee of how (much) the direction of the jobs market will shape, it makes thing more complex than the "we're sinking!" analysis, since there are more variables which take part than just "robots".
I'm very curious about how the participants other income will change. Income is the best proxy we have for productivity, so if their other income changes much then we might be able to make some interesting observations about their work/leisure tradeoff.
It would also be very interesting to see how productivity changes with respect to demographic factors.
Why isn't anyone talking about how they will actually be able to pay for this? We know how people respond already. It's called welfare. The interesting part is that everyone gets it. But the 1000lb gorilla in the room is HOW will it get funded. Do we have an energy boom like Alaska etc and fund it that way?
> We know how people respond already. It's called welfare.
Welfare is not the same as BI, and has different structural incentives, so there is no reason to expect that people will respond to BI the same as they do to means-tested welfare programs.
> Do we have an energy boom like Alaska etc and fund it that way?
No, we have a "growing returns to capital" boom, and fund it by taxing capital the same as other income, rather than tax favoring it.
> No, we have a "growing returns to capital" boom, and fund it by taxing capital the same as other income, rather than tax favoring it.
Could you please provide some sort of example of this?
> Welfare is not the same as BI, and has different structural incentives, so there is no reason to expect that people will respond to BI the same as they do to means-tested welfare programs.
I'm well aware they are not the same. However I work with many who are on wellfare and understand their mindset a good % of people who will be on BI will be these people.
> Could you please provide some sort of example of this?
An example of taxing capital the same as other income? Basically, its just elimiting reduced LTCG rates and other reduced rates of taxation applied to capital gains. (Probably with added provisions to allow advanced and deferred recognition of gains so that irregular windfall gains -- capital or otherwise -- aren't unfairly taxed as all current-year income in a progressive system.)
> However I work with many who are on wellfare and understand their mindset a good % of people who will be on BI will be these people.
In a UBI, everyone will be on the UBI. The initial percentage of the people who will be on UBI that are current welfare beneficiaries is equal to the percentage of the population that are current welfare beneficiaries.
(In what I see as a sensible transition to a mature UBI funded primarily by taxes on capital, the early net direct beneficiaries of UBI are mostly not current welfare beneficiaries, but working people who are not eligible for means-tested welfare programs, since means-tested programs would only be phased out as UBI-counted-as-income resulted in eliminating eligibility for them.)
This is probably where my ignorance of socio-economics will shine, so please bear with me. In all the articles I've come across regarding universal basic income, I've never seen the idea of a flat tax rate mentioned (e.g. everybody, everything, 20%). It seems to me that it could work for the same reasons UBI is supposed to, i.e. reduce overheads among other things, while in this case also potentially reducing the risk for abuse and manipulation.
In my view, a universal flat tax rate would go hand-in-hand with a universal basic income. Since the essential aim of UBI is to ensure people can at least meet their basic needs to achieve a certain degree of freedom, it wouldn't seem too far-fetched to imagine meeting those needs at the societal level as well (which is already done to a large extent in a lot of countries anyway), i.e. free public healthcare, improved and completely free public education, even free electricity, water, internet and so on. The knock-on effect obviously being that the UBI wouldn't need to be as high should some or all of the basic needs be covered by default as public services.
Taking this a bit further, I'd like to see companies be incentivized to have their employees participate in Education in general. For instance, employees could spend 4 hours/week of their working time to go explain what they do to kids or run training sessions for adults trying to change career paths. The employer could be rewarded through some sort of tax break or something similar. Teachers would of course still exist, but the "burden" of Education would no longer be theirs only. I think this would have a number of benefitial effects:
- it would subsidize the cost of Education to some extent
- it would help level and adjust the job market more rapidly
- it would help participating employees have a better understanding of their own job
- it would expose people undergoing education to more professionals as opposed to almost only academics
But most of all, I believe it would make people realize that Education is everybody's responsibility and that it is a continuous and evolving process for people of any age or background.
There's obviously a lot more to be said about any of my points above, but I'd be interested to hear what people here think.
I understand that YCombinator would not have the ability to set tax rates and such, this is more of a thought exercise.
If I understand your proposal correctly, you propose to
* set the income tax to a flat 20%
* provide no (or very little) universal basic income
* Increase freely available benefits
Addressing the tax issue specifically - you propose the benefits are:
* Reduce overheads
* Reduce risk for abuse and manipulation
I don't think a flat tax rate will achieve the things you want it to.
A progressive tax rate doesn't add any administrative overhead at all, it's just a different way of deciding how much tax you pay once you've correctly totaled your income.
Right now, I see 3 general categories for 'abuse and manipulation' in taxes - fraudulently misrepresenting your income, fraudulently misrepresenting deductions you may qualify for, or legally structuring income and behavior to pay much less taxes than otherwise expected (i.e., finding 'loopholes').
Your primary way of combating those abuses would be to simplify the deductions people can take. To a lesser extent, you can also simplify or refactor the different definitions of income.
A flat 20% tax rate means decreased government revenue overall, lower taxes for the rich, and higher taxes for the middle-class and poor. Most people would consider that to be a failure on every point.
Thank you for your comment, you bring up some very valid points. I think I might not have expressed myself clearly enough on some of mine so I apologize for that.
set the income tax to a flat 20%
The 20% I mentioned was a completely random figure, my guess is that it should be much higher, but this would obviously need to be researched properly. This also wouldn't solely be for incomes, but rather for all financial transactions, which I believe (though I may be misguided) would reduce potential loopholes that rely on declaring income in various ways (including not as income). I think this idea is more or less in line with your idea to "simplify or refactor the different definitions of income".
Additionally, with a flat tax rate, I imagine it would be much easier to subtract taxes at the source (e.g. as is done in the UK for incomes) which in turn would reduce administrative work and therefore overheads.
provide no (or very little) universal basic income
I am definitely in favour of a substantial universal basic income (within reason, of course). I simply believe that it would work better alongside a strong support network (i.e. education, healthcare, etc.).
A flat 20% tax rate means decreased government revenue overall, lower taxes for the rich, and higher taxes for the middle-class and poor.
Regarding "lower taxes for the rich", I'm not sure how true that is (again, if we agree that 20% is a made-up figure for now). The rich benefit from ways of skirting these things that poor and middle-class people do not have. This reminds me of an article by Warren Buffet in the NYT on how the rich get special treatment (http://www.nytimes.com/2011/08/15/opinion/stop-coddling-the-...).
As for poor and middle-class people, I think it's important to look at the bigger picture. The initial tax spending would be, as you note, possibly higher, however relatively speaking this is money they would no longer need to spend on basic necessities, which for society as a whole seems more beneficial and a greater equalizer.
I want to give major kudos to Y-Combinator for getting into research, and especially for launching a Basic Income experiment. I consider this Elon Musk-level thinking!
Due to the fact that we're automating a ton of work and approaching a post-scarcity type society, it will definitely be important to determine if basic income is achievable.
Since BI often discussed in the context of ML taking away jobs, why not perform this study on Uber drivers.
As someone who walks by Uber's new Oakland HQ regularly, it is always covered in anti-tech graffiti. Uber might gladly fund part of the research for PR reasons alone.
I can't help but wonder - if there is basic income, won't the economy adjust and prices would rise so that any basic income would be insufficient again to buy you anything more than food for a week (not enough for rent or anything fancier)?
I hate to be the ostensible libertarian, but unless EVERYONE gets BI, the system will only perpetuate the poor staying poor just like so many other government programs that disincentive moving up in income due to the loss of benefits
While I can't speak for everyone, I expect most proponents of "Basic Income" as a new social structure are advocating for "Universal Basic Income". i.e., everyone gets a check.
In addition to, ideally, providing for a basic level of needs, a Universal Basic Income also enforces a certain equality of social status - there's no stigma to getting your UBI welfare check if your rich neighbor across the street is getting the same check.
The most commonly proposed alternative to a truly Universal Basic Income is the Negative Income Tax. If implemented with a progressive tax system (like the U.S's current tax system), there's still no disincentive to work, as every marginal increase in earned income is associated with a marginal increase in real income (even as the negative income tax benefit drops off).
Actually, for what it's worth, one of the strong arguments for switching to UBI is that our current system of welfare programs actually disincentives moving up in income! In current implemented welfare programs, there are several income-tested thresholds where support drops out entirely - meaning that a marginal increase in earned income can represent a decrease in real income.
Great empty platitude there. Socialism is about economic democracy and worker self management + ownership, although the term has become increasingly nebulous in recent years. Classic socialism, as in what was spoken of by those like Marx and Kropotkin, had nothing to do about some redistribution of money. What is related is social democracy and conservatives using the label for any social spending they don't agree with.
Only startups actually have to raise their capital in an entirely voluntary manner, with all the due diligence and stipulations that entails. Government just takes it. It's the difference between your wife shopping for groceries with your credit card and an armed gunman sticking you up the ATM telling you to comply or die.
It's the threat of violence. Like I said, you either comply or die. Just try resisting your eventual imprisonment and find out. Of course people are well aware of what the threat ultimately entails and as such choose to comply, but this makes it no less immoral.
You'd think, if that were the case, that at least one person would have been killed for not paying their taxes in U.S. history. Can you cite a single example? Otherwise you're employing empty rhetoric.
Given the couple hundred million people who are compelled to pay taxes every year, if they truly faced a "comply or die" ultimatum you would expect over the decades to see thousands (at a minimum) of killings.
Eric Garner and quite a few others are terrible examples of police brutality that minorities face in the enforcement of what should normally be non-lethal actions under any circumstances, even total non-compliance. Lethality here is a method of racial and/or class suppression, not so much enforcement of specific laws (e.g. jaywalking, loitering, cigarette tax compliance).
If only people without an income qualify, then it is not Basic Income. Basic Income is received by everyone without any means test. The purpose is to avoid perverse incentives in which people on welfare see little value in getting a job.
Then you get into a whole mess of determining what's actually a company and what's a job and lose one of the (hopeful) benefits of BI which is allowing people to explore creative endeavors like the arts which aren't totally job based or allowing people to study for a better job without having to compromise and basic living standards.
Well it wouldn't be 100% subsidized, meaning that the company has to payout some money. With a subsidized payout, I imagine companies would hire even more people. And, even if someone gets away with not actually "working", there's a cap on the number of dollars the government subsidizes.
As much as I like the idea of programming side projects by just relying on BI, I'm not sure how realistic that is; I think cost of housing and food – both of which are increasing – needs to get much lower for that to be possible.
You misunderstand me. My main point was that by making it a job subsidy you're limiting the benefits to jobs only where UBI would allow people to pursue non job endeavors like education or creative fields without being destitute. Not that some people could skirt the system by making a company just for themselves to get benefits.
> As much as I like the idea of programming side projects by just relying on BI, I'm not sure how realistic that is; I think cost of housing and food – both of which are increasing – needs to get much lower for that to be possible.
The point of UBI would that it would be set high enough to cover those costs. And if a particular location is expensive enough that it couldn't you'd have the freedom to move wherever it could to support you. Living in the mid-west is incredibly cheap compared to any big city or the coasts after all.
Surely we could work out education / creativity. For example, the gov could consider attending a university as a "job", and send funds that way. In any case, why worry about people "skirting the system" when the alternative (UBI) requires no work at all?
I'm _not_ worried about people getting paid to do nothing. It's a feature not a bug to me because it gives people the freedom to do non job things like the arts which are culturally enriching or do volunteer work helping other people.
False dichotomy A job is not either "feasible and necessary" or "unfeasible and unnecessary".
Ultimately, the idea is that creating a job at a loss would be preferable to "giving money for free" because it could/would cost less, but not less importantly, it would be a potential for wealth creation.
If, stupid example, somebody would be paid for running on a bike to produce electricity, that would create wealth by, say, reducing market prices, which the alternative, staying at home watching TV, wouldn't. Of course, I'm talking about large scale, and I stress that this is a st00pid example.
I personally like this idea, but it may be too complex to put in practice - even at a loss, it requires effectively handling a business. But at the same time, would that business be necessarily worse than the (perceived) government efficiency?
The problem with such make-work is that you're paying people to do work which shouldn't be done. You're assuming that "staying at home watching TV" doesn't create any value—but it creates entertainment value for the consumer. If it didn't have any value, nobody would buy cable.
Let's say we have some totally trivial job. Say, generating electricity from running on a bike. The market wage for this would be $1.
In the status quo, we might assume that nobody would do that job. If nobody is willing to do that job, it means that their opportunity cost is greater than $1—ie. that even if they are unemployed, their non-market activity is worth more to them than $1/hr. Let's assume their non-market activity is worth $5/hr to them.
Now a government subsidy comes in and pays the employer $5/hr for everyone they employ. So the employer starts advertising bicycle jobs at $6/hr (in practice, they would keep some of the subsidy for themselves). Now the individual is willing to take the job at $6/hr.
Somewhat counterintuitively, this has destroyed value. In the status quo, we were paying nothing (no subsidy) and total value was $5/hr (the value the person gains from their leisure time). With a subsidy, we pay $5/hr and gain only $1/hr in total value (the benefit of the person riding the bike). This is obviously worse.
The only way that your system makes sense is if you treat leisure time as worthless. But that's clearly false: if leisure time was workless, everyone would work every possible hour and unemployed people would all be walking around the streets looking for pennies.
That's a really good, illustrative example. It seems true that, given a single hour, you're "destroying" the value of the individual's leisure. However, the individual wouldn't have to work away all their leisure time, would they? Assuming a living wage, they would still have the opportunity for leisure.
Also, I would imagine that the world is big enough to get a job at company involved with a topic you're at least mildly interested in. I wonder if subsidized wages would better support art studios?
> It seems true that, given a single hour, you're "destroying" the value of the individual's leisure. However, the individual wouldn't have to work away all their leisure time, would they?
Sure, but every hour they're working would destroy valuable leisure time.
> Also, I would imagine that the world is big enough to get a job at company involved with a topic you're at least mildly interested in.
That's a really good point. There are whole classes of jobs which lie on this spectrum, up to "volunteering"—jobs which provide sufficient non-pecuniary benefits to not need a wage at all.
It's also a big problem with the current system where jobs and living are inherently coupled. There might be a job which could pay $1/hr which I would gain $7/hr in satisfaction from, but such a job can't exist because of minimum wage laws.
A wage subsidy might be a way of encouraging the fulfillment of such jobs, but it's unfortunately also going to end up subsidizing destructive jobs (like the minimum wage Walmart jobs that a sibling comment refers to). A subsidy program is very open to manipulation and also entrenches us in a model where a "job" should be the key determinant of income, even though lots of valuable work can be done through freelance or casual collaborations.
In contrast, UBI directly addresses the problem of needing to work to live. So people can do thinks like focus on art studio work (which might be fulfilling enough to require no wage), but can also do slightly less fulfilling work (for example, trail maintenance) at below minimum wage.
Walmart today is the greatest example of subsidized jobs in practice. Their employees are underpaid and are given social benefit brochures on their first day working. Townships will give Walmart thousands in subsidies to get a store to move in, just to have all the wealth of the town vacuumed up and shipped to the Walton family while all local businesses wither and die because they cannot compete with the economies of scale at hand.
So the state and the taxpayers get to subsidize Walmarts profits, when Walmart could not operate in half the locations it has without corporate welfare to subsidize the costs of their employees.
This already happens today, it happens in many industries (including agricultural harvest and food service) using circumstantial employment rules to underpay employees and have the state subsidize their cost of living so the business can be more profitable.
It is absolutely dystopian and against everything the UBI movement stands for. It is much more reasonable to liberate peoples time to do what they think is valuable, rather than have some bureaucratic state agency colluding with business interests to determine what is valuable enough to force them to spend their time according to that metric (and hint, their measure of value is going to be shareholder value in all its forms).
I posted a comment with a link to a NYT article that mentions subsidizing jobs.
I do wonder though -- if the government subsidizes jobs by $X/hr, what incentive is there for companies to not just reduce their contribution by the same amount (so the net to the employee is the same)?
I'm no economist, but I would imagine the effect of doing so would phase out quite rapidly for jobs above the currently-prevailing minimum wage.
So while a $10/hr job might not be able to become a $7/hr job, I would expect that jobs at e.g. $20/hr would automatically become jobs at $17/hr in an environment of a $3/hr subsidy.
But I admit I haven't spent a ton of time thinking about this and am probably missing something.
I am also just thinking this through for the first time :)
If what you say is true, then I think we will have just successfully upgraded minimum wage to a living wage, and have allowed companies to hire more people at higher wages due to the wage subsidy :)
I think most of that effect in the example was achieved by the minimum wage increase. The wage subsidy then ends up as a gift to the employers.
Big employers in the US already do this to some extent, by paying unsurvivable wages with the knowledge that their employees will make up the difference through state-sponsored transfer payments. It seems that an across-the-board wage subsidy would simply extend this practice further up the income spectrum and increase margins for employers across the board.
But isn't the argument against min wage increases that it would decrease jobs, since employers wouldn't be able to hire? Or, that robots will be cheaper than a higher minimum wage? That's why I suggest both of these ideas together might work.
After all, you don't have to subsidize all jobs; perhaps only subsidize the lower-income jobs, while letting the market handle the higher-paying ones (like it is now).
I would argue that the idea is not quite mainstream yet outside the tech community. The tech community though is very concerned about UBI as we see automation barrelling down the line and making a large percentage of the population unemployable. When that happens many a programmer would like to not be lynched in the streets by Luddite mobs for doing their job.
> It just occurred to me that birth rate might go up on Basic Income, which wouldn't be very sustainable.
IIRC, empiricially birth rate tends to go down with a stronger social support network (probably because people rely on children reaching adulthood less as an emergency support).
Let's call this what it is. Any system that short circuits the basic human need for hard work and reward compensation will never be a success. You can sugar coat it and re brand it any way you want to. Humans need that feedback loop of blood, sweat and tears before they receive a 'reward'.
That theory is actually pretty challenged. Makes me want to find time to enhance the wikipedia article, but it would be a lot of work.
Among critiques are that the !Kung San people the study of which is at the basis of this theory _weren't_ actually exclusively (or possibly even primarily) engaging in hunting and gathering as economic activity at the time the anthropologists studied them, but those anthropologists just chose to leave out the wage labor as "atypical". And that the !Kung San at that period of history actually were a regional underclass -- if they didn't work much, that's because they didn't have many options, and is similar to the extremely poor in any society. See Edwin Wilmsen, _Land Filled with Flies: A Political Economy of the Kalahari_
That's just a start.
But anyway, I agree with you that it's ridiculous to think that people can't be happy unless extorted to work for others at threat of starvation.
Why don't you hire someone who will need the basic income themselves? Do you want your team to be comprised of a bunch of PhDs who have never needed a basic income? Or is it more important to have PhDs on the program so it at least looks good, even if it doesn't scale or succeed?
This is very Venus Project'ish! I am very excited by this blog post. If anyone wants to learn more about some fundamentals behind this, start down the Venus Project path and prepare to think differently.
I think a Universal Basic Income would help with this. Given the ability to survive without working a shitty, low-paying job, you now have the ability to say no to said jobs. Meaning demand for said jobs goes down, forcing the employer to automate or raise wages so that someone takes the job.
There's a lot of skepticism about basic income, especially when it comes to how does it save money? The top comment as of this writing is questioning it:
> But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food? Do you tell them "tough shit, you've exhausted all your social safety nets" or are there safety nets below BI, essentially recreating the welfare programs previously destroyed? If so, how do you prevent fraud without a department following up on Joe's twelfth "my car broke down" case of the year?
Allow me to digress for a moment, I've recently been reading "The Expanse" series, and they have a throwaway snippet in the second book (i.e., not a spoiler) where a Martian Marine is walking the streets of a city on Earth. There's a girl who sells her a hot dog. The girl says that she's doing it for work credits. After she accumulates one year worth of work credits, she can attend university and get a real job and make money. Otherwise, she'd have to be "on basic."
Like I said, it's a throwaway scene, so there's not a lot of detail, and even in the later books when they talk about being "on basic", it's not a detailed description. But the girl in the story distinctly mentions "money" after "getting a job" which came after "university." That implies to me that, on some level, money doesn't exist for those "on basic." (And to be clear, in this not-terribly-futuristic Earth, everyone's on basic.)
In other words, the term "on basic" implied to me that you get food, shelter, clothing, access to public transportation, K-12 education, healthcare, and basic internet automatically. But if that's the case, why would anyone want money? Well, the implication here is that the food is minimal: ramen noodles and vegetables and beef. Shelter are studio apartments. Clothing are Wal-mart quality. Basic internet is more like 56K than broadband.
In the Expanse Earth, if you want more than that minimum (and most of us would), then you have to spend a year working to prove your willingness to contribute to society, and then you can go to university for free, then get a job and make money. That money can buy you things like a house with a yard, a car, surf and turf, and vacations to the moon.
If we were to somehow (and that's a big if) go with the definition of "basic" from The Expanse, it's almost impossible to squander it. You aren't handing Joe $500 and saying "This is your money for the month. Don't blow it." The food and clothing are free. (Presumably with demonstrable need, but in a post-scarcity society, perhaps T-shirts cost virtually nothing compared to the previous welfare systems and you might as well just hand them out on demand).
I'm not an economist, and I don't know the ins and outs of basic income, but that one throwaway page in The Expanse made me think a lot about what I think basic income should look like... and I don't think it should look like a monthly check.
> I'm not an economist, and I don't know the ins and outs of basic income, but that one throwaway page in The Expanse made me think a lot about what I think basic income should look like... and I don't think it should look like a monthly check.
1) If Basic Income is doled out slowly (say every week or every day as a credit card), then it's nearly impossible for someone to die from starvation. Should we also take away their knives just in case they commit suicide some other way?
2) The idea you mention is not "Basic Income", it's something else. And the major problem with that "something else" is: Who gets to decide what level of shelter is "good enough for basic"? Who decides what quality of t-shirt is "good enough"? Who decides which level of Ramen is "good enough"?
Having the government (or even a company) decide what products millions of people should get is Communism. It's pretty obvious that everyone getting these products will be unhappy with them. (Some people will think they are too cheap, others will think they are too expensive. But few people will be "happy" about it.)
Basic Income is giving everyone some money and letting people spend their money as they wish, just like Capitalism. Companies are forced to read the market and adjust their products to answer new demands. If they don't, some other company gets the dollars. Heck, science tells us that even if people choose to buy the exact same products as in the above paragraph, the people who choose it will be happier because they got to choose.
Everyone will choose to make their own trade-offs. In fact, some people will choose "cheap everything" in order to save up money. With their saved money, they can purchase "Luxury" items. So all companies benefit, not just the low-end.
For example, someone can choose to eat cheaper ramen in order to afford an XBox (people already do it today!). If many people start making that same trade-off, the market can respond and start chasing these dollars. Maybe Microsoft decides to make a low-end XBox. Maybe some competitor does. Maybe some rich people buy the new low-end XBox because they like its attributes better. Everyone with money is free to choose. There is no walled garden between the haves and have-nots.
No offense, but the idea in your book sounds a lot closer to "prison" than Basic Income.
Gonna have to disagree with you. I think your view is a bit pessimistic.
> Who gets to decide what level of shelter is "good enough for basic"? Who decides what quality of t-shirt is "good enough"? Who decides which level of Ramen is "good enough"?
> No offense, but the idea in your book sounds a lot closer to "prison" than Basic Income.
You don't have a choice in prison. In prison, you eat what they feed you, live where they tell you, wear what they give you, and if you don't want those, then you get nothing at all.
You DO have a choice in this "basic" world. In a "basic" world, you get those things no matter what. The government picks it, sure, but they say "This is what you get at a minimum. If you want more, here's a path to contribute to society, and society will compensate you with money, and you can use that money to buy nicer stuff."
Post scarcity doesn't exist. Someone has to make the T-shirts. If you think people would be better off if everyone had the same tshirt instead of a variety of choices that is the system we already have. The government making T-shirts at cost and distributing them is communism and it has not worked in the past.
Sure, the someone who makes the T-shirts is the someone who wants to earn money, as opposed to sitting "on basic." I'm not sure how you missed that part. It's in the 7th paragraph.
The point being that it doesn't take 7 billion people to provide for 7 billion people. It might take only 1 billion people, or 500 million people, or even 100 million people, to provide enough resources to cover everyone else.
Part of the reason we're not in a true post-scarcity society is that we as a society have decided that in order to get stuff, you have to have money, and in order to get money, you have to earn it, and in order to earn it, you have to have a job. So we have all of these unnecessary jobs out there that exist solely so people can make money without necessarily contributing to society.
And so the dream, such as it is, is two-fold:
The first part is that we provide a basic floor of services to everyone. That 100, 500, or 800 million people that are needed to provide resources will do so in return for money and will therefore have more stuff. The rest can work if they want, or subsist on the basic floor. That's not communism.
The second is that by providing that basic floor, we can eliminate the notion that you have to work and contribute to survive, That's true today, but it doesn't have to be. We could eliminate the busy-work that almost all of us are doing. We can get rid of paper-pushers and ditch diggers. We don't need them all. The laws of supply and demand would push people into more productive roles, rather than simply working for the sake of a paycheck.
Like I said, I'm not an economist, nor am I an expert on any of these things. I read a sci-fi book, and it made me think about it. That's it. :)
> The point being that it doesn't take 7 billion people to provide for 7 billion people. It might take only 1 billion people, or 500 million people, or even 100 million people, to provide enough resources to cover everyone else.
There's plenty of empiric evidence from wellfare states like Norway, Denmark and Sweden that "enough" is not enough for the receivers.
The people who receive always wants to receive more. We are not talking about giving people food and shelter anymore -- the level of welfare includes TV and internet subscriptions, smartphones, brand name sneakers and junk food. Just to name a few of the "Basics".
Due to human nature, the level of welfare demanded by the receivers will always be higher than the available welfore.
Of course there is evidence that people on welfare want more of it. You are already socially ostracized for being on it in the first place. Everyone around you spends tremendous effort to remind you if you are on welfare you have "failed" in society. And while I may not be privy to the extent of criticism in Scandinavia, I know stateside the requirements to even get on most of these programs are brutal and invasive, and state agents will take every opportunity to try to tell you how you don't need food stamps because you must have enough to live off with $200-300 a week income.
UBI is about discarding that - that system, broken fundamentally, that makes the poor the enemy of the helpless, and works to exclude you rather than include you in society. Instead of being a leech, you are just another person. Whether or not you make more than the minimum is up to you, but if you cannot house and feed yourself with the means to do so provided you, you are no longer the pitiful homeless guy on the street corner, you had the opportunity and you refused it. But nobody can target you for having a UBI - because they get the exact same money too, enabling them to take more risks and follow their passions more than they otherwise would. Workers benefit tremendously from it through the increased bargaining power it gives them with their employers, possibly enough to justify the increased tax burden alone from their perspective.
And it is in its name - welfare or unemployment insurance is broad and has its definition changed to fit the narrative. Of course you can end up with luxury goods attached to welfare when dealing with people who had such things but now do not, but its supposed to be insurance, right?
None of those contradictions need enter a dialog about UBI because UBI is not complex. It is intentionally simple, to avoid the corruption from both the state and the citizen level. There can be no mistaking the intention behind it, and thus anyone can obviously see when anyone is trying to mislead on what that intention is. Unlike with draconian and bloated welfare systems where you can have dozens of programs all overlapping all under or over funded and all ripe for abuse and exploitation, UBI is dead simple, and the UBI recipient can want more all they... want, but part of the reason you live in a republic and not a democracy is to avoid the rampant runaway will of the people. Because if we had that now, wouldn't we be taking the fortunes of every millionaire and billionaire yesterday?
> Instead of being a leech, you are just another person.
There are still "leeches", they may just be harder to discern.
For example, imagine a small community of 5 people. Each receives $30k/yr in UBI. 2 of them are homemakers, 1 is an artist, and 1 plays video games. None earn any additional income. The fifth person owns and operates a small factory, earning $300/yr (of which he pockets half).
Obviously this is overly simplistic but it's clear the leeches are the individuals who do not contribute funds (whether it's via excise taxes, income taxes, or inflation) in excess of the sum they received as BI.
Obviously somebody is subsidizing them (ultimately under threat of violence if they refuse).
There are only two options on how to resolve the growing disparity between labor and capital due to automation. Either you violently take the fruits of "labor" from capital that has no labor (automated factories, self driving vehicles, the actuaries, secretaries, typists, and accountants already displaced by computers, the engineers, assembly workers lost already, etc) or you take the means of production themselves.
The 20th century saw several attempts at the later. They never worked, because you were centralizing control of everything into the hands of few, which breeds tyrants. But the status quo is decidedly more and more imaginary as we progress towards post scarcity. We already have implemented all the mechanisms needed to pay a UBI, and while I would certainly hear arguments that jus what we have now breeds tyranny, what we have now has been the most effective yet, and UBI is the natural progression into the post-labor age.
Of course, I'm willing to field alternative solutions, but just like anyone sane will not give climate changer deniers the time of day in actual debate anymore, it is only a matter of time before people saying "nuh uh, no way, Ima stick my fingers in my ears and ignore all the economic signaling that human unskilled labor is dead" is just as ostracized for its fictitiousness.
As the saying goes, human desires are infinite whereas the resources necessary to fulfil them are finite.
In a market economy, desires are constrained by the value an individual is able to provide. Under a UBI, I guess they'll just be constrained by a politician's willingness to say "no" and the tax cattle's willingness to produce.
People can decide what they need. It is a lot less bureaucracy to say "Here's a check that should be able to get you shelter, clothing, and food -- go find it." rather than trying to place everyone somewhere.
I just see way too many people not doing this. BI would be like winning the lottery to these people. Someone would hand them a check once a month and they'd go spend it on useless stuff.
To top it off, they'd be first in line to complain about how crappy "the system" is.
People will complain about anything and everything. What is extremely valuable about UBI, though, is that unlike traditional welfare systems where those who squandered it are often just those who are also the most pitied, there is no ostracism for using a UBI and no social isolation for it because everyone gets it, and those who cannot manage their money have no one to blame but themselves.
Today, the poor are defensive of one another to some degree, defending their "way of life" even when it is exploitative of social safety nets because they have to fight for scraps and every step of the process in getting such benefits is humiliating. It should surprise no one that once people have it, they are happy to blow it and stick an effective fuck you back to the society that ostracizes and criticizes them.
Which is one of the pillars of utility in UBI. It is a panacea solution to negating hostile poverty based cultures like ghetto. There is no more war against the poor, or active emotional attack for needing help. Everyone gets the help, and there is no vector for abuse through it, so those who are aggressive towards it or squander it are no longer fighting the man but are just fools who deserve no pity.
If that were the case, then the dividens should be paid proportionally to the "collective" taxpayer... the ones who paid the most taxes... the wealthy.
You totally don't get it and probably never will. Wealth isn't created equally and will never be. Do yourself a favor and read up on Venezuela.
Agreed. But that wasn't the claim (Equally != Collectively). It takes the whole society to produce both the demand and the capital for wealth creation.
> dividens should be paid proportionally to the "collective" taxpayer.
Although the IPhone example did refer to public financing; focusing on taxes here is missing the point, which also includes wealth without such an obviously direct link to government financing.
"The top one percent of income earners, who paid 38 percent of federal income taxes, faced an effective tax rate of 23 percent." [0]
"The richest 1% of the world’s population now owns 50% of its total wealth, according to a report by Credit Suisse." [1]
I was in the top 5% last year. I paid an effective tax rate of 28% federal, and almost 45% including state/local. Why should I give one flying fuck if the people that control 50% of the world's wealth pay a majority of taxes, if they pay a lower effective tax rate than I do?
This idea that the 1% pay more than their fair share because they pay a majority of taxes is some ridiculous double-speak. One single percent of people control 50% of the world's wealth. You want me to feel bad for them how?
You're right. I am. And the stats above were US focused. (The 50% of wealth stat holds[0]).
The point, though, was GP's sole contribution was a link pointing to an article that the top 1% pay nearly half of federal income taxes (actually 45.7%) as a counter-point to its parent claiming the rich don't pay their fair share.
Well, 23% federal is not their fair share, based on income and wealth accumulation.
As to me being in the global 1%, there is no doubt. But like I said, I paid a lot in taxes, and I champion basic income (see any previous comments of mine on the subject). I don't defend high earners as unfairly burdened, and I believe that poverty and lack of healthcare in this world is a political problem, not a money/resource problem, and the fact that so many kids in the US, let alone the world, go hungry at night is a travesty of epic proportions.
Because you and I are likely to become useless. If we are not capital owners, who do not have the means to survive exclusively off the value of our assets, then we will become useless to the economy in this century.
We already do not send people to prison for unpaid debts. And it is not a genocide we could easily see through - the unemployable, a number growing daily through automation, will not just sit down and die, but likely burn all of society down around with them if abandoned by said society.
This isn't some isolated fragment of the population. This decade, its going to be 11 million US citizens associated with the trucking and transport industries. In the decade following, service jobs, office jobs, actuarial, law, and medical jobs will all be going to AI neural nets and robotics with realized vision. And if we ignore how they contributed to the economic engine that produced such abundance, and let them starve while the owners of the means of production reap near infinite supply, that would realize our current extinction event to its fullest.
Jobs are for machines. Not so distant future. Only a few percent of people are then needed to do actual work, and mostly because they freely choose to do so... Like agriculture in the past: only .0X of people can feed us all, so to speak. 80% of all Jobs in the western world are already bullshit jobs, that can be eliminated without any disadvantage.
Ultimately one is truly free when he can decide what to do with his time on earth without any pressure.
Or, to put it into perspective: why bother about funding for a tech startup, when a few friends can choose to Code stuff they want, just for fun, without any risk or have to live on ramen? Its a whole new level of entrepreneurship that would be enabled.
First of all, not everyone should work. Be it a child that lives off of his parents' money, a stay at home mom whose bills are paid by her husband, or a young, poor but promising artist who lives in an apperment from his mecenas.
BI is immoral (imho of course) because people get paid for doing nothing. It sends a message to society: laziness pays.
Being for or against policy because of the "message" it sends has historically been a pretty bad idea.
Just look at the drug war, where we don't want to send the "message" to kids that drugs are OK.
There's no telling what incentives people will actually have once BI is implemented. Maybe they'll actually be more incentivised to seek risky and rewarding work because they have a guaranteed safety net.
If laziness and productivity pay the same BI (that's what a BI is), then it doesn't send a message to anyone in particular. A person with a BI can still gain more by working. The incentive is still there.
And that's what it is: an incentive, not a moral. It's not immoral to give people something that benefits them.
> BI is immoral (imho of course) because people get paid for doing nothing.
Consider that without enough money to live, people will not do nothing. They will steal and riot. Look at it this way: like other social programs, a BI can be thought of as a way for rich people to buy a more stable and peaceful society in which to live.
I think the concept of a BI is unnecessary and poorly thought-out, but it's not immoral.
Lack of sex and romance is immoral: why should anyone have to find a consenting partner?
The obvious answer is that rape is an initiation of force. It's immoral. Your needs or desires don't change that.
Lack of BI is not immoral. It's like saying lack of trust fund is immoral. It makes no sense. People don't have a moral obligation to provide you with things.
Anyone is free to work as hard or as much as he or she wants - of course, this is not about the ill and the disabled - as long as she doesn't come to the tax payer for extra money.
I grew up with basic income. In high school my parents gave me $25 a week. If I wanted a new bicycle or expensive sneakers I had to work. At the time $25 covered going to the movies on a Friday or $7 grand stand seats at Fenway.
Maybe we should look at how teenagers manage allowances.
I don't think that's a good test case because allowances don't have to go to things like basic necessities so leisure and nonessentials get all the money and there are a lot of constraints on what a teenager can do. They're bound to their home and have limited free time to do other things.
I presume your strong, proud, pull-yourself-up-by-your-bootstraps oneliner throwaway comment was well thought out, so perhaps you could shed some light on the interesting artistic choice of failing to put a space between "find" and "out"?
Look at your self righteous attitude. Maybe you should grow some tolerance for alternative ideas and thoughts. There are many of us who are skeptical about the idea and would like to see how it goes.
>Maybe you should grow some tolerance for alternative ideas and thoughts
Yes! Exactly! That's just what I wanted you to do! And you even elaborated a bit! A nasty throwaway line like yours about how it's obviously going to fail does not telegraph that you're "skeptical about the idea and would like to see how it goes" -- quite the opposite. You've already determined that the study will fail, and that's the conclusion you're interested in seeing. Think I'm wrong? How could I have reasonably concluded otherwise based on "[o]r moving backwards, the study will findout"?
Why not just give them money? If someone is "too lazy" to work, they're not going to be productive in any job anyways. We already give these people substantial subsidies in the form of food stamps, housing assistance, etc.
If someone wants to not work and live in a bad part of town. No offense, by why do you care? You'll live a much nicer life than them, working, and having more.
I have a hard time understanding how BI is going to afford everyone the ability to live in a nicer part of town. "Nicer parts of town" are a scarce resource. As such, they're costly. If you increase the BI to a level that would presently afford everyone to live in nicer areas, then the prices would simply rise commensurately.
Also I'm not really sure what safety has to do with the BI. The whole point is that each person gets $n and they can spend it as they see fit. Maybe someone would like to spend 10% of their BI on secure rural accomodations. Maybe another person would like to spend 100% on a sketchy rat trap in the Tenderloin. That's their prerogative.
When people talk about only having a limited number of jobs, I hear "tremendous waste." Don't fix that TV, throw it away. Don't bother sorting out the recyclables, throw it all away. Don't clean that, throw it away.
That work is not done because it does not create enough economic value to provide a living. People can't afford to do low-paying work. BI makes low-paying work affordable, so more people will do it, which will benefit all.
There are plenty of people who do work but still can't cover their basic needs reliably (minimum wage isn't nearly enough in big cities but cities still need the jobs that pay minimum wage) and then people who can't work (infirmity or lack of skills).
Why should money just accumulate at the top where it's marginal utility is vastly smaller than if it were in the hands of the bottom portion of our population?
Finally why should work be the measure of a person's worth to the point of denying basic survival if you don't?
Of course there will always be people who cannot work. But the point is, BI is a basic income for anyone. No strings attached, Here's OPM, even for people who could make a living without BI. Strikes me as a waste of taxpayer's money?
Providing a wide ranging universal safety net seems like exactly the kind of thing that government is best suited for over any other institution. There's a lot of places it could wind up saving money over the current system anyways: practically no administration costs, lower health costs because people aren't forced to live in shitty places that make them sick because they're too poor to move somewhere else.
Even if it winds up costing more I don't classify giving everyone the freedom to live their life in a way of their choosing ultimately as a waste. Hell that's the basic utopian dream from Star Trek, Culture or a thousand other places, so much wealth that anyone can do anything with their lives and it's a rounding error. Are we there, no, but we have the surplus to take care of everyone's basic needs today.
Government fails in most areas. I agree with your point about administration costs, but don't you think politicians will come up with other things that they can spend the saved money on?
There's a lot of things they could spend money on that also wouldn't be a waste of money. Infrastructure could really use more money, the space program could definitely benefit from a pile of cash to both the public and private sectors, and funding for education is in serious need of an increase (as well as reforms to improve effectiveness).
Just because the government wastes money some places doesn't mean they're incapable of putting it to good use in other ways or that we should avoid good programs just because they might misspend savings from it.
I've seen it said repeatedly that BI will save us money (or at least, not be so outrageously expensive) in part because we can eliminate existing welfare programs. "Just cut a single check, no more overhead from several agencies", they say.
But riddle me this: what do you do when someone on BI has a financial emergency or, as will happen with some regularity, just flat-out blows all their money and now can't afford rent and/or food? Do you tell them "tough shit, you've exhausted all your social safety nets" or are there safety nets below BI, essentially recreating the welfare programs previously destroyed? If so, how do you prevent fraud without a department following up on Joe's twelfth "my car broke down" case of the year?