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I like the simple argument made here about UBI enabling efficient consumption.
I worry about three things with UBI though and they're more social than economic.
1. Power Divide - society will be easily divided into two groups: those who depend on the UBI to live and those who don't. The former will be absolutely at the mercy of the latter. We can see this a little bit with the coronavirus relief packages.
2. Predators - individuals and companies will find a way to take your UBI check from you as fast as possible. We can see this in housing where some governments give poor people vouchers for rent. Those vouchers are targeted by slumlords who find a way to give you as little as possible for them. There will be rampant scams and bad behavior in areas where the UBI makes up a larger portion of total income.
3. Charity - let's say we actually give every person enough money for food, housing, and utilities. Some people will mess up. They could spend it all on an addiction or just make a bad investment. Even with UBI they could still end up hungry or homeless. Will we help them? Or will we say "you had your UBI, the rest is on you". This changes the morals of how we treat people in the worst times.
I wish all of the above wasn't true. But I just don't think America can handle UBI and I'm not sure how that's going to change.
Power Divide - society will be easily divided into two groups: those who depend on the UBI to live and those who don't. The former will be absolutely at the mercy of the latter.
One aspect of UBI is that poor people would be less at the mercy of the rich. If you're a poor person now you absolutely have to try to keep your horrible job else you'll lost the ability to pay rent and buy food. You have to take all the crap your employer gives you. With UBI, assuming it's enough to live on, you could walk away from that job and still survive. That shifts a lot of power from employers to employees. It's one of the most appealing aspects.
> One aspect of UBI is that poor people would be less at the mercy of the rich.
That is a very strong statement that I don't think can be claimed at this point.
In my opinion, I feel things will simply shift under UBI. People will receive UBI, but then other things, like rent, food, etc. will all just magically get more expensive.
I cannot see any implementation of UBI working any better than things now unless the predatory nature of those in power is put in check.
How are you more at the mercy of the rich if you have more money?
Consider a very smart and very poor person. You walk up to him and say "Hey, want 1200 dollars?" Do you think he'll say "No, that would increase my dependence on the rich." I don't.
I just can't conceive of the mechanism. Slum lords try to separate the poor from their money now. Pretty much everyone does. The only difference is, the poor would have more money.
There's probably going to be predation on the mentally ill or incompetent. That could be solved by helping those people, limiting what they can buy, or harshly punishing the exploiters - some combination. But even if they were cheated out of their UBI I don't see how they'd be worse off (without assuming people wouldn't help the mentally incompetent if they had UBI which seems dubious to me).
It depends on how UBI would play out. For example, let's say UBI gives everyone $40,000 a year. In much of the non-coastal US, that's enough to live on. But, pricing might still be based on everyone having a job. So prices now reflect the assumption people have 40k + whatever their salary is. I could see the rent-seekers adjusting their charges accordingly. A slumlord could now price their rents on a poor person making $60k a year (40k + 20k from their job) instead of just on the $20k alone. Doubling or tripling the rent. Consumer goods would possibly follow the same pattern.
Maybe UBI would come with some sort of rent or price controls. Or maybe the fear of massive inflation would temper the greed of the rent-seekers. I don't know how it would play out. And I have to say I'm generally in favor of UBI. Just thinking out loud about how it might not be as helpful as it could be.
If everyone had $40k/year of guaranteed income, all of a sudden opportunities to go around slumlords opens up: they can buy land and new-build or redevelop housing with UBI-Backed mortgages (so the bank knows they’re getting the money back).
Renters almost by definition aren’t capable of amassing enough capital to build new housing, so are at the mercy of the existing supply. If it is guaranteed that everyone has a capital-amassing stream of income available to them, they gain an ability to turn that stream into something longer term. Sure, this still may not be possible in areas with strict housing regulations, but a guaranteed, portable stream of income also provides people the means to move.
And why would they sell you land for less if they know you have $40k more of income? Everyone can pay that extra money, if I am a seller I am raising my prices accordingly.
Is there a reason other than naked greed, why you (philosophical 'you', not you personally) would raise your prices accordingly? Keep in mind that even as a multi-millionaire slumlord you would also receive UBI (or else it ain't universal) which is enough to cover basic food and shelter.
Because you don't directly set real estate prices based on the buyer's income. You simply sell to the highest bidder. The bidders look at their own income and decide what to pay. If all the bidders have more money, the price will tend to rise.
Slumlords require a limited supply of local housing to gain leverage. If people on UBI are free to move then slumlords are competing with each other, so the same market forces that keeps prices low everywhere else are in effect.
Some people on UBI would happily trade worse living conditions for more spending cash. But that freedom of choice is what enables efficient resource allocation.
"Slumlords require a limited supply of local housing to gain leverage. " Indeed - if you want to get rid of slumloards then how about getting government out of the way of new housing being created? San Francisco is the poster child for how utterly draconian zoning laws screw everyone, but lower income people disproportionately.
It wasn't "getting government out of the way." It was literally government working in tandem with the trade-union interests of finance, insurance, and real-estate to preserve the value of the "asset," real estate. The problem is BOTH the government AND allied private industry working AGAINST the interests of their constituents and clients. The correction here will be MASSIVE.
Not sure if I'm convinced, assuming pricing is based on supply and demand. UBI might increase demand a little bit (as the homeless can now afford housing), but probably not by much.
The article talks about an overabundance of CONSUMER GOODS, but no amount of deflating TV prices can make up for the fact that Rent, Healthcare, and College is what's putting pressure on the lower and middle class right now. UBI will inflate rent the same way cheap student loans inflate tuition.
>How are you more at the mercy of the rich if you have more money?
Because it's not about mere money, but about power. Getting double the money you get now doesn't make you more powerful than e.g. Jeff Bezos. In some instances it might make you less (e.g. if the cost of living increases because of the extra money circulating, if you start depending on the extra money, etc.)
That is and always was a popular remark but the trials showed people might work fewer hours but for the most part become more productive when the fear of losing everything is removed from the equation.
Sorry, but I don't understand exactly what you mean.
It sounds like you're saying most people wouldn't quit, which doesn't conflict with my statement, which is that "some people" would quit.
If you want to try to dispute that, you'll have a tough time with me, since I personally already have quit, even without the UBI, and from much more than $100k.
I thought it was just a variation of "everyone will stop working!". If a few people stop it's not a problem. We need enough productivity to keep things going but working a useless job is a problem. Working for no reason and no purpose. Work for the sake of working. Work consumes resources, we shouldn't spend finite resources on things we don't need. You can just sit there and think of something to contribute to society. That is, if we are worthy of such flattery in your experience.
Does that happen with any other product? Are other consumer products priced based on calculation of consumers' incomes, or are they priced based on demand and competition in the market? I think rent in high-COL cities is more determined by high demand there than landlords' personal assessment of the residents' average incomes. With UBI, people would be more free to move away from areas with high rent. There could be more free competition on housing/rent across the whole country, which might drive down rents.
>I think rent in high-COL cities is more determined by high demand there than landlords' personal assessment of the residents' average incomes.
A landlord doesn't have to personally assess the average income of the residents. The high demand will roughly do the assessment for them.
>With UBI, people would be more free to move away from areas with high rent.
This is something UBI allows, but I'm skeptical whether people will actually do that. Remote work also allows people to do that, but until the virus it hadn't really been considered as a serious option in the vast majority of workplaces.
>Remote work also allows people to do that, but until the virus it hadn't really been considered as a serious option in the vast majority of workplaces.
Yes but the cruical difference is that now, if I ask for remote work to move and the company says no I have to choose between having and income and moving. With UBI they say "no" I say "ok" and have income to fall back on.
The key thing UBI enables is the ability to meaningfully make a choice to leave your current job if you want to without destroying your ability to keep yourself alive.
I would wonder what limitations UBI would require. What if people get UBI in US and move to a low cost Asian or African country to live princely lives with their UBI while American taxpayers pay for that lifestyle.
My personal guess is that it won't happen on a large scale. After all, most people feel connected to the places where they live and to the people around them. Moving to another country can be difficult if the divide (language, religion, customs, political system and its stability, law, personal and property rights, safety) is wide. This seriously limits the choice of places people would be willing to move to long-term in the first place. Historically, large-scale permanent migrations happened only if living conditions in the place of origin became hostile.
Also, where would people move to? Many destinations are developing countries and thus the cost of living there will rise in the long term. Also, these expats would be heavily affected by foreign exchange rates.
People might indeed cluster up in certain places, buy property there and live a leisurely livestyle. These factors would make prices rise and in the long term it would become less attractive to move there. This happened in Spain where property prices in premium locations have skyrocketed because of well-off people from other EU countries buying homes there. Depending on how much the goverments of the target countries care about this, they might think about countermeasures, such as restricting property acquisition to locals.
If the outflux of money becomes significant, it will affect relations with the target country as the origin country will seek to reverse the flow. Trade deals will be affected, and developmental aids, if there are any, might be reduced. If it works, the target country might make it more difficult for expats to stay long-term. But the most straightforward approach might be to limit the UBI based on residency, or make the expat lose perks such as voting rights.
higher education in ALL colleges is priced in a similar way. They've all raised their prices in accordance with the amount of money the government is willing to guarantee kids will have access to.
For the most part I agree, however community colleges usually offer very cheap prices, even more so if you are a resident of the state or country which it resides in.
> This is something UBI allows, but I'm skeptical whether people will actually do that
I am a supporter of the UBI theory but I have to say I am skeptical of the implementation. People are usually incentivized to move towards the places that provide opportunity - jobs, education, etc. UBI might dampen that incentive.
Given that most leadership systems are strongly influenced by the rich I have to wonder whether a system like UBI will be implemented in such a way that people are less dependent on the rich rather than actually becoming even more dependent.
demand for housing is somewhat inelastic though. It will only increase to the point where homeless people can now afford to rent a room somewhere. UBI would only significantly increase demand if it was so much money that a lot of people would be looking to buy second or third homes.
The problem, in the end, is the other side of that inelastic demand.
Everyone needs to live somewhere. Landlords only profit if their properties are occupied, but they can simply decide to all increase their rent by $1000 a month, knowing that eventually, the only choice for some people will be to pay it or be homeless.
I have no idea if it would actually work this way in practice.
Education is priced based on what rich international students can pay, then most domestic students get massive subsidies. I don't think it's a reasonable comparison.
Rent is based on demand and competition in the market, which is why it reflects consumers' incomes. That's the entire problem with UBI: it will just result in widespread inflation, in housing and every other market. The only way to keep rents from rising so rapidly is for people to be able to own the properties where they live.
(This does, indeed, fall under "some form of socialism" that the author deems magically "unworkable." Simply a tax code of affordable taxes for personal property - i.e. a home you own and live in - and high taxes for private rental property used to make a profit, with the intent that it should make financial sense to sell to an owner who will live in it.)
==That's the entire problem with UBI: it will just result in widespread inflation, in housing and every other market.==
Do you have any evidence to support this type of absolute claim? People have been screaming about inflation since the Fed massively expanded their balance sheet in 2007. The only things we’ve really seen inflate are assets (buying housing, stocks, etc.) we haven’t seen much inflation in non-assets (renting, commodities, consumer staples).
I think it's mostly location-based. NYC, Seattle, San Fran, Austin, Denver, Boise and more cities have seen significant rent increases. On the other hand, we have Rust Belt cities like Milwaukee, Chicago, Cleveland, Indianapolis, St. Louis, Detroit, Cincinnati, and more where rents haven't risen at the same rate.
Edit to add some specificity, although it's not "rent". Here [1] is a 3 bed/2 bath house in a very safe Chicago neighborhood for $325k. The local public elementary school is an 8/10 and the high school a 7/10.
If a significant number of readers here on HN click that link, driving traffic to that specific listing, I wonder if it would cause the agent to think there's more interest in the home than there really is, giving them the suggestion that they should increase the price.
It does have a "HOT HOME" banner on the first picture. Could that be from HN readers?
Let's implement income caps for all Bay Area tech company employees at $75k. Then landlords will lower rent and the housing price issue will be solved. /s
Max incomes and max wealth seem like excellent ideas. It should be gradual tho. I would like to see a basic income start at 50 or 100 bucks. That way we can see some of the effect and deal with it. It would at least reveal how hard it is to implement.
Sounds like a problem that you could also solve via things like universal rent control. Lock the rent of all units. If you're not happy with the rental income of a unit, you're free to sell it to someone who wants to buy a primary residence.
Nothing, because UBI+salary = previous salary. So everyone's part of income available for paying rent is the same.
Only difference is that the guy who earns $2500 right now might be able to get a better job because he can quit without immediately losing his apartment.
I can't see inflation not catching up with whatever UBI provides within couple of years. In the example above, rent will go obviously up, as will prices of products and services. When everybody has more money, I for sure can ask for more for my services/products.
As for dependency, the money won't magically spawn on the table, they will be earned by state on taxes and then paid to citizens/residents. So you depend on who is in power anyway since there will be many rules, exceptions etc. It brings another new universe for corruption, leftist politicians to promise (and deliver) higher payments that next generations will have to pay back and so on...
All these mental games, me, you, everybody... we can't get the full picture of everything mixing up with everything else - economy, mentality of individual and groups, greediness, black swan events, selfishness etc. and come up with a nice simulation how it will end up all joined together. That's just wishful thinking and people pick up side which they prefer, nothing more.
I'm not sure how this works in the US, but in other countries there are laws against such increases in rent - especially 'social' rent for those with low income.
In most of the US, I believe there are no laws. California recently passed some legislation limiting rental increases per year, but it's still something like 7-8%, which is ludicrous.
The first world country I'm from has, effectively, nation-wide rent control (varies by region) and rent increases are limited to something around 1%, set each year (tracking inflation somewhat).
In the US, this will work very poorly: a landlord can just bump your rent by exactly the UBI amount and get away with it. Otherwise, they would have to wait for a vacancy to set the rent. But eventually, I agree that the rent would just absorb the UBI in many cases.
In the country I live, rent is indexed and adjusted to inflation on an yearly basis. When the contract expires, parties have the chance to negotiate rent value at contract renewal to either increase it or decrease it.
Many big cities in the US have forms of rent control. Usually this is tied to a particular tenant, if the old tenant moves out the landlord can charge a market rate.
Perhaps nothing, his tenants will likely move to apartments in better neighborhoods, or, buy their own homes. He'll need to keep rents the same to continue to attract replacement tenants.
So demand for cheap apartments fall and prices stagnate. But you can't just think about one step, you have to consider the implications of that step.
For example, if people are moving out of their bad apartments into nicer apartments and homes, demand for nice apartments and homes will increase, driving prices higher. Which makes sense--suddenly there is much more money available for housing. But that's not the end of the story, either.
What is the incentive for the owners of small apartment complexes? It seems clear. They need to renovate their apartments so that they can capture the new up-market demand. Successful, mid-tier apartments could buy up cheaper complexes to renovate them and charge higher prices (this happens even now).
The low-demand, low-price alternatives will fade away, because the land owners can make more money with slightly nicer, more expensive units.
Why would the low-price apartments see lower demand? There’s going to be a huge number of folks who are now making a low income looking for housing. Many of these people are currently either totally unhoused or living with family/friends because they can’t afford even low-price places. If there’s a huge new demand won’t apply in fact increase?
They'll buy their own homes? Through cheap government sponsored mortgages? Add that to the list of government spending that will expand under UBI.
They'll move to better neighborhoods? What's going to happen to the people living in those neighborhoods? It's not like there are houses sitting vacant...
Sure, no government incentives required. The median home price in the US is $226,000.
A typical mortgage payment on that mortgage is $1,100.
Adding $1,000/month will put many renters above the minimum income they'd need. Keep in mind, a married couple will be getting $2,000/month.
There will be vacancies for the same reasons. People moving up-market.
Highest end homes will also increase in value. Everybody moves up, and homeless folks who are homeless due to loss of income will have a place to live.
The majority of our mortgage market is govt guaranteed at artificially low interest rates (i.e. the US govt is taking losses on the time value of that money)- that was my point.
Everybody moves up- meaning more homes being built- so you'd expect this to increase house production in the US, correct?
So, despite a disincentive for low payed laborers (like those who do construction) to go to work, the housing market will not just continue, but actually become more productive?
That $1100 a month- doesn't include home insurance, doesn't include property taxes, and assumes a $60k down payment, correct? Seems like a charitable number to pick.
Artificially low interest is not a guarantee. It's an opportunity for the time being.
They are already paying rent, and if married, they get $2,000.
If their rent is $600, they would have $2,000/month to save a down payment and then have $2,600 to buy a median priced home. That's enough to cover insurance and property taxes.
The standard down payment is 20%, so a $226k home would be $45,200.
What if every landlord but one raised the price by 1000 a month, and that one realized he could get more business by raising only 900 a month, so in response to that one landlord others lowered to only +800 so the one countered with +700... Etc. Etc.
This argument would be much more persuasive if each landlord could supply an effectively unlimited supply of housing. As things currently stand, a landlord reducing his rent would clear his limited inventory first, but the broader effects of the actions of a single agent would be fairly muted.
Sure, in theory you can eminent domain a neighborhood of low density housing and replace it with higher density housing. In practice though, its politically impossible most places.
Raising rent ... and building more houses. Raising rent skews incentive significantly towards renting. Eventually the market becomes efficient as supply outstrips demand and rent sinks again.
With an ability to command higher rent, renting becomes profitable on properties that were previously not profitable to build on. In the long run, I expect rent to fall relative to the current state of affairs as housing is overprovisioned (using the added income from more rent) and moves more towards a buyer's market. Furthermore, with UBI workers are in a stronger negotiating position so we'll see more work from home which also lowers rent by reducing competition in the cities.
As a former landlord I’d do the same thing I did then - keep my price low if I like my tenant or increase / not renew the lease to kick them out essentially. There’s a lot of variables to pricing for different kinds of landlords.
It’s also illegal / breach of contract to increase rent based upon a person’s increased income as well unless it’s outside a lease period. I was told this as a landlord and I was mostly interested in getting a good tenant rather than trying to get the most dollars anyway. A bad tenant costs you far, far more than whatever you’d have increased your rent by.
It's mentioned in the article indirectly: when you enable consumers to demand more, you increase competitive pressures amongst producers as well. Your landlord raises your rent by $1000? That's fine: you move to another town that's cheaper. Landlords are no longer competing within a town or city; now, they're competing with landlords every where else.
> That's fine: you move to another town that's cheaper
This is a pretty privileged perspective to have and shows that you may not fully grasp what it's like to be poor.
Do you understand the costs of moving (both monetary and time spent)? Do you understand the cost of most likely having to quit and find a new job (if they are available)? do you understand the costs (socially and mentally) of having to leave your community/family of support?
The opportunity cost of what you are suggesting makes it much less feasible than you make it seem
One of the benefit of UBI—indeed, for some people, one of the explicit purposes of UBI—is that it drastically reduces the need to fear that moving will be too expensive for you.
It is, of course, possible to implement a UBI that is too low to make it practical to move, but I would argue that in that case, it is missing the "Basic" part, because it does not provide enough to meet real people's Basic needs.
I think the concern many people have (and rightfully so) is that the economy is not a static system. Any artificial offsets (UBI) will just get priced into every agent's value calculation.
The thing that gives "Capital" power is that you have it, no one else does, and you're trying to transform it into some arrangement that over time creates more value than it consumes.
The transformation applied can absolutely be done incorrectly, making subsequent capital value transformations more difficult to accomplish profitably given greater constraints on the means the capital allocator can bring to bear.
Nothing about UBI substantially changes the nature of that system, therefore, the real problem to be solved, (the asymmetry of means between capital allocators) given a system that optimizes toward capital control centralization (more capital fewer hands) without also being paired with wealth ceilings via tax extraction at the top and reinjection at the bottom.
> is that it drastically reduces the need to fear that moving will be too expensive for you
Sure, that would definitely be one area where UBI would assist with but as I mentioned in another comment - it would kind of defeat the purpose of the UBI if people had to spend it on mitigating the consequences of people taking advantage of them receiving UBI
The empowerment of poor people to move may be enough to just discourage landlords from raising rents in the first place. It's like when workers join unions and increase their bargaining power: even those not in the union benefit.
The pro UBI arguments completely miss the 2nd level effects - the predators will come out in droves and the less intelligent will be conned into long term contracts that consume their entire UBI. UBI is a gift to the wealthy - it gives them a huge pool to steal from.
Possibly, but that sounds like a problem which could be solved separately, perhaps with stricter laws about what constitutes an onerous contract; we need not discount UBI entirely because it causes some problems, since the problems UBI causes might be better than the problems we have without UBI, and the problems with UBI might be easier to solve.
If the issue of predator treatment of consumers were addressed first, a large amount of the pressure for UBI will evaporate. The poor are poor due to predator capitalism, not due to any lack of skills on their behalf.
It might be that UBI is politically potentially possible, while the other issues are not politically viable to solve in the present situation. Politics is the art of the possible.
Being poor isn't a lack of intelligence, it's a lack of money. No doubt a few people will get conned out of their money, but for the majority it would be a net positive to have more money at their disposal.
That will absolutely happen sometimes the question is how common it will be vs how many other people will be able to use those resources to get themselves into a better situation.
Even if the cost of moving/visiting family were offset by the rent savings - which very possibly would not be - it would kind of defeat the purpose of the UBI if people had to spend it on mitigating the consequences of people taking advantage of them receiving UBI
oof. Ignoring the uncomfortable and unsympathetic assumptions you are making, I will again reiterate what I have in other comments:
it would kind of defeat the purpose of the UBI if people had to spend it on mitigating the consequences of people taking advantage of them receiving UBI
Your argument makes no sense. We can just replace "UBI" with "job".
It would kind of defeat the purpose of making money with a job if people had to spend their earned money on mitigating the consequences of people taking advantage of them receiving money.
So... the takeaway is strive to earn less so you get preyed on less?
I don't agree. Jobs are much more than just income. They provide purpose, skills (possibly for life and future work), experience (in general and for acquiring future work), possible medical or investment benefits, connections (social and for future work) etc. All these things mean that there are many situations where earning less or having to move would be outweighed by the benefits.
This is not the case in my example - UBI is JUST income. If the providing of UBI creates more problems and negates the income, then it loses its benefit and purpose (not saying this would be a guaranteed problem inherent to UBI, but that was the premise of the OP)
I would suggest that, whether or not you identify with/have been part of a group, you consider that your perspective/experience very possibly is not the experience of everyone else in that group.
Wouldn't that only work if the other town didn't also have UBI? I think the conjecture is that if everyone, everywhere is suddenly guaranteed to have a certain minimum amount of money per month then landlords everywhere are going to raise rents. Who are the landlords that are just going to leave money sitting on the table at a cost to themselves? The only thing that could counter this reliably would be an increase in housing supply.
I actually think that would be a better solution than UBI, figure out what American public housing has done wrong (namely the idiotic towers in a park idea) and fix it, say by producing lower density functional neighbourhoods that have proper streets, places for business, community services, etc. and just build masses of them. Housing is the biggest cost after all and it's a large public works project that could be carried out everywhere. You'd have to fix the problem of corruption in projects of that nature though and that's unfortunately a much bigger challenge.
> figure out what American public housing has done wrong (namely the idiotic towers in a park idea) and fix it
I think an issue with this approach is that it's top down, as as mentioned in the article, "those at the top can’t manage all the information about the economy".
A counter-argument may be to just let towns and cities decide what to develop then, since local people have the best information about their neighborhoods. However, 1. this is already the default method and has resulted in housing crises where NIMBYism is rampant. 2. UBI would also help in this case as you're increasing the demand for housing while increasing competition between people living there and not (assuming people want to move to the area in the first place).
Job is one part of life. A human is not like a variable in program that can be refactored into another class as needed.
What you are saying would work perfectly for a young college graduate, without much family or friends, who has no dependency or no one dependent on them.
Now imagine a young single mother or father that depends on their family for babysitting or caring for the child while they try to become functioning member of society.
Imagine someone with some health condition that needs access to certain medical facilities.
People live in cities and migrate to cities because they can access schools, colleges, entertainment, public transport, medical facilities, better opportunities, parks etc etc. They can't just pick and move and uproot themselves.
I think people who work in technology do not have enough exposure to the poor and struggling members of the society. I grew up in a really really poor family and when I talk to my coworkers it is very apparent that they don't understand poor people.
Even moving somewhere else within the same city is a lot less hassle if you are less concerned with immediately having the work part of the equation figured out.
I am not a young graduate, uprooting now would be a big deal for various reasons. Neither are my friends in their 30's raising families - some of which are living with their parents for the kind of reasons you describe.
My point is that without being so close to the financial edge all the time, even less well off families can take a step back and make decisions that work best for the future. The stress associated with risk (like quitting a job) results in a scary amount of lock in for many people I know.
It's not a feasible solution for _everybody_. However on the net, by giving that option to _all_ renters, you will discourage the population of landlords from increasing rent in general.
On the anecdotal other hand, I've moved eighteen times in my life. Some of us not only don't mind, but given the opportunity, enjoy new places and new situations.
Did each of those moves include raiding the dumpsters for boxes? Enlisting others to help pack and move? And taking a year of savings to cover a deposit?
But you're making a straight-up Maoist argument here. You are arguing that the rent-seeker class (quite literally) are so uncontrollably avaricious that there is no way to moderate them: logically, they must be destroyed and we must go with communism because there is NO possible balance to be struck between rent-seekers and proletariat.
I'm pretty lefty but I sure wouldn't go so far as that. Tell them not to bleed the tenants totally dry. Try making rules. Try enforcing rules. If that doesn't work, THEN we can talk along 'kill all the landlords' lines, but I am just not convinced it's that simple.
I think there is room in a liberal market capitalist system with social supports (such as UBI, which is nothing more than a lower overhead social welfare system) to allow people to have property and stuff without it automatically going to Mao's worst nightmares. Yes, people are greedy, but that's not the only thing in the system.
Exactly what will not happen, and a major reason why UBI will be a colossal failure if implemented. In our current political climate there is no way in hell UBI is implemented fairly and with rational checks and balances. The effort to implement UBI will be riddled with "pork" and what end up with in reality will be a sad, sad joke.
> The UBI must be indexed on the cost of life and updated every year.
That makes no sense at all. UBI is just an income redistribution scheme, thus it can only work if it's linked to productivity. Otherwise you create a system that's bound to fail and collapse in the times it's needed the most: an economic crisis.
Invest in building luxury housing in areas with high quality of living in order to lure people who can now afford better apartments and are no longer tied to a particular area?
Raise it to 2000. But the parent was talking about how now with UBI, people don't need to work to pay that.
With food stamps, and other welfare programs that already exist to cover your other costs you don't have to work to be able to afford living anymore. Sure you can't go anywhere or have a fancy new phone or car but your income from work could pay for those things instead of just barely being able to stay alive.
Yeah, that is a fair point. Nonetheless, at this point we are not providing them a general income and instead society will just be subsidizing rent.
I don’t like this solution because it is a pretend-solution. What are the causes of poverty? Prevent them. What are the barriers to mobility in the job market? Alleviate them.
UBI helps but in my opinion it is just sweeping the problem under the rug.
Value capture by capitalists. Perverse incentives of means-tested welfare programs. Making choices that are suboptimal from an expected value perspective because they are better from a risk perspective when you can't afford to take risks.
> Prevent them.
UBI prevents or reduces all of those causes.
> What are the barriers to mobility in the job market?
People not having the resources to take time off their current job to retrain, either via formal training program or taking temporary lower-paid work in a different field, among others.
Why wouldn't the landlord raise rent to $3000 if it's clear that most of their tenants could manage to find a job on the side to cover the difference? That's what they already have to do now, right?
Because like any other price gouging circumstances, attorneys general can get involved, city councils, county, state... if landlords in particular want to start charging more than the market can bear that can be stopped.
I don't get why this one fear "omg rents will skyrocket!" gets trotted out as The Reason UBI will fail.
Because that would require all landlords in every place anyone would want to live to coordinate with each other, and to also coordinate with builders to not build more housing in places people want to live to not build new housing. $1,000 per month, at a 3% interest rate, would support around a $400,000 mortgage. That's getting into the territory where you can custom-build a house, and is several times the cost of a pre-fab house. Two people on $1,000 / month each could cover cost of living somewhere cheap, and if rents get high enough in places where jobs exist, some people will just entirely opt out of working and go buy a house where stuff is cheap, which reduces demand in impacted areas.
Prices will go up by some percentage of the basic income amount, but that percentage will be less than 100% of the difference. The landlord might raise rent from $1000 to $1600, but not to $3,000.
I understand that, in reality, the rent increase will probably not be 100% of the maximum possible theoretical increase that the current tenants could handle. In reality, it will be some fraction of that.
But what I am saying is that theoretical value for the new rent amount in that pricing model is $3000, not $2000 like the other poster was saying. Thus their arguments don't work.
If it’s so obvious, why do all supporters of UBI ignore the issue? If you really care about the well being of the worlds population then address the underlying problems.
Provide them access to the education you received (starting with primary school, not college).
Prevent their exploitation by the companies. Especially those that we often work for!
I would bet a better effect can be realized by investing in public education at the primary-high school levels. Make teacher salaries competitive with engineers. Enable all schools to have the equipment and teacher qualities they need.
Getting a good education is a lot easier when you have notebooks, filling breakfast, and parents whose stress or sleep-deprivation doesn't exacerbate untreated mental health issues.
We're not ignoring the issue, we just don't think the issue is the same one you do.
The main issue in the world at the moment is income inequality, the things that you are listing stem from that, you can't fix education inequality without first addressing the income issue - UBI proposes that we tackle the source of the problem rather than trying to patch things up downstream
You cannot fix wealth inequality by giving the paltry amount of monthly stipend UBI is discussing. To address wealth inequality you need to educate the public better and you need to regulate capitalism better. Simply giving people UBI is a gift to the educated capitalist who will simply raise prices while simultaneously paying lobbyists to insure raising their prices is legal.
What paltry amount are we discussing? The concept of UBI is that it pays a living wage, enough to feed, clothe and house someone. It might not eradicate wealth inequality but it definitely narrows the gap/reduces it.
I'm assuming you accept that the poor are getting poorer and the wealthy are getting wealthier - how do you propose to stop that without UBI?
UBI alone is not a solution, it needs to be accompanied with access to adequately funded education and affordable housing and healthcare. Education is the #1 driver of success, and at minimum a better commitment to education by the United States will pay back multiple times over. Additionally, what leads you to believe UBI will allow an individual enough to feed, clothe and house themselves? Sure, that's the "idea" but in this world you think that would become a reality? No way. UBI as implemented will be watered down and it's effect will be a net zero, triggering the conservatives to cry "see! it does not work!"
>How are you more at the mercy of the rich if you have more money?
Because that money is coming from the rich. Would you say your boss/employer has less power over you the more you make? IF that is the case, it's not because of how much you make but rather because of how much value you have to the company. In the case of UBI, there is no value exchange, only a handout. If there is a value exchange, it's merely the prospect of less riots/civil unrest.
(This is not even to mention the wash effects of inflation, which are covered well in the other comments on this thread)
There's a difference between random one-time gifts of $1,200, and depending on the largess of a single patron every month in order to feed yourself. The B in UBI stands for basic, not luxury, and it's unclear that those dependent on UBI to survive would be able to save money.
UBI will help the destitute, but if the person holding the purse strings, be it a billionaire philanthropist, the government, or your employer, and you're dependent on that to survive, that gives that entity power over you.
for welfare, and other welfare-like government services. Other services, like issuing passports, the DMV/RMV, running busses, would still continue to exist.
It puts you at the mercy of the government. Of course, you could argue that that practically puts you at the mercy of the rich because governments are heavily influenced by the rich, but it really doesn't matter who you're at the mercy of. It's a mistake to fixate solely on the rich as the only people you should worry about being at the mercy of.
Take government grants and other forms of funding received by universities. Sure, it sounds nice, but the result is that institutions slowly begin to depend on these sources of funding to the degree that their successful operation and even very existence depends on them. This puts universities in a very dangerous position and this dependence has been used to steer universities in directions they might not otherwise have gone.
> also because there is a fixed amount of land (like literally the surface of the earth occupies a finite area at least on human time scales)
Not really. If the Earth's surface was populated at the same density as, say, Paris, that would be over 3 trillion people.
> and because building housing stock takes time
Not a whole lot of time actually with modern techniques. See the speed at which some of the Corona hospitals were built.
> and because of zoning restrictions and other institutional constraints
Which only apply to existing cities.
Right now there are houses in the middle of Iowa - or even Detroit - that cost a small fraction of what a house in a city with good job prospects costs. If UBI became a thing, people would be able to move to those places. Not everyone would want to, but some would, and that would be enough to move the prices.
Can you provide some evidence for this? Your argument, by extension, would mean that anything that increases a person's income is effectively pointless. Increased minimum wage? Prices increase and eat the income increase. Collective bargaining? Prices increase and eat the income increase. Taken to the extreme, any action to improve the lot of the poor/low-income is wasted effort, because rent seekers will always collect the maximum rent.
I'm willing to concede UBI (or other unrestricted cash grants) could impact specific segments of a market. But, I can't find good evidence one way or the other that those negative pricing impacts offset increases in productivity, wellness, etc.
The good news is that, to take one of your examples, while the minimum wage does have a small effect on prices, the inflationary effect seems to be vanishingly tiny compared to the actual wage rise offered. (PDF link) https://mitsloan.mit.edu/shared/ods/documents/?PublicationDo...
Some people think the price of going to college has gone up because so much money has been made available to students through financial aid. I don’t know if that’s been proven but it sounds plausible.
I'm actually in the higher education world (on the periphery, as a software developer). It's more complicated than that.
Over the same time period that loans have become easily obtainable (via US government backing), massive amounts of regulation has also been imposed on colleges/universities.
While people love to talk about football stadiums, luxury dorms, and other amenities, one of the largest increases in the cost of running a college is administrators to keep up with regulatory demands.
I'm not claiming administrators are solely responsible, only that it's not as simple as "Uncle Sam gives students money and college spend every penny".
Additionally, public funding of colleges has dropped over the same time period. As of 2018, state funding of public colleges was down ~$7 billion since 2008. It was slashed during the down economy, but never brought back up again.
To add a small bit of context for the last point about funding. A $7B reduction in funding sounds like a lot, but during that same period student loan debt increased by $760B.[0] On the balance, the reduction in state funding seems like an insignificant piece of the puzzle.
There is a myth that administrators drive up the cost of colleges. The truth is that overall university headcount, including administrators, professors, etc. have all increased, and the costs along with that headcount has as well.
The rapidly increasing headcount growth, including professor headcount growth is driving the increased cost which is driving increased borrowing.
Universities need much bigger class sizes, many fewer professors, and many fewer administrators. Overall headcount at universities needs to shrink by ~70% to get the cost back inline.
No politician, or university president is going to say that because it would be so brutal to oversee. But... students are suffering with massive debt loads and someone is going to have to make the right choices to cut those costs.
They've all increased, but the rate at which administration positions has increased dwarfs that of professors and students. According to the figures in the article cited here, administration positions grew at 3.5x the rate that professors have, and 2x the rate that students between 1975 and 2005 [0].
They stated "...administrators to keep up with regulatory demands."
I wonder, however, if administrations just take on a life of their own and grow bounded only by available budget. It seems like this happens in the private sectors with layer upon layer of management.
That's certainly been my experience; management and bureaucracy will expand to fill any available budget unless constrained. Since management almost always runs the show, there's almost never constraint.
Hiring bodies to perform the administrative work required by law. Lots of compliance - title 9, etc at the federal level, plus more at the state level.
We have several teams of developers pushing out state-level regulatory updates to our software (and these updates are frequent and often done on short notice), plus more teams doing annual federal regulatory updates.
And again, I'm not claiming this is the largest contributor, only that it's one of many reasons (easy access to loans included as well).
A good example is the parallel legal and law enforcement systems on college campuses. In the past, you'd call the regular police and you'd take issues to the courts used by all other citizens outside the university. Now universities maintain their own law enforcement and farcical "justice" system. This stuff is not cheap to operate and comes with tons of overhead.
"We
find a pass-through effect on tuition of changes in subsidized loan maximums of about 60 cents
on the dollar, and smaller but positive effects for unsubsidized federal loans. The subsidized loan
effect is most pronounced for more expensive degrees, those offered by private institutions, and
for two-year or vocational programs."
Sure, and I conceded that in my initial post. What I'm looking for is published work that indicates that changes in consumer prices equals the increase in income due to unrestricted cash grants/UBI.
I've looked, but all I see is conjecture. Nothing academic. The academic articles I do find tend to assert the opposite - that any changes in consumer prices are smaller than increases in income, granting the recipient more buying power.
they won't be equal because not all ubi income will be spent on consumption. it will stimulate consumption, however, which was the primary reasoning behind the op and that will lead to some form of inflation edit: inflation because based on the assumptions of the op, the supply side has stagnated and so there is less downward pressure on aggregate prices. the degree of that inflation is unclear and i'm not familiar with any empirical studies. either way inflation won't match one to one with the increase in income.
fwiw i noticed above you mentioned that there will be an increase in productivity, wellness etc. although i tend to agree with the wellness aspect (esp. compared to our current circumstances) the degree to which wellness would increase is also unclear. for some colinear studies, i'm thinking of finkelstein's work on medicaid expansion in oregon where they found exposure to medicaid increased reported well being of recipients.
and i don't think productivity increases under a ubi holds water on theoretical grounds.
you seem to be assuming large increases in productivity and wellness and other benefits and then asking if inflation will erode that, when we also need to consider that the possible benefits will themselves be attenuated, particularly for those already at lower incomes or those who will earn a ubi.
Housing is supply and demand. More demand for housing without an increase in supply will increase cost. That said, a guaranteed income may allow many people to safely choose to move out of an area that was hard to accomplish previously. If you're living paycheck to paycheck, how do you move far enough away from a high-cost area to actually reduce your housing cost while still allowing you to reach your job, since you can't quit it and still afford to pay rent? All you can usually do is trade commute time for rent cost, and then you pay in time and vehicle wear and gas.
UBI would allow an unprecedented level of freedom for people to relocate with little risk, and that would itself have a massive influence on city make-up and the housing market. If a lot of the unskilled labor in the bay area actually chose to move somewhere else, wages for those people would either have to increase greatly to meet demand, or the area would finally have to allow much more cheap housing.
I imagine other shifts like that would play out large in small in almost all aspects of the economy. UBI entirely changes everything.
If we assume that income reflects society's demand for an individual's labor/skills/knowledge, and we arbitrarily increase income with no concomitant increase in demand then we have to assume something else is going to shift. A couple of outcomes seem likely to me:
* employer wages for low-demand workers will drop, as competition for low-demand workers will not increase, and those workers will accept a lower wage reasoning that the UBI 'makes up the difference'
* if employer wages are not allowed to drop below a certain point (the minimum wage), then more disposable income will create increased demand for scarce resources (e.g., housing that is a bit better than currently occupied) thereby causing prices to rise.
I'm no Econ major, so happy to hear how my reasoning may be in error.
The logical leap that you are missing is that prices don’t always rise quickly enough as a response to increase in wages. What a person is willing to pay is only part of the pricing equation. You also have to consider what competitors are charging and how much potential margin there is to play with.
Inevitably though, all prices consolidate and all players in the market will charge more to meet the increase in wages, it’s just a slow process.
The only time it happens quickly is if each business conspires to raise prices simultaneously, which isn’t going to happen or may be illegal.
So yes, increase in wages or handing out UBI inevitably raises prices after a period of time, necessitating the need for even more increase in wages and more UBI. It’s not a one and done thing.
Here's the thing though: typically, the market discerns that wages have increased slowly and incrementally, which is why it's only able to incorporate that information over a period of time. If we passed a UBI in this country, suddenly, my landlord, the grocery store, etc. would all instantly know that my wages have increased, and by what amount.
Because housing expenses are generally the single largest expense in any household budget, that means landlords are going to reap the majority of the benefit here. People selling homes also know that wages have gone up and by what amount, so this will impact the sale price of new homes. So, any amount of UBI would end up being a huge cash transfer from renters to landlords and other existing homeowners.
While land is constrained and should probably be dealt with separately, wouldn't the price increase in consumer goods, i.e. the grocery store to use your example, require collusion between every merchant?
Isn't the other part of Adam Smith's supply and demand stuff the idea that competition will drive down prices? Sure, everyone's got another $2,000, but if I can undercut the guy who's trying to mop it all up, wouldn't I? And wouldn't someone else try and undercut me?
Wouldn't that bring prices down? And if not, why not? If there's another larger force at work keeping prices high and keeping people in poverty -- and if poverty is something we want to do something about -- doesn't that suggest that we need to constrain sellers' behavior in some ways we aren't really doing now (like laws against gouging)?
> Inevitably though, all prices consolidate and all players in the market will charge more to meet the increase in wages, it’s just a slow process.
All prices? No. Clothing is now effectively free, for example.
Prices of necessities are the only things you want to watch. Basic food products, healthcare, etc. Those prices have risen around the same as the rate of inflation or spiraled out beyond. Food prices cannot outstrip the inflation ever, because of food subsidy and/or ebt which is tied to it.
You could buy a shirt for $5 at walmart. And there is even a reasonable chance the material quality would be good. It almost certainly won't be fashionable. Purchasing quality second-hand clothing in North America is even cheaper.
For food, some people buy bulk staples and some buy high-end food at Wholefoods.
The degree of substitutes and variety available on the market is staggering for consumer items.
Dirt poor people being slightly less dirt poor and not having to worry about where their next meal is going to come from will not inflate basic goods that much.
We've seen this with higher minimum wages. The amount of inflation is much lower than than the wage increase, and poor people end up with more buying power.
A serious distinction is that increased minimum wages incur a burden on employers which they pass around to their customers and business partners. The increase of burden is directly proportional to the amount of work of an hourly employee. UBI does not come from an employer and is not tied to an effort. There is no direct market burden, but yet an increase of cash is available none the less.
It should also be noted that inflation is not immediately present following a cash stimulus. It takes time for inflation to set in as a response to market conditions and as such inflation is measured as an adjustable change over a given period of time. That said specific single time examples of UBI not adjusting inflation only demonstrates a faulty understanding of economics.
Money at the government level is not a zero-sum game, so thinking it's as simple as raising taxes is an oversimplification, and while unchecked printing of money is problematic leading to inflation, how the monetary base grows would need to be part of a well-considered implementation plan.
the theoretical reasons for not increasing minimum wage is not inflation. it's a decrease in employment.
empirically, however, things are sticky and so we have not observed concomitant decreases in employment with (small to moderate) increases in the minimum wage. my other guess (not sure if this is supported by the literature) this can also be because not only is the market sticky, but because workers were being paid a lower wage than their employer could have afforded.
Sure, if UBI is implemented without a matching increase in government revenue, or reallocation of existing government revenue. Every serious proposal for UBI does one, the other, or both of those.
There is plenty of literature that contradicts your assertion. Here are a few links...
And time and time again, things that by conventional wisdom would increase inflation somehow don't. Macroeconomics isn't that simple, and posting a wikipedia article isn't an argument.
You'd think that employers would be all over UBI then because it means that they can instantly cut the wages of their workers by the amount of the UBI and that more people will have money to purchase their goods and services.
Why? It means that they can pay less than they do now and still retain workers. How is it not a positive benefit for them? It potentially means that people working for them actually want to work and aren’t doing it just to survive.
Because the jobs they're offering are shitty, demeaning and menial, and most people who take them are doing so because they need to survive. Absent the survival need, the companies will have to dramatically improve working conditions to maintain the sheer quantity of labor they require.
Perhaps, but the reduced wages (since total income is now UBI + wage instead of 0 + wages) sounds like it will more than make up for whatever increased costs they may have to make the working environment less shitty.
Just saying “inflation” is both condescending and lazy. Billions of people have been lifted out of abject poverty over the past few decades while also dealing with inflation. We know it’s a concept and it has relevance to the discussion, so merely saying the word brings literally nothing to the table.
Discarding the term merely for its presense is by argument equally lazy. I didn't provide only a word, but also provided qualifying source material.
What the other replies have failed to consider is that UBI is just injection of cash. It isn't a voucher for a specific class of goods, such as rent. It is just cash that can be used for absolutely anything. If that means burning cash on a $5000 handbag then so be it. Inflation is literaly the injection of cash into a market.
The problem with inflation is lost value. Cash is an abstraction of value to conduct an exchange. The real world worth of that abstraction is variable. When the availability of that abstraction increases disproportionately to a real world value it will be able to purchase less. The most common reason is that prices increase to follow the increased availibility of cash, but there are other reasons as well.
When everybody equally has uniformly increased purchasing power the natural counter-reaction is to reduce availability of goods and services. That can mean raising prices. It can also mean removing goods from market to make them more exclusive. Any means of restoring value to the prior state will happen to lower disruption to the transfer of goods.
Had you read the wikipedia article it would have addressed everything I just said.
If you had a more well versed economics background, you might be more privy to how narrow of a view you have regarding inflation.
Australia currently has a program where anyone impacted from the effects of the pandemic, receives $1,500 a fortnight- and yet is experiencing deflation. The very fact of this debunks your argument, as it is a significant portion of the population who is now receiving a cash injection. This money is not exclusively for rent, nor is it tied to food stamps; it is $1,500 to spend as you wish.
Further, The Reserve Bank Of Australia is in favour of these payments.
And it's also worth noting, many economies have an inflation target of about 3%, which indicates that inflation is healthy and to so staunchly avoid anything that may affect inflation is a fools errand.
Regardless, please read more than a wikipedia article before holding such a strong opinion. The other commenter called you out for being lazy, and I wholeheartedly agree with them.
The pandemic will deflate most economies. So much so that that attempts to correct for this by injecting cash, controlled intentional inflation, only lightly softens the blow. The US economy is expected to see a contraction of 35% to the GDP this year, which is huge. I believe the great depression only contracted the US economy by around 22%. This great deflation is even after several rounds of economic stimulus, which are largely comprised of giving people money from the government in similar spirit to a UBI.
In this case the goal of stimulus is inflation and it isn't enough to repair the economic disruption.
Despite the sharp and historic deflation this is not unusual though. Pandemics are historically known for economic deflation. Europe experienced a devastating pandemic about once a century for more than 10 centuries in a row yielding plenty of economic evidence to this.
The most important thing to learn from this is that a sudden economic deflation hurts poor people and corrections insufficiently help poor people. Wealthy people are not directly impacted, at all. Attempting to correct for that difference with an economic stimulus, such as giving poor people cash, does not at all balance that disparity.
If anything this current pandemic illustrates that a UBI is an insufficient control for balance. Instead of focusing on what to do about poor people if the goal is to balance the disparities of wealthy people against poor people then wonder what to do about wealthy people. Tax the shit out of wealthy people and use that increased government revenue to grow the economy directly in ways only business can: increased infrastructure (there is more to that than just roads and telephone poles).
As for taxing wealth I am a huge fan of a complete estate tax and not a huge fan of income taxes. Take everything greater than $10 million of estate value when a wealthy patron dies.
Inflation certainly is a curious animal and the Wall Street bailouts and the recent record-setting currency printing has primarily inflated capital markets rather than raw goods necessarily. Consumer price index is perhaps more important to consider than the general macroeconomic inflation figure used. Modern Monetary Theory gets a few things right showing how printing money isn’t necessarily going to result in inflation and that taxes can be used to offset spiking demand.
Australian deflation is false though, as the CPI has been impacted significantly by the free child care. Wait and see what it looks like in ~6 months time when the next figures come out without any influence of free childcare.
That the inflationary effect of a cash injection is not sufficient to counteract the deflationary effect of people going out less and buying less debunks nothing.
Come on, man. Linking to Wikipedia and expecting people to read a 12,000 word article to magically construct the ~200 word argument you've laid out here is almost a textbook definition of laziness. I stand by what I said.
I suspect that rents might even go down. One of the reasons that rents are so high is that many people are forced to live in cities (i.e. high rent places) to have a chance at a miserable job. Freeing them from that could also foster more people living in the countryside with much cheaper housing (or gasp! even ownership).
I suspect that this is the sort of thing that can only be determined by running either a simulation or a pilot. This is too complex to be determined by logic or thought experiment.
Multiple pilots have been run in real-world circumstances. They aren’t true UBI (because they’re a tested cross-section of people, not everyone in a society), but the results have been positive for the recipients in every single pilot…and employment has gone _up_ in every single pilot (mostly because people are able to go back and get education that increases their employability).
> They aren’t true UBI (because they’re a tested cross-section of people, not everyone in a society)…
They're also time-limited, and the funds come from outside the test group. An actual UBI at scale would need to be effectively permanent and self-funded.
What the tests have shown so far is basically that if you pump a bunch of outside funding into a small community it tends to make most of the recipients a bit happier. Which isn't much of a surprise. They take the opportunity to improve their employability because the experiment is going to end soon, leaving them to fend for themselves. Who can say whether that effect would still be there if the extra income were guaranteed for life? That certainly doesn't seem to be the case for many lottery winners, and many people who inherit wealth from responsible parents end up spending it frivolously.
Is WFH actually more acceptable? Sure some tech companies have promised to go permanently WFH. But every other business that isn't a social media company cannot wait to get back to the office and constantly complain about lost productivity due to online meetings.
Maybe it's just my bubble, but unless someone had a tech job, they seem to hate WFH.
In the UK at least there are indications that several major companies are preparing to cancel leases and reduce their total office footprint.
Both Barclays and Lloyds for example have flagged that they expect to reduce the size and number of offices, with Barclays' CEO saying "putting 7,000 people in a building may be a thing of the past".
I don't think it will be a quick process, not least because there are a lot of long term leases in place, but odds are a lot of businesses will use e.g. expansion or leases expiring as an opportunity to experiment with more working from home to see how it works before making new long term commitments, and assuming it works there is every chance there will be increasing pressure from shareholders etc. if people see competitors slashing office costs dramatically.
I think that reflects more of a question of how to manage a transition. E.g. Barclays appears to have wanted to get rid of its investment banking office in London since before Covid anyway, for example, and even in this article, it says:
> In his latest remarks, Mr Staley appeared to cast doubt on the idea of abandoning those hubs, saying: "We also have a responsibility to places like Canary Wharf, like Manchester, like Glasgow."
>
> He added: "We want our people back together, to make sure we ensure the evolution of our culture and our controls, and I think that will happen over time."
Which sounds like more of a question of how to handle the fact they're sitting on vast amounts of land in long leases in prime locations and have realised leaving offices empty without being able to point to economic benefits will lead to all the wrong kinds of attention, while realising that it will take them time to make it happen smoothly.
Also further down in the article, it points out this:
> However, not all big banks take the same view. Last week, NatWest told more than 50,000 staff in a memo that they could continue to work from home until next year.
>
> The bank, then known as RBS Group, said it had been reconsidering how the bank works "in the longer term" and intended to tell staff about "future ways of working" later this year.
It's clear it will take a long time before things starts going back to normal any way, and every month these employers have to adjust to working remotely, and recover efficiency while working remotely, the incentive to go back to big offices will drop.
I also know someone who worked at UBS when they moved into their new London offices, and they'd totally ditched fixed offices for most staff and moved to hot-desking for everyone, with the intent of significantly reducing the proportion of staff in the office at any one day. That was well over a year ago. Many of these banks have been looking for ways to reduce their office footprints for years already.
The current situation may prove temporary, so some are hesitant to change their living arrangements. It is too early to see if wages will move for white collar city dwellers (since wages mostly change when people switch roles this has a lag). Already rents in some major cities such as London have declined.
But if people stop doing those miserable jobs, salaries will have to go up, which in turn will increase the price of goods and services, therefore creating inflation.
That hasn't been a huge problem as minimum wages have been raised.
In theory, yeah, sure, that is the textbook phrasing.
But the lowest tier jobs that are going to be affected is this scenario aren;t remotely close to the largest percentage of total wages, so I can't see any huge shift being induced.
UBI affects the cashflow of those making more than just subsistence money less and less, and I think that diminishing percentage is an aspect of this that gets lost in the battle of philosphicals.
I agree with inflation but not because the salary raise, but because with UBI the people purchasing power is theoretically higher so companies will just raise prices.
IMO I don't believe those people doing miserable jobs with low pays take a significant part of wage expenses, related to higher managements. If there are data about proportion of the wage we'll get more information.
Yeah it’s like UBI people believe rent prices are set by something other than the maximum that the landlord can get for it. If you give people ability to pay greater rent, as say the advent of the motorized plow did, then rent goes up. Simple as that.
By this logic why the current rents are not even higher? Why do people still have any money left for iphones, netflix etc.? Why is it not all taken up by rent?
I suspect rents rise to where it is just about tolerable for most people in any particular renting cohort, where the cohort is matched to the type & quality of housing.
When it's not tolerable, people leave the cohort and move down a grade, to lower quality and therefore cheaper housing.
Obviously it's not tolerable if you don't have enough money left for food & essential bills.
Not sure why iPhone & Netflix come into this, because they are so extraordinarily cheap compared with rent, food and bills. But of course a phone is essential, and an iPhone very useful, cheap (on contract) and arguably essential these days - for some people it's their only access to the internet. People would not find it tolerable if they couldn't afford a few nice, cheap things, such as Netflix.
When you account for rent, food, bills and a few nice things, as far as I can tell that does take up all the income for many. Have you noticed that a lot of people aren't saving anything?
Of those who are saving, mostly they are saving for a deposit on a mortgage, and/or a pension.
Because people want to buy those things badly enough that they will spend less on housing, to a point, to afford them.
Theoretically a nationwide increase in discretionary income could create new classes of goods that would be desired enough to compete with rent and phones. Or it might not and people would just spend more on rent and phones up to their new limit. Phones would probably move upmarket to capture this revenue as they are essentially globally competitive. Rent would not as much due to the nature of housing supply and the effort of moving cities.
Because you can often get iPhones for <$100 or even free if you get one a couple generations old and sign a 2-year contract. Why do people still use "iPhones" as some sort of litmus test to judge if someone is poor?
Because housing is inelastic and in short supply -- everybody needs it and if the price increases they will still pay for it.
If you increase the housing supply, the price falls. Increase it to a point where there are some vacancies and suddenly landlords don't have as much bargaining power to take your entire UBI. At some point a landlord is going to say
"well better to fill it for $900/month rather than let it sit empty".
I think a huge part of UBI is making the economics of the essential things in life work out so normal people have the power when it comes to basic needs.
Personally, I really hate this comment, for several reasons.
First, let's consider the price of the rent. Assume for a moment that somebody manages to fix all mental health problems, alcoholism and so on, and that magically everyone manages to find a good job that pays reasonably well. This is supposedly the dream land of the pure capitalists: everyone works and is productive and so no handouts are received. Well, what would you suppose happens to the rent in this situation? If everyone is able to pay, then rents would go up, wouldn't they? So the difference between UBI and this is only that in one case people don't necessarily have to work, while in the latter case they have to spend 8+ of their lives doing stuff they may not like.
What this means is that your main point is simply that you don't want people to have money to pay for housing, because that may make prices go up for you. You are literally advocating that some people must be homeless so that life for us is easier.
Secondly, the rent argument consistently ignores the fact that if you don't have to work, you can go live wherever you want. One could go live in Alaska and buy 1km2 of land for 10$ because who gives a shit? construct their own igloo or something and then live there forever. This would additionally free them up to spend a larger part of UBI on other products. Instead there is this weird assumption that people will forever cluster in SF or other highly populated centers, because apparently humans are ants and like to breathe pollution.
You’re articulating clearly why even solving all underlying causes of homelessness wouldn’t actually cure homelessness. Why don’t you believe your own argument?
In any case, while that is the obvious conclusion (as you’ve stated), I never took the position that we merely need to fix mental health etc. I am not saying UBI will work but will make prices go up so I don’t like it.
I am saying that UBI won’t work, it will in fact make inequality worse, AND there’s a solution that will work. It’s the LVT. Once we have LVT, then we could do UBI and the upside would not get absorbed by landlords.
It’s odd to me that you’re claiming that I’m being dismissive of poor folks but you’re literally advocating moving to an igloo in Alaska as a solution?
I apologize if using hyperboles makes my point less clear. I'm not literally advocating Alaska, I'm trying to make the point that cities as we currently know them only exist because they are the most efficient solution when the population mostly has to work in the same location. Once you remove this constraint, it's much more viable to have smaller and more distributed population centers, without necessarily resorting to living alone in Alaska. This would still significantly reduce rents, and even better allows competition between distant locations which wouldn't otherwise be competing on prices.
For the other point, UBI as I know it must be financed by some sort of increased taxation of the rich, it is not the government blindly printing money and distributing it. I don't know whether that taxation should be LVT or something else, I'm simply talking about why the argument that UBI doesn't work due to rent is, in my opinion, incorrect.
If we accept that a feature of cities is people want to live in them, and will compete for that, therefore UBI won't help people live in cities.
How does LVT help poorer people live in cities? The competition for clustered housing continues, that's a fundamental cause.
Richer people still have an advantage over poorer people in economic competition. Instead of people renting and landlords scooping up all the UBI, with LVT you have people competing to buy housing and LVT scooping up all that people can obtain (whether it's UBI, earnings or something else).
Poorer people don't have much luck buying housing in the first place, because of mortgage gatekeeping, even when the actual cost of purchase (mortgage payments) is significantly lower then renting. Even when they do, they pay more for the same level of housing in the end (mortgage interest).
So a switch to a city economy where housing is primarily based around purchases would seem to be not so good for poorer people trying to live there, unless something can be done about access to long-term credit.
1) Public investments such as subways yield increases to public coffers (today, the landlords who happen to own land near a new subway station get a windfall off the city’s billions of dollars of investment). This would incentivize public investment.
2) Land speculation goes away, and development is strongly incentivized, so more units come online and push prices down.
3) Both of the above improvements, as well as private investments made due to public/communal value (such as HQ2 not being built in the middle of nowhere), would funnel huge amounts of money to public coffers. We as a democratic society can decide if we want service workers living in our cities (I reckon anyone who lives in reality does want this) and have the resources to fund making that possible. Things like functioning transit systems go a long, long way.
Land tax is a better then income tax, because it is more efficient. UBI is better then 100 different need based programs because it is more efficient. But government/politicians do not value efficiency, they value bureaucracy. So they will stand in the way of anything better. Clearly what we need is a UBG, Universal Bureaucrat Guillotine.
> How does LVT help poorer people live in cities? The competition for clustered housing continues, that's a fundamental cause.
It means there are better incentives to build denser housing (redeveloping doesn't increase your property taxes, but as your area gets more desirable your land value tax goes up whether you redevelop or not) and public transit (because the city can fund it off the land value increases). So there's a bigger supply of clustered housing.
> Poorer people don't have much luck buying housing in the first place, because of mortgage gatekeeping, even when the actual cost of purchase (mortgage payments) is significantly lower then renting. Even when they do, they pay more for the same level of housing in the end (mortgage interest).
LVT helps a lot with that as well: property becomes less good as an investment, and you don't get to pay lower property taxes just because your bought a while ago.
> If we accept that a feature of cities is people want to live in them, and will compete for that, therefore UBI won't help people live in cities.
It depends on why people want to live in cities. The people who are living in cities mostly for the vibrant community will probably want to stay there. The people who are living in cities because they can't get a job outside the city will no longer have that constraint, and some of those people will move away. Not everyone has to move away for competition to decrease.
I think you are overestimating the ease of people moving from one place to another. While job may be a primary reason people live in the cities, there are other important reasons like access to entertainment, shops, being close to other friends who leave nearby etc. It's not as simple as saying "oh, I could spare 500$ a month by moving in the middle of nowhere, let's do it". Not everybody wants to live in suburban/rural areas and spend most of his time at home.
> oh, I could spare 500$ a month by moving in the middle of nowhere, let's do it
For $500/mo sure. But if it's like people say and landlords try to raise rent $2k/mo like people are saying, then yes people would definitely move.
Also you could easily save $500/mo right now by moving from a big city to somewhere small. Right now, without UBI being a thing. The rent difference under a hypothetical UBI rent increase would be far more than $500/mo.
You think suburban people stay home all the time? What sort of overgeneralization is that? Suburbs = guaranteed vehicle = travel not just mandatory for commuting, but at will, as desired.
If a city in the US existed where everyone magically got their problems fixed, I imaging it would be seen as a desirable place to live, so no wonder the rents go up.
Rent is an auction, so there is a dynamic/negation about living in a place. It's not true that rents go up if "everyone is able to pay" - only if "everyone is able willing to pay"; where are competing cities with lower rents in this example?
Increasing the supply of a good or service will only push the price down when enough of the demand has been satisfied. If the demand far outweighs the supply you're not going to see the price budge for a long long time.
This is basic Econ 101, not Nobel prize territory.
That's only in a dysfunctional market (as housing is in the US). The solution is to fix the housing market by disabling NIMBYism and other such things that cause the housing market to be wholly dysfunctional.
But yes, we should probably fix that before we implement UBI.
I reckon if you fix that, with say the LVT proposed by Henry George in SF during a similar explosion in wealth (and accompanying inequality), you’ll find UBI likely unnecessary. If it is still necessary, you’ll have overflowing public coffers to pay it out with, AND it won’t be eaten by landlords.
Somewhere like SF, a land value tax would simply be another incentive to developers / landlords to build more units. The problem is not caused by a lack of incentives, as evidenced by the sky-high rents - landlords already have huge incentives to build more houses. Why aren't they? I would have to guess, restrictive planning laws are limiting the supply of new housing.
Speculation affects housing prices only because of development restrictions. Because only a small fraction of land can legally be developed, it's possible to corner the market for new development. If all property can be developed, there would be orders of magnitude more competitors in the development space, and impossible for an individual or cartel to control.
You have land and are choosing not to utilize it (rent it out or sell it) in the belief that you will get a higher price for that same land tomorrow.
Today, your tax liability is tiny when you do this. This incentivizes landlords in hot markets to keep their land off the market, thus making the market hotter, this further incentivizing speculation, etc.
This is why you see empty storefronts or empty lots in incredibly expensive areas. The owner can sustain the cash flow loss today in exchange for higher prices tomorrow.
LVT would mean your tax burden is the same (moderate to high) whether you rent it out or do not rent it out, thus making it infeasible to sit and wait for a higher price tomorrow. This would bring more units onto the market and more efficient uses, thus bringing prices down.
Since LVT is often proposed as replacing other forms of taxation (or at least dramatically reducing them), the cost of actually building a dwelling or storefront also goes down — thus further incentivizing non-speculative behavior.
Indeed! A few points just so people who haven’t heard of LVT before don’t walk with easily addressed misconceptions:
1. The government today assesses land value. It also must assess the value of far, far more nebulous things that can be hidden, transfigured, created/destroyed, or moved offshore. Yes more importance would be tied to this singular assessment, but this assessment is singularly easy to assess!
2. The price/value itself would be set by the market. The assessment of that value, of course, would be by the government and you are correct there is risk of differential here (though mitigated by point 1)
3. Lastly, because land cannot be created, destroyed, or moved, a tax upon it is uniquely unable to either incur inefficiencies (deadweight loss) or to be passed onto tenants/consumers. This is contrast to every other form of taxation, which incur inefficiencies then get passed onto the consumer in the form of price increases anyway.
> This is why you see empty storefronts or empty lots in incredibly expensive areas.
The reason why the speculator leaves the storefronts or lots empty is that putting them to use right now would prevent them from being used for something even more valuable in the future. If they could use the property for something productive now without impacting the expected future use they would happily do so and collect the extra income. Coercing them into putting the property to use immediately, via LVT or zoning rules or whatever, is thus inefficient and economically destructive. The speculation serves a useful purpose.
Wrong. The "productive" activity for land holders under system without LVT is preventing others from utilizing it. Without LVT you only achieve massive resource underutilization and favoritism of the first who grabbed it.
If the landowners aren't using the land, and they're not letting anyone else use it, then no one is making any money–least of all the landowners, who also have an ongoing opportunity cost due to the capital they've tied up in the land itself. That's hardly productive. Or rationale. There is no profit in leaving land idle when it could be put to productive use without impairing its future earning potential. Are you claiming that landowners would maliciously prevent the land from being used, at their own expense? Please be specific.
Yes there are landlords who hold land out of use because they know there are or will be others who will eventually want to use it.
There is very clear profit in buying land for cheap and sitting on it until somebody wants it. Land doesn't depreciate unlike buildings. Building something on that land is often more risky for landowners whose business is pure speculation because at sell time the building will have to be torn down by the next user.
This is consistently evident in real world. It might not be in economic theories and textbooks which are designed only for utopia-land.
It really sounds like you're agreeing with me in every sense that matters. You just fail to see the downside of the alternative without speculation where someone buys the land for cheap, does something correspondingly low-value with it without regard for its future potential, and then when somebody else finally does want it for a more valuable use we either can't use it that way or have to tear down what the first user built (which is doubly wasteful when it could have simply been built somewhere else in the first place) and start over.
I honestly don't understand your point much. But let me add this about speculation and land holding for the next user.
There is zero need for a private owner to hold it. The land will not disappear, it will always be there. Government on behalf of the community can hold it just as well without the incentive of preventing others of using it.
This makes land different from other goods where if there were no speculators (dealers who hold inventory) the market would dry up (stocks, bonds, used cars).
Land is in this regard more similar to concert tickets. There are speculators who acquire this limited commodity but their profit stems from preventing others getting them and selling it to them at a later date at incresead price.
Society looks at this type of business as highly unethical.
> The land will not disappear, it will always be there.
The land might not disappear, but it can very easily be rendered unfit for purpose through misuse or neglect.
Let's put this in concrete terms. Say we have a plot of land which is suitable for various kinds of development. We have a prospective buyer who is looking to build a house. They like this property the best but there are several other suitable options; let's say they'd be willing to pay $25k, but not $30k, to acquire this land as the site for their home. The home will be worth perhaps $250k (not counting the land itself) with an expected lifetime of at least a century with proper maintenance, and effectively can't be moved once build.
Development trends in this area suggest that in perhaps ten years' time there will be demand for some sort of commercial development—office space, retail, services, whatever. They aren't here yet, but if trends continue then 10 years from now someone would be willing to pay up to $100k for this piece of land. (The other sites that the first buyer was considering for their home would not be suitable for this purpose.) However, they're not going to pay $250k extra for a house that they're just going to have to tear down to make room, even if the owner of that house were willing to uproot their family and move somewhere else.
Without speculation there is no reason not to sell the property to the first buyer for $25-30k and let them build their house. However, this represents an economic loss of at least $70k ten years later (the $100k value to the future developer minus the $30k maximum value to the residential buyer) since the land is no longer available at that time for the commercial development. To make it available at that point would cost around $250k just to offset the value of the house, plus the cost of tearing it down, never mind the hassle of moving the family.
With speculation, there is someone bidding say $75k for the property and the residential buyer picks one of the other available properties instead—perhaps not their first choice, but a good enough alternative. The speculator limits the use of the property to such things as can easily be removed in ten years to make way for the anticipated commercial use. Perhaps that means leaving it empty, though it could also be turned into a park, short-lease retail space or transient housing, something that could easily be cleared up to make room when the future demand materializes. Then, if all goes well and they predicted the market correctly, they sell the vacant property for $100k and make their well-deserved profit.
Of course, it may not all go well, in which case they'll be forced to take a loss. Speculation only pays when you make the right predictions.
> Government on behalf of the community can hold it just as well without the incentive of preventing others of using it.
If government correctly anticipates that the land will have more value in the future, they can act like a private owner and buy the land and hold it until that use materializes. Where this breaks down is that the government isn't risking their own capital in the process; if they are wrong and the value of the land decreases instead it's not the government that pays the price, but rather the public. Which means they have less incentive than a private owner to accurately predict the future value of the property, and are more likely to lose money on average. When they do lose they don't go bankrupt; they just take more money from the public via taxes. This is merely an inefficient, socialized, and corruption-prone version of private speculation fueled by public funds.
> Land is in fixed supply and everyone needs land to work, sleep, and exist upon.
For those who are convinced supply&demand doesn't work for dwellings, buy a rental and charge 10x the market rate. See how that goes. This applies to any business. For example, try selling something on Amazon/Ebay/Etsy/Craigslist. You can charge whatever you like for it. Whether someone will buy it is another thing entirely.
Everyone needs food, too, but ironically it's the unneeded food (like Starbucks) that's expensive.
Today how that goes is you get huge tax cuts for not making money and keeping valuable resources off the market.
How that should go is you get taxed at the same rate as if you had set it at a price it could be rented at, therefore encouraging you to set your price correctly.
That’s the LVT, that’s basically the entire thing.
You have to think of it in a deeper context than it being binary. It has very similar properties to oil. It's also fixed, but technology has done some phenomenal things to extract more of it with greater efficiency. The same is true for land and housing. UBI, self driving cars, and a greater shift away from working in offices are all going to change how we live and the type of land we will want to live on.
I don't think land is fixed in supply. We can build up and down and in the far future, into space. Either way, we are seemingly far from land being the bottleneck at the moment.
So you're saying that it's hypothetically everyone then? I say hypothetically because the U.S. is only partially a free market (i.e., not a free market), and so that makes any appeal to the "free market" hold little water.
In what way is the increasing ratio of rent to income working for renters?
The government is a monopolist land owner that hands out new land at prices designed to please existing private land owners and lobbyists. This is as far removed from a free market as an absolutist monarchy.
Of course it is a fact, it is one of the most basic laws of nature. It can be observed in interactions of other biological species not only ours. It would still hold if there were no humans. Claiming otherwise is like denying gravity.
A model working and producing a personally.desired outcome are two separate things.
The assumption of a labor shortage because of low nominal unemployment is incorrect - the gig economy is thin margin as it is even with poor pay. It utilizes the previously "idle" labor in a marginal business model but without sufficient demand in other sectors it only provides a low floor.
You are citing a political opinion from a newspaper to prove somehow supply and demand is not a natural law. What is next, an article in Astrology Today arguing 1 + 1 != 2.
"the maximum that the landlord can get for it" is a function of (approximately the minimum of) [1] the amount of money the tenant earns and [2] the price of the tenant's alternatives.
Just because [1] increases, doesn't necessarily mean [2] does.
There is a simpler model that works very well across the whole world. Rent is tied to the price of real estate, which is tied to the purchasing power of the average person living in the area. At some point it's not even worth for the renters to rent out and keep themselves outside the reach of rent controls because their property simply goes up in value and they can take loans against it. As banks expand credit at low risk premium, now to everybody thanks to the new income from UBI prices will only go up. Bank lending drives prices in the end and income and rates are the key factors.
Or just allow developers to build more housing, preferably high density.
The problem with the high cost of housing in markets like San Francisco, is the wealthy capitalists owing real estate create regulations preventing any new housing from being developed.
I see this line of thinking a lot, but it's a bad one. It's understandable that people think like this in a place like SF where landlords have grabbed up a lot of salary increases, but it really doesn't work that way.
If it was true, rents would keep climbing to 90+% of incomes but they don't. It would also imply that any other income income increases or redistribution (widespread pay rises, social security, etc etc) were pointless, you might as well give up on any kind of redistribution entirely.
Of course, if there was a UBI, there would be increased demand for stuff that low income people need like housing and food. That's the whole point of increasing equality! Shifting consumption from sports cars and chandeliers to food and shelter is the goal. But then supply would shift to compensate.
Another advantage of UBI is that even if you do wrongly assume it doesn't result in any net redistribution, it's still beneficial, because it smoothes income over the lifecycle, and a smoother income is much less stressful and unpleasant than a choppier income.
> I see this line of thinking a lot, but it's a bad one.
You can't just state that and it be true.
> It's understandable that people think like this in a place like SF where landlords have grabbed up a lot of salary increases, but it really doesn't work that way.
Yet, it does work that way. In every city I have ever lived in, it's worked that way. For rent in particular, any excuse that more can be paid leads to higher rent prices. A company built a new office nearby? Rent goes up. More "affluent" people are moving into a particular area? Rent goes up. And so on.
> If it was true, rents would keep climbing to 90+% of incomes but they don't.
Why? That's not the implication. Rent increases are done in a cleverly predatory way. Often times, rent is increased in small to medium steps but frequently, and the notice of such rent increases is notified in the minimum (if that) time legally required. That often leaves renters stuck because there are other, big surprise, expensive barriers to moving. Rent is a predatory system that maximizes the amount of rent that can be collected. That doesn't mean it goes to 90% of incomes as you claim, which nobody else is claiming.
My overall point is not about just rent. By providing UBI and not putting other protections and improvements in place, a capitalistic society will not just sit around and leave meat on the bones. Things will simply shift and people will still be in poverty. A poor educational system will still be there. Creditors will still be around. Etc.
>A company built a new office nearby? Rent goes up. More "affluent" people are moving into a particular area? Rent goes up. And so on.
Those things seem to be due to demand. A new office means that people can make more money living in that location, so are willing to pay more for accommodation there. More affluent people moving to a location means that they must see some value in living there. How does UBI increase the demand for housing in any one place (or at all)?
"Everyone" doesn't make x more, some people make less. There's no more money overall. Money is just shifted around. Demand will increase on housing (particularly in the low end), but so will supply.
> People will receive UBI, but then other things, like rent, food, etc. will all just magically get more expensive.
In the same way that you declined a promotion because everything would magically got more expensive.
If things simply shift, then there is no reason to expect any of these to change and we might as well implement UBI right now, because it doesn't hurt, right?
If you are middle class now, then for you nothing changes except that your salary might include a line -$1000 salary decrease +$1000 UBI (no, if basic income were enough to retire, you would have retired already).
Things change for low wage jobs, where your employer now represents a share of your income, not all of it, and you can negotiate without fearing of being hungry on the street.
When I get a promotion, does everyone in the country get a promotion? A promotion is also private to everyone but the IRS, who does increase costs through tax, especially for the lower and middle class. The analogy you present doesn't make sense.
I mentioned this in another comment, but I fear UBI will be an excuse for those in power to have even less incentive to care about other problems like education, healthcare, the credit system, consumerism, etc. I fear it will be the case of "we're giving you free money, what more do you want?" from the government and wealthy.
You don’t think very clearly if you think prices magically raise.
There are still market forces and people retain freedom to move.
“Predatory nature of those in power is put in check” UBI puts it in check by allowing the market to solve for everything while guaranteeing a minimum market participant power for all members.
Why do you think SF housing prices have gone up x% over the last 20 years?
Are the buildings x% better to live in?
Are the landlords providing x% better services?
No. The people who work there are producing x% more capital, therefore landlords take that x% and call it “cost of living.” This is not a new phenomenon in any regard, and UBI proponents must answer for it.
If their solution is rent control, then rent control is a solution even without UBI. Which of course it’s not a real solution, because then you’re distorting the price of housing and not going to get your construction/maintenance needs met.
LVT is a tax scheme that lets the market set prices for what it’s worth to live in an area (land rent/ground rent), then recoups that as a tax upon the people who claim special privilege to decide what to do with that land.
I guess I'm not following your counter argument. The reason SF housing prices have gone up so much over he last 20 years is because people need to live there to get the job they want. If you can live anywhere...wouldn't that mean only the people who need to life in SF to do their work would live there? People who don't need the service job money would just move out. I'm just missing the issue here. When you decouple housing from working, the equilibrium would simply move out; you would no longer have a force keeping people in.
I wrote a big long article for you, but realized you’d counter with the idea that landlords will collectively decide to hike rents no matter what.
So, the simple argument that UBI will not increase minimum rents by 2k a month overnight with no improvement in living conditions: landlords will have to compete to get the UBI out of individuals hands. Right now, the lowest income housing isn’t in competition for individuals, it’s competing for government approval and integration. If everyone individually has 2k a month to spend, they have the luxury of shopping around.
>“UBI lets all the poor people leave” is not convincing at all.
The value proposition for service workers in high-COL cities like SF is probably already bad. How would UBI make it worse? At least it'd be easier to move away from those areas. Maybe cities would have to pay serivce workers more to make sure they stay.
Rents are high in SF because there is extremely high demand for those apartments at high prices, because they allow access to high incomes. The value of living in SF for a random serivce worker is not increased by them getting a $2k UBI cheque, it is decreased. For the tech workers driving the demand, $2k a month is not going to do much to change the value they assign to housing in SF either way. So I do not see how the UBI cheques would increase demand, and therefore rent, for housing in SF.
1. You didn't provide any actual evidence or deeper claims than (putting something in parenthesis). I don't really believe the coal mine claim, as in reality we don't see that happening. Mining towns are still among the cheapest and poorest towns in America.
2. That's a really naive sense of economic productivity. Here is a thought experiment.
A) Let's shut down all of Amazon HQ1.
B) Let's shut down the dams that provide 86% of Seattle greater area's electricity.
Which one of these entities is ACTUALLY responsible for that "productivity" then? And I bet you rents in Seattle without electricity would drop far greater proportionally than they do out by the dams. Rent follows incomes, not productivity.
There is no deeper claim being made. We are saying the same thing. You can call it income if you'd like. A person's wages are some portion of their productivity. The distinction is irrelevant for this point.
You don’t think it’s the high demand for housing in SF, combined with limited supply to meet that demand, that allows landlords to raise prices?
I suspect you’re used to thinking of an information economy where supply is effectively unlimited and “best services command top dollar” is the principal factor in pricing.
Supply is not just limited, it is fixed. When you pay rent you are making two distinct payments wrapped up in one. First is for the actual accommodation/building/apartment and it’s maintenance. The second is for the mere footprint of the building. Sometimes these two payments actually go to two different people.
There is a problem with limited supply of units, yes, but in reality the majority of cost of living comes from the second type of payment: the fee for the ground rent. The ground is in fixed supply.
With perfect development policy, prices would still go up, ground rent would continue to be seized by people who had nothing to do with its generated value.
The schools, employers, and natural appeal of SF makes its ground rent high. Landlords did none of that.
I love idiots screeching about big tech creating to much demand. Seriously? Too much demand is a bad thing? Hardly! How about reversing the crap zoning laws and NIMBY attitudes so supply can rise up to meet demand?
The SF housing crises was caused by a bunch of selfish people declaring through policy (zoning laws) that they have theirs and don't want where they are to change to accommodate others.
And this is supposed to be an enlightened leftist utopia? Talk is cheap until it can affect you personally is the real lesson of San Fransisco housing politics - playing out rather dramatically. Blaming landlords is laughable. San Fransisco has an embarrassment of jobs brought by the high tech companies in the bay area and instead of embracing them (by letting more housing be constructed) they resent them and blame everyone but the real root cause - severely restricted supply.
Rents do not eat up all income increases. Otherwise rents would be 90+% of incomes and all income increases (minimum wage increases, widespread pay rises, social security payments, etc etc) would be pointless.
The burden is on answering: why not? What protections are in place now or are being proposed that would prevent such shifts?
People in power, i.e. those with money, don't like giving up money or potential profit. Without protections in place, prices will simply rise or adjust and people will stop worrying about unemployment. In the end, it just puts a different label on things, creating another category for poor people, and I doubt it actually improves anyone's lives. This is because the problems aren't necessarily all at the bottom. The majority of the source of problems are at the top of the socioeconomic ladder.
One possible reason is that people would be willing to pay more for the items since they now have more money. And since everybody gets the same free money, everybody will slightly increase their price-willing-to-pay threshold.
I doubt rent and food can go up much because of UBI as the basic versions of both seems more controlled by supply than demand. For areas where demand is higher than supply I do suspect that thing will get magically get more expensive in order to class distinguish between poor people under UBI and rich people.
Utilized farm land and output per farmer has steadily gone up each year with basic food prices falling as an result. I guess I could imagine that if more people would want to become farmers because of UBI it could lead to farm land becoming more expensive which in turn would lead towards higher food prices. UBI will likely also increase prices for status food where there is a low supply and high demand, so I would expect a rise in cost for food that get associated with wealth and status.
For rent it is more complicated. Low income jobs tend to force people to live in cities that are near industries. UBI would allow said people to live outside cities which tend to have significant lower rent as there is significant more supply of cheap houses and cheap land to build cheap houses. Being poor however tend to have a behavior impact where people want to live close to relatives, which in turn often has the result of people staying in cities even if they have cheaper living elsewhere. It is a possible risk with UBI that in cities the rent will go up a bit in low income areas, and significant in high income areas in order to keep people with UBI from living there.
>> People will receive UBI, but then other things, like rent, food, etc. will all just magically get more expensive.
Of course they will, but that's missing the point. The point is that the newly printed money will no longer enter the economy through corporations (corporate debt) but through people and this will change the fundamental dynamics of the entire system. It's about changing the flow of newly printed money and how it enters our economy. So instead of corporations trying to extract money from the government and banks and using their control over people as a bargaining chip as they do today, they will have to focus on actually delivering value to people and keeping them satisfied.
Employees will not be disposable bargaining chips for corporations to get something from the government or from banks, people will be the focus of all economic activities because that's where the money is going to be coming from.
Consider that in 20 years, there will be x times more money in circulation in the economy that there is today. Right now, all that money has to pass through the hands of banks and corporations first this makes people dependent on banks and corporations; this is an unhealthy and unjust dynamic because it's people who are creating economic value, not banks or corporations. Why is the government assuming that banks and corporations are the most efficient way to distribute new fiat money into the economy? Aren't people inherently better at figuring out what they need?
Look where corporations got us, people are effectively being told what they need through targeted advertising.
To me it seems like we're just trying to navigate a way to a post-scarcity society with the least amount of backlash/damage.
We could give people money, or we could say "up to so many kilowatt/hours this is free" or "you are entitled to this set-amount of groceries for free". Or to combat prices that inflate for UBI, the government could be reporting what is a reasonable price.
Man I wish I had taken economics. I truly don't know all the ways this could harm us.
> We could give people money, or we could say "up to so many kilowatt/hours this is free" or "you are entitled to this set-amount of groceries for free".
The point of the article, is that centralized planners are really bad at calculating these things, thus the eventual collapse of the Soviet Union and China moving to a much more market based economy.
Except that we do have approximate data that can give us hints at whether this works out or not: the differences in unemployment safety nets between countries, as well as how strong their minimum wage laws are (and other appropriate laws that are supposed to protect employees).
If someone is giving you money every month, for free, you are less at their mercy. Currently if people dont take whatever work is given to them, including being forced to go to work in a pandemic, they starve. If they have at least a basic set amount coming in every month they have the ability to actually pause and figure some things out. A married couple just through UBI may have enough to scrape by with no work. The work force suddenly has negotiating power because they don't have to take any job that comes along.
I could see society changing as well. If 20 people got together and formed a commune, that commune is essentially self maintaining as they get an income, can grow their own food etc.
To get a little off topic, a huge benefit I see is poor people would be less at the mercy of abuse.
Currently, women can be stuck in abusive relationships which are challenging to escape. Having a reliable stream of incoming money can help then run away.
Bankers are the first one that will eventually support UBI legislation in the US.
Because they understand that UBI will be a profit center for them without some sort of limitation on predatory pricing and lending.
1. The increase in demand will first short-circuit the supply of basic essentials.
2. Banks will be the first ones to step in the gap to finance companies working to meet UBI demand
3. Then eventually over time, banks will begin extending credit to overextended UBI-powered citizens. The citizen is the conduit for government-to-bank revenue exchange.
It should be easier for the poor to get mortgages if the bank knows UBI can be relied on. Landlords will lose some leverage as a result.
If target and walmart, currently competing for business on opposite sides of the same street, both raise their margins on food and clothing in response to the implementation of UBI then they are clearly colluding and I would hope that an enormous antitrust thing would ensue.
The real answer is that UBI isn't just money. Basic housing is free. Basic foodstuffs are free. In addition to everything else being sold, you can just get milk. Or rice, or cheese. Or lots of things I haven't mentioned or thought of. No questions asked.
It would be difficult to have predatory pricing if there's a suitable, free alternative.
It would take magic. The markets for most basic necessities are reasonably efficient. There's no major monopoly on them and it's not that hard for anyone to enter the market.
A key point, Like in the well off middle class people can get subsidies for solar panels, but a single parent who buys her electricity via a prepayment meter pays more per KwH.
This implies that people with resources will not do better by and for themselves, which contradicts most of the soft policy that guides eg- lax capital gains, dividends, and estate taxes.
If scarcity was a driving force in creating the competition that capitalism deems necessary, then there would be no point in hoarding or passing down more wealth than could be spent in a lifetime. So, it's an obvious mistruth.
And if the price of all things will increase because some people are no longer starving and able to afford to pay more, perhaps that's a fair trade. We will optimize for more convenience, higher quality, and more novel products, then.
Perhaps this only illuminates how close people who feel they are doing well are to the people that take most of the prejudice for their lack of wealth. Maybe being a small business owner doesn't put you in the same world as Wal-Mart any more than being white and working class makes you basically equals to Elon Musk.
Perhaps it's the tide that lifts all boats and not how many have sunk around you.
Please don't come at this with simple models since the real-world interactions are very complex. What you describe only works that way in non-competitive markets or where there are artificial constraints on supply. Food and product prices are pretty much all determined by marginal costs in competitive markets since if you try to increase your prices "because my customers have more money now", your competitors will undercut you and you'll go out of business. This is why things have been getting cheaper over time as a portion of income, even while incomes have risen [1].
Housing is its own story because anti-development policies have constrained supply, which artificially forces prices up. However, 1) it's important not to conflate it with cost trends of other basic needs, and 2) there's a strong argument that increasing base-level income also increases mobility to lower-cost areas, which has a stabilizing effect on housing. The few reputable studies on UBI-equivalents I've seen show pretty minimal price inflation in comparison to the income gains, for example [2].
UBI is not a silver bullet, nothing is. We need a complex net of programs like Universal Healthcare to reinforce a UBI like system, or really any system. One comment here made the argument that people can still spend all the money on whatever and be out of luck for necessities. Making some of those necessities included in citizenship (healthcare) could lessen that issue. Universal Healthcare on its own might lead to a massive boost new entrepreneurs now able to build their own business vs stuck at a job for the healthcare. It's been a key part of my job searches as I could not afford much without good insurance and company contributions.
It is far from solved in Europe. The problem with single-payer healthcare systems that are common here is that you cannot really bypass the supply-demand law. Since European governments are paying for healthcare for everyone, and effectively are setting the prices of healthcare services, keeping them low, the nature compenstates by limiting supply. So, in general, you can get your surgery for free, but you will have to wait 2 years for the next free time slot to have it. So what you save in money, you lose in the lost time.
Given an equal amount of expenditure, a single-payer healthcare system will always be able to deliver a better standard of care than a privatised one because of the greater negotiating leverage and the removal of a profit margin for the insurance provider.
It may be the case that in countries which spend less on health per capita than the US wait times tend to be longer on average (and I'm pretty sure the data says this isn't universally true), but that's not an inherent property of the single-payer system - and wait times for someone who would never be able to afford the surgery they need under the American system are infinitely shorter.
Inherent property of single-payer system is that medicine professionals salaries are low compared to US, so there's strong incentive for said specialists to emigrate (or for wannabe doctors to pursue other career paths in the first place). Countries with such systems suffer constant shortage of doctors and nurses, further limiting the supply of healthcare services. Truth is, almost all progress in medicine happens in the US, which effectively subsidises healthcare for the rest of the world this way.
> that you cannot really bypass the supply-demand law.
So you really think that the demand for, say, hip replacements, will grow indefinitely because the recipients don’t have to pay money for it?
> the nature compensates by limiting supply.
Which nature, and how does it limit supply? I can’t think of any reasonable interpretation of that statement that makes any sense.
There's nothing inherent in single payer systems that forces long wait times. And in my experience (Sweden), when you need care you get it. That in contrast with that it proved almost impossible to get to see an in-network doctor when I lived in Michigan.
Thing is, poor people would be _more_ at the mercy of the politicians. Especially at the start, when UBI will still be 'novel'. Because the politicians will be able to change UBI, and poor people would at some point start depending on UBI.
When the government can just take your money out from under you, that starts making politics quite important.
Do note that there will need to be provisions for changing the amount of UBI. At the very least to index it to inflation. Heck, refusal to raise UBI for inflation for long enough would already screw over the people who depend on it.
They will be less at the mercy of the less rich (e.g. 'petitbourgeois') who cannot impact the broader system, and more at the mercy of the super-rich (e.g. 'oligarchs') who will be able to influence the monolithic/all encompassing UBI structure.
this is pretty much an axiomatic property of the power concentration required to implement broad-scope social programs enforced by the state.
The problem I have with this is “who gets to define what is and is not a horrible job?”
Just not liking your job can’t be the litmus test here. If 95 percent of people doing a job thinks it’s a fine job and 5% hate it, does that make it a horrible job? What about 5% and 95%? When does a job become horrible?
Also, what about a generational change in attitudes or a difference in attitudes between regions. There are jobs I did that I consider decent honest work that I put myself through college doing that many people twenty years my junior would not even consider. There are jobs city folks would do that country folks would not do? There are jobs immigrants are fine with that native born citizens would consider horrible.
For those of us working hard and paying lots of taxes, we have expectations here since it's the fruits of our labor that are paying for all this. If we're expected to work so others don't have to, there needs to be solid justification that those of us still working agree with.
How does UBI differentiate itself from socialism, a welfare state and/or communism? Where is the money for UBI going to come from? What incentive would there be for people to work?
Tax rates on the rich are at historically low levels. Rich people would still get UBI but the top level tax rate would effectively cancel it out (and more). Current welfare wastes a lot of money on admin/staff/fraud investigations and none of that would be needed with UBI since everyone gets it.
People would still want money. UBI isn't going to be enough for a lavish lifestyle, people will still want to work. It would make lower-paying activities like art/open source more viable though.
> Tax rates on the rich are at historically low levels
Not really. The income tax didn't exist before 1913 and the government was way smaller so there wasn't a even need to collect a lot of taxes. Are you thinking of the 50s? Because even in that time people just avoided to declare all their income (it was easier back then) or used other loop holes to avoid paying taxes [1]
> Current welfare wastes a lot of money on admin/staff/fraud investigations and none of that would be needed with UBI
Not to mention a lot of other social programs that would be folded into UBI and eliminated overnight. Social security, food stamps, rent assistance.... That's not enough savings to pay for UBI, but it's an appreciable chunk.
And the existence of UBI would imply the existence of a national registry, which would drastically change the equations regarding illegal immigration. Border enforcement becomes a lot less important to some anti-immigrant demographics, if those immigrants cannot receive any welfare. Police for fraud, sure, but maybe you don't need as many fences and armed guards patrolling the border?
I'm just saying the knock-on effects of such a drastic shift in society would be huge, so expecting a simple comparison of current costs and revenues is so simplistic that it's guaranteed to be off by a lot.
> How does UBI differentiate itself from socialism, a welfare state and/or communism?
From welfare state: By giving it unconditionally.
From socialism/communism: You're still allowed to own "means of production", and you're also still allowed to try to maximize profits etc. as a company. Private property, especially owning a business privately, is still a thing.
> What incentive would there be for people to work?
You work because you want to lead a somewhat nice life, where you're able to afford things. UBI (at least the more serious proposals) would cover just the very basics: You'll be able to afford a roof over your head, food and other such basics. Want to afford some nice things? Need to work.
And this is in my opinion the beauty of UBI. Doing a crappy job until the end of my life for a crappy salary that doesn't get me anywhere? No way. Doing a crappy job for a while until I've saved up enough cash to afford something I want? Why not. It incentivizes to make crappy jobs that nobody wants (unless they must) more attractive; accelerating their automatization (see e.g. the garbage truck examples in this thread - people running behind it vs. having an automated crane to do it); giving power to those who currently have no option than to work whatever they're given, no matter how much they dislike it.
I think I get it now. Basically in the current system you can chose between being on welfare OR working and not receiving welfare. In the UBI system everyone gets a base pay that gives you the option to live life at a minimum however you're not de-incentivized to work like in the welfare system where you have to chose between either working and losing all your welfare benefits or not working and living life on welfare. In the UBI system everyone gets a base pay, you can chose to improve your life standards by working but don't have to. Either way there is a redistribution of wealth from the ultra rich to the rest of society that gives them more buying power to in turn move the economy forward. Am I sort of getting it now?
> [..] base pay that gives you the option to live life at a minimum however you're not de-incentivized to work like in the welfare system where you have to chose between either working and losing all your welfare benefits
Exactly! I think there was an Article in the NYT a few months back about some Scandinavian experiments with UBI - they gave a bunch of people UBI to see what happens. If I remember correctly, there was a story about one guy who was previously on welfare, and creating some sort of hand drums was his hobby and he was occasionally asked by others if they could buy some from him, however he wasn't allowed to sell them because otherwise he would lose his welfare benefits. But risking to start a business wasn't really an option either, because it wasn't making enough/as much/as reliably as welfare did so he was really kind of in a crappy situation where he could have improved his life conditions on his own but sort of wasn't allowed to for legal reasons. UBI totally took this kind of pressure from him.
Of course, there were also those who essentially took a year off to essentially do nothing. And if UBI is introduced, there will certainly be a percent of people that decide that they'll just stop working (will be interesting how many come back, once they get bored). But I believe that those kind of people always have and always will exist - thanks to progress and automation, we're in a spot where society doesn't really need everyone to work anymore and still be able to function.
Not parent but yes. In addition people would also be incentivized to work part-time (or project-based) jobs without fear of losing their welfare benefits.
Edit: Or like parent just wrote, it can allow you to bootstrap a small business.
> You work because you want to lead a somewhat nice life, where you're able to afford things. UBI (at least the more serious proposals) would cover just the very basics: You'll be able to afford a roof over your head, food and other such basics. Want to afford some nice things? Need to work.
Situation in Germany for unemployment / welfare: 450sqft apartment, utilities included, TV, smart phone, 400€/mo cash. Where are those serious proposals that suggest making the UBI pay less than the current social programs?
I think the main difference with UBI is that in order to receive unemployment welfare you have to not work, they are de-incentivizing working essentially. In the UBI system everyone gets a minimum paycheck and that would basically be like living on welfare however if you want you can go work somewhere else in addition to earn more money and improve your living standards if you want to. Probably minimum wage would have to be raised so that people would want to work as a maid or McDonald's but the economy would adjust to the supply of workers I assume.
> Probably minimum wage would have to be raised so that people would want to work as a maid or McDonald
The beauty of UBI is that government mandated minimum wage, with all its drawbacks, wouldn't be needed anymore. People would be able to refuse shitty job offers and not starve. Ultimately, employers would have to raise wages but not because of the law but because of workers' better negotiation position.
I consider the things you mentioned basics, but YMMV. I reckon that the majority of people would like to have more in their life than that, and would be willing to work to that effect, at least I would be.
> Where is the money for UBI going to come from? What incentive would there be for people to work?
Ideally the money should come from the elite class that is accumulating the capital thanks to automation and monopolization. A huge part of this capital is currently spent in non-productive ways like speculation, lobbying and luxuries. This is what some socialists and social democrats are proposing, though most agree we have not reached the needed level of automation and advancement yet.
Neoliberals don't really want the UBI anytime soon, they just hijacked the term and are now bastardizing it just like they did with many other good leftist ideas because they found them either threatening to their interests or useful for their power games.
As other posters here have already noticed, "neoliberal UBI" will most likely be used to incite conflict and division between the lower and middle class. They will make the middle class pay the bill while promoting victim mentality and degeneracy among the lower class. This should produce a shitshow that will help keep the wage slaves distracted for the next decade or two until a true UBI becomes a possibility.
"Ideally the money should come from the elite class that is accumulating the capital thanks to automation and monopolization."
Have you done the math on this? The scale of UBI is so large that it has to mostly come from the middle class. A meager $20k UBI for all 300 million Americans would cost $6 trillion. Even if you liquidated the 100% of wealth of the top 400 Americans you'd only get $3 trillion, and you're only able to do that once, not every year.
>Ideally the money should come from the elite class that is accumulating the capital thanks to automation and monopolization. A huge part of this capital is currently spent in non-productive ways like speculation, lobbying and luxuries.
The incentive for people to work is that $1000/mo would provide for a pretty meager existence. (This level is already an unaffordable level of UBI if paid to every US adult citizen; this is coming from someone philosophically aligned with UBI but also able to multiply and compare numbers.)
I still see this as a redistribution of wealth, tax the rich and give to the poor which is socialist in nature, not saying that's bad thing just that it's nothing new. In Poland this sort of thing is already happening, e.g. parents get 500 PLN/month per child, it's not called UBI here though.
It’s absolutely and definitionally socialist in nature, but I don’t find the use of labeling to be especially helpful (and often harmful to shutdown discussion).
I’m interested in whether something tends to create a society that I think should exist for my children and their great-grandchildren (whom I’ll surely never meet).
Most of those things happen to have market-based outcomes in mind, but I’m open to good ideas that happen to be socialist, anarchist, communist, or any other broad label.
So for Germany, that'd mean it ought to be lower than our current social programs? They provide an okay living, and there's not a lot of incentive to work, which is why we have a lot of long-term unemployment.
~1000€/mo, regular VAT is 7% for essentials like groceries, 19% for anything else, with a few exceptions.
The average worker's income tax rate is ~40%, but they'll also have to pay for health insurance (included in welfare at a subsidized rate), pensions etc.
Thanks for the data. To me, that sounds like the end result is within a whisker of $1000/mo after deducting the VAT “rebate” to the German government when that 1000€/mo is consumed almost immediately on a mix of 7% and 19% items.
Sure. The problem is there's little incentive to work. To achieve that, to make it uncomfortable to rely solely on UBI long-term, we'd have to make UBI lower than our current welfare programs. I don't see any proposals for that, much less any support.
Easy. Legislate away the possibility of UBI being used to pay debts: In case of personal bankruptcy, UBI is unforfeitable towards debt payment. Lenders will quickly shy away from lending against a noncollectable "asset".
With UBI, the poor will actually be more at the mercy of the rich as they'll depend on some powerful centralized instance providing them money, instead of earning their own via providing goods to the market (e.g. services).
So, to actually solve the issue you're going to need to decentralize and de-automatize. Otherwise lots of people are going to lose their economic and hence existential purpose.
> they'll depend on some powerful centralized instance providing them money
You just described most jobs. The difference is that UBI would be something like a right, as opposed to jobs where you can be cutoff from your livelihood at a moment's notice.
> instead of earning their own via providing goods to the market (e.g. services)
We need to get over this Smithian vision of everyone being their own little entrepreneur. You'll see the job 'market' acts very little like a utility maximizing market when you get into the details. For example, see the endless posts on this site about 'culture fits' and ritualistic hazings posing as interviews.
> The difference is that UBI would be something like a right, as opposed to jobs where you can be cutoff from your livelihood at a moment's notice.
A right can be withdrawn, especially as we a working towards outcompeting lots of people using machines. Then keeping a large population would be merely a hobby of the powerful.
> For example, see the endless posts on this site about 'culture fits' and ritualistic hazings posing as interviews.
Right, it is not perfectly efficient, but better than alternatives that are determined top down by rigid rules enforced by a powerful apparatus.
>> they'll depend on some powerful centralized instance providing them money
>You just described most jobs.
No. Now you depend on a lot of semi-powerful un-centralized instances, and not just one point of failure. And you can pick your poison according to your tolerance. It is not perfect, but it does not leave you at the mercy of one and only one entity without any recourse.
This is like Google banning you on gmail, and hence adsense and youtube, or Paypal or Visa banning you on their payment network, only a million times worse.
My opinion is that UBI would need to be established as a quasi-right at a minimum, similar to how we talk about Social Security (third rail of politics, etc).
It is much easier to get locked out of the market for jobs that pay a living wage than you realize. If you have a bad credit report or a criminal record, those un-centralized instances start to behave like a single point of failure. And you definitely don't have any recourse.
I'm aware it's not perfect. I just don't think you realize you want to take exactly the thing that is wrong about our current situation and make it the core feature of society.
The fundamental difference is that UBI would be subject to democratic processes. The private economy is not. Not that democracy is working all that well right now...
I don't want UBI; I want people to have some assurance they will be able to eat tomorrow.
> The difference is that UBI would be something like a right
The notion of a right does not include material implementation of that right for you by others, it merely states that you have a right to earn it and keep it by your own work and effort.
The right to counsel is more about what the prosecution can't do (sentence you without giving you a reasonable chance to defend yourself) than it is about something other people owe you just for existing. It's there because sentencing you when you didn't have the benefit of competent counsel to make your case would call the legitimacy of the court's judgment into question. Note that it only applies when you are the defendant, not the plaintiff, and you can't claim your right to counsel just because you need someone to help you draw up a contract. The right not to be sentenced without the benefit of counsel upon being accused of a crime is a negative right.
The idea that other people owe you specific goods or services just for existing—a.k.a. positive rights—leads directly to contradiction and conflict.
It's not enormously different from other programs like Social Security. No one I know of lives in fear of the Social Security Administration. Do they have some power and need to be watched? Sure, but it's not some distopian nightmare.
I see a critical difference: social security is not paid to a majority of eligible voters and the funding is being taken from a majority of workers. That combination provides critical controls against the benefit levels rising (or being promised to rise) without check.
The AARP is a wildly powerful lobby, well out of proportion to the number of their members. People don’t live in fear of the AARP, I agree, but you might ask where does that power originate?
How do you possibly enforce that while things become ever more centralized and automatized. We are already losing to those in power and we are not even a tenth of the way there. E.g. there has been a massive decline of applications of anti-trust laws.
This is a weird comment to make when people are simultaneously discussing how the rich have the state do what they need - corruption, lobbying, regulatory capture, tax breaks, interest-free loans...
It shifts the power from employers to the state, not to the employees, the state then merely allows the former employees to play a little.
You're expecting UBI to also fix the lack of democracy? That's a separate problem, that definitely also needs to be addressed. UBI is just to prevent poor people from starving while rewarding working your way up out of poverty. It's not the magical supercure for all society's ills. Those need their own solutions.
Like proportional representation, approval voting, banning corporate money from politics, etc.
UBI is just to prevent poor people from starving while rewarding working your way up out of poverty
I don’t think most people in poverty will work their way out of it. It’s a mindset and a lifestyle, in addition to a reality. UBI probably won’t change that.
It’s an interesting thought experiment: can you have a society without impoverished people?
Not starving, though, is something that can be directly impacted with UBI.
I've been poor. Even homeless. It definitely changes your mindset, but I'm not sure in the way you think it does.
I'm less afraid of poverty now. More able to take risks. Less afraid of "losing what I worked so hard to get".
I think what you're talking about is "the underclass" - people who have no experience of earning a wage and have lived off government benefits for multiple generations. They definitely have a different attitude to life.
How long were you poor for, and how did you get out? And what was your prior educational history? I think it's awesome that you were able to do so and that you have and had a resilient mindset about it. I don't think everyone in that boat necessarily fares so well. But I'm open to being educated.
True. I've had an expensive education, and always saw it as a temporary setback. I didn't use that education to work my way out of it (that was manual labouring on a construction site for cash in hand). But I also didn't immediately spend that cash in hand on beer and smokes like many of my contemporaries.
Surely you believe that some percentage of the poor are that way as an avoidable result of their choices? If you believe that, reasoning about whether UBI will have a general propensity to improve or degrade that outcome seems a sensible part of the conversation to me. (If you don’t believe that, that’s ok, but then we disagree.)
You are ignoring how those choices come about. It is a complex issue.
The relevant analogy is people telling those struggling with depression and anxiety to just stop being depressed and anxious. It doesn't work that way. There are other problems and barriers in the chemical imbalances in the brain that lead to these disorders. Yes, people with these conditions can have mindsets and make decisions, caused by both the disorders and potentially their natural psychology, that are not conducive to getting out or that got them in in the first place, but those are not the cause. The thinking and mindset is more of a multiplier or a catalyst to the underlying cause of chemical imbalances.
The same thing goes for those in poverty and in the lower class. Yes, mindset and decisions can lead to worse off poverty or a situation where you can't climb out of it. But those are not the primary causes in the general case. (Of course there are always exceptions and edge cases.) What are the causes? In my opinion, it's rampant consumerism (buyers don't just make the choices independent of other influences, they are heavily influenced and emotionally hacked to make the choices they do), a poor educational system, a poor support structure such as the problems with health insurance, racism and many other -isms, general socioeconomic inequalities and segregation, monopolies, capitalism, the credit system, city infrastructure and the requirement to own cars, the movement of jobs into cities, etc. And all of these have secondary effects that all feed into each other. It isn't clear how UBI solves these and doesn't just shift things around. I get the idea of UBI, but it seems to place all the blame on poor people.
So like I said, the situation is complex and can't be summarized by "poor people are poor because of their mindset and lifestyle choices".
Thank you for the thoughtful response that was partially responsive to my question “are some percentage of the poor that way as an avoidable result of their choices?”
I’m not saying all or even a majority, but I believe it’s a substantial subset and understanding the likely effects of UBI on a substantial subset of the targeted population seems wise.
I indeed missed "some percentage" when replying. Sorry about that. You can view my response as an elaboration of my original complaint above, which is basically what it became anyway.
Regarding UBI, I currently can't understand its potential effectiveness when more comprehensive reforms seem to be also missing. People are not being educated, employed, fed, given healthcare, etc., and I almost feel that UBI is going to blossom into this excuse to forget about those problems and thus the people facing those problems while minimally giving them chips to still play and lose at the table.
Having been homeless and having made some drastic choices to get to where I am now, what a tremendously offensive thing to say.
There absolutely are people who can't currently, or may never be able to, steer their life in a useful direction.
But most people? I'd say instead that most people are stuck in a poverty cycle because society is constructed that way.
When people are given enough money to be able to afford helpful choices, as opposed to scraping along at subsistence level, lots of people find their way to better, more stable, healthier, less stressed lives.
It's only a mindset when you don't have the means to climb out of it.
What I am saying is that expecting UBI to transfer power to the employees while these problems still exist might not go too well. I don't expect UBI to be perfect from the get go, and I don't expect these other problems to be solved within the next decade - so what now? Do we condone poor people (that have absolutely no way to fight back) to the whims of a corrupt government for a decade or more because it might get better sometimes in the future?
They already are. It's not something that's changing because of UBI. And if it's truly a UBI, then it will be a lot harder to deny people that basic income than it currently is with welfare and social security.
IMHO it's a lot harder to deny a concrete, targeted entitlement than a super-wide payment for everyone without a reason/need that might just get reduced to nothing over time.
It's much easier to deny that people meet a very specific set of criteria required for such a targeted entitlement, than to deny that they are citizens and alive.
That depends on the constitution of the country and how UBI is implemented. You can enact laws and mechanisms that prevent governments from influencing the UBI and make it very hard for parliament to change it in a negative way, e.g. require a 2/3 majority and other hurdles. You could even add a right to UBI in a section of the constitution that cannot be altered. Germany has the so-called Ewigkeitsklausel, for example, that makes any attempt to alter articles 1-20 of the constitution invalid.
It's perfectly possible to build in security mechanisms.
This discussion revolves around the USA. Do you expect the USA to solve the problems I listed within the next decade? I don't, definitely not if Trump wins again.
> It's perfectly possible to build in security mechanisms.
Sure it is, but there would have to be someone with the power to do so and more importantly the interest to do so. That's something I simply don't see happening in the USA - check their health insurance system for a concrete example. If they're unable to copy the similarly capitalistic but freer system of Switzerland or other countries with mixed private/public health insurance, then what hope is there with the issues I listed and the UBI?
I find it unlikely that genuine UBI will be implemented in any country in the near future, although, to be fair, history of mankind has brought surprising changes in the past such as e.g. the complete downfall of Feudalism.
I just wanted to make clear that it's possible to implement UBI. There are many reasons against UBI, but not the ones you gave.
Personally, I'm against UBI for two reasons. First, it does not solve the fundamental problem, which is capital accumulation an ever increasing gap between the rich and the poor. The more money you have, the more money flows to you, and the gap has grown insane. Unless this trend is addressed and reversed, even UBI cannot prevent massive social unrest in the long run. Second, UBI makes it mentally and morally easier for employers to fire people and to lower wages even further. In the end, it will lead to a grossly impoverished class of UBI recipients who will work 6 days a week for $3.25 an hour to supplement their meagre UBI.
In my opinion a classical welfare state, maybe with a negative income tax, strong worker protections, tax-funded education and health care, and strong means to prevent wealth accumulation are the only ways to tackle the problem in the long run. Reforming hereditary laws and stopping almost all "financial products" would be a good start. Right now, once you have reached a certain threshold you can just live off by speculating on Wall Street and juggling around virtual money without ever producing anything of (non-monetary) value. That shouldn't be possible at all.
A deeper problem is that the whole model of existing economy is flawed, because it's based on permanent expansion, which leads to fast exhaustion of natural resources. It is simply not maintainable on Earth for more than 200 years from now.
> In the end, it will lead to a grossly impoverished class of UBI recipients who will work 6 days a week for $3.25 an hour to supplement their meagre UBI.
I don't know how to break this to you, but surely you know there is already a grossly impoverished group of people working 6 days a week for $3.25 an hour without UBI.
If you add the UBI to their income they'll be hugely better off and they might even be able to choose between working those 6 days or staying at home and looking after their children, or caring for an elderly relative without the risk of being made homeless, or being unable to afford food for their family.
> If you add the UBI to their income they'll be hugely better off and they might even be able to choose
Maybe, maybe not.
For clarity, I am a fan of UBI. But I'd like to run through a hypothesis about an adverse effect.
If you add the UBI and costs go up accordingly, the real, marginal benefit they can obtain by working for $3.25 an hour will actually decrease.
This means someone who is in circumstances where they can currently earn a meagre income to tip the balance to being able to make ends meet in that circumstance, will find their ability to work the same amount in a UBI world will not tip the balance to being able to make ends meet.
In other words they will be pushed to change circumstance, towards more work and/or lower cost. E.g. move somewhere cheaper, work more hours.
This does not sound like a net benefit for the already impoverished. It sounds like a trap, because low-wage working will provide less marginal benefit to change what people can afford when they are stuck.
If someone is making ends meet by working at your (illegally low) wage, then having that wage _plus_ UBI means that they are UBI rate / existing wage times better off.
The wage's percentage of total income dropping is a red herring.
No one will be pushed to work more when they have _more_ resources at hand.
You have to understand that a sufficiently high UBI is very expensive. It either costs trillions of dollars or will be so low that poor people may be worse off than now due to lack of other welfare. Realistically affordable UBIs would amount to less that what jobless people get on social welfare, e.g. around 200-300 EUR in my country. I've seen the figures, and those were the ones of proponents of UBI. Do your own calculations and you will see what I mean.
If you want to help poor people, start with radically capping and reducing rents per m^2 everywhere. And by "radically" I mean radically, not just halving them. That's one of the biggest problems in almost every country and it will get worse and worse if current trends continue.
Expensive is okay, we're talking about eradicating poverty, as first world nations we should be judged on how well we look after the most vulnerable in society, not on how wealthy the 1% can get.
US population is what, 300 million, ~75% of that are adults, multiplied by something like $35,000 is what, 8 trillion? The top 1% have a wealth of 35 trillion, US GDP is around 24 trillion - is it acceptable to spend 1/3rd of your GDP on eradicating poverty and creating a more equal society?
Employees should not depend on the government for their ability to walk away from a job. They should depend on real assets that help them live more self sufficiently outside of their employment. This should include family, friend and other forms of community ties.
They would not really depend on "the government" as UBI would be codified in law and universally available, so government could not take UBI away from an individual or a group.
Also, we already depend on "the government" to make available (or protect) some pretty important stuff we depend on: rule of law, public safety, healthcare (in most developed countries), etc..
That's a typical fallacy: that governments are always "good guys" and never have any bad intentions. UBI will be a step towards totalitarism, that's a given.
Corporations are also theoretically accountable - you don't have to buy an iPhone if you don't like what Apple is doing. Are there clear practical limitations to how customers can exert pressure on corporations that way? Limitations that render it largely theoretical? Sure! (Same with elections.)
True, but there remains the question of how people will vote when UBI is on the line. People aren't perfectly rational and it's entirely possible they'll vote for more payments regardless of what other changes that brings, including loss of accountability.
It's hard to imagine people won't bore to get themselves more free shit. If you look at is history and hell Ubi itself, it seems there is no limit to how much p people 'deserve' to take from others.
If people experience coordination problems when reigning in corporations, I'm not sure why they'd do any better when it comes to electing public officials.
Ah yes, and people are famously satisfied with e.g. US federal elections.
Companies are accountable to customers in the continuous rolling election of the market. You can vote them out of your life at any time. It is the ultimate form of accountability. This is especially good because bankruptcy as a form of accountability can ultimately affect everyone in the company, whereas in reality almost all decisions made by governments are handled by unelected officials who persist across party elections and for which there's no systematic removal mechanism. They can't go bankrupt. In some countries they can't even be removed, as the civil service isn't directly controlled by the elected politicians. Mostly they fly under the radar, screwing things up for their entire lives.
At least with companies there's some sort of limit to how dysfunctional they can get before they lose influence and power.
This is a crock of shit. You can vote for which style of shoes will succeed this spring very successfully. Virtually everything else more complicated is a crap shoot. Anything systemic requires the people actually use all the tools at hand including government.
> Power Divide - society will be easily divided into two groups: those who depend on the UBI to live and those who don't
Already happens, with welfare.
> Predators - individuals and companies will find a way to take your UBI check from you as fast as possible
Already happens, with welfare.
> Charity - let's say we actually give every person enough money for food, housing, and utilities. Some people will mess up.
Already happens, with welfare.
Notice a pattern? People who are likely to mess up with their finances / welfare, etc. will likely mess up with UBI. UBI covers a way larger group of people and gives them opportunities and flexibility, I only see that as win.
The 2020 USA welfare state is bonkers stingy and punitive: prove you have these dependents and have been looking for work for this long and have not received benefits for this period...
UBI would be an absolute sea change. It is not some mild extension of "welfare" which isn't really a thing. Go in clear-eyed!
Attempts at micromanaging welfare aren't a problem exclusive to the US. And they always end bad. Receiving a minimal sum to not starve or be forced to beg or steal shouldn't be more complicated than taxing a bigger income, it should be less complicated.
At first I scoffed at your question as typical nay-saying, but the rough math puts the price tag at $6T ($30k/y * 210mm adults). Where would we come up with the money to do this? Well, just getting rid of all government services both Federally and State would only generate $4T (can't get rid of defence, so this is a non-starter)
How about getting rid of all taxes and just taxing transactions--like VAT, but more, so anytime money changes hands? 2019 was $21T, if you put a transaction tax of 30% in place, you would cover the cost of UBI.
I am normally against flat taxes because they hurt poor people, but if you're giving them UBI would this the negative impact of a non-progressive tax? You'd simplify so much but getting rid of most accountants and the IRS, drop in the bucket but nice to see. They would certainly kick and scream. You'd also collapse real estate prices because cities would lose their need, but would kickstart rural economies like woah. This would help alleviate the rural/urban friction we're currently seeing.
I'm just arm chairing, I have zero background in economics.
> (can't get rid of defence, so this is a non-starter)
Why is eliminating all government services an acceptable hypothetical but not cutting any of the imperial occupation budget? I call it as such rather than the Orwellian “defense” because this is what that money is actually used for.
Especially when our defense department (which historically loved to entertain the wildest possible “what if”s in the name of keeping us secure) has literally dropped the ball w/ COVID in a monumental way. For decades they been worried about everything from communism, to searching your shoes at the airport, all because they can’t dare let anything happen to us. But they happily let a virus completely shut down are entirely economy and kill an order of magnitude more people than 911, without so much as a shoulder shrug.
The more I think about it the more the UBI system starts to makes sense. Essentially I think taxing the ultra rich could redistribute wealth to the rest of society which would give them more buying power to stimulate the economy. Those that don't want to work can live on a minimum UBI monthly check but they wouldn't be living great which gives them incentive to look for a job so that they can raise their living standards. Even a McDonald's job could taken by someone looking to earn extra cash for whatever goal they have, probably wages would have to rise a bit so encourage people to go work there instead of just living on UBI but that's in general a good thing.
For everyone else who is working to pay for it, that's a rather big and fundamental upside.
UBI proponents have an unfortunate habit of engaging in a form of sophistry: by saying everyone gets UBI, they try to pretend the policy has no losers. They forget about the feelings and needs of the huge numbers of people who would be paying for UBI instead of receiving it, regardless of how the government chose to manipulatively print the numbers on your final paperwork. Almost all people, almost all of the time, will just be paying more in tax in order to make the UBI work, so it'll all cancel out for them. Money will come in via UBI and immediately go out again in the form of higher taxes. It must be so because the resources to pay for UBI don't come from nowhere. They come from people.
The reason welfare is means tested is because it's corrosive to society for workers to feel like they're being punished for working. People must work. That is fundamental. UBI makes the fraudulent claim that in theory nobody has to work, because everyone will receive UBI no matter what. This is obviously untrue and would be obviously untrue even to small children. What happens if everyone decides UBI is enough for them and just check out? Who works in the fields? Who builds the buildings? UBI has no answer for this. The dishonesty it would require from government and society would corrode away the pillars on which it sits.
This gets less true every year. The only reason we can't have robots handling almost everything and people living lives of pure leisure (except for, say, mandatory menial tasks one day a year), is because we haven't yet figured out a way to do it fairly. And maybe the technology isn't there yet, but it will be soon.
The problem is that the people who own the robots don't see why they should give away the fruits of their R&D investment to everyone else for free. And they have a point! If you're saying "spend loads of time and money developing robots for us, and then we'll take them off you and you'll be no better off than anyone else", why would they bother developing them?
But in the long term, we need to move towards a world where automation serves humanity as a whole, instead of whichever particular corporation happens to own that particular piece of automation. I just don't know how to do it.
Society must produce at least to feed itself, and people working is the way we produce. No country in the world has fully automated its food supply, no one is even trying! and the US has outsourced a lot of its food supply to third world countries. That is why you think people need to work less and less every year, because the US imports more and more every year. The minute the US stops working is the minute the rest of the world stops sending in food.
We produce more per worker with every year as technology improves. It follows that we could do less work per person every year.
I'm talking about humanity as a whole, not the US in particular, so it doesn't really matter whether people in the US eat food that was grown in the US or elsewhere.
Demand is a no one-dimensional entity though unlike what you'll see in a macroeconomics report. The demand for smartphones in 1900 was precisely 0, for example. What happens is that our consumption will spread out and decrease in other areas, which puts some pressure on those industries to compete. Americans spend less and less on food now both because other things take up more of the monthly budget as well as cheap food options being available. Yet Belgians spend many times more / month on food and less on rent compared to Americans. Consumption also is dampened by taxation (pretty consistent in MMT and is probably closer to how things work under a reserve currency country).
The only reason everything isn't done by robots is a social question of fair allocation?
I'd be fascinated to know what the people working on self driving cars think of that logic. Because the tech is very hard to get right. The problems are not merely sociological.
You fail to understand the perversity of the incentive. The incentives rarely scale down smoothly. Probably one of the biggest things is health insurance.
At some point you have people near the cusp of getting free health insurance and health care. Imagine you are also getting $300 in food for your family monthly.
Now imagine you at some point get the opportunity get a raise and make another $400 per month. You earn a whopping $4800 more unfortunately you lose the food assistance worth $3600 and you end up paying $300 every 2 weeks for health insurance for a 7800 loss then you have to actually pay for your prescriptions and this amounts to another 200 a month or ultimately another $2400.
I have not even touched on subsidized housing which is yet another factor for some.
In the above example taking a $4800 raise would cost you $13800 leaving you 9000 in the hole for a family that can't afford to lose much and still remain solvent.
What you want is for those people to take every opportunity available to progress the incentive you have created is for them to stay a part timer and work the exact number of hours that keeps them on benefits and look for no path upward because every path upwards leads through a space where they are apt to lose their ass and possibly their home.
You have also created an incentive for them to vote more of your money into their pockets in terms of benefits. With half the nation sharing 12% of the income if you let the have not class grow large enough eventually they will coalesce around voting your money into their wallets.
All those things are fixable by using curves instead of hard thresholding points. A largely USA specific set of incentives problems isn't a general argument for UBI, which claims to be a global solution.
I think there's also a problem with arguing the solution to badly designed welfare systems is a far bigger one. What makes you think it'd be run better? As I point out elsewhere, UBI will still be means tested and still require administration, if only to restrict it to residency in a local jurisdiction.
1. Does the current system encourage work? When you require means testing for benefits and have sharp discontinuities, the incentive to work isn't very strong.
If a full time job pays $x/month and your benefits are $0.8x/month, then taking that full time job and losing the benefits only puts $0.2x in your pocket. That seems like a pretty poor deal for 40+ hours a week away from home. A UBI system which always paid the same amount would mean that any income from work would immediately go in your pocket. That's a very strong incentive to work - working would double or triple your income.
2. The type of work that people _must_ do for society to function is actually quite small. People must grow crops, run the water treatment systems, maintain roads, generate electricity, sure. But there's also a huge class of pointless jobs - pointless admin due to wasteful bureaucracy, entire divisions of defence contractors working on things which will never be used, a huge number of startups spending VC money on things which they have no hope of succeeding at, wasteful processes and systems at state telecom companies the world over.
The only thing we can say about work in our economy is that it is done because someone wants to pay for it to be done. Not that it's necessary. Things become profitable because incentives exist to do them, but often these incentives are artificial or completely crazy.
If UBI significantly alters the economic incentives, maybe that's not a bad thing. Does it really make a difference to society if someone spends their days pushing paper in a state telecom company, or creating art?
There will of course be scroungers and lazy people. There's a lot of people who work right now who do the bare minimum as it is. They might drop out completely. There will also be people who are given a stable safety net from which to pursue a new career, return to education, care for their parents, build a house in the woods, build a business.
I don't think we can say for sure which group will be larger.
We don't have UBI right now, but we do have people who inherit money. And in my experience with people I've known who've inherited enough money to live for a few years, they've almost entirely continued working. The inheritance has given them a safety net from which to pursue a risky career or retrain. It's been a huge positive for them. In inheritance we already have an entrenched intergenerational BI for a group of society - UBI in many ways is recreating that for everyone.
it's for all intents and purposes a religious belief. your word choice of 'fundamental' hints at it. it also disqualifies people with crippling disabilities from... what exactly? right to live? i hope not!
people must eat, drink and sleep. that is fundamental (actually a hard biological requirement). it doesn't follow that work equals food, water and shelter, though it was true for most of humanity's existence up until the invention of civilization.
We can go on about the morality of means testing but the way that welfare has been destroyed along with the increasing amount of bureaucracy to stay on it currently has shown a worrying pattern - those who get legal representation are those most likely to claim benefits they're entitled to, not necessarily the poorest.
One of the answers to the welfare means testing trap I've seen is to extend the EITC much, much more. It turns out according to the Andy Sterns think tank that researched it that the cost of such a program would be about $1T off from what UBI would be. Furthermore, such a program would be under incredible attack from the GOP that it'd turn into the sad state of welfare today such as in MS where basically nobody receives benefits while the state collects money for it. The attempts to defeat welfare will never end and given the clown car of different issues that are constantly being eroded perhaps another solution is worth a try to divert the attention of attackers (and also slide other important protections in place as well).
I've never seen any UBI advocate think that nobody has to work and it's a pretty inflammatory and bad faith argument that UBI advocates believe such nonsense.
The reason for using a consumption tax to fuel UBI is that if the workforce drops significantly, this doesn't mean consumption drops, and if much of the revenue produced is from automation or a non-human labor produced value taxing it doesn't seem unfair because no person earned said income directly. What we're seeing in trials repeatedly across even developed countries and concentrated among existing assistance recipients is that UBI recipients don't drop out of the workforce though except for new moms and students, both groups which probably shouldn't be plowing fields and in construction because their contributions to society also are required for it to continue. This idea that people en masse would stop working with UBI is simply not true - do rich people stop working because they have passive income? Not at all
I've never seen any UBI advocate think that nobody has to work and it's a pretty inflammatory and bad faith argument that UBI advocates believe such nonsense.
Sure you have.
Ask a UBI advocate what the cut-off threshold is beyond which people stop receiving UBI. If 20% of the population are receiving UBI and aren't choosing to work, does that mean the remaining 80% can't get it? Are they forced to work? How does this function?
You've never seen a UBI advocate address this basic problem and never will, because the entire concept is that checking out of work to live off the UBI payment is a universal right. By definition it's available to everyone. But also by definition it cannot be available to everyone.
In a real attempt to deploy this system, it would be kept in check by inflation. If too many people stopped working the amount of money collected in taxes would fall, so governments would have to print money to continue paying their UBI obligation. This would rapidly cause the UBI payments to become a trivial amount and outcomes would reset to where they are today. If UBI advocates attempted to prevent this fail-safe mechanism kicking in by making automatic UBI increases linked to inflation, all that'd trigger is hyperinflation and civilisational collapse. UBI would die, one way or another. The only way it can survive is if virtually nobody uses it to stop working, but "people can stop working and be super creative" is one of the primary arguments for UBI.
BTW your suggested approach of using a consumption tax doesn't work either. Think about it. The consumption tax must be zero if you're living on the UBI, otherwise it amounts to just a lower UBI. So we can say the real UBI is whatever you receive minus whatever consumption taxes you pay. If "real UBI" is set to some arbitrary number via legislation, that places a hard limit on how high consumption taxes can rise. The rest would have to come from borrowing (time limited) or income taxes (subject to how many people are working, and how effectively).
Purpose of UBI isn't to improve your finance/risk management, that's an issue of education. Let's be real, there won't ever be a system that's perfect and has no minority of population that suffers.
I think you are touching upon an important point there. Because from the little I know, it appears that experiments with UBI have been largely more successful in places where people appeared to me smarter. Smarter, as in capable to make less ignorant/unwise decisions. Which indeed is largely proportional to education (although not grade or level), but can also in part come through culture and unwritten social habits and norms.
However, this is also why I believe that there is nothing that could still save the USA. For starters, the changes it would need to prevent it from cannibalizing itself (as most crumbling empires), would require dismantling existing power structures and interests that will not hesitate to destroy everything (civil peace, country, world, everything) to "defend" themselves. Those powers are almost nowhere as powerful as the are in the USA, and I am everything but positive about reining those in. As long as those run the show, good luck with anything else.
UBI experiments in countries like Kenya and India in poor rural areas with little education show few problems.
Non-mainstream ideas like UBI and RCV are simply suggestions exasperated that things aren't working to avoid a complete disaster and dissolution of the US. Should we keep trying to yell and scream for the same solutions tried for decades and ultimately lost as the GOP has stomped on the fragmented left in the US? To me, the worst of all solutions is to KEEP doing the same damn things and continuing to lose like what Dems did with Russiagate. We might get gay marriage rights, perhaps some civil rights 2.0, and some semblance of Roe v Wade but to me that won't matter if we're in a full blown Civil War a few years from now. Pulling conservatives / regressives back to the middle and into something resembling good faith dialogue again is possible with UBI discussions at least that I haven't found with almost any other political topic in... decades. Granted, that'll be until Fox News gets their hands on it, but beating mainstream media narratives (both left and right) to the punch has been productive.
I do get those points, and I can agree with all of them. Just with the exception that I no longer believe that there is anything that can save the USA from itself (as in: literally nothing).
It's not that there aren't initiatives/option that will obviously improve the current situation. It's that all the decision making paths towards any such progress are thoroughly corrupted and rigged, with the effects of such improvements being diametrically opposed to the personal interests of those who (both overtly and covertly) run the USA.
These are people with a proven track record of "always winning". Meaning, they will sacrifice anything and everything, before having their own interests harmed. Good luck with that. It could prove far worse than civil war. The current political divide that everyone knows the USA so well for (but is mostly a crafted false dichotomy either way), might "evaporate" surprisingly quickly, once shit really hits the fan. The government might quickly turn to "protect the country at all costs", against any form of "chaos" and disturbance of "order" (and no, it won't matter which party will be in power).
On the other hand, even in hopeless situations, people should never give up hope. However, I certainly expect no improvements as long as those who currently consider themselves untouchable, remain convinced that they are indeed that.
Why would it be worse? Slumlords exist because they are the only ones who accept the rent vouchers. If you just receive cold hard cash you can spend it in the conventional housing market.
Welfare isn't meant to solve addiction but it could certainly kick start someone's life after they have recovered. People think drug addicts don't deserve welfare but a UBI would prevent that stigma because nobody gets excluded.
Really the only valid concern is the first one. The rich have no interest in giving up their wealth but that is only natural.
What really bothered me was that the cost to the government to drug test welfare recipients in Floridia cost more than to simply give them the money in the first place. Fiscal conservative me says "what was the point of that?" and the only answer I see making sense is that it's competing ideologies where the more important one wins, and in this case it's punishment over fiscal responsibility and abdicating any government responsibilities for solving the causes of widespread addiction. Which makes almost no sense given how strong the DARE program was in the 90s (granted, based upon hilariously bad trials and a sham by politicians as feel good projects)
In my country everyone who is older than 65 (or so) gets AOW, a state pension. Which is €1200 per month.
There are no conditions except for having lived (not worked) in the country for at least 40 years of the 65.
This is basically UBI for elderly and it has been in place since the 1960s.
None of the (theoretical) issues you named have been a problem.
Do some elderly spend all their AOW on a slot machine as soon as it comes in? Sure.
Do some people try to scam elderly because all elderly get AOW? Sure.
But overall the program has resulted in <3% of all elderly living below the poverty line. In other countries without this, such as Germany, you can find older people still having to work well into their 70s to get by.
The important difference is that society doesn't need pensioners to work (in fact, retiring to free up jobs for younger people is often considered desirable), so the main concern around UBI, which is that it discourages people from working, does not apply.
In fact, the AOW age has been increased from the age of 65 (eventually it will be increased to 67) to ensure the ratio of working population to retired workers is large enough to keep the system sustainable. Even covering just two extra years was considered too expensive. Obviously extending the system by another 47 years would be a huge challenge.
> which is that it discourages people from working
The OP mentioned nothing about that, do you mean "my main concern around UBI"?
FWIW I've never seen a UBI study that has actually found a statistically significant decrease in working among anyone but mothers with young children and kids in school. Granted there's no increase either as some UBI proponents have suggested. It seems to be pretty neutral.
> In other countries without this, such as Germany, you can find older people still having to work well into their 70s to get by.
If they weren't getting any pension (aka not having worked their entire life), they'd get welfare, which is about 1000€/month. They'd only have to work if they wanted e.g. a larger flat, or more luxuries. I assume the same is true in the Netherlands: if you get AOW and you want two cars, they don't double your pension but you're free to work and earn money to afford those cars.
The trouble of course is in expanding those programs unconditionally to everyone. If you can get by well enough with 1200€ in the Netherlands, why would a 20yo not opt to live off of the expanded AOW instead of working?
The AOW is only one of two pillars in the Dutch pension system. The other one is a mandatory investment scheme.
The AOW is a baseline, to keep you from being homeless or starving to death or having to beg for money.
For your last question: there are also people who are content with whatever welfare they get now and don't even try to work to better their lives. Even though everyone could do this it seems almost no one does.
2. Private pension system regulated by pension law
3. Individual private pension
Slight nitpick on the AOW, you don't need to live in the Netherlands for at least 40 years. It's by rate, so if you lived 20 of the 40 working age years in the Netherlands you will receive 50% of the AOW (even if you leave the Netherlands).
This comes from mentality of a given country I believe.
In my own east european country, we have a stable Roma population (about 10%), of which cca 98% never work. They already rely completely on welfare system, to the point of making enough children to have large support payments (families with 10 kids are common, 15 is not unheard of, although kids are sometimes running around bare naked in the snow).
I can imagine quite a few countries would literally stop if given the option to just now work
> 3. Charity - let's say we actually give every person enough money for food, housing, and utilities. Some people will mess up. They could spend it all on an addiction or just make a bad investment. Even with UBI they could still end up hungry or homeless. Will we help them? Or will we say "you had your UBI, the rest is on you". This changes the morals of how we treat people in the worst times.
I think it should be pretty clear today to any scientifically-minded person that addiction is a mental health problem. Here In Germany, the vast majority of homeless people are addicts or people with major mental health problems. You have a small minority hiding from the law, and an even smaller portion of healthy people choosing the lifestyle.
Instead of relying on the charity of wealthy people, good public mental healthcare, public addiction centres and social workers engaged with the homeless community are the ways forward.
The parent comment said "spend it all on an addiction or just make a bad investment". What do we do with the person that gets e.g. their 1000€, spends it on a night with champagne and then has nothing to eat or pay their rent? Too outlandish for you? How about if they spend it on a new TV instead of rent, a new smartphone or a couch?
There's a reason why some people get into debt because of consumption: they don't plan reasonably. What do we do? Do we not pay them UBI but give them pocket money and keep the programs in place to cover their rent etc because they can't be trusted to take care of that with money we give them? Do we just ignore their fate and watch them go hungry and eventually homeless? Do we keep the programs in place, give them UBI and then pay their rent when they spend the UBI but didn't include the rent?
If a person consistently chooses to buy TVs instead of food, I think that strongly speaks for mental problems. I don't think it is really expedient to micromanage people, so if they spend their money unwisely and don't see a problem, that's tough luck. At the same time, having infrastructure to help them get back on their feet is important.
Again, I'm not sure about the situation in the US, but here we have public services that can help people go through debt restructuring or private insolvency in the worst cases, as well as offering classes for money management and centres for addictive behavior. This isn't done purely out of humanitarian concerns either, addiction and lack of education are problems that keep people from being productive citizens - and this is expensive for society at large.
>If a person consistently chooses to buy TVs instead of food, I think that strongly speaks for mental problems.
That's not right. We're living in a world like this. When people cite stats that show x% of people living paycheck to paycheck that is almost guaranteed to be due to over-consumption and consumer debt if your household income is above, say, $50-60k/year. At that level, you have over-consume to have nothing left over.
Simple problem to solve. Give them their 1000€ a month daily at 33€ a day. If they blow it all, they are hungry that day but eat the next. With a debit card it shouldn't be too hard.
Most of the people who are poor are more careful with their money than you are. The poor aren't poor via consumption. They are poor because they lack the skills needed to earn a better living.
Citation needed. Financial illiteracy is a large driver for poverty, many people have a hard time understanding compounding interest and what that means for the idea of consuming things with credit card debt.
That just means that UBI does not replace a welfare system. You still need to have programs that provide a safety net for people who are irresponsible with their income, or just fall on hard times to the level that UBI isn't sufficient to dig them out.
> Instead of relying on the charity of wealthy people, good public mental healthcare, public addiction centres and social workers engaged with the homeless community are the ways forward.
Those probably don't exist with UBI, because one point of UBI is to take all the money going into those support and give it directly to the people and let them take care of themself.
In german there is a significant number of people and families who are only somewhat functional because of those external support. Without this support, they will probably end on even lower levels than now.
UBI is not a replacement for universal healthcare, in the same way that unemployment benefits are not a replacement for public education: they both may be related somehow, but they do not overlap completely.
The healtcare-system is not responsable for social problems, usually it's not even financed from the same sources, at least in germany. And a universal healthcare-system is not part of UBI. It's also somewhat questionable whether it's possible to finance them both equally.
When people talk about UBI, they usually forget the healthcare-problems, because that's a big financial burden which will sting the posibility of UBI.
>In Germany, the vast majority of homeless people are addicts or people with major mental health problems.
That's true in Canada and United States. The problem is that there are major legal barriers pushed through by activists to prevent forced institutionalization. Apparently it is a fundamental human right to live in a tent city off the freeway without basic sanitation.
This is fallacious. The push against forced deinstitutionalization was made because of the systematic abuse within that system. The role of any modern society is to offer people who need it treatment and basic support (and that should include housing, of course), without impeding their basic human rights.
>The push against forced deinstitutionalization was made because of the systematic abuse within that system.
That is a quintessential example of "throw baby with bathwater". You've replaced regulated institutions staffed with credentialed professionals (medical and otherwise) providing safe and structured environment and healthcare, with mentally ill people living in tent-cities and squalor, surrounded by crime, prostitution, abuse and illegal drugs and exposed to the elements.
Tell me again how you've guaranteed 'basic human rights' with your replacement for institutional care? And don't tell me that any problems in the 60s and 70s with institutional care, could not and would not have been improved over time. Instead, the policy to dismantle state and municipal institutional care destroyed countless lives that would have benefited from said care.
>The role of any modern society is to offer people who need it treatment and basic support (and that should include housing, of course), without impeding their basic human rights.
And people who aren't capable of making the best decisions for their lives due to mental illness - how does that factor to your equation of 'basic human rights'?
Again, this is redirection. Mentally ill people squatting in tents is not a problem everywhere, only in places where nothing was done to replace the asylums, and where people were just abandoned in the streets. Better social programs were created in most places, like supervised housing, regular social worker visits, "Housing First", etc. Putting people in what is in many ways worse than a prison, for the "crime" of suffering a mental illness, was not right, and most developed countries actually chose to improve the existing system instead of just "throwing the baby with bathwater". If the place where you live is full of mentally ill people living in the streets, the solution is not to return to the system that existed before, but to create a better system to replace it.
Yes. 1000x times YES. We're not talking about institutionalizing just anybody who is on the street. We're talking about institutionalizing people with severe mental illness who cannot make those decisions and are living on the street. Are you not for that?
A quick google shows that at minimum 25% to 30% of homeless have serious mental illness, and almost half have some mental illness (50%-60% of homeless females suffer from mental illness). There is overlap with drug addiction, but drug addiction tends to represent around 40%-50% of homeless. It's also necessary to differentiate temporary homelessness and long-term homelessness. I didn't find any numbers, but I suspect long-term homelessness is dominated by mental illness and drug addiction. That's not to say people cannot fall on hard times and end up homeless, but that population tends to bounce back within weeks or months and also requires different policy solutions as well.
On a side note, have you walked through homeless encampments in cities like San Fran, or Seattle? It is obvious that mental illness and drug addiction is rampant.
However way you slice it, mental illness represents a huge part of the homeless population. Policy wise, they are treated no different than people who end up homeless due to economic circumstances.
Between drug addiction and mental illness, it's not 'more like half', but hey - let's say it is - doesn't it bother you that the current policies are created with the assumption that homelessness is an income problem? That, therefore, 'more like half' of the homeless population is not helped by the billions of dollars being spent on combating homelessness?
25% of the homeless are seriously mentally ill according to the most extensive survey ever done by HUD.
35% have a substance abuse problem.
Believing that these populations don't overlap involves some pretty magical thinking. Logically between 40-50% have one or the other problem and 10-20% have both problems.
This doesn't however paint a complete picture because its a chicken and egg situation. Did people end up homeless because they were ill or on drugs or did they end up ill and or on drugs after they were on the street.
They could absolutely spend it all / get an addiction etc. The beauty of a UBI though is that next month they get it again and can start over. There is always the ability to start again, every month is a renewal. These setbacks that currently force people into the streets and doom them for a lifetime would now have the potential to only be setbacks. Of course there will still be homeless people and addicts, but at least every month they will have money for food magically appear in their bank accounts.
The current system results in widespread homelessness, despair and inequality. To say we are going to stick with what we have instead of giving everyone the basics to live a decent life makes no sense. We are sticking with a known flawed system that punishes the poor because a few people may not play by the rules in the new one.
Why would charity drop off, if someone is charitable, now they have more to donate. People are also easier to help because they are starting from a solid base instead of nothing.
As far as being at the mercy of the rich, we are already there. If everyone had an income, they could actually band together if they wanted and use it on projects causes that are important to them instead of just the constant struggle to survive.
For those who won't ever be homeless, another thing to consider about UBI going to homeless addicts, is that the destitute no longer have to break into cars, steal from stores, or beg for change on the side of the street, just to survive.
It sucks when an addict steals the catalytic converter off your car. They cost a pretty penny to replace! (~$3000) Meanwhile the addict is getting $50, maybe a couple hundred dollars for it? UBI means surviving until the next UBI check (be it monthly or weekly or hourly) allows you to spend it on whatever they need. Be it drugs or alcohol or food.
Point 1 already applies to existing welfare programmes. It seems to me that if anything, the divide will be reduced by switching to the UBI model, as everyone gets it, not just those who fulfil certain criteria.
Point 2: I'm not convinced that UBI worsens the opportunity for predators, compared to how things stand today. Why would it?
Point 3: I'm not convinced this is likely to be a real problem. Today, different countries have different levels of welfare. I doubt people are less charitable in high-welfare countries (although this is just a guess), and overall, you're certainly better off being down-and-out in a high-welfare country.
Primarily anecdotal, but my experience (as a Dane married to an American) is that Americans are more likely to both give to charitable organizations and volunteer their time, whereas Danes are less likely to do so. Seems to be slightly backed up by this article (at least the volunteering part): https://www.theguardian.com/news/datablog/2010/sep/08/charit...
Also, I will add that when people on cash assistance in Denmark (kontanthjælp) do stupid things like spend all their money on alcohol, the general response seems not to be an offer of support but a "pull yourself together, you've got the means to do so". It definitely might just be the the circle I'm in, but thought I'd offer up my experience.
1 this exists and is way worse with wages. People are forced to work, and at mercy of their employers. UBI frees people from wage slavery.
2. This is no different than now. Endless scams- advertising, etc all the time to extract peoples money. Regardless of source.
3. Duck ups aren't going away. Under UBI they at least won't be at the mercy of beauracy and changing political will re funding social services. And people who want to volunteer to help them will be free to do so not having to spend a 1\3 or more of their waking life just to survive.
UBI won't fix all problems. But its advantages outweigh.
3. It also gives you an unlimited ability to "reset". If you fuck up, you're not stuck with working your way back from scratch. When the next UBI check comes in it'll give you a recurring bump to help you get back on track.
> some governments give poor people vouchers for rent ... targeted by slumlords who find a way to give you as little as possible for them
This seems to be a problem because the vouchers are only redeemable by government-granted monopolies, and thus neither tenant nor landlord are participating an open market. If the tenant could go anywhere else with their money a la UBI nobody would choose those terrible living quarters / they would be priced appropriately.
An open market will always favour the landlord, so you'd end up with more homelessness, or more slum housing and ten-people-to-a-room at the very best.
We've been trying these approaches for centuries now, and they always end the same way. There has never been a "free" market which hasn't vastly increased inequality of opportunity across the population as a whole. Why is it so hard for proponents of "free" markets to accept this fact?
UBI simply highlights that money is a proxy for political power, and there's no way - short of violence - that those with limited power can access personal or political leverage in any system which over-rewards concentrations of power.
UBI will improve nothing, and may make some problems much worse. The real solution is improved public education at all levels, limits to advertising that promotes selfish greed and consumption, regulation of the press to eliminate the deliberate dissemination of obvious fake news, good public healthcare, higher taxation for giant monopolies and their owners, improved regulation to end the financialisation of everything, much improved public infrastructure, stronger unionisation and other forms of collaborative politics, and easier and cheaper access to capital for small business of all kinds.
>Poor people aren't poor because they consume too much.
Sometimes that is the case. I would say that if your household income is above $50k/year and you're living paycheck to paycheck, that results from over-consumption.
Alternatively living in a city where rent costs $24k per year by itself and health care and health expenses cost 10k. 5k in taxes. That accounts for 39k in itself. 500 a month in food 150 in internet and phone service and we are up to 47 and still haven't talked about car insurance, gas, laundry products or really any notable consumption.
Out in the suburbs you could still be paying 18k + all the other expenses.
God forbid if you have student loans or any other big bills.
I will say it again. Poor people aren't poor because they consume too much in the same fashion that people who can't breath don't have copd because they breath too much.
>Alternatively living in a city where rent costs $24k per year
It's OK to say that some areas are not affordable. Manhattan is a great place to live, but it is is not affordable for most people. Don't live in a place where it costs $2k/mo to rent an apartment if you don't have a salary to justify it.
>Poor people aren't poor because they consume too much in the same fashion
You cannot make that kind of universal statement. Sometimes it is an income problem. Sometimes it is a spending problem.
Poverty is also a finicky concept. We immigrated here and lived in the immigrant ghetto for the first 10 years after immigration (mid-80s to mid-90s). We didn't have a lot of stuff, but I never went hungry. Both my parents worked multiple minimum wage (or below) jobs, but there was always dinner, there was always breakfast and lunch for school - even if myself and siblings had to heat it up. Looking back, I would say it we were poor, but really what that means is we didn't have a lot of stuff and all our cloths were from consignment stores. Both my parents were able to scrape enough for a down payment on a house after 10 years of frugal living. They are retiring into a comfortable life now. What happened? My circle of immigrant friends who lived in the same ghetto, from Eastern Europe, Hong Kong, Iran, all came here with similar economic factors, all of them are doing well. How is it impossible in your world-view that an immigrant who comes to this country with no advantages, still manages to build a nice life? And yes, my experience has colored my view on poverty (at least poverty outside of mental illness and drug addiction).
I see your cynical, defeatist posts all over the place - I don't understand how immigrants can build a life, with no communal or familial roots, minimal language skills, while you, being native born having all the advantages complain about being poor and not being able to get a mortgage loan. DO SOMETHING ABOUT IT.
It's not the 80s where you worked your way through college and 5x the median annual income bought you a median home its the 2020s there 24x the median income paid over 30 years buys you a home as long as you can afford it alongside the high cost of health healthcare and student loan debt.
Every era has always had successes and failures and a certain bar between one and the other. The bar is higher now so that the rich can extract more of the value from the system. More yet thus will fall below it that isn't defeatism nor is screaming do better at them a strategy for improvement.
> DO SOMETHING ABOUT IT
Would you like to add #trysomethingnew or #learntocode
I'm 39 year old with lungs that don't work so well anymore with a sick wife, one household income from now until forever, 10s of thousands of dollars of student loan debt, and a level of education best described as "some college" in computer science.
I'm not defeatist or defeated. I have an apartment, health insurance, and I'm planning on getting through covid and keeping my income enough above rising costs to keep having a home and even some small niceties. I'm open to opportunities but I'm not in much of a position to claw my way out of the bottom half if I'm realistic about it. The United States has always had an underclass and they couldn't ALL DO SOMETHING ABOUT IT in any particular era and not because of mental illness or drug addiction.
Why don't you try being a landlord if it so easy? Not only do you have to capitalize to the tune of hundreds of thousands of dollars (or get leveraged to that level), between costs and taxes, your profit rate is going to be pretty tepid. It's not easy money, trust me.
>We've been trying these approaches for centuries now, and they always end the same way. There has never been a "free" market which hasn't vastly increased inequality of opportunity across the population as a whole. Why is it so hard for proponents of "free" markets to accept this fact?
Because that's not true. The free market has been the primary and pretty much the only driver of prosperity. And you cannot legislate prosperity. There is no magic combination of minimum wage, rent control and welfare that will increase jobs, income and wealth of the individuals.
> limits to advertising that promotes selfish greed and consumption, regulation of the press to eliminate the deliberate dissemination of obvious fake news, good public healthcare, higher taxation for giant monopolies and their owners, improved regulation to end the financialisation of everything, much improved public infrastructure, stronger unionisation and other forms of collaborative politics, and easier and cheaper access to capital for small business of all kinds.
Every communist nation thought it could 'educate away' human nature and brainwash to population into good communist automatons, and every time they tried it led to a humanitarian crisis. It's seems to be a core property of communist thought that human nature is completely flexible and can be shaped in anyway to make communism actually possible.
It IS easy to be the landlord. You can borrow the money for the property and charge more than the mortgage and then outsource the actual day to day collection of rent and finding tenants. Compare this with your actual job then compare this to people who have to work multiple physical job instead of your sole intellectual one.
>You can borrow the money for the property and charge more than the mortgage and then outsource the actual day to day collection of rent and finding tenants.
TRY IT and see how the math shakes out for you. I bet all those leveraged landlords are really having a ball with this pandemic. Or how about 10 years earlier when the housing market collapsed and debts were called in. Or tenants that destroy their property requiring thousands in repair. Or delinquent tenants that cannot be evicted for months due to municipal policies. Or property that sits empty because cannot find tenants. There is no free lunch and no easy money.
Your perspective is based on ignorance and a comically naive view of real estate.
The economic stress of being a landlord, and the bank potentially repossessing your extra houses you don't even live in, doesn't compare to stress of BEING HOMELESS. Sorry to yell, but there's a difference being forced to live on the street, starving from not having eaten in days, and being stressed about next quarter's financials being off, while inside of an air-conditioned house, and having food delivered.
They say money doesn't buy happiness but personally, I highly recommend being rich over being poor. If, as a rich person, you chose to invest in real estate (risky, as pointed out why) instead of the stock market (also risky, see Q1 2020 volatility), then sure let's discuss ROI for REIT vs SPY over a 15 year period that includes 2008 and 2020. However, let's not pretend being in the highly privileged position of throwing money you have but don't want to spend at a problem (Eg selling shares of stock, in order to cover the cost to restore property after a bad tenant) is remotely the same thing as being too poor to afford food.
There are risks involved with investing money, but the number of hours it takes to make $50,000/year from a $10,000,000 investment, is approximately 0. For those hustling 60 hour weeks to make $43,440/year, that's obscene.
If you were a landlord and couldn't save enough in the 12 years between 2008 and 2020, to weather a few months of not having the rental income, maybe you should have taken fewer trips to the Caribbean, or Europe. For those that are just getting in during 2020, I'm sorry.
>The economic stress of being a landlord, and the bank potentially repossessing your extra houses you don't even live in, doesn't compare to stress of BEING HOMELESS.
That's not true as a universal. Tenants have flexibility of moving to another locations, moving in with friends or family, or making alternate arrangements. On the other hand, foreclosure and repossession would mean the erasure of a family's life savings.
So yes, it does compare, and in many cases it is worse.
By the way, chronic homelessness is not an economic problem. It is equal parts mental illness/drug addiction and polices pushed by activists to prevent providing institutional care to those individuals. Economic homelessness, on the other hand, though it is terrible and happens, it is a transitional state and existing government welfare programs mitigate.
>If you were a landlord and couldn't save enough in the 12 years between 2008 and 2020 ...
This is obscene statement. You have no qualms creating hypothetical fiction in order to extend irrational levels of empathy towards your fictional situations, but you have zero left towards a real group who could be really struggling. And no, landlords are not your Dickensian style villains. They could be working class people who saved their entire lives to purchase another property, or they may be renting out their own house ... and you look at them with disdain. Ugly, through and through.
Foreclosure takes a long time during which you could sell the house and extract any gains in equity made during years of fast growth and use this to support your family and keep your home where your family lives.
In a bad scenario you keep most of your wealth and the home you live in.
Your bad scenario is still literally better than half the nations good scenario.
1. People in the comments below have addressed this. Not really sure how this creates a greater power divide than the current system. Having money allows individuals choices.
2. Again, providing people with money will allow them to have more choices. If housing becomes too expensive in my county, I now have a greater degree of freedom to move and this creates more competition for rental rates.
3. This is one that I feel like most people miss the forest for the tree. You're right, it's going to happen. I just don't think that a portion of bad actors in the system should prevent that massive benefits it can create for the people in society that will spend it in more productive ways. I've heard arguments of how it will create disincentives in society. That people will choose to no longer work. But when I ask the exact same people that pose that question if they would stop working if they had $14,400 provided to them every year, the answer is unequivocally, no. If you're looking for policies that solve all problems, you're not going to find any.
If you want to do UBI, the correct implementation is:
- Give the same amount to everybody* , with no means testing to avoid it become a political football. Bill Gates gets it too. This also removes any dis-incentive to work while also collecting UBI. Otherwise congress with write up a 9000 page law about who gets how much and when, which they then hold everybody hostage to.
- Pay for it with a flat tax on all income from all sources, including capital gains, dividends and carried interest. All the money goes into a separate off-budget pool for immediate monthly distribution. Like SSI, but with no 'investing' in treasuries or anything else. Don't let the politicians get their hands on it. Money comes in and immediately goes out. This makes it self-balancing. As people reduce their work, the pool shrinks, causing some people at the margins to re-enter the workforce. As we become more productive the pool will increase, allowing more people at the margins to reduce work if they want to. The tax rate can be adjusted as necessary as we see how it's working out.
* "Everybody" certainly has nuance to it that has to be defined. Children? Green card holders? Illegal Aliens? Felons? Inmates? Citizens living abroad? This is certainly an important definition, but less important than the overall idea.
They literally survive by using their power to placate whoever they need to, voters in their district broadly or special interests specifically.
They will never not choose to carve out as much benefit for their supporters as possible. Look at every piece of legislation in the past generation. Why would this be any different? Given the vast amount of resources UBI would be directing it is absolutely inevitable.
I don't think I disagree with you (is that the same as agreeing?). I wasn't describing what I think would realistically happen, I was describing what I think would be best.
I just wish we could find a way to give people money with no judgement of any kind, political or otherwise. That's probably asking too much....
> Power Divide - society will be easily divided into two groups: those who depend on the UBI to live and those who don't
There's already a power divide between those who can live off of their assets and those who can't. Those who can't are at the mercy of those with significant assets when it comes to providing themselves with housing, healthcare, food, etc.
> Even with UBI they could still end up hungry or homeless. Will we help them? Or will we say "you had your UBI, the rest is on you". This changes the morals of how we treat people in the worst times.
Look at the standard UBI proposal of $12k a year. That is not even enough to cover health insurance premiums, deductibles and copays for a single person on the individual health insurance market, let alone a family.
If UBI were to replace social programs, people would necessarily have to choose between paying for healthcare, or going without it but being better able to feed and house themselves.
UBI must be a supplemental income on top of programs that address our societal and economic shortcomings.
1. It's hard to see how guaranteed income would put the less well off more at the mercy of the well off. And you don't provide a causal explanation of how this effect would arise.
2. Surely UBI is cash, not vouchers. At which point the particular lower-than-face-value scenario is moot.
3. This is a valid point. I'm not sure whether it's good or bad, but it does seem likely to entail some morality shake-up.
How is this different than welfare, except that with UBI people are able to get a job without fear of losing benefits?
2. predators
Again, how does UBI makes this problem worse than it already is? I've never heard of _any_ idea which makes this problem disappear.
3. charity
In my opinion this is actually an argument in favor of UBI, rather than against it. Maybe the charity mindset would change, but I don't see it completely going away. On the other hand, many excuses will. We would benefit from a system that gives people a better chance at demonstrating personal responsibility.
> They could spend it all on an addiction or just make a bad investment.
In countries with a tradition to have full government care for all citizens, those cases are solved by having the payments managed for you (usually by the city). So you would have weekly smaller payments rather than a monthly payment, and you may even have the city pay your rent for you rather than giving you cash in hand. And if you still mess up and are in a temporary urgent need for money, you can apply for an additional extraordinary amount to cover your critical expenses.
I'm aware that such a "nanny state" is not attractive to a lot of Americans, however this is an approach that solves most of the potential problems and it also relieves other citizens from being concerned about having to give out charities.
The "nanny state" is only part of what would make this unattractive. I'm pretty sure that a lot of other Americans would see this not as UBI but as the government funding landlords and making them richer.
Because addicts, when given the choice, might choose not to have a roof over their heads and thereby collectively pay landlords less, it would make landlords richer to give them reasonable living conditions standard?
It's not as if the government will rent you a penthouse. If there are no cheap apartments available in a certain place, you just don't get to live there. I've lived in a building with a fair number of government-paid apartments and the people there are very, um, shall we say "poor" in the non-monetary sense (though that too). The rents were low (that's why I was there as a student) and while I'm sure they turned a reasonable profit just like they did from the students renting there, the rents were below those of neighbouring buildings. What's more, in the Netherlands many landlords price their apartments just above the limit for government support so that even if you could easily afford a place €10 cheaper, you now can't because you are losing out on up to 350 euros a month of support. Landlords don't want government-supported renters much of the time. It's not that lucrative.
Something no one ever talks about with UBI is how the effects will be eliminated in a few years. The very things poorer people would buy from it would get more expensive by the UBI proportion, it will just be inflated away.
When everyone has an extra $1000 do you really think landlords won’t increase rent? The price of food and clothing won’t increase? When literally an entire country is richer by this amount?
UBI does not create more wealth. It does not mean all the people receiving it will put more value into the economy. It just means everyone gets X+$1000 more tokens for the same wealth/goods. Poor people will still be in just as difficult a situation as they will be competing for the same goods against the same people as before.
Something no one ever talks about with UBI is how the effects will be eliminated in a few years. The very things poorer people would buy from it would get more expensive by the UBI proportion, it will just be inflated away.
Someone brings this up in literally every UBI discussion ever.
> Why wouldn't rent seekers - both landlords and more abstract rent-seekers - just raise prices?
Why doesn't every change in income level and distribution just change price levels of goods demanded by different groups resulting in no change in relative buying power? Several reasons:
(1) No one has access to idealized monopoly rents, and
(2) (relative to redistribution) Very few goods are demanded only at one point in the income distribution.
Housing is the largest issue here, and probably needs gov correction.
OTOH, basic goods becoming more expensive means producing them becomes more attractive which leads to lower prices or better wages (because less people will be willing to work shit jobs with crap pay like in the meat industry today).
Housing is rarely the issue on its own, because it is what it is due to related factor. Why live in one particular location? That's the motivator towards housing, and it relates many different things.
e.g in my city, I am positive the rent is high because of issues with transport i.e. poor transport means you need to live closer to work for a reasonable commute.
Your argument is easily shown to be silly if we replace $1000 with $1 mil.
Now everybody is a millionaire. Does this mean that prices will increase? Of course.
But will people be just as poor as before? No! People that were millionaires before are nothing special after this measure. That's what UBI does, it reduces wealth inequality between lower and upper class.
Now this argument does not and will not apply to the billionaire class. For that inequality we need a different solution, starting with unavoidable progressive taxes.
You stated that the poor people would be in the exact same situation if they got UBI. Clearly this is not true if the UBI would be $1M. Perhaps $1000 is not enough to accomplish this, but it is obvious that UBI has the potential to lift people out of poverty. It is a wealth equalising measure.
Everyone gets X+1000 instead of X. That means if X used to be 1000, you now get double your income. If X used to be 100000, basically nothing changes for you. Perhaps double the income does not mean double the purchasing power because of the effects you stated, but there is no doubt your purchasing power will increase.
Rents will go up, that is very likely. However, it is extremely unlikely the rents will go up by $UBI everywhere. Most other products will remain unaffected. That means that if your rent goes up by $UBI/2, your purchasing power has still increased by 1.5X. This is a gigantic increase for poor people that live paycheck to paycheck.
Giving the poor $1M is the same as taxing the rich more heavily. The richest would just leave, and those with more modest wealth would be less happy, possibly leaving in the future. There have been countries that seized the assets of corporations and the wealthy, and redistributed them; this rarely worked out well.
> there is no doubt your purchasing power will increase
Why is there no doubt? Just because you having more money, you must have more PP? But if everyone* gets more money, it might not.
What you are doing is devaluing currency. Everyone invested in currency loses as their investment loses value. The rich have more "money" so it might seem this proportionally penalises the rich, but it doesn't - a person whose large wealth is invested in things that aren't dollars doesn't really lose a lot, the dollar-amount value of their investments just increases, which cancels out the effect of a lower-value dollar.
> Giving the poor $1M is the same as taxing the rich more heavily. The richest would just leave, and those with more modest wealth would be less happy, possibly leaving in the future. There have been countries that seized the assets of corporations and the wealthy, and redistributed them; this rarely worked out well.
This is a rather nop argument that can be made against any and all taxation. Giving everything to the rich and leaving the poor to starve has rarely worked out well either. It tends to lead to rather violent uprisings and riots. Those also tend to make countries less attractive places to live.
> Why is there no doubt? Just because you having more money, you must have more PP? But if everyone* gets more money, it might not.
My post was stating this from the perspective of poor people. UBI equalises purchasing power. If the amount of products produced remains the same, adding a constant amount of money to everyone's income will increase the purchasing power of the people in the bottom, and decrease it for those in the top.
It is obvious in extreme examples: if Bob makes 1000 per month, and Alice makes 99.000 per month, then Bob has 1% of the total PP, and Alice has 99%. If we then add 1 billion to both of their incomes, both Alice and Bob now have roughly 50% of the total purchasing power.
Only if you assume the wealthy have zero resistance to moving, and would leave for a country with lower taxes at any level of taxation. You're essentially saying nothing can be described as expensive without the same complaint being valid against anything not free.
> It is obvious in extreme examples
That extreme example only applies it to 2 people. Applied to all Americans, and the dollar becomes worth less.
Your PP equalisation has the exact same effect of heavy taxation, although it feels more like revolutionary redistribution. Whatever you feel about that, it's still short of redistributing PP because it only applies to currency, and not other investments.
>Giving everything to the rich and leaving the poor to starve has rarely worked out well either.
Not taxing the rich does not equate to "giving everything to the rich and leaving the poor to starve".
Almost all the decline in poverty over the last 30 years was due to economic development which, according to economists who study development, was massively facilitated by the spread of market institutions like property rights
The solution to poverty isn't for government to take money from the productive and give it to the poor. The actual solution is to increase employment options and the earning power of the poor. Socialist ideologues need to look at the empirical evidence, and the economic literature, and learn that the welfare state works against the solution to poverty. The profit-motivated investment that emerges when people's right to their private property is protected, is the solution to poverty.
This isn't correct. The figures are not founded in reality.
“Over the past decade, the UN, world leaders and pundits have promoted a self-congratulatory message of impending victory over poverty, but almost all of these accounts rely on the World Bank’s international poverty line, which is utterly unfit for the purpose of tracking such progress,”
>>This isn't correct. The figures are not founded in reality.
I don't have time to look at this link right now, but it's a broad set of metrics that have dramatically improved over the last 30 years, including nutrition, infant mortality, wages, percentage of people with running water, percentage of people with permanent dwellings, etc.
This rejection of the established Economics is no less superstitious/anti-scientific than the rejection of the established findings of epidemiologists on the efficacy of vaccine. It has the same layman's fallacies, and conspiracy theories about the scientific discipline bringing out these findings.
"Philip Alston, the former UN Special Rapporteur on extreme poverty and human rights, upon the release of his final report, which will be presented to the UN Human Rights Council tomorrow by his successor, Olivier De Schutter."
Affiliation with the UN doesn't make someone credible. There were UN human rights officials claiming the George Floyd killing was an indication of widespread "racial violence" in the US, a claim for which zero evidence exists. There is absolutely no evidence that even Floyd's killing was motivated by anti-black bias.
Alston's statement doesn't provide any substantive criticism of the statistics. He points out that the cutoff for extreme poverty used by the UN is extremely low, as if that is in itself a moral failing.
The point of any poverty line is to measure progress, not to imply that the line is a sufficient standard of living.
Alston also points out that the number living with a wage below $5.50 a day has declined very little since 1990, which omits how much smaller this cohort's share of the global population is today than it was in 1990, due to population growth that has occurred since then.
UBI increases aggregate demand, so as you point out it increases inflation. However, it doesnt increase individual demand equally. Rich people’s demand will increase fractionally less than poor people’s. This means consumption inequality will decrease. So the choice of how much UBI to give is a balance between the good of decreasing consumption inequality (us has too much) and the bad of inflation.
Many places where I have seen people wanting to introduce UBI, increased (flat percentage) tax is often also suggested. The percentage is then suggested to be set at a level so that:
- People at low average income will have more money (the UBI-increase will be higher than the tax-increase)
- Average income: You get as much as before.
- Higher income: you pay more in taxes than you get from UBI.
Basically it ends up being a way to move money from the ones with higher incomes to the ones with less. It will ofc still give some inflation as poor people have more funds for basic needs. But other people will have less - and the average person just as much as before. Limiting the effect of the inflation.
Even if average inflation doesn't go up, when you look at specifics it doesn't look very good for the poor, the very people it's supposed to help. Take your example.
- Low income housing costs will probably inflate because all poor people will have an extra $1000 to spend.
- Avocado costs probably won't rise, as middle classes will have the same spending power
- Bentley and yacht prices might decrease as the rich have less spending power.
So you haven't helped the poor. You've created the usual issue with socialism/communism that in the end all it does is pull everyone down, rather than lift anyone up.
If that's your goal, fine, admit that you hate the rich. But the marketing promises of UBI are not that, they are about helping the poor.
I will admit that I don't have enough understanding about macro-economics to know how everything will be affected. But inflation on low-price housing does make sense, but I will admit I don't know enough about the field to understand to what degree. So at this point I just wanted to state the points I've heard other people make related to UBI. (basically that is also comes with increased taxes).
My own opinion is that I don't know the correct way to do economics in the future. But I do think that we at some point should think very different. I don't think the current system works out for most people in the future. And UBI looks more like a band-aid than an actual fix.
> Something no one ever talks about with UBI is how the effects will be eliminated in a few years.
No, this is something someone raises in literally every conversation, without any support.
> The very things poorer people would buy from it would get more expensive by the UBI proportion,
The argument you are making is that redistribution regardless of magnitude cannot affect buying power, even if the after-redistribution distribution is perfectly flat, people (at least those coming up from below) will retain exactly their pre-redistribution buying power.
> UBI does not create more wealth
Not as a first-order effect, no; it's first-order effect is redistribution.
> It just means everyone gets X+$1000 more tokens for the same wealth/goods.
Only if it is fully monetized, which doesn't seem to be anybody’s plan. If any of it is financed by traditional fiscal means (taxes and/or debt) it's redistribution, not flat addition.
Your argument rests on the assumption that poor people consume a set of goods completely distinct from middle income and wealthy people. If the price of a loaf of bread increases by 200% in an attempt to take advantage of increased purchasing power, why would the wealthier consumers accept this, if their income had not increased? Competition would put an end to rent seeking behaviour.
And on the subject of low income housing, it's often highly regulated, and can't be hiked arbitrarily.
If I've understood correctly, your argument is that the inflation in the basket of goods consumed by low income people exactly cancels out the increased purchasing power, I'm not sure you can argue that's definitely the case.
Basic goods demand is fairly stable. Poor people will always need to pay for food, shelter, etc. Just with basic income, they won’t have to worry about how they’re going to scrape together the money next month for the rest of their lives.
These inflation concerns also assume zero elasticity on the supply side, which seems odd since there is no monopoly situation on any basic good, with the exception of housing in specific areas. Fortunately, the ability to move places strongly increases with a guaranteed income too.
"Will landlords increase rent" is a real economics problem.
Maybe UBI is financed through massive deficit spending, leading to inflation, and rents increase.
Maybe UBI is financed through broad-based tax increases that offset the increased income, leading to nothing in particular.
Maybe UBI is financed through increased taxes on rich hedge fund managers, who all quit their high-paying finance jobs to pursue their low-paying art passions, and rents decrease.
Any of these are plausible. UBI is a political topic, and how it is financed is crucial to understanding its impact.
Not everybody will get an extra $1000. For people on welfare, social security, etc. UBI will mostly just replace that. The big advantage is that people who start to work from a position of unemployment don't lose that money and won't get punished for working. The other big advantage is that you save a lot on bureaucracy figuring out who is entitled to what according to which rule, because everybody gets the same.
It will help the working poor a lot, but any market where there's real competition, that competition will continue to keep prices low. If prices go up anywhere, that's a sign that in that market, there's no real competition.
Or it could be that wages go up due to basic income, in which case costs and prices will indeed go up, but then there will be a good reason for it.
Saving on bureaucracy is a frequently made argument that I have never seen supported by a quantitative analysis. Do they exist? Such a claim seems untrue on its face.
You can't eliminate the welfare bureaucracy with UBI because:
- You won't want to be giving free money to literally everyone, only people within your jurisdiction. So you still need to figure out who those people are and whether they're authorised to receive UBI.
- It will act as even more of a magnet for illegal immigration, so you'd still need to spend on border reinforcements. Same problem as they have now in Germany and Sweden: lots of people turned up who can't work and sit on welfare forever. If you don't stop this it's in reality a policy of giving out enough free money to live by western standards to the entire world, which isn't how it's being advertised.
- You still need to deduplicate everyone and ensure people can't register for UBI over and over.
- You need to stop people creating fake identities to receive UBI for people who don't exist.
- You still need to ensure UBI stops being paid when someone dies, even though families and friends have strong incentives to stop the state finding out about a death.
- You still need to decide how much the UBI is, how much it should change, and whether the amount should vary by location. What's plenty for someone in the countryside may be considered insufficient in the city.
- You still need to track where people live, the moment you give way on the amount being adjusted regionally, which you will because the sort of people who most enthusiastically support UBI are all-in on the type of "fairness" that invariably means not treating people the same. Or are they going to advocate for a single income tax rate across all earning bands as well?
- You will need a huge rise in taxes to pay for this, meaning tax evasion and avoidance will also go up quite dramatically. You'll need to bulk up the tax bureaucracies to handle this.
UBI is just a modern rebranding of what in the 20th century was called the socialist utopia. People tried it, it doesn't work. That was Russia at the start of the 1900s. UBI advocates today seem to have forgotten about all that, but they're re-treading intellectually dead ground.
> "So you still need to figure out who those people are and whether they're authorised to receive UBI."
You need to figure out who they are to be able to give them money in the first place. That's not the thing you're saving on, but all the other checks to see if you're justifiably unemployed/disabled enough to be receiving this money.
A big problem with the welfare system is that people only get it when they don't work. They lose it when they get a job, which can often mean they actually lose purchasing power, so they're effectively being punished for working. UBI creates a system where you always get ahead by working, even if it's only a little bit.
Of course you still need the basic civil bureaucracy; every country needs that. But you don't need an extra layer of bureaucracy on top of that.
Yet people routinely choose to get off welfare and get a job, so clearly, the thresholding can't be that bad. Obviously there's going to be some cases where some jobs and welfare package combinations don't make financial sense in the instant, if you assume no chance that the job will ever lead to a pay rise. But it works well enough most of the time.
I've argued above that in fact you will still need a complex welfare bureaucracy that looks very similar to the one we have today, given even basic constraints like "there should not be excessive levels of fraud". Deciding if people have a job or not is a trivial cost compared to the entry-level costs of just making sure you're paying people who exist and you only pay them once.
Again - does anyone have a rigorous, convincing analysis of the cost of means testing specifically? Perhaps I'm wrong, but I don't think so. Especially because people who argue for UBI do not argue for the abolition of things like disability benefits, government subsidised health insurance and various other means-tested subsidies.
Some people do, some people don't. The threshold is surmountable for some people, but it could be a lot lower.
> "you will still need a complex welfare bureaucracy that looks very similar to the one we have today, given even basic constraints like "there should not be excessive levels of fraud". Deciding if people have a job or not is a trivial cost compared to the entry-level costs of just making sure you're paying people who exist and you only pay them once."
I strongly disagree. For one, there's a lot less room for fraud if it's something that everybody gets. Secondly, the government already needs to know that people exist. People get born, they go to school, they pay taxes, they vote, they die.
> "Especially because people who argue for UBI do not argue for the abolition of things like disability benefits, government subsidised health insurance and various other means-tested subsidies."
I would prefer those not to be means-tested, but equal for everybody. If you're disabled, you get disability benefits on top of your basic income, and you get to keep them even if you do manage to get a job despite your disability. Similarly, I'd like to see health insurance as part of that basic income.
The only place to test people's income would be for paying taxes. Basic income takes care of everything else. (I suspect even progressive taxation might be replaced with a single flat tax rate in the basic income is high enough.)
Disability benefits are means tested by checking if you're disabled, so I think we're talking at cross purposes. Abolishing means testing for that would mean abolishing disability benefits entirely. It'd just be rolled into general welfare or UBI. Is that what you want to see?
What about income tax? Shall we set a single income tax band for everyone? You say no but where's the consistency? Means testing is good when taking money but bad when giving it? Why?
The logic of a strictly egalitarian universal welfare system would also suggest governments be strictly egalitarian in all ways, meaning all taxes would be poll taxes. Everyone treated the same. But nobody is arguing for that, which makes it look like they're not working from a general principle of lower bureaucracy and more equality, just a general love of welfare.
Is means testing not about income? I mean to take income out of the equation, so people don't lose benefits when their income rises, because that would create perverse incentives. If you manage to hold a job despite being severely disabled, more power to you. That's not something that should be punished.
I think I already addressed all of this in the comment you're responding to: if UBI is high enough, I think there could indeed be a single tax rate for everybody. Because the UBI would already provide a comfortable living income, and only income for luxuries would be taxed.
But I think UBI will start lower than that, which means that at first, progressive taxation will still be necessary to some extent.
Alright, I've been using means testing to mean, a test of eligibility. But I just checked the dictionary and it's indeed defined in purely financial terms.
So we can add to the list of welfare bureaucracy that'd still be needed, disability tests. That's where a big part of the fraud comes from in any welfare system, because fraudulently obtained disability benefits is effectively a form of UBI: for those who have it, it never ends even if they get a job, unless the job is one that their pretend disability would prevent them from doing. Very attractive. Also, doctors and assessors don't pay for it so they tend to be willing to grant it to people in very lax ways.
This can be seen in the way people on disability benefits rises and falls with the economy in the USA.
As for a "comfortable income", again, you're dreaming. For everyone to have a comfortable income without having to work, with extra income only for "luxuries", isn't physically possible. It's literally the original communist vision that was abandoned because it didn't work. Comfortable income was simply redefined back then as subsistence income in a broken economy, and luxury was not only reserved for Party members but redefined as a standard of living lower than that available to ordinary people in the supposedly deeply unequal west. UBI is just centuries old political ideas re-heated and re-branded.
> Again - does anyone have a rigorous, convincing analysis of the cost of means testing specifically? Perhaps I'm wrong, but I don't think so.
We don't actually need a rigorous analysis of the costs of means testing to conclude that arguments that extending a benefit from <10% of the relevant population cohort (e.g. an unemployment benefit with eligibility testing) to 100% of it (i.e. all working age population) will cost more than the testing, unless governments spend 90%+ of the relevant component of their welfare budget on admin rather than payouts. Common sense as well as the published statistics confirms they generally don't.
If the landlords are not being taxed at least as much as they increase rent, they have an incentive to increase rent in response to UBI. The result could be an inflating effect in essentials like food and housing, even if offset by a deflating effect in non-essentials, disproportionately affecting the poor whose main expenses are essential.
IMO the only viable responses are either rent control, or more elegantly, high availability of public housing at fair rents mixed with private units so as to not create class segregation.
You can tax jeff bezos as much as you want, low end property prices will still go up, (and food etc), because poorer people will have more money, and will spend it on the same things. You might decrease the demand for luxury yachts, but demand for necessities will be the same.
I think you would only see inflation where supply is constrained and even then only in limited areas. Food is likely to be safe as supply exceeds demand.
Slum properties in richer areas might see it however perhaps those people living on the breadline in a rich city would take their BI and migrate away.
UBI does not create more wealth.
Nor do pensions for the elderly yet we still pay them.
The solution to that is to produce more goods. There is no physical law that says that there is a fixed supply of housing. Currently, it is difficult to get approval to build in many urban areas, but if we eliminate that barrier, there is no reason somebody else can't jump in and undercut an extortionate landlord by offering housing at X + $999, etc. until the price is pushed back down.
UBI doesn't directly create more wealth, but it would spur demand for creation of more actual goods. After all, poorer people tend to spend much more of their income than wealthier people. And once that is done, society will in fact be wealthier in a concrete sense.
it will also impact salary negotiations, as company tend to give you the absolute minimum for any job where's the slightest competition among employees.
I still think some form of UBI is worth considering, especially to remove bullshit jobs and help the poorer to come by, but should be complemented from other more positive initiatives (free tuition, free healthcare, free transit) and it will be extremely important to pin down where the money for it exactly comes from, as putting the burden primarily on the middle class would do more damage than not on the economy.
> When everyone has an extra $1000 do you really think landlords won’t increase rent?
Before even going there the key is to ask where this money comes from.
Handing any significant amount of money on a recurring basis to everyone is tremendously expensive.
Without considering inflation the first issue that comes to mind is that people will use the extra money to pay the extra tax needed to give them extra money....
I wouldn't be worried about prices of food. Money from UBI should end up in the hands of people that provide poor people with what they need. It's societally useful thing.
ubi doesn't automatically mean that you get a flat increase. there are models where it is modelled with taxes in mind. so simplified. if you had nothing before you know have $1000. if you had $2000 before it stays. if you had $3000 before it goes down to $2500. so sure if you just stupidly add $1000 that wouldn't work
1. We have always had that but it isn't the poor at the mercy of the rich it is the poor always at the mercy of exploitation by the politicians. Government gives with one hand then takes back through fees, penalties, and taxes.
2. The primary predator are relatives and common thugs usually wrapped up into a gang environment.
3. We cannot always protect people from being stupid. The idea we can is a no win situation. All you can do is try.
America can handle a UBI but the two political parties cannot. To them it will be a means of control and a weapon. Unless #1 is solved, where the government buries people under fees, penalties, and taxes, UBI will only become a transfer of money from the right hand of government to the left hand.
UBI will require rewriting the whole structure of how the government collects money. UBI must include providing all services for individuals for free or heavily discounted.
I have another concern. What will stop landlords from increasing the rent by high percentage of basic income?
Suppliers always price their goods as high as they can for the specific values of supply, demand and competition, and none of those things will change. The customers will just have more money to pay for the right to live under a roof.
There are two options here: rent control, and the free market.
If enough houses can be built, and basic income is high enough to pay free market prices, then any landlord who asks too high a price, will price themselves out of the market because there will be other cheaper houses. But for this it's vital that the supply of houses is unrestricted.
Of course a landlord might bait and switch with low rent as you move in, and rapidly increasing rent once you get settled. That's simply something that needs to be banned. After you've moved in, landlords should only be allowed to increase rent by either inflation, or the average increase in new rent in the area. But preferably just inflation.
Free market won't work. It doesn't work because you can't build enough houses. For the free market to work you'd have to build way more houses than people need because owning house without tenants is extremely cheap and you don't have to lower the rent (or sell it at lower price). You can just let it be unrented for quite a long time and still come ahead when tenant or buyer finally arrives.
I think you should just raise cost of owning additional houses so keeping them empty really hurts.
Rent control seems like government micromanagement that we want to avoid with BI.
Making empty houses more expensive through property taxes is absolutely an option. I think it's totally fair to reimburse the community for taking land away from the community to put an empty house on it.
My point is: there needs to be competition on the supply side in the housing market, to keep prices somewhat related to the real cost of the house. If this isn't possible, the government needs to step in. I hope to avoid that where possible, though it's certainly necessary to prevent landlords from raising the rent on people after they settled in a home.
The community didn't own the land, so didn't lose it; It's more accurate to say - the community still has to manage the land (e.g. policing, fire service) so property tax always needs paying, and should be relative to those services.
Private ownership of land does take it away from the community. The problem is that we've gotten so used to everything being privately owned, that we've grown blind to the possibility of land not being owned by anyone and belonging to everybody.
Land that isn't private is still owned by the government, and maintained by taxes. I wouldn't say public land is belongs to everyone, so much as it belongs to no one - there are limits to what it can be used for e.g. can I build a house on such land?
I believe free market will work. I feel most around here keep imagining how UBI will affect the CURRENT housing market which is mostly tied to the proximity to jobs. In fact UBI will significantly change this market.
UBI will, in theory, get people stuck near "job hubs" with extremely high cost of living (most of that being rent) to move to more rural areas. They will no longer be tied to commuting 1h each way to work 40-60h a week to work a dead end soul sucking job just to spend 50% of income on rent and finally just move somewhere more hospitable and conducive to bettering themselves.
And also, you CAN build new houses in lots of places that are not the current "city centers".
Housing cannot and will not be efficiently handled by the free market. It is a basic need. Noone will wait for a year before prices go down because landlord are now trying to outprice eachother. The response to overpriced housing is not "Eh, I'll guess I'll be homeless for a while", its "have no choice but to pay". Especially for something controlled by such a small portion of the population
I've moved from Australia (no rent control, laws heavily biased towards property owners) to Berlin (renter's paradise).
Renting property definitely should be treated as a business, done by companies, and heavily controlled by regulation to favour the tenants. This is how it's done in Berlin, and it works really well.
Treating property as an investment vehicle is actively harming society.
You're right. I'm just imagining a world where there is sufficient supply of houses, and property owners will need the income that renting it out provides. It should never be profitable for them to sit on empty houses. Too often it still is.
> That's simply something that needs to be banned.
That is banned. I don't know the limit but it's similar to what you describe. Landlords aren't allowed to raise prices by much per year. It still adds up, but by then you know to look for another place and have a year or two to do it.
UBI becomes the single biggest election issue. Politicians promising increases to get elected, and all the bad policy that stems from such motivations. This is then followed by an inevitable pullback at some point in the future, causing immense harm to everyone relying on every cent of their UBI (most people).
Yes, absolutely. The key difference is in the incentives/outcomes of the policy. UBI involves lessening incentive to participate in the labor market, lower taxes increases the incentive (because you keep more of your earnings). At some level of 'passive' income it becomes very difficult for a rational person to make the decision to go to work every day.
UBI is one of those ideas that is theoretically awesome but doesn't survive contact with reality, or rather the inevitable flawed humans that administer it.
> UBI is one of those ideas that is theoretically awesome but doesn't survive contact with reality
You don't know that - you just base it on your theory.
Of course, every idea gets perverted by current political system, but the problem is often not the idea itself.
Huge appeal of UBI is that it's simple hence easier to control. Taxes were supposed to be simple too and yet they got overcomplected to serve the special interests.
The danger of abusing UBI for political gains is as real as it happened with taxes, but it doesn't mean the idea is inherently bad - we just have an inefficient and harmful government system and fixing it should be a priority if we want anything nice like properly implemented UBI. Another Yang's idea, Ranked Choice Voting could at least mitigate some of the issues like political bipolarity.
It seems you agree with me that UBI is a good idea, but that human beings and imperfect systems muck it all up.
I have yet to see a government institution remain uncorrupted and focused on the original principles upon which it was founded. That has little to do with politics as every party comes up with some bad ideas once they find themselves with power. This is at least partially due to the fact that every party is under constant pressure to 'do something' even if doing absolutely nothing (or at least nothing visible) is the right choice.
Yup. This kind of gets at why us socialists are generally against UBI. It doesn't actually put any power in the hands of ordinary people, and the ruling class can just as easily take it away again as they gave it. Much better to have basic services (food, housing, healthcare) provided directly, with the workers in control, as that both makes it harder to take away (when healthcare workers go on strike, even the rich notice), and harder for landlords to just absorb the difference.
I think this is one area where pretty much everyone who has had some exposure to government can agree. I've often tried to liken it to the ACA. Yeah, we can probably get it passed, and it may help for a while. However, you're one election cycle away from potentially losing it.
I have a very hard time conceiving of long-term solutions to such large problems that don't basically boil down to 'if the government is in charge of it, it will end poorly'
Politicians tend to promise to spend more taxes on projects that will benefit some segment of the population. In the UK "more money for the NHS" is a definite vote-winner.
I’m not really concerned about the first two, because they all apply to any low income. UBI will not–and is not intended to–remove relative poverty.
The third is a potential issue, but the question is whether it will be an improvement over what happens now; i.e. many don’t get the chance to administer their own funds or even have them administered on their behalf, we just skip straight to “it’s all on you”. A credible UBI would likely require a massive expansion of redistribution, because we spend so little on poverty relief today. True poverty relief would require giving people a lot of money, and that is by definition very expensive.
The fundamental issue I see with UBI in 2020 is that it must ultimately be paid for with massive productivity gains (in the face of many hard structural challenges), with no real evidence of where they will come from.
The US already has lacking support systems. I'm still baffled how people can simultaneously complain about tent encampments and not be outraged at the lack of homeless shelters. I'm not sure if there's much to destroy left.
Elsewhere, neoliberal UBI would definitely cut into these systems.
> Some people will mess up. They could spend it all on an addiction or just make a bad investment.
The solution to this is easy... Low friction bankruptcy. If your UBI is paid daily, and one day you mess up and gamble it all away and get big debts, that should not stop you spending tomorrow's UBI on food.
Today, debts chase people for years or decades, and keep the poor poor. The fix is to let bankruptcy be something you can sign up for online in an hour. Then, if a debt shows up, you simply show them the bankruptcy certificate and walk away. The creditor then has to do all the work of finding any assets you owned at the moment you got the bankruptcy certificate and using them to pay off any debts.
>>>1. society will be easily divided into two groups: those >>>who depend on the UBI to live and those who don't. The >>>former will be absolutely at the mercy of the latter.
I feel the opposite is more likely to be true.
An scenario of populist leaders capturing UBI individuals and controlling centralized UBI distribution, promising them benefits and at same time menacing them of cuts, and in the meantime dividing the non-UBI crowd with single issues like abortion.
Non-UBI people at the mercy of UBI people is the real danger.
3. I could see part of this as a good outcome. Charity is too many times a fraud. And people would not have any excuse to have their children begging on the streets.
The first thing will be forced by economic factors, not just landlords doing their job. everyone just takes a permanent vacation because work sucks. At the very least a lot of them will work less. This is an intended outcome. Supply hence falls through the floor because full automation doesn't exist. As supply is constrained and demand is just as high (if not higher) this in turn starts triggering higher prices which is to say (hyper)inflation. Now your UBI is worth nothing and you will be joining the nearest sweatshop soon. If the government tries to inflation correct UBI it will just make it worse.
Paying people 1200 a month isn't going to inspire them to take a permanent vacation because while it might be enough to survive on its not enough to live well on and people want to be needed and purposeful. Supply might tighten but it wont fall "through the floor". Furthermore demand right now in the US isn't just as high if not higher its crap and its going to be crap through 2020.
Instead of basing it on bad armchair psych how about provide a credible analysis from an actual economist that shows the conclusions you are suggesting.
If you want serious economical analysis by an actual economist, I'd suggest maybe not going on hacker news, for example you could go here https://www.google.com/url?sa=t&source=web&rct=j&url=https:/... . Its a different argument, but the first part before it gets overly political is especially a good, by-the-numbers approach to basic income. I would point out though that the original blog is not much of an economical analysis so I don't see why my comment not being a scholarly article can be held against it.
We really need to stop calling it Universal. There is literally no way it could ever be so. I'm all in favor of a less bureaucratic welfare system. However, the main savings comes from all the people who make up that bureaucracy. So the savings come from firing a whole lot of people.
Even taxing the richest households and extra 5% would only give the poorest households an approximate extra $1000 per year. This isn't life changing and isn't even much of a supplement. This is a very non trivial problem to solve. We need a much larger source of money.
money is fake^Wfiat. it's just points in the game of capitalism. we have designed money so we can most importantly pay taxes with it, but also buy food and shelter and receive it for something or indeed anything, but we can also design a slightly different system where we receive it for no reason at all.
> 3. Charity - let's say we actually give every person enough money for food, housing, and utilities. Some people will mess up.
This is why it should be a regular and frequent income, rather than giving people a lifetime's worth of money when they turn 18. As it is a regular income that resets every week/month/whatever, it's harder to mess up to that extent. Addiction or unwise Hire Purchase agreements might do it, but with the latter, lenders are likely to be even more aware of affordability than they currently are.
That aside, I would imagine that UBI could make people more charitable towards those who are thoroughly down on their luck. Partly because if someone is destitute under that system, something must be really wrong in their lives.
One problem with poverty at the moment is that it is so big. When problems are really big (see also climate change), people feel that effects of their own efforts would be trivial, and so are dissuaded from doing anything at all. If fewer people would be made destitute by bad decisions made out of desperation, donors might feel they can actually do something about it.
Another problem with poverty now is that there are so many diverse causes that it is much easier to aim relief efforts at the symptoms - e.g. shelters for the homeless, food for the hungry etc. If UBI covers that for most people, then we can put more effort into fixing the causes - abuse/addiction/mental illness/predatory lenders/discrimination etc. Thereby removing the need for charity.
Speaking of points 2 and 3 (and I apologize for being a bit tangential), how are they not teaching home economics in school. I'm solidly GenX, and they didn't teach me Home Econ (luckily my parents took up that role). This is a point of education that has been sorely lacking in school for decades and it is truly confusing.
Young men and women are coming out of school without the basic knowledge of how to set basic budgets and balance checkbooks. How to understand interest and how that will effect their payments in the future. Understanding that principal comes out last unless you make extra payments, so that it behooves a person to spend a little less on amenities and pay down the principal now .... things like this don't seem to be offered in basic education. Not to mention basic life skill classes, as well (again, these also weren't offered when I was in school either). School seems to be ONLY college prep but, even then, not very well suited for the skills one needs to transition to living a life there.
Anyway, like I said... Tangential conversation. But, basic home econ would seem to address to a degree, points 2 and 3 if UBI were offered. Though, I will admit, I am a major proponent of "education will set you free".
I agree with your third point. People will take the money and make bad decisions and then ask for more. In US we have food stamp program to grant free food to people who cant afford it then why do people still beg for money. I have heard of people using food stamps program and sell them to store for cash and these types of fraud exist because people easily do them without getting caught. I guess we can apply technology to reduce this fraud as much as possible.
Another thing happening in US is the unemployment program and the Coronavirus relief program which pays unemployed extra $600/week on top of unemployment. This way they make more money than they used to when they were working. In this case their incentive is to just stay home and not work which is also not right as without essential workers in the service industry we cannot get work done and if we start paying them higher than they get with the extra $600 we won't be able to afford them to be hired full time or temporary basis. For example someone even earning the lowest minimum wage can make $800/week and that is about $42,000 annually so we sort of do have UBI currently happening and worth learning from that.
All of those seem like valid criticisms against UBI, but is it an argument not to do it? Are those issues non-existant without UBI? Take your third point - what do we do with people who spend all their UBI on drugs and gambling? Even though the “you’ve had your UBI the rest is on you” approach seems morally wrong the current situation is that they get even less or zero help anyway so UBI would only be an improvement for those people.
Maybe add more restrictions to gambling (and reclassify things like trading/investing as partially gambling), and keep policing drugs as usual.
Also, mandatory warning attention-abusive mediums, such as casinos and mobile apps; and stricter regulation against misleading advertisement. And greater scrutiny of lobbying..
The problems exist now. How does more income make poor people more at the mercy of wealthier people? How does more income make poor people more susceptible to predators and scams?
UBI helps mitigate these problems, it doesn't create or make them worse. Even charity... I expect some people will increase their donations, because the UBI is free money and they don't necessarily need it.
I'm also wondering about how the amount will be set in practice. Assume UBI is introduced now and set at $1000 per month. In 20 years, $1000 per month will probably not be enough for a basic income, so the amount would have to be raised somehow. Will it be rules-based? Or will it be subject to the same political fights as the minimum wage currently?
This can very easily be solved by making it inflation adjusted (i.e. the value increases with inflation every year). This happens for instance with many social contributions in Switzerland and is IMHO the only reasonably way to set such value.
If you set UBI as inflation-adjusted, then there is no viable political mechanism to reduce it. "Cut everyone's income!" is a losing political message, forever ever.
Inflation is the pressure release valve that allows quietly cutting real costs. Every employer, business, government relies on this. It's why the Fed targets low but positive inflation.
I don't know. In Europe almost all of these things (welfare, social security, minimum wage) have been tied to inflation since forever. Sometimes they get cut, sometimes they get raised.
In Belgium a lot of stuff (salaries, rents, social welfare) is tied to inflation, and sometimes we do 'Index Jumps', where we simply don't index for a year.
Belgium is fairly unique in that respect. If I remember correctly, it also takes into account the evolution of salaries in neighboring countries (France, Germany) when deciding collective salary increases.
> I worry about three things with UBI though and they're more social than economic.
> 1. Power Divide - society will be easily divided into two groups: those who depend on the UBI to live and those who don't. The former will be absolutely at the mercy of the latter. We can see this a little bit with the coronavirus relief packages.
The problems I see with UBI are:
* It won't take into account the differences in the cost of living for different cities.
* If it is paid based on the household size there'll be an incentive for lower income families have more kids in order to cash larger UBI checks.
A book to read, though older, is Tyranny of Kindness and it expands on the plight in vivid detail of our current system.
The article is an anecdote, but it tells the narrative of how the current setup is pretty difficult for people, particularly single mothers with children. They are already at the mercy of people and find no help for charity. In the article, it even mentions how the family that gets supported moves out of their subsidized apartment. It also mentions how brutal the current system is in terms of cutting off benefits.
I’ve been a hardcore pro-UBI for years from the perspective of moving (part of) the distribution of newly minted money from private banks to spread out over individuals. Gradually I have recently been feeling doubt for another reason: it makes everyone dependent on the government in the sense that if the government completely controls the demand side of the consumer economy (in the frame of the article). A majority of the population will (either due to unemployment or committed spending over non-UBI income) be unable to make ends meet without UBI.
It actually puts a lot of power in the hands of government and central banks.
> They could spend it all on an addiction or just make a bad investment.
So could you with your salary (assuming that’s how you get money). It stands to reason your employer shouldn’t be trusting you with that money they give you.
3 - we should also invest in educating people (so they make less bad investments) and fraudsters busting. These 2 measures together with the UBI itself probably have chances to minimize the number of broke people (nobody actually wants to loose money and be homeless, right? most of them will do their best to use the UBI to avoid that) to the the point when it's very small and only consists of really sick people. Then yes, we help them by putting them in appropriate mental health care institutions until they are ready to take care of themselves.
> Power Divide - society will be easily divided into two groups: those who depend on the UBI to live and those who don't. The former will be absolutely at the mercy of the latter. We can see this a little bit with the coronavirus relief packages.
The main point is that it makes people dependent of the State if they entirely live on the UBI, which is a pretty poor behavior to encourage - the larger the UBI-reliant population becomes, the more they will extract value from non-UBI reliant people through elections and majority.
People are dependent on the state anyway. Wealthy people are the most dependent on the state. Because they rely on it to defend their property rigts. Without which they would not be able to keep their wealth.
I'm not advocating for no state at all. But there's a difference between a state that protects your rights and defends your country and one that provides everything for all. That's not at all the same level of dependency we are talking about.
I think UBI only works as a replacement and simplification of existing programs. As a way to replace progressive tax with a flat tax and eliminating other food and welfare programs, but essentially ending up in the same place without all the corruption and loopholes.
If UBI is pasted in without cleaning out the existing cruft then it'll just be another mess on the pile.
However if done correctly, and not as a form of welfare, then it will be a vast improvement (in terms of fairness) with no effect on inflation.
Exactly, unless you make the UBI ungarnishable and useless for loans the payday predators will just find a way to drive those dependent into debt until they take all the UBI they can from as many as they can. What % of current homeless will that be?
Still, I hear UBI proponents say that you have to allow loan payments, because otherwise it's not fungible basic income. I disagree and think BI doesn't need financial engineering on top.
3. Assuming UBI has any negative impact on the value of the dollar, the fall in financial mobility you have from constantly, let's say "messing up" and losing your benefit every month would be greatly devastating. This wouldn't be a new group of people though, this would be the same homeless people we see today.
Even if I like the idea of UBI idealistically, I am worried about potential inflation.
Once there is more money in the system (that before the UBI just wasnt there) the prices of basic things might rise and at the end the money you get from UBI will be a "new zero".
I am not saying that this will happen but I think this is serious concern.
The entire world is stuck in a liquidity trap and we have negative real interest rates. No advanced economy has had north of the 2% target for a meaningful amount of time prior to the pandemic. Inflation is something to watch out for. IMO, deflation is the bigger concern.
Source: former deficit hawk convinced hyper-inflation was just around the corner for half a decade.
I'm the opposite. I've thought about deflation for half a decade. Interestingly the conclusion is always the same but with a different coat of paint. The central bank stimulus doesn't reach the real economy and by "real economy" I mean the parts of the economy that are being used to measure inflation.
Inflation happens when lots of money chases too few goods or workers. We see it in housing, stocks, perhaps also education and healthcare. The money does go somewhere but not to where it is most effective. Why is there no inflation in salaries? Because of underemployment. Companies can always fill their open positions and pick among the cheapest applicants. Why is there no inflation in other consumer goods? Production is happening primarily in developing countries with an even larger surplus of labor.
The answer is probably a little boring and obvious. Give money to people that will spend it immediately, rather than to people who will try to convert it into inflation proof assets. The coronavirus related economic stimulus packages are pretty much the only policies that even attempt to do this.
If they overdo it can easily result in hyperinflation but I think inflation is overdue.
UBI doesn't actually create money. It redistributes it. I would expect the effect you describe in the short-term, but in the longer term supply of basic goods should increase to match increased demand.
My main worry is housing. If we don't increase significantly the availability of housing, prices will just increase. Similarly with college education and health care that have had significant price increases in the last 30 years.
It would give more buying power to the poor. Right now Dollar Store is a niche. With an income floor, it can become a real industry and support a wider variety of goods. Eg, UBI is a market maker for subsistence goods.
Re: 1 - That's a huge market segment for companies to cater products and services to. The former isn't at mercy to the later - they are both benefitting as they're all receiving UBI. If you're making $50,000 a year are you going to be unhappy with getting $62,000 a year because of UBI - along with your partner and any adult children?
Re: 2 - Yup, people will have to learn to develop trusted networks and oversight to enforce and prevent, limit that behaviour. That's an organizational related problem.
Re: 3 - UBI on its own vacuum doesn't really work, it's why you also need social services, at least basic health care covered, etc - including rehabilitation programs to funnel people through.
I think the world is/will be automated enough so everyone has their most basic needs met. So if a company makes robots that make robots to do the work, that company will not be making trillions, due to high enough taxes to support everyone.
The time will come so even Google-like companies will be taxed to the wazoo
Wow ... a comment about UBI I typed out on my phone now has 600+ replies. I sort of regret posting this since I assume others have much more insightful things to say than I do!
Many great points were made in the replies so I want to be clear about something: I do believe that UBI would be better than what we have now. However I don't think that's the appropriate standard of judgement. To move forward with what would be the biggest government program ever (in terms of cost) we can't only look for marginal improvement. We need to be sure it will be a radical improvement.
Free-market capitalism has mostly failed the lower and middle class of America. UBI gives money to everyone and lets this same market system sort out the rest. I don't have faith in that system to do much besides find new ways to crush those who are currently suffering.
4. Funding - How are you going to fund UBI today? How are you going to fund UBI through a global recession, war or global pandemic? Given the hard choice of continuing to pay UBI or keeping a key economic contributor from collapsing, which will you pick?
What will you do if people generally take the option to not work? In the UK, I believe we now have some fifth generation families that have never worked a day in their lives, and it's not clear how to motivate them to work with the safety net providing enough money for the small number of luxury items they enjoy.
5. Protection - Social wealth-fare systems need to be protected from outside influences. It's not feasible to import all the poor people from across the globe and pay them all a decent living allowance, the economy simply cannot support it. This will in turn have some knock-on effect for immigration policies.
6. Acceptance - When social systems such as the NHS (socialist healthcare) and a form of basic income (for those not working) were introduced in the UK, people were ashamed to use them. Gradually attitudes towards these systems changed, from shame, to general acceptance to expecting. Where people originally begrudgingly took money from the government to see them through hard times, but now consider it as a viable income to replace working. I would imagine the same to be true of UBI. As social attitudes towards UBI relax, I would expect to see unemployment increase.
7. Tax - You're going to fund this through taxes, which will mean increasing taxes on the rich. This will provide a higher incentive for them to avoid paying taxes. The result of implementing UBI could be to drive your 1% away. Also, as with the current tax-brackets (taxes based on incomes), people are dis-incentivized to work towards a promotion as the work-load increase doesn't increase linearly with income after tax.
I think Europe will have to think very hard about some of these questions, I would consider the coronavirus to have provided an unintentional opportunity to observe how such a situation may unfold.
3. Charity - let's say we actually give every person enough money for food, housing, and utilities. Some people will mess up. They could spend it all on an addiction or just make a bad investment. Even with UBI they could still end up hungry or homeless. Will we help them? Or will we say "you had your UBI, the rest is on you". This changes the morals of how we treat people in the worst times.
Sadly, this will be important for selling UBI to moderates and conservatives. We have to be prepared for UBI to set us back in a big way when it comes to behaving compassionately towards people who can't solve their own problems. I still see it as a positive idea overall, though. Two steps forward, one step back.
There should be no mercy for those that spend their free money on addictions. My father spent almost all the money he received for my disability on alcohol and god know swhat. 100k gone down the drain. That money could have kickstarted my life just perfectly. But hey, why safe the money you get for your children for those children? Nah, better spend it on your own live, because.
If UBI ever becomes a thing, I hope that also means that people are on their own if they overspend it.
Where I live, if the introduction of a UBI was followed by a drastic reduction (or complete elimination) of the means-tested system we know today, hunger would potentially become a problem for people blowing their money early in the month (or getting robbed?).
This tells me the utopian ideas of replacing the entire complex system with a simple UBI isn't feasible. You'll end up in dreadful ethical choices and moral hazard. This is indeed already happening, but the bureaucracy of it makes abuse less attractive.
> if the introduction of a UBI was followed by a drastic reduction (or complete elimination) of the means-tested system we know today,
As I understand it, that elimination is part of the point of UBI. The MTBs are no longer needed.
Why do you think hunger would be caused by UBI? At worst, I would expects those who already depend on MTBs would be in the same position they are in today.
I suspect I know what my society will do to people who repeatable demonstrate the inability to take care of themselves and manage basic living aspects of food and rent. They loose the right to do it themselves and get appointed a guardian.
Where I live, if the introduction of a UBI was followed by a drastic reduction (or complete elimination) of the means-tested system we know today, hunger would potentially become a problem for people blowing their money early in the month (or getting robbed?).
If that happened regularly the charities would be started up again, except next time far more people would have a little extra money to give so they could be much better funded.
>hunger would potentially become a problem for people blowing their money early in the month (or getting robbed?)
How is the likelihood of this connected to the source of their money? Is hunger not a problem for people who work for a living and blow their money early in the month (or get robbed?)
> I like the simple argument made here about UBI enabling efficient consumption.
If you mean this...
"Instead of continually trying to optimize supply, with diminishing returns, we need to optimize demand by giving consumers more money to spend on things they desire."
...then unfortunately it has a critical flaw: redistribution does not create wealth. If the problem is that growth is stagnating, you can't fix it by redistribution. You can only fix it by increasing wealth creation.
That's not to say that there might not be a decent argument in favor of UBI helping to increase wealth creation, by enabling more people to pursue innovations because they don't have to spend as much time and effort on basic subsistence. Such an argument might be worth discussing. But that is not the argument this article is making.
I fundamentally don't like UBI because, like other forms of welfare, it makes the poor ever more reliant on the government without incentive to become self-reliant.
I'm a strong believer in self-reliance. I think solutions that tackle poverty should have a path to self-reliance in there. Current welfare programs reward continued reliance and punish self-reliance (i.e. government benefits yanked if you try to supplement income too much with self-reliant sources, etc.). The ideal program helps people work their way to a state where they are no longer reliant on the government to survive. UBI locks the poorest into government reliance permanently.
You might say "yeah, UBI will help people be more self-reliant because now it's unconditional and you can supplement however you want". And maybe that's partially true. But I still think without an incentive, indeed a culture shift that values self-reliance, the poorest UBI recipients will still be stuck in rut, because they don't just lack money, but fundamental financial education that middle/upper class receive as intellectual inheritance from their parents. Just like today, it doesn't matter how many government subsidies you get, the poor's standard of living will scale to their income until every penny is gone. Someone needs to teach the poorest how to live below means so you can save, invest, avoid expensive addictions and health problems, etc. and an unconditional check in the mail won't automatically bestow that knowledge.
I predict if UBI becomes a thing it will actually increase the divide between lower and middle classes, because the middle class will use it more effectively (i.e. saving, investments, etc.) while the poor will use it less effectively (as a consequence of lacking financial education).
> Just like today, it doesn't matter how many government subsidies you get, the poor's standard of living will scale to their income until every penny is gone. Someone needs to teach the poorest how to live below means so you can save, invest, avoid expensive addictions and health problems, etc. and an unconditional check in the mail won't automatically bestow that knowledge.
This is misleading. Psychologically speaking, those who are poor are more likely to spend money immediately, because this is the rational thing to do if your life is unstable. Money has a way of disappearing (loan interest, people who come after you because you owe them money, etc.) if you hold on to it, so the rational thing to do is to convert dollars to goods that help you immediately[0].
This obviously prevents any form of long term investment. The solution is to provide stability. Reasonable (non-means-tested) welfare programs do that. The problem isn't that the poor are dumb or uneducated or something, it's that the incentive structures literally push them away from long-term investments, so rational action is to not save for the future. Provide stability and the incentive structures change.
> Money has a way of disappearing (loan interest, people who come after you because you owe them money, etc.) if you hold on to it, so the rational thing to do is to convert dollars to goods that help you immediately
That's largely just a roundabout way of stealing (if you consider defaulting on debts stealing, which I do in many cases). "If I frivolously spend my money before paying my debts, then I don't have to pay my debts!"
I have a lot of experience working with poor people in Maryland, primarily poor African American women (single moms). The vast majority immediately spend their money as you say, but I disagree they are spending the money on "goods that help [them] immediately". Some tried to pay bills, but were too ignorant to understand what they were paying for and why. They would send money to anyone that sent them a letter with scary red ink on it. Also, counter-intuitively, many of the poor I've worked with had the latest iPhones, huge TVs, cable/HBO, air jordans (super expensive shoes), and other luxuries I myself don't have. You could argue these are "psychological necessities" to keep them from falling into despair, but again, I disagree.
> The solution is to provide stability.
The state of Maryland provides free and/or heavily subsidized housing via HOC and free food via SNAP, yet the recipients of such programs I have worked with still frivolously spent cash on toys and luxuries (not to mention booze, cigs, and lotto) as soon as they got it and were in no way on a path to self-reliance. If free food and housing doesn't provide stability, I fail to see how UBI would (especially considering most UBI checks would be eaten as rent which is largely equivalent to HOC)
> The problem isn't that the poor are dumb or uneducated or something
That might not be the entire problem, but it is disingenuous to argue it is not even a component of the problem. Financial ignorance (and ignorance in general) is a huge factor in inter-generational poverty. I've worked with single African American women who had no idea where their money was going. When I helped them get their accounts in order, we found they were paying Comcast for cable despite not owning a TV, they were paying for all sorts of extraneous insurance and warranties they didn't need because the letters in the mail had predatory "amount due" stamps in red on disguising them as bills, etc.
Self reliance does not just magically happen because of "stability". Even a lot of middle class people are living borderline unsustainable lifestyles, where missing a paycheck would be catastrophic because they went way too far into debt for their <huge house/expensive car(s)/etc>.
Paying down debts in the optimal order to get on the path of long term savings is not something you can easily bootstrap yourself into without help. You need teachers and mentors for that.
> Paying down debts in the optimal order to get on the path of long term savings is not something you can easily bootstrap yourself into without help. These people need mentors.
UBI, to a significant degree, keeps you from falling into debt in the first place.
> The state of Maryland provides free housing via HOC and free food via SNAP, yet the recipients of such programs I have worked with still frivolously spent cash on toys and luxuries (not to mention booze, cigs, and lotto) as soon as they got it and were in no way on a path to self-reliance. If free food and housing doesn't provide stability, I fail to see how UBI would (especially considering most UBI checks would be eaten as rent which is largely equivalent to HOC)
Means tests. The free food and housing isn't actually stability. It's only there temporarily, and only if you're poor enough. If you at some point attain "success", you lose the thing that made you stable. For SNAP that might be okay, but knowing that you'll need to move if your income goes up isn't stability, it's the opposite.
> When I helped them get their accounts in order, we found they were paying Comcast for cable despite not owning a TV, they were paying for all sorts of extraneous insurance and warranties they didn't need because the letters in the mail had predatory "amount due" stamps in red on disguising them as bills, etc.
Indeed, these things are bad. I'm claiming they're a symptom.
> That's largely just a roundabout way of stealing (if you consider defaulting on debts stealing, which I do in many cases). "If I frivolously spend my money before paying my debts, then I don't have to pay my debts!"
Sure, whatever floats your boat. I'm not applying value judgements, I'm offering solutions.
> UBI, to a significant degree, keeps you from falling into debt in the first place.
So you are saying the current poor already in debt are screwed, but the rising generation can use UBI to prevent themselves from getting into debt?
Plausible, but again, I doubt it. Like I mentioned earlier, a big chunk of the middle class are living above their means. If you suddenly have more money, for a lot of people it just means you can go into bigger debts for better housing, better cars, etc.
If middle class people with dual incomes are living life on the knife's edge, with little savings and big debts, why wouldn't the poor do the same if they suddenly had more money?
Where does the voice of frugality come from? You act like it's an instinct people naturally develop when things are stable, but it's not. I was taught frugality by my parents. I have many middle class friends who were not taught frugality by their parents and guess what? They have much nicer cars and bigger houses than me (but also deeper debt and less savings).
> Indeed, these things are bad. I'm claiming they're a symptom.
Predatory insurance/warranty companies are a symptom of what? I claim they exist as a consequence of exploiting ignorance. A $1k monthly check won't make that exploitable ignorance go away, and indeed it will continue to be exploited, perhaps to an even greater degree. Then what? UBI proponents will have to argue for a bigger and bigger monthly check until we are practically a communistic society.
> Like I mentioned earlier, a big chunk of the middle class are living above their means.
The middle class aren't the people who are on SNAP today, you keep changing the groups you're talking about.
> You act like it's an instinct people naturally develop when things are stable, but it's not.
I'm not talking about frugality. I'm talking about long-term planning. Which is aided by stability.
> Predatory insurance/warranty companies are a symptom of what?
A symptom of poor people who are in debt and don't have the time or energy to actually understand how or why. They're overwhelmed. If you aren't in debt or know the extent to which you are actually in debt, predatory "amount due" stamps don't work.
As far as I can tell, you seem to be arguing that because scammers exist, we shouldn't implement UBI, because scammers will just get all the money. So what about all the people who are poor but wouldn't be scammed?
> The middle class aren't the people who are on SNAP today, you keep changing the groups you're talking about.
My point is that even if you have a steady income (or two!), that doesn't necessarily mean you'll be a long-term planner. Thus, UBI will not automatically make the poor into long term planners, thus UBI will not automatically grant long-term stability.
> A symptom of poor people who are in debt and don't have the time or energy to actually understand how or why. They're overwhelmed.
If you have experience in this area I apologize, but it seems to me you haven't really worked with any actual poor people. A huge chunk of poor people I've worked with in Maryland have nothing but time. What's your excuse for them? Sure, there's the "single mom working 3 jobs with 4 kids" stereotype, but actually a lot of the poor African American women I've worked with have no job and are home all day (esp. during covid) and are totally reliant on government.
> If you aren't in debt or know the extent to which you are actually in debt, predatory "amount due" stamps don't work.
Not getting into debt in modern America is tricky, even more so for the poor. Knowing the extent which you are in debt and the optimal way to pay it off requires financial literacy, which the vast majority of poor I've worked with don't have and don't know how to get. And as I've said I don't think "stability" will magically result in increased financial literacy. So we are just arguing in circles now. It's fine if you disagree with me. I personally don't think UBI will make any measurable dent in poverty at all, unless you torture UBI statistics to confess. Happy to be proven wrong, but would like to see another country with more favorable conditions go all-in and prove it works first before the USA.
I really can't be bothered to argue in depth but in the backdrop of record high wealth inequality in the US, your idea that the poor just need to spend less is beyond ridiculous.
UBI is a payment for everything you give up to society. Where do you think all that property everybody respects came from? Who does that system deserve to continue?
UBI is not a giveaway, it's a payment that's long overdue.
They should be the rare exceptions for when all else has failed, not the rule.
For everyone else, including the majority of stay at home parents, they should work toward self reliance (again, just my opinion. I think not being reliant on the government for your survival is a great boon to both the individual and society).
There are a lot of people here dissenting on the idea of UBI on the premise that they find meaning in work, and to take the incentive to work away will lead others (themselves included) not to have meaning in life.
I’ve taken a year off of work to start a business that failed and spent the past few months hanging out with my kids. At first, my stress levels were high because daycares were shut down and I was panicking about my business. When I accepted the fate of my business, I chilled out and just hung out with my kids. These past few months were amazing. I loathe finding a new job now. Instead, I’ve built a mechanical keyboard, explored streaming, learned how to cook, read useless books, and learned how to be present.
I see the choice of UBI as: “do I toil away for the wealthy class? Or do I took away for myself?” No way will I toil for someone else if I had a choice.
The lack of real world experience on a HackerNews UBI discussion is infuriating. Western society's white collar elite are completely unaware of truly how many "sucky" jobs there are in the world that all enable our (currently) superior standard of living. Your entire existence relies on a globalist system of slave level labor producing products from all corners of the world. Automation of every industry is impossible unless we have true human replacement robots (many decades out). UBI will over time simply raise costs of all goods/services to subwelfare level that people "can't live on".
Whos going to: - clean your hotel/office/home - cook your food - serve your food - fix your household - grab your garbage - build new houses - build/maintain roads - build/maintain water, sewers - deliver your packages/mail - Drive trucks around - pack/unpack trucks - produce meat products (have you seen a meatpacking plant?) - maintain farms/livestock - provide difficult medical services - be a nurse aide (clean poo?)
I have not even started to list all the jobs required in order to "magically" produce our cheap goods from overseas including clothing and electronics. These are farrrr from completely automated.
Lazy Americans don't need to work right? Discussion about UBI is an expression of guilt over how well our standard of living (general hacker news crowd) compared to the vast majority of the world.
In Europe and Australia, all those jobs get done and the people doing them get fairly compensated for it. For example, the pay for a garbage truck driver is actually quite high, because it's an unpleasant job and they need to attract people to do it. And because the salary is high, it's also heavily automated, with pickers that grab bins and empty them into the truck.
Meanwhile, in Southeast Asia, the same job is done by three people, two of whom jog outside next to the vehicle in the sweltering heat and manually empty the bins into it. They're breaking their backs and get paid like crap.
> In Europe and Australia, all those jobs get done and the people doing them get fairly compensated for it.
Having worked in the service industry in wealthy Iceland for years, I can’t say I agree with this statement.
While working exusting 12 hour shifts with mandatory minimum pay (sometime a little less because of exploitative unpaid overtime), the owner of the business was regularly found to be the highest payed person in the country.
In other words, my work, contributed to some rich guy getting richer, while my compensation was only as little as he was allowed to pay me. That doesn’t seem fair does it. Ask any working class person, in europe and I’m sure they have a similar story.
I live in Vietnam and get to see the rubbish truck go past my house every day exactly as the person above you described. It's summer time here, 35-40 degrees and high humidity every day. One person drives the truck, the other two go through people bins and sort their rubbish, extracting the recycling since nobody here has the habit of separating their waste. I don't know the exact wage of these guys, but judging from other government jobs it's probably around 3 million VND/month (~$130), slightly less than $1600 a year, and it's likely they work 6 days a week.
Food and rent is cheap here, but not that cheap. You can barely survive on that wage, especially if you have a family. You will be eating mostly rice and probably scrounging for other work on the grey market.
In Iceland, you'll get at least minimum wage, $2500 a month, ~$30,000 a year. Of course, the economies are different. However, using PPP (purchasing power parity) [1], Iceland minimum wage would be equivalent to around $13,000 a year in Vietnam, or 8 times a garbage collector's pay here, for significantly easier work and less hours.
I'm not trying to say that you had it easy, or that it was OK to pay you that amount for such long shifts and to stiff you on overtime. However, by objective comparison people working equivalent jobs in developing countries have it much, much, worse.
Even though the working class in rich countries like Iceland is constantly cheated out of their fair compensations for a (relatively) shitty job. One must not forget that in the grand scheme of things, we still have considerable privilege by the nature of our birthplace.
We can—and should—complain about how we get the shorter end of the stick in the current economic system. But we must not forget that globally we constantly are the beneficiaries of much worse cheating of the foreign working class.
As I write this we are still calling for the arrest of Icelandic business owners who were guilty of bribing Namibian government officials in exchange for a privileged and unfair access to common Namibian fisheries in a scandal known as Fishrot. We are also waiting for the justice system to act on a slumlord who took advantage of imported labor, and left a house he rented them with inadequate fire escapes. The house burned down with three people (all foreign laborers) still in it unable to escape. The Icelandic justice system seem to be unwilling to pursue justice in either of these scandals, demonstrating how Icelanders are criminally benefiting in the international context.
Fairness is relative. In Iceland, that minimum wage guarantees that you can live in some comfort. In the US, you can work in a similar job with similar hours, but your shifts are often completely unpredictable (and intentionally kept below 35 hrs/week to avoid paying benefits), you can be fired at any time, and a single unexpected expense like a health problem can see you reduced to homelessness.
>> In Europe and Australia, all those jobs get done and the people doing them get fairly compensated for it. For example, the pay for a garbage truck driver is actually quite high, because it's an unpleasant job and they need to attract people to do it. And because the salary is high, it's also heavily automated, with pickers that grab bins and empty them into the truck.
This is true in America as well, FYI. It's a large source of union jobs.
They actually stopped using prisoners, but are still only paying $10.25 an hour and work one of the hardest jobs I can imagine. They are basically not allowed to use the lift on the truck because it slows them down, so they hand lift my cans every time in the 95 degree heat.
In Southeast Asia? Try New Orleans, Louisiana where sanitation workers have been striking to make $15 (they currently make $10.25 with no benefits) and jog along side the truck and empty the cans by hand.
> And because the salary is high, it's also heavily automated
That isn't really obvious to me as having a cause/effect relationship. Could you please expound? Why would high salaries cause heavy automation in a given field?
Automation only reduces cost if wages are already sufficiently high so that the cost of initial investment and maintenance is economically justified in the mid/long term.
The reason you see trash pickets riding robotic trash collectors in rich western countries is simple: it's far cheaper to buy and maintain a robot than it is to pay the salaries of enough people to achieve the same goal.
You don't get robotic trash collectors in southeast Asia and Africa and South America because for the price of a single robotic trash collectors you can pay the salary of a bunch of people for a few years. Hence, you get people carting wheelie bins.
> Whos going to: - clean your hotel/office/home - cook your food - serve your food - fix your household - grab your garbage [...]
People will take these "sucky" jobs, but they will be compensated well enough to justify it (since they will have an option of not working). This raise the prices overall, but not at the same level. For example, meat products prices will grow more than let's say organic vegetables. Note that demand for many of the products and services is pretty elastic (most people don't have to go to restaurants, they can cook something at home). This way at least people will have an option of having UBI and living frugally, instead of doing a crappy job.
UBI, at least Andrew Yang's UBI, is not going to remove those jobs - they will still be around and still be in demand because UBI isn't an income, it's a basic income, or around 1/3 of what an income should be for most people.
If anything, the wages of those jobs will go up because the demand of it from laborers will go down.
This is basically how it works in Saudi Arabia. Citizens are guaranteed a job where they can get away with doing nothing. If they happen to be fired, they get a monthly stipend until the government finds them another job. As a result, most of the real work is done by immigrants.
Thank you. These are necessary functions of society that require hard work that although maybe rewarding To some people in some capacity is mostly not desirable labor if other alternatives are available such as spending more time with family and reading whimsical books. How do you convince enough people to clean poo or raise and maintain livestock or climb inside a fuel cell in order to fulfill necessary the needs of society? We know how communism and capitalism traditionally have coerced people to do so. The reality is not pretty from either angle, but are we really even close to that alternative yet? It’s a noble premise but we have a long ways to go.
Most of that stems from the fact that the US dollar is the main global reserve currency - so people around the world are willing to accept them in exchange for real goods and services.
This won't be the case forever. Once it flips, the magically cheap overseas goods become the expensive imported goods only rich people can afford.
Yeah, just a century ago the reserve currency was the pound sterling, a century before that the franc, a century before that the Dutch guilder. I guess people in those times also expected the status quo to last forever.
> The lack of real world experience on a HackerNews UBI discussion is infuriating. Western society's white collar elite are completely unaware of truly how many "sucky" jobs there are in the world that all enable our (currently) superior standard of living.
Your comment makes it complete clear you have a severe lack of real world experience.
Go to a wealthy country. I mean an actual wealthy one where even lower class people are paid well enough to buy a house, have a project car, get at least 6 weeks vacation a year, get generous maternity leave etc. etc.
Now look around and notice that all those sucky jobs you talks about are getting done.
Also notice that in those wealthy countries people can quite readily choose to get welfare to the tune of a few grand a month. They could perfectly sit around and do nothing and get enough money to live, if they wanted to.
But they don't.
Why do you think that is? It's because they're paid well to do those jobs. As long as jobs (even sucky ones) pay well, there will always be a line of people willing to do them.
If there are no people willing to do them, pay more.
As a real-world example I used to live in one such country and I worked in a factory stacking boxes. All day, every day. Pick up box, turn around, put down box. Starting hourly rate was $45/hr. Time and half on Sundays. Double time on a holiday. No union, those were just the pay rates.
The company I worked for still made a healthy profit, and so did the end company the boxes were being stacked for (Safeway, actually)
Not sure if you are thinking of Scandinavian countries? If so, I think you're exaggerating the wealth of your average citizen a tad, even if the point still stands.
But in Scandinavian countries it seems to be mainly immigrants that do the sucky jobs, even if they are better compensated than elsewhere (although of course everything is more expensive, food, housing, etc).
I'm in a similar situation after being laid off from my job. I would have a much more enjoyable life if I didn't have to find a new job. I've improved as a person more over the past few months than I have in the past few years working full-time. Now I have the time (all of it really) to actually think about who I am and how I can improve my habits, diet, health, etc.
I feel like nearly everyone (especially in America) are too caught up in their careers to realize how unhappy and unhealthy they really are.
The problem I see with that is that if a huge number of people take that route and happily (let's assume) live their lives without working, they lose access to the ability to participate in a meaningful way in the economy by producing something of value; if they're not producing value, no one is going to value them, and they'll eventually be locked out of the new, smaller elite group that controls the means of production, and the power that goes along with that.
I don't see how this is any different from the current group of "unskilled" workers who aren't valued (even if they are "essential"). At least with UBI they can live reasonable lives and create their own meaning, through community or art or activism or religion. Any of which are better outcomes than sacrificing most of their time on bullshit jobs which break their backs and/or their spirits.
It is year 2061. I live at the Universal Housing City 14 (or UHC14). Due to rises in housing prices and rent over the years we UBI receivers had to be relocated to these new cities. I was born here as my parents decided to abandon their jobs in favor of pursuing meaning in their lives. Now I can not leave this place. There is no way to earn an income, since everyone here is provided by the UBI and thus no way to pay for education. All of the unskilled labor was automated when UBI laws came to be and first people left factories empty. I am not qualified to do anything in the outside world.
Yes. That was the point in my little dark fantasy. UBI would increase the current price of rents, which is why government had to build new cities that were 100% subsidized by then (in from of UBI) since just UBI was not enough to pay rent anywhere anymore. i.e. if as a hypothetical landlord I know for a fact that you get $XXX/mo from government "for free" then why wouldn't I ask $XXX/mo in rent?
This gets at a problem I always wonder about with UBI (as someone who genuinely sees the value in a successful implementation of it). What happens in 20-30 years once the system has been entrenched. Will the children of those that choose not to work for additional income have decreased social capital an struggle to enter the workplace if they choose? How do you prevent those that choose to work from using the increased wealth to exert force on those who didn't? These are the actually problems I see around UBI, not how to balance the budget.
This is the actual dilemma with UBI that should be discussed. I feel though that not everyone who leaves the workforce will generate $0 in value. There are many people who would rather create their own small business, maybe selling a minor product, streaming video games, or any number of things. Over the past few months I've realized that there is so much opportunity to work for yourself online by providing some niche service that you really can sustain yourself. If you have enough time, patience, and money to find that niche and work at it that is.
It's similar to children of mothers who all stayed at home. A generation later, many of their daughters decide (or are forced) to enter the workforce, but not all. I see working and non-working moms coexist today without any undue tension.
This is actually a really, really good question. It could create entire new future populations of disadvantaged and disenfranchised people with the same types of afflictions as the current groups. True equal access and opportunity would mitigate that of course, but good luck there.
> What happens in 20-30 years once the system has been entrenched.
What about a scenario where we get one big step closer to a vision shown in Idiocracy? A world where people don't need to struggle may be great for some self-directed people, but I suspect it will be ultimately terrible for many (even if they won' see it that way).
From a nilhistic point of view, isn't most work already performed by human useless and pointless in both the grand and minor scale? I do agree that my observation even from the Covid lockdown, is that many people's default state to pursue is activities with 'ease or non-challenged' rather than 'difficult '. To me, Covid lockdown proved why UBI was a bad idea.
If humans have free time, they create dance videos on Tik-tok.
Also, it's obvious there's a lot of people using their time for more interesting things too, even despite the fact that we are pretty isolated and in a high stress situation. And I'd say that if that doesn't get so much publicity is because the spaces we have for that kind of interactions are kinda anemic in modern society (maybe due to spending most of our time working on pointless jobs?).
Good point! We also have to think how long it takes to go from having to work pointless jobs to not having to work at all. Maybe it would be a generational thing where the first group of people will primarily spend time doing things that are deemed pointless (making dancing videos on tik tok), and the next generation is able to grow up more liberated and able to produce more "valuable" things--art, music, poetry, whatever.
Right now, a lot of people seem to think having any job is what makes them valuable. That's not something you get over quickly or easily.
Even stay-at-home parents have this up-hill battle. People in the US are still trying to fight for paternity leave. "Not working" is such an evil concept.
On the other hand, there's me. I hate not working. I would appreciate a UBI, as it would let me get out of a not so great place, and let me focus on working on what I like to do, but I would definitely still be doing useful work.
If the work your going to be doing is useful, then why don't you do it? Or is it objectively not as useful as your current occupation? In general the market compensates based on how much it is wanted by others.
It's amazing what an individual will think is useful when doing the work, vs what a customer who pay for.
> If the work your going to be doing is useful, then why don't you do it?
For me: I am doing/learning how to do it, but I don't have capability to monetize it right now.
In general: I have personally known many people who want to have a career in X, but can't because they are working three jobs to try to house and feed themselves.
> [I]s it objectively not as useful as your current occupation?
For me: It is objectively more useful then my current occupation. I can't explain more without revealing more of my private life than I am comfortable doing here.
In general: Regardless, something being less useful then something else doesn't make it not useful. 75% is less than 100%, but is still greater than 0%.
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Also, bonus argument for UBI.
Most (all?) propositions for UBI I have seen will cover only the bare minimum. Almost everyone wants more than this, and will be willing to work to get the extra money.
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Edit 0: Add less situational arguments.
Edit 1: Add bonus argument.
Edit 2: Move things around because I'm stupid and can't get formatting right the first 3 times.
In software at least, the opposite seems to be true.
You can make $500k+, but you have to spend your time building things that are not only useless, but a net negative to the world.
Or you can choose to spend your time building things that actually benefit individuals as well as humanity and large. But if you want to do that, you have to do it for free.
Nobody is getting paid $500k+ to directly build things that are net negatives to the world.
You can claim that a very senior Facebook employee is contributing to a _platform_ or _product_ that is a net negative to society. But at the same time, the work they're doing directly from an engineering perspective is probably technically on the cutting edge, and they're likely mentoring and growing a large number of other engineers at the same time.
Contributing to technical excellence and growing younger engineers is a positive, which is why they do their job. Don't dehumanize the people working at large corporations. They're not the ones steering the products in democracy-breaking directions.
> Nobody is getting paid $500k+ to directly build things that are net negatives to the world.
Yes, they are.
Anyone involved in adtech, tracking, their garbage news feed algorithm is actively and directly harming humanity.
Sure, they're involved in a good project or two as well, like https://www.opencompute.org/. But that represents a tiny minority of Facebook employees. The vast majority are getting paid directly to build things that are net negatives to the world.
> but at the same time, the work they're doing directly from an engineering perspective is probably technically on the cutting edge
I don't even know how to begin to unpack this. "Hey, I've built this new rocket I call the V2. Don't blame me if my employer uses them to bomb civilians in London, even if I knew that was exactly what they were going to do before I started the project. Just celebrate my technical excellence!"
> Contributing to technical excellence and growing younger engineers is a positive
No. Training young engineers to abuse their users for profit is not a positive.
As for technical excellence, that is quite a stretch for a website that can't even support the browser's "Back" button. But that's another discussion altogether.
How many people would rather raise their kids than work one or more jobs? Or has raising kids not been deemed useful because "in general" the market will compensate based on how much others want it?
A lot of the people objecting also think someday they're going to be a baron of industry who needs income incentives to keep workers toiling away for them.
If your tax burden is overwhelming to your finances you are going to get more out of UBI than you get taxed into it lest its failed in its primary goal of wealth redistribution.
My tax burden isn't overwhelming, but I'd sure like to pay less rather than more. UBI would mean I'd have to pay more (no, "we'll just cut the overhead of existing social programs" will neither be enough -not by a long shot-, nor work, as we'll still need some/many of those social programs).
I'd very much prefer others working as well instead of me having to work more to make up for their not-working, ergo I'm not such a big fan of that kind of wealth redistribution. I'd like a wealth redistribution combined with a work-load redistribution though. They work, I work less, I make less money, they make money, the contribute.
My problem with UBI is that why would giving out "free money" change the world?
Say I'm your landlord and you pay me $100/mo for rent. Now you start getting UBI thats $500/mo. Why wouldn't I increase my rent to $200/mo, $300/mo, or even $400/mo? I know that now you can afford the increase. So you'd still have to earn income if you wanted to stay in that place. All I see is prices going up for anything and everything in population centers.
Only option for people who want the benefit of UBI (i.e. freedom to do whatever they want and not worry about working for a living) would be to move in smaller cities/towns where the demand for the housing is already low enough that price hiking wouldn't make sense.
I also feel like UBI would divide the world even more wealth wise. People on UBI wouldn't be able to afford luxury goods or events since thous would be still aimed at the working people and for people to still work they would have to earn significantly more than what they would get on UBI. Putting this in other words: UBI would be the literal bare minimum to keep a roof over your head and food in your fridge. Forget streaming services. Forget eating out. Forget going to movies/concerts/theater.
Easier way is to think UBI as "free meal" tickets and free housing. Which doesn't sound all that appealing.
When those people move from high rent areas to the presently dilapidated small towns that UBI would revive the renters in the cities won't be able to price gouge their units like they are used to.
Right now housing is totally out of wack because there is an extremely scarce resource (urban housing) that everyone wants and cartel like control of supply to prevent expansion thus making the price grow uncontrollably to consume as much of the maximum incomes earnable in the area as possible.
If suddenly people had a choice between slave for subsistence wages in an extremely high CoL area or move somewhere incredibly cheap and live off government cheese those that make that choice will deflate the demand until a more equitable equilibrium is reached.
So while your landlord could try charging you more for your UBI adjusted you will have the bargaining position that they almost certainly won't be able to replace you with someone willing to pay such outlandish rents.
> Easier way is to think UBI as "free meal" tickets and free housing. Which doesn't sound all that appealing.
For the 20% of food insecure families or ten million+ homeless people in the US it would probably be very appreciated.
And it isn't just the outright homeless, its those currently in abusive households that have no out too.
And it might surprise you, but the working poor - the 80% of paycheck to paycheckers - aren't going to luxury sporting events or buying luxury goods right now anyway. They are paid too little to afford it when the cost of subsistence is so high.
Because he can't alone arbitrarily raise the rent and lose you to another landlord, but if across the board people suddenly had $XXX more money per month it would be stupid not to increase the current rents for that amount (assuming they aren't a slumlord). Most people don't want to move away from large population centers (where most rent payers live).
Also when the experiment begins there are exactly zero guarantees that it will last more than one election cycle, so would you by immediately quitting your job and moving to a cheaper city to enjoy couple years of UBI or would just pay the extra cost in rent from the "free money" you get from the government and wait out if the experiment continues or not?
I can easily see that increase to be permanent if the program is seen as a success and then people are left with the same decision of moving out of the cities where they have their lives established in favor of not having to work for a living.
I grant you that I have a very pessimistic view of the future and it sure would be wonderful if I could just dick around playing WoW all day without having to worry about bills, but the little devil on my shoulder is constantly whispering scenarios where all attempts at making world better through charity just end up with us in a worst place than where we started.
Because the price of rent is based on housing supply and housing demand. Neither of those change significantly with UBI. At best people will upgrade their housing.
If I can now pay say $100/mo for rent and after UBI I get $100/mo more. If I don't want to quit working I can now pay $200/mo for rent. This means that I would be looking for a bigger place to rent.
Now multiply this across the whole society and it becomes really apparent that landlords who do not increase their rents at all are just leaving money on the table that they could easily get.
Because if my hypothetical landlord would increase my rent say 1/2 of the new UBI increase I would get on top of my salary it would be really silly to start looking for a new place with same price as my old rent since those would all now be worst in one way or another.
Supply and demand it the main driver obviously, but just look at the Silicon Valley and neighboring areas. The rents are absurd partly because of demand, but mostly because the tech companies are paying ridiculous amount of money for the people to work there. If the pay would go down the rents would have to come down even if the demand stayed the same, since no one could afford them anymore. With UBI it would be the opposite. The demand would stay the same, but suddenly everyone could pay more for the same place.
> The rents are absurd partly because of demand, but mostly because the tech companies are paying ridiculous amount of money for the people to work there.
I think the correlation runs the other way. Tech companies pay ridiculous amounts of money because the rents are absurd, because demand far outstrips supply.
1. Demand is high because tech companies hire a lot of people.
2. Supply is limited because of geography, NIMBY-ism and Prop 13.
3. Tech companies pay their employees more and more money to retain them because it costs so much to live here. Also there are other tech companies happy to outbid them if they do not.
If supply weren't limited or job options not so plentiful, there would be no reason for tech companies to pay people more. They aren't handing out huge salaries for the heck of it.
I don’t have issues with people owning billions, AND I’m for a UBI (though not in the US, you have way too many issues to fix before even considering one IMHO).
Weird isn’t it? Maybe things aren’t as black and white as you said and nuances are possible.
> At first, my stress levels were high because daycares were shut down and I was panicking about my business. When I accepted the fate of my business, I chilled out and just hung out with my kids.
You might be in the minority of people with mature enough emotional response and ability to deal with stress.
What would happen if you had an existing alcohol/opiate/etc addiction? It seems that UBI provides few precautions from money flowing towards addictions and relies on everybody being at their best behavior and vice sector not expanding to capture that disposable income.
> In particular, Forget was struck by the improvements in health outcomes over the four years. There was an 8.5% decline in hospitalisations – primarily because there were fewer alcohol-related accidents and hospitalisations due to mental health issues – and a reduction in visits to family physicians.
That is promising, but US examples are less auspicious.
Two large unconditional programs that come to mind are the Alaska Permanent Fund dividend to state residents and tribal distributions to Native Americans.
Alaska tends to lead various reports on drug/alcohol abuse per capita and "Although they only make up 1.7% of the U.S. population, Native Americans experience substance abuse and addiction at much higher rates than other ethnic groups."
Did you read the link you posted? Here’s a direct quote from the section discussing the factors contributing to the prevalence of alcoholism is Native American communities:
“The overall economic disadvantage of Native Americans, characterized by poor education, poverty, and limited resources, likely contributes to the prevalent abuse of alcohol among this ethnic group.”
Elsewhere on the page it cites the specifics such as lack of access to education, lack of access to health care, underemployment. Let’s not forget centuries of getting fucked over by the federal government.
Do you have source which lists UBI as another factor?
> What would happen if you had an existing alcohol/opiate/etc addiction?
IIRC studies have shown that about 9-11% of Americans have/had an addiction. I think you should consider trying to find out if your assumption that the majority of people have addictions is substantiated.
This article[1] claims 21 million Americans (out of 330+ million) have addictions, although it only includes drugs and alcohol.
Your fellow citizens are not employing you or else the desolate ghettos would be overflowing with capital growth.
Traditionally it takes a capitalist to start a business that can feed and house a population and that capitalist is in it to extract value from their labor. The job does not exist to serve the community, it exists to make the business owner richer. All the demand in the world will not build a sandwich shop lest a capitalist has the funds to build the building. Even if that capitalist is a local who can get a bank loan to do it, etc.
I really curious how many of the jobs no one wants to do would still get done. I get that the B in UBI is "basic" but still, so many necessary jobs are jobs no one really wants to do but they do because they need money. If they didn't need money would those jobs still get done. Trash collection? Construction work? Hotel cleaners? Janitors? Farmers, Grocery Store stockers, truckers, nurses, sales clerks, .... Sure they'd get more than "Basic" but if they knew they were housed and feed and got medical service until death if they did absolutely nothing how many would choose to do absolutely nothing? Would it be enough the world would be a much worse place to live? Would it be enough that the price of all those services would double, triple, quadruple raising the prices of all the related services and the amount needed for UBI?
I don't like the idea of people suffering jobs they hate but I'm really glad and privileged they choose to do them.
So the solution is to continue using suffering and historic injustice to force people into doing stuff they don’t want to do - “or else”? I don’t think so. In India, even middle class families can afford a part time house maid because the latter’s salaries are insanely low thanks to cruel supply/demand dynamics and poverty; the same family, after moving to a developed country, would just do the chores themselves. It leads to a more equitable society.
So someone else should pay for you to sit around doing new hobbies? Glad you are having a good time, but how can you not view what you do as lazy from the eyes of society? There is no free lunch; the money is coming from somewhere.
By saying what you said, you just proved why the people were dissenting the idea of UBI in the first place. If people do exactly what you did, there would be no innovation and progress. People will end up living off of the ones who do the actual work. There will come a time when no one will want to do any work. Then what would happen? You will return to where you started from!
Why give free money to everyone? Clearly a rich person doesn’t need a monthly check from government...
Milton Friedman long ago proposed a negative income tax to replace means-tested welfare programs. Essentially, people below a certain income threshold would receive money which scales to a maximum the closer their income approaches zero.
I do think people radically underestimate the unforeseen consequences of a free guaranteed income, even if it was low. I’d be willing to live as a poor person if that meant not having to work. Actually, where I live now I live comfortably on $1200 a month. I definitely would choose not to work or work less if that money came free from government. If I got free money I wouldn’t increase spending, I would reduce work.
> Why give free money to everyone? Clearly a rich person doesn’t need a monthly check from government...
The answer is that it's much simpler to send everyone a check. The rich person will pay more in taxes than the amount of their check, so it doesn't matter. Indeed, the arguments that we should do otherwise are to the benefit of the rich, because the proposed cutoff invariably comes somewhere in the middle income range, resulting in higher marginal rates on middle income people rather than higher income people.
In other words, a cutoff allows the rich to pay lower taxes in the amount of the money that had been going to people in the middle.
>> Why give free money to everyone? Clearly a rich person doesn’t need a monthly check from government...
> The answer is that it's much simpler to send everyone a check. The rich person will pay more in taxes than the amount of their check, so it doesn't matter.
There's a more subtle reason: if everyone gets a check, the program is more politically popular, making it harder for the rich to build a political coalition to kill it. That means the people who really need it will continue to get it.
IIRC, FDR opposed mean-testing social security for this reason. Almost everyone gets it, and the middle class gets enough to make some kind of difference in their lives, even if they could get by without it. Compared to other welfare programs, it's been unkillable.
It also blurs the distinction between "people who support themselves" and "people who need support". Given that one of the arguments against UBI is that it might create/expand/entrench a dependent underclass, giving it to everyone might be an important feature.
>The answer is that it's much simpler to send everyone a check.
That's an answer, not the answer. A similar question is: “how much should UBI pay per month?”, and a similar answer is that “it's much simpler to just pay gazillion dollars than spend time figuring it out”. After all, the only difference is the cost.
IMO there's a proven balance in having a system (“bureaucracy”) to find out who need financial assistance, and simply assisting those. But then again, I fundamentally disagree with UBI because I have a differing view on society and the rights and responsibilities of its members, along the lines of “society takes care of you if needed for the price of you helping make this possible if you are able”.
Maybe it's easier to understand this from the other side.
Suppose we have some kind of assistance programs for food and housing. If you don't make enough money you can get a card and with this card you can buy specific kinds of food, but not alcohol and not restaurant food. You get housing assistance but you have to live in designated government housing.
Then somebody suggests that we extend these benefits to everybody. But that's stupid -- why would you want to pay taxes in cash in order to get a food allowance card which requires you to buy what the government says, or live where the government says, instead of just keeping your money and buying whatever you want with it?
So all of those programs have phase outs, because people who "don't need them" don't want them. They'd rather have the money instead.
A UBI is money to begin with. Lowering your tax rate so that you don't have to pay to give yourself a UBI is a no-op. It cancels out. The tax you would have to pay to fund it and the phase out you would need to not receive it are mathematically equivalent.
The difference is that by putting it into the tax rate, you can see what you're doing better. If you have a 25% tax rate and then implement a 50% phase out rate, you're effectively imposing a 75% marginal rate on lower and middle income people and then a lower marginal rate on higher income people. Requiring it to be set as part of the tax rate makes it more blatantly obvious how silly that is, and that's all. And then, seeing that more clearly, people might choose more sensible marginal rates than that, so that you're never taking more from people who make less.
Hum... No, on the case of paying everybody (with increased taxes) or just the poor there is no difference in cost or total distributed.
What you do lose is the hability to focus your help into an specific group. Every UBI proponent will tell you this is a positive, because governments just suck at this, but it's a very powerful politic tool.
> The answer is that it's much simpler to send everyone a check.
I am always shocked by the general lack of awareness people have about world intricacies.
Social welfare, fiscality and related issue in modern developped countries is one of the most complex systems I know of. I am 100% serious. It's a huge mess of rules, exceptions, directives, conflicting aspirations, unforceable & not unforceable || not unforced rules, outdated scheme, 0,1% population targeting welfare, federal, state, regional, city size rules and much more.
It crosses to healthcare, food, housing, education and more.
This whole mess was built bit by bit, step by step, over decades.
Thinking "we could send everyone a check" is right down heresy to anyone having truly worked aroung these fields.
* Else the check amount is the same for everyone and good luck to 4 kids families in high rent area
* Else the check is calculated depending on all the above factors and this system will never roll out (check Obamacare implementation issues)
Isn’t the fact that the current system is so extremely complicated (and because of that, expensive) exactly one of the reasons UBI is so appealing? Cutting out the bureaucracy will save a lot of money that can then be send to the people. If you spend $1000 to figure out that one person “deserves” $800 instead of $1000 you are wasting a lot of money/time for zero gain.
The people in the high rent area can move to a low rent area if they can’t hold a job: they have nothing holding them there under the UBI rules. As for kids, perhaps they should also receive (smaller) UBI that would go to their parents.
> The answer is that it's much simpler to send everyone a check.
Seems even easier to increase the standard tax deduction we already have and are familiar with. Then you can increase tax rates to make sure those evil rich people don't see any benefit.
The standard deduction doesn't allow for negative rates, which means it can't be used to replace means-tested assistance programs in the same way as a UBI.
The EITC does, but it has a cutoff with the aforementioned problems, and if it didn't (and the amount was high enough to replace the other programs) it would be hard to distinguish from a UBI, outside of the easily-gamed income requirement which does little more in practice than discriminate against honest homemakers who don't get to claim it.
You're right, I meant tax credit and not deduction. My point is that a negative tax rate would be straightforward to implement and would be the path of least resistance to a UBI.
Yes, having a large unconditional "standard tax credit" with no phase out would just be another name for a UBI.
Realistically what you have to do at that point is to use a flatter rate structure instead of a phase-out so that the credit is paid back by the time you get to higher income levels, but that's much better than the existing nonsense where the marginal rate structure goes all over the place from sometimes >90% at low income levels (from phase outs) to ~20% in the middle and then back up to 30+%.
You get a strongly progressive effective rate just from the credit, so at that point you can use something like a 35% fixed marginal rate and simplify everything else too. Interestingly this also means it doesn't even have to be an individual income tax. You could use VAT or charge payroll tax to employers and get the same result without individuals even having to file tax returns anymore.
Sure, NIT + control of income tax rates is isomorphic to UBI + control of income tax rates in terms of how much money people get in a year. The core downside of piggybacking on the existing tax refund system is that individuals would get their NIT refund once per year, and spiky distribution has problems. One of the core benefits of NIT/UBI is that many inefficient means-tested welfare programs could be ended without people starving, going homeless, using the ER as healthcare, etc. But if the distributions are a year apart plenty of people are going to exhaust their money and require those welfare programs to continue, now all the more inefficient because the relevant population in smaller. NIT has to be tabulated based on income, but UBI can be monthly/weekly/daily/whatever frequency.
But you can buy food with the extra money from your tax deduction last year.
Meaning, your problem is only a one-time, short-term problem. You aren't arguing in good faith if you try to use that to discredit his proposed solution.
> Why give free money to everyone? Clearly a rich person doesn’t need a monthly check from government...
Because then you need to test for means, and that means you have to hire new bureaucracy to conduct those tests, and then pay their benefits and pensions and travel expenses, and then you need to hire additional bureaucracy to address occasional loopholes in your checks, and then 10-20-50-100 years later you're back to square one with massively bloated self-serving bureaucracies conveniently appropriating dollars to save pennies.
That's what drives UBI advocates bonkers about the current benefit programs. For example, food stamps benefits. I say anyone with an SSN should be able to apply for one and get it electronically. It helps farmers, helps food availability, and is generally spent locally. Instead we have layers and layers of bureaucracy ensuring Jeff Bezos and Bill Gates are prevented from receiving SNAP benefits.
I hear this argument a lot but it makes no sense to me. Suppose UBI is $12k/year. Then as long as it costs less than $12k to identify a rich person, it’s cheaper to not pay the rich people than to pay everyone.
In fact, we already have any agency that does this for most Americans called the IRS. The budget of the IRS is $12 billion, which comes out to about $100 per taxpayer. The cost of the IRS administering the tax system is less than 1% of the value of the money it raises. The IRS does things like check if people are eligible for credits and deductions they claim, and if they are due a refund. Clearly it’s much cheaper to employ an agency like the IRS to check the numbers than it is to just pay everyone. Increases to the budget of the IRS raise tax revenues, yielding a positive return. And since we already have the IRS, we don’t even need to fund a new agency to do this work for UBI. Compared to the overall cost of the UBI program (trillions of dollars) it would be trivial to fund the IRS to do means-testing. This would make UBI a much cheaper program, so it would be easier to fit into the budget.
I don’t doubt that local welfare agencies are a shitty bureaucracy, and I wouldn’t advocate putting them in charge of UBI.
You're forgetting that the citizens of the US are people, not robots. When everyone gets the same treatment, you get a feeling of unity and you don't divide society into "leeches" and "providers" based on who gets UBI and who doesn't. The UBI becomes part of what it means to be American.
Furthermore, you can solve the same problem just by increasing taxes on the rich. If you send every rich person $12k, but also tax them $12k more per year, the money spent/saved is exactly the same as not sending it to them in the first place. So this statement you made is false:
> This would make UBI a much cheaper program, so it would be easier to fit into the budget.
I’m just responding to the common claim that means-testing UBI would be expensive relative to the expenditures of the program (well-illustrated by the quote “appropriating dollars to save pennies“ in the comment I responded to). This is a quantitative question, not a moral one. I don’t think it serves the movement to be making arguments that are obviously wrong if you do a bit of easy research or math, or just think critically about it. It makes the advocacy less credible. Since most people only read comments online and don’t post, you might not normally get any feedback from those who feel this way.
> Furthermore, you can solve the same problem just by increasing taxes on the rich. If you send every rich person $12k, but also tax them $12k more per year, the money spent/saved is exactly the same as not sending it to them in the first place.
This argument assumes you are identifying wealthy people, so again, it doesn’t support the claim that the overhead of identifying wealthy people will make UBI more expensive.
> When everyone gets the same treatment, you get a feeling of unity and you don't divide society into "leeches" and "providers" based on who gets UBI and who doesn't.
No; it may obscure that distinction slightly but it very much still exists. Anyone who receives more in UBI and other desired services than they pay in taxes will remain a "leach". Those who pay more in taxes than they receive are the providers, without whom the whole UBI system could not exist. (The relevant pre-UBI terms are "net tax payer" and "net tax receiver".)
No that's not true at all. Receiving a UBI and using the income to take care of your aging parents makes you a giver, not a leech. Your attitude is unhealthy and shows how selfish and narcissistic you are.
> Receiving a UBI and using the income to take care of your aging parents makes you a giver, not a leech.
No that's not true at all. So what if you're not the only one benefitting from your UBI payments; they're still coming from someone else's effort, not your own. To be a "giver" you first must earn the things you're giving away. Your attitude is unhealthy and shows how selfish and narcissistic you are.
The most likely implementation in the existing US federal government is a negative income tax.
> I definitely would choose not to work or work less if that money came free from government.
You aren't alone, so your $1200 would not go as far in that future as it does now. There would be some inflation (perhaps only localized increased costs to some industries), but I'd suspect that people working less would be a feature, not a bug.
UBI doesn't make people not want to work at all. Work provides income, meaning, and dignity. Some people would move from industries which have lots of crappy manual jobs (like janitorial services) to industries which are currently only hobbies, but with UBI subsidies could be sustainable as a career. I imagine lots more Etsy shops.
You also have to remember that supply and demand still works. If the UBI causes several of your janitors to quit because they now have better options, you can still get them back by paying them more. All it does is give more negotiating leverage to labor because they no longer starve if they walk away.
No telling if that would be the only effect. You could reduce income inequality while also increasing poverty, so I don't see the reduction of inequality as an end in and of itself.
> You could reduce income inequality while also increasing poverty
So let's think about what it would mean to do that.
In one case you could have some people who are just above the poverty line and if you took a little bit of money from them and gave it to people below the poverty line then the first group could end up below it while the people already below it don't get enough to end up above it. In theory that's "increasing poverty" but only in a strict technical sense which isn't even inconsistent with the result still being a net positive. Also, that wouldn't be possible under plausible rate structures because anybody in the approximate vicinity the poverty line would be receiving more than they pay in taxes and the net payers would be making significantly more than that with no reasonable possibility of falling into poverty as a result.
The other possibility is that the program somehow causes such a dramatic amount of economic damage that more people end up below the poverty line than started there as a result of increased involuntary unemployment etc. But the poverty line in the US is $12,760, whereas the most commonly proposed amount for the UBI is $12,000, so that seems incredibly unlikely -- people would have to be unable to find a job making $760/year, in an environment where employees have greater leverage. And you could preclude the possibility entirely if desired by making the UBI e.g. $13,000, which would just outright directly eliminate poverty.
If this program causes inflation because the cost of it is untenable, then $12K can quickly become worthless. Supply and demand are laws of nature, you cannot escape them. If the economy suffers from lack of productivity as a result of this program, and money must be printed in excess of what goods and services are being produced...then nominal payouts matter not. Hyper-inflation is a real possibility and has ruined more than one empire in history.
The argument that a UBI would cause a significant amount of inflation continues to be nonsense. Necessities do not have perfectly inelastic supply and would not be consumed in significantly larger amounts than they are already. The large majority of the US population already has access to food, shelter and medicine and pulling the remaining <10% of people into the market is not going to cause hyperinflation. There is a pretty good guess that it could relieve a lot of the existing regional high prices by making it more attractive for people to move into lower cost of living areas and use the UBI to offset the lower average wages there, until enough people have done so to bring down the already existing high costs in major cities.
Inflation refers to the value of the currency, which would not be directly affected.
If different people had money than currently do then they might buy different things with it, and then the demand for the things they want would go up and demand for some other things would go down. That isn't inflation, it's a demand shift. And for most types of products it would only cause increased production of those things rather than significant price changes. Meanwhile for other things (e.g. things which are artificially scarce), the price changes themselves would shift demand elsewhere -- who is going to pay $10,000 rent in San Francisco if it's <$1000 in Pennsylvania and the difference in local wages doesn't close the gap?
Which serves as a reason to regularly increase the amount.
“UBI doesn't make people not want to work at all“
Speak for yourself. Work is a means to an end. I have no desire to work if basic income takes care of my basic necessities. I have no intrinsic desire to get up every day at the same time and do what my employer tells me to do. And to be clear, when I say work I mean the necessity of doing things in exchange for money. Cultivating my garden, writing software nobody uses, or music nobody pays for, isn’t what I mean by work.
> I have no desire to work if basic income takes care of my basic necessities.
It is widely observed that many people work far more than is necessary to supply their basic necessities, because people's desires don't tend to end with those needs.
You may have quite limited desires, but there is no evidence that that is true of humans generally.
> Which serves as a reason to regularly increase the amount.
Which serves to further increase inflation.
So you increase the amount more, and shortly thereafter inflation increases more again.
And so you increase the amount again, and so on, and so on until suddenly you have hyperinflation and your economy collapses, see for example the Weimar Republic, Zimbabwe, or any of a dozen other examples throughout history.
I definitely don't want to feel like I'm in a rat race while on the job, but I enjoy lots of parts of work. After taking ~18 months off work, I realized I enjoyed the first 3-4 months of unstructured self-directed activities, but I think I'd prefer more daily structure (whether job or otherwise). If I get the place where I can retire, I'm probably volunteer for part of my time.
Most of the proposals I've heard of UBI / negative income tax are good supplements but don't completely replace work-based income. $1000/month per adult is among the largest benefit I've heard.
> Cultivating my garden, writing software nobody uses, or music nobody pays for, isn’t what I mean by work.
That's great, but if a significant number of people feel that way, then there is a noticeable loss of productivity in the economy as say 35% of people are not producing anything of economic value. That impacts tax revenue. It probably also means there is work not getting done, like the stuff nobody wants to do.
I find it super hard to believe 35% of the population would be satisfied coasting out the rest of their life on UBI.
I'm pretty sure there have been various studies all but disproving the "common sense" notions people have about UBI and laziness. Or the fundamental idea that if you don't make it hard on poor people they won't do anything of value. Or that poor people are lazy, and that they are poor because they are lazy. Etc, etc, etc.
>Some people would move from industries which have lots of crappy manual jobs (like janitorial services)
That work still has to get done though. Somebody has to be the janitor. If you then increase the pay of a janitor then lots of people that would otherwise increase their skills to do with that requires more skills would end up as a janitor instead. This triggers a pay increase in those jobs too.
I don't see how you don't end up with just a lot of inflation. The money a job pays doesn't matter on a societal level. What matters is the products/service doing the job provides. No amount of money shuffling is going to make 2 apples turn into 3.
I agree there would be inflation, but how much and where it would present aren't clear.
The highest paid jobs (eg. CEO) inflate very little and the lowest page jobs inflate quite a lot. There is currently an anti-inflation effect in the lowest paid jobs when inflation would help these workers have a better living.
Jobs thought of as "minimum wage jobs" in the USA (eg. hourly workers at McDonalds) pay a decent living in Denmark. They don't have runaway inflation. We should examine why there is a such stark difference in expectation between the USA and these other countries.
That said, I don't think UBI is the only way to solve the issues I care about. I might be satisfied simply by easier and fairer access to existing welfare programs (which are already subsidizing those low-wage employers).
> The highest paid jobs (eg. CEO) inflate very little and the lowest page jobs inflate quite a lot.
The issue is that you have few of the highest paid jobs and many of the lowest paid jobs. The labor cost of a giant factory isn't so much the director, it's the thousands of workers. If you double their wages, you double the cost. If you double the director's salary, you'll hardly notice in the balance sheet.
"Since 1978, and adjusted for inflation, American workers have seen an 11.2 percent increase in compensation. During that same period, CEO’s have seen a 937 percent increase in earnings. That salary growth is even 70 percent faster than the rise in the stock market, according to the Economic Policy Institute."
Yes, that work has to be done. I'd just rather we find a way to do it that does not involve a system of glorified slavery where we force people to do it for survival.
Because it's simpler and avoids duplicating effort, since the means testing is rolled into the tax system, and avoids perverse consequences, since with a single payment system you don't end up with a combination that has greater than 1:1 reductions in benefits without outside income for some recipients at some income levels.
> Milton Friedman long ago proposed a negative income tax to replace means-tested welfare programs.
A negative income tax is, in terms of who gets what payment, exactly equivalent to a UBI funded by a progressive income tax.
A monthly UBI with the usual annual income tax filing and reconciliation payment/refund is a better mechanism than simply rolling the UBI into the income tax calculation and annual reconciliation, though.
> I do think people radically underestimate the unforeseen consequences of a free guaranteed income, even if it was low. I’d be willing to live as a poor person if that meant not having to work.
I think people like you overestimate it, because they ignore the well-established effects of general deprivation and voracious human wants. They may also overestimate their own tolerance for non-work, as do many people leading up to retirement.
> I’d be willing to live as a poor person if that meant not having to work.
Some people would. But many more people would also be willing to work a little bit more for a little bit more, which UBI makes easier than existing means-tested programs.
And many people who initially would reduce work for the novelty of leisure would turn around later and work to have the things they couldn't afford on the basic stipend.
> I definitely would choose not to work or work less if that money came free from government. If I got free money I wouldn’t increase spending, I would reduce work.
Unless you are the poorest of the poor, that outcome isn't actually contrary to the design or problematic.
Giving everyone the same amount is symbolically useful, because it's a way in which all citizens are equal. Everyone gets the same amount and what can be fairer than that?
But, practically, anything a UBI plan gives you can be undone with an equal and opposite tax. The net effect after taxes is what matters and it's going to redistribute money or there's no point in doing it. Some people pay more taxes than others and raising the top income tax rate is enough to ensure that the wealthy don't benefit.
It can be made exactly equivalent to a negative income tax.
That depends on the competition. If the market rate doesn't go up, you might have trouble filling vacancies.
It seems that rents are going down a bit in San Francisco because some people who can suddenly work remotely are moving out (among other reasons). UBI is an income that you can take with you wherever you go, much like social security, so it's likely to make living in cheaper places more attractive.
This is why I strongly prefer "Universal Basic Housing" over (or in addition to) UBI. Landlords must be forced to provide a useful service for a good price instead of just freeloading off of the risk of homelessness.
Please no. How many times do cities have to try and fail at public housing for us to realize that the government cannot provide nor maintain it efficiently. There are much more effective ways that government can provide housing:
1) Allow actual competition. Adopt Japan-like zoning to make it easier to build. Landlords cannot freeload if they have competition. Make it harder for small special interest groups to veto new development.
2) Set property taxes appropriately or implement a land-value tax so that landlords have to pay for part of the surrounding improvements.
Most of the time is taken in getting approvals and permits, things that cities have direct control over and can + should optimize. Just doing that will decrease costs since a quicker turnaround means faster ROI and less risk for a developer.
You're right that cities do not expand uniformly, and city improvements are also not uniformly distributed. This is why a flat property tax does not make sense. Use land-value-tax to balance. If one area is very desirable, increase land taxes in that area and use the revenue to fund improvements like parks, libraries, schools all around the city.
- The cost of deciding who qualifies (and enforcement) is relevant. Particularly as you're spending money on every citizen, but only making savings from a small minority.
- You can "claw back" the money other, cheaper, ways (e.g. income tax increases).
- Negative income tax don't work for children, disabled, or the elderly like UBI does. If they don't work, it doesn't work. Therefore, you wind up with two schemes.
People keep on tacking on complexity, which breeds costs, which makes the whole scheme disproportionately expensive. It is universal because universal is cheap to run.
I think it could mostly be automated. Your tax filing from the previous year is put in a system and can figure out if you get money. They could even do an equation based on cost of living and other factors like number of dependents. They could either send out a check or direct deposit it.
If something changes (like a job loss) you submit a form and they send you the money. They can figure out if you owe them the money back on your next tax filing.
This does work for children since they would be counted as a dependent. This would probably change your tax filing which could change the calculation.
This would also work for elderly since they would still be filing taxes.
It would be easier to do it universally but it would likely cause other issues like more inflation.
"a system", "an equation", "They could either...", "a form", "they can figure out"
This posits the capability of the government to put together a really remarkably competent administration, that knows everyone's tax filings, everyone's citizenship status, where everyone lives, the cost of living in every part of the country (or the world?), and can speedily process paperwork continuously throughout the year. Certainly no such administration currently exists. It would probably be very expensive, and the individual-filing-based workflow would be burdensome both to all people and to the administration. Lose your job? File a form. Get a raise? File a form. Get an inheritance? File a form. Move? File a form. Get married or have a kid? File several forms! There's a reason individuals only have to file taxes once a year. Bureaucracy is waste.
Aspects of this hypothetical administration would need to exist for any UBI scheme, but in a UBI scheme with equal payments the burden on the individual would not be more than ensuring the bank account or address they use to receive their tax refund is current throughout the year, and continuing to file taxes once yearly.
How does immigration work without knowing who your citizens are? How would you prevent a non-citizen from getting a passport without having such a record?
If you want to get a passport the onus is on you to provide sufficient documents to prove citizenship. Because the US has birthright citizenship this is generally as simple as proving that you were born in the US or that either of your parents was a US citizen.
On a case-by-case basis it's generally pretty straightforward to determine whether someone is a citizen, but there isn't a list. The closest thing is probably the social security administration's register of people who have applied for a social security number, but even that doesn't cover everyone.
>This posits the capability of the government to put together a really remarkably competent administration, that knows everyone's tax filings, everyone's citizenship status, where everyone lives, the cost of living in every part of the country (or the world?), and can speedily process paperwork continuously throughout the year.
I agree that it would be more difficult than just doing UBI. I am not a fan of just taking the easier path just for the sake of ease. Only giving money to people who need it would be better for everybody.
The US already has cost of living numbers. Just to be clear I am saying they could use these numbers not that they have to use them. Receiving $5,000 in the Bay Area is different than $5,000 in Wyoming and making $50,000 in the Bay Area is different than making $50,000 in Wyoming. This is why I was suggesting using the cost of living numbers.
>Certainly no such administration currently exists.
UBI doesn't exist either so it already would need to be set up.
If they can set up actual tax equations it would allow for a more stream lined IRS. This would help modernize the whole tax process which would be beneficial for all of us. I recall a country (maybe state?) that released the tax program they wrote. You could download it and run it yourself if you wanted. This would be great for people. There would be no need for most people to buy Turbo Tax or go to a tax guy.
>It would probably be very expensive, and the individual-filing-based workflow would be burdensome both to all people and to the administration. Lose your job? File a form. Get a raise? File a form. Get an inheritance? File a form. Move? File a form. Get married or have a kid? File several forms! There's a reason individuals only have to file taxes once a year. Bureaucracy is waste.
You would not have to file forms. You would only need to file a form if you wanted to receive money or stop receiving money. If you are fine waiting until the next tax filing you would be free to do so.
This is no different than the current welfare system. If you wish to receive welfare or stop receiving welfare you have to fill out a form. What I am suggesting is less manual validation than the welfare system since I would go with the assumption the person should get the money. It would automatically be fixed after filing your taxes.
>Aspects of this hypothetical administration would need to exist for any UBI scheme, but in a UBI scheme with equal payments the burden on the individual would not be more than ensuring the bank account or address they use to receive their tax refund is current throughout the year, and continuing to file taxes once yearly.
I am in favor of replacing welfare with a negative income tax. If you want money from the negative income tax and your income did not automatically qualify you from your previous year's filing then you fill out a form. This would be less work for many people since there would be an automatic enrollment based on the previous year's tax filing.
I agree that UBI is easier. I just don't think people like Jeff Bezos needs government money. If Bezos receives a few thousand extra he is probably not going to spend more or invest more. It would be a waste to give to somebody like him. We could in turn provide extra money for people who actually needs help. The people who need help are more likely to actually spend the money than Bezos so it could benefit the economy.
It's literally cheaper to simply give everyone a $1,200 check than it is to try and create rules that exclude people based upon some criteria.
That is how the welfare program operates today. It's expensive to manage and at its current position not inclusive enough which then leaves a number of people worse off when you are just above the cut-off.
So I don't think a UBI should be anywhere near $1,200 a month.
But one of the features of a UBI is it causes people to drop out of the labor market. Especially for shitty low end unskilled labor jobs. And this is great because the reduction in supply will drive up labor rates and help inequality in a far more natural way than a minimum wage.
Where people would otherwise have no income UBI will increase spending. Where they don't it has other benefits. But if you want to save that cash then that's also good.
> Why give free money to everyone? Clearly a rich person doesn’t need a monthly check from government...
The problem is that a small loophole or exception paves the way for larger exceptions, and so on, which continues until the original concept is gutted and bleeds out to the status quo
The principled reason is that it is, well, universal. If you're a citizen, you get certain rights and responsibilities, end of story.
A more realist perspective notes that historically, if you make a program for the poor, it becomes a poor program (underfunded). A scheme it is more likely to succeed the more people who buy in to it. (Notice how the ACA is becoming more popular over time? Or look at Social Security vs. SNAP.)
> I definitely would choose not to work
I think people both pro- and con- are not really thinking through how this would play out in reality. Income, wealth, type of work and social status are intimately linked, especially so in the US.
There will immediately be some slur for people who choose not to work that will probably replace the "your momma's on welfare"-type crap. Lots of people's shallow, status driven dating rules will expand to exclude the voluntarily-unemployed. It will become obvious that there's a very low glass-ceiling over their heads that limits them in all sorts of ways. It will also become harder to crawl out of over time, both for individuals who don't maintain useful skills, and as a social class, because that's how humans act.
Some people will of course choose that life. But I think it will be a lot less appealing than you think.
> I do think people radically underestimate the unforeseen consequences of a free guaranteed income, even if it was low. I’d be willing to live as a poor person if that meant not having to work. Actually, where I live now I live comfortably on $1200 a month. I definitely would choose not to work or work less if that money came free from government. If I got free money I wouldn’t increase spending, I would reduce work.
this is not an unforeseen circumstance, but a desired outcome
> I definitely would choose not to work or work less if that money came free from government.
Is that a bad thing? Say We went from participation rate from ~65% to 40%. That could be good, we stop trying to force people into jobs unnecessarily as we automate + it might encourage dirty jobs like cleaners to be better paid and balance the wage market as people have a way to walk away.
Point 2: Generally I agree that UBI is a bit of a pipe dream for now. I think we'd be better off doing some 'guaranteed job' system where we focus on societal roles that add value but dont compete with free market. Give people a guaranteed 3 day a week job for basic living wage type deal and earlier retirement ages. Use this as a transition point to hopefully automating much of the world and some system of UBI as we slim workforce needs.
I'm not entirely decided on this matter myself, but I'll take the position.
One reason to include the rich in UBI is that it reduces administrative overheads. If it's means-tested, that means monitoring, investigating and ultimately punishing the poor. Why bother?
One reason is simplicity in managing it, reducing government costs.
For a middle to upper income earner their overall tax rate would be the same, the income tax rates could be adjusted so someone on $100k still pays the same overall amount of tax.
Second it is gets rid of the high effective tax rates that low income earners deal with. While low income earners pay low or no income tax, they lose their benefits the more they earn, so a dollar earned could mean up to a dollar less in benefits, which is a disincentive to work. Something that is often missed by the people who say having a UBI would be a disincentive to work.
I think you'd be surprised and how meaningful work can be if it is actually meaningful. The definition of work has been taken over by the current economy as maintaining some rich corporation's systems of printing money. Work instead should be defined as adding value to society.
Its a good point you bring up. And I think people don't talk enough about other options that assume you're working or trying to find work, such as increasing minimum wage and unemployment benefits dramatically, instead of UBI. Or like that proposal you brought up.
I think UBI is easier to swallow for some people, cause they'd get it as well, they might be more willing to open up to the idea.
That said, I think the amount you'd get on UBI would balance itself out to what can be given. If everyone becomes lazy bums that rather not work, we'd all see our UBI payments decline year over year until we can't live off it and would need to go back to work. A bit of a simplification, but it's possible that the system thus finds a stable level on its own that works.
What is so bad about reduced "work"? Maybe people who are currently working at stupid, unnecessary jobs will make art and poetry and music. Or maybe invent cool things. Or maybe just relax and learn about themselves.
I have never understood this obsession with 100% employment.
> I have never understood this obsession with 100% employment.
Employment means income and tax revenue and social security funding. 100% employment means more people have personal income, the nation's social security system is not exhausted, and the state has more revenue to invest in public policies.
What UBI enables, I believe (and same with universal healthcare and other social safety nets) is lowest barriers to entry. I have no doubt that some will not do anything productive with the moneys it’s pretty much beside the point.
The point is to have a guaranteed floor for all in society, much like the idea of bankruptcy (before the conservative demonization of the idea particularly in the 1990s and Bush era, in the USA) it’s a way to ensure people can start over or continue to build momentum without fear of being homeless, starving and/or being unable to provide the basics for their family or themselves
This lowers the barrier of entry for people to free themselves of being shackled to giant corporations or dead end jobs just for “security”
Reducing the number of hours/jobs that people currently work would reduce the labor supply and wages would rise (Econ 101). I don't see how these "consequences" are a bad thing.
Furthermore, "unforeseen consequences" are effects that we don't know will happen because they lie beyond our ability to predict them. There will always be unforeseen consequences of any major policy decision.
Oh, you sound too sure... Have you considered that maybe once not obliged to work anymore you could instead adopt a more entrepreneurial attitude? Perhaps exploring your genuine interests?
Why give free school to everyone, libraries? Clearly a rich person doesn't need those either?
Public services should be public. There's extreme social value in equal access and you reduce an extreme amount of bureaucracy and debate in the process.
>If I got free money I wouldn’t increase spending, I would reduce work.
WE SHOULD ALL REDUCE WORK.
Sorry for the caps but we need to collectively get into this mindset. We're more productive than ever with very little to show for it. We've been having labor outright stolen from us for decades.
We're more productive than ever with very little to show for it.
Agreed. "Indeed, in 2006, the top twenty per cent of earners were twice as likely to work more than fifty hours a week than the bottom twenty per cent, a reversal of historic conditions." [1]
Hours isn't a great metric for direct comparison here. I worked 50 hours a week back when I was lead for a small company years ago. But 50 hours coding vs 50 hours working manual labor? My dad was a farm hand back in the 1950's-1970's. I'd much rather do 50 hours of my job than even 5 of his. To argue the two are comparable strictly on hours is… goofy.
They're not remotely comparable. The jobs themselves have gotten better even if the hours might have gotten worse.
I spend my day listening to music, watching YouTube, doing largely what I'd be doing anyway but with GitHub, Slack and a terminal open. Why do I care if it's 15 hours or 60 if I'm getting paid to do what I'd be doing anyway?
Doesn't it strike you as odd that you must perform the appearance of working all those 50 hours (even though, as you've just mentioned, you spend the majority of your day listening to music and watching YouTube)? And what about those of us who don't have that luxury - say, due to increasingly invasive corporate tools preventing "time theft"?
We live in a planet. A planet that also has other countries.
The reason people in the first world can even produce the thought of wishing for less work is because all of the heavy lifting needed for them to exist was outsourced to third world countries.
The only reason you think you are so productive is because almost all your clothes, technology, medical supplies, house appliances and most of your food was produced outside the US by foreign workers; you had nothing to do with it. IT HAS NOTHING TO DO WITH YOUR, YOUR SUPERIOR PRODUCTIVITY, OR ROBOTS.
The US is living off the back of illegal miners in the third world and it tells itself "yeah, we should do less!".
I am not making a point against automation, we clearly need more. But the world is so big and the people so numerous all the automation we have pales in comparison with the needs of us all. That is why the number of people working globally has increased, even with automation, not decreased.
> The reason people in the first world can even produce the thought of wishing for less work is because all of the heavy lifting needed for them to exist was outsourced to third world countries. That is why the number of people working globally has increased, even with automation, not decreased.
It's not because the number of people existing globally has increased? People in poor countries didn't work at all until developed countries started shipping their work overseas? What did they all do then?
Some still don't. Just read the stories about villagers in China being brought in in truckloads to work manufacturing electronics. Not everyone is part of the labor-force, not even today.
That's flat-out untrue. They aren't part of the industrial workforce. Surely they were already doing something back in their village, even if it was low-productivity farm work or manual labor that paid very little. In developing countries everyone works because it's a matter of survival.
> That's flat-out untrue. They aren't part of the industrial workforce. Surely they were already doing something back in their village, even if it was low-productivity farm work or manual labor that paid very little.
Housewives obviously do something they don't stay in bed all day, and what they do is very valuable for society. But they do not directly contribute to the GDP and hence they are not part of the workforce, industrial or otherwise.
Rural "housewives" in the developing world run little businesses or sidelines (cooking, sewing, childcare, midwifery and other medicine, selling produce), and/or work on the farm. They're very much a part of the informal workforce.
I'm talking about worker productivity within the US. Hour for hour we're outputting more and getting paid less. Before overseas labor you weren't less productive because you had to make your own clothes or something. That time had already long passed. I'm talking about what has happened since the 1950s, not the 1850s.
We have a lot to show for our increased productivity, though the 'things' may not be what you care about. Fancy televisions, nice food, great cars, and a lot more travel are the current 'mindset'. If you think people should be happy with less, you shoud try to convince them; if that fails, you can also lead a less consumption-driven lifestyle on your own!
Why do you want to force me to follow your priorities?
This is false. I do not understand how so many people are coming in here peddling this theory with 0 sources. It doesn't even follow basic logic. You're positing that we're spending more while also earning less? Where's that money coming from then?
It's objective that productivity has increased while pay and leisure time have decreased. This isn't a result of any increase in material goods. People are spending less because simply because they're getting paid less.
In 1956 the federal minimum wage was $1 (roughly $10 adjusted for inflation). Today it's 3/4 of that at 7.25.
Minimum wage is irrelevant in a discussion about averages. Also, you’re forgetting that increased productivity has led to decreased prices for things that used to be manual labor intensive.
It’s possible to both make less on average (inflation adjusted) and have access to much nicer things. The equivalent computing power of an iPhone would have cost you millions of dollars in 1990. Food is cheaper, any automated manufacturing output is significantly cheaper, etc.
When so many people point something out to you that you think “doesn’t even follow basic logic”, it usually means you’re making a bad assumption somewhere.
Unless a corporation (or cartel) can monopolize an increase in productivity, society will reap the benefits through lower prices even if wages don’t increase. Competitive forces ensure that. If you’re interested in learning more, check out what happened with the mini mills and steel prices.
Literally the opposite. We do so much useless work that our productivity curve remains flat even as technology makes us extraordinarily productive at the tiny fraction of actually meaningful and necessary work
You don’t need to work like crazy if you do skilled work and spend your money wisely. When I was a software engineer I took months off between jobs. I worked less than 40 hours when freelancing. However, most of my colleagues used their income to buy trappings like a mortgage, clothes, eating out, video games, drugs, new gadgets and toys, cars, their own apartment, etc.
Most people choose to spend their money increasing their standard of living instead of buying time at a low standard of living.
As Picasso said, “I’d like to live as a poor man with a rich man’s money.”
You're responding to an aggregate statistic with an anecdote. I too did not graduate high school, but now have an advanced degree and a high paying job. Claiming that that invalidates the notion of privilege is silly.
Still, he literally said "do skilled work and spend your money wisely", the former implying that he focused on developing his skills, and the latter implying that he didn't live beyond his means. Hard to characterize either as some sort of undue "privilege".
While I kind of get what you're saying, mortgage/rent, clothes, cars, and food are necessities. :)
This sounds a bit like the Mr. Money Mustache philosophy -- live very cheaply, save like crazy, retire early -- which is all great advice, but elides the level of fortune involved, e.g., getting and keeping a high-paying job straight out of college, having no college debt, quickly marrying someone else who also has a high-paying job and is down with both combining incomes and practicing Extreme Thriftiness with you. IIRC, he made the rather bold claim that he could both live and retire on $25K a year -- which is something a lot of people would, well, prefer not to do. With all respect to Picasso, I'd at least prefer to live as a middle class man with a rich man's money.
There are expensive and inexpensive ways of approaching accommodation, clothing, food and transportation. The fact that so many things which used to be considered luxuries are now thought of as essentials (and that were once considered sensible but are now considered extreme thriftiness) goes to show that people actually want the frills of a lifestyle where they work hard and can as a result afford luxuries in every area of their lives.
> People actually want the frills of a lifestyle where they work hard and can as a result afford luxuries in every area of their lives.
Well, yes, sure, and sure, there are different levels of "luxury," e.g., there's getting a BMW 5 series, and there's getting a Honda Insight but springing for the Touring model -- and that's not counting the choice between used and new (what if the person with the BMW 5 series bought it used for about the same as someone else paid for a new Honda Civic). But, particularly at the income levels the average HN reader seems to have based on comments, "build up savings" vs. "afford small luxuries" is often a false dichotomy, which is what I was getting at.
Our desire to have awesome stuff and amazing experiences expands to fit the space available. People compete for social status, and they don't want to miss out on whatever's new and exciting. There's an unlimited amount of resources that we could spend on medical research (curing every medical condition, including shortness, cognitive impairments and ageing, plus enhancements/transhumanism), climate engineering/geoengineering/megastructures, space exploration/tourism/real estate and other areas of scientific research, and most of this is going to happen as a result of private-sector employees exercising their consumer purchasing power. We're curious and productive creatures; I don't think a large proportion of us are ever going to just stop and make do with whatever the state of the art was at the time.
Amazes me that American Presidential candidates are in their 70s and people and parties just go with it. I was shocked reading the news that Wilbur Ross was hospitalised - he has a major work role and is 82 years old. Age of retirement in Australia for that age group is 65. I understand some people just don't know how to stop or what else to do with their time, but I feel like pinning too much hope on retirement is misguided. Far better surely to be doing more living while in your prime. More likely to be physically able to enjoy it, for one thing.
From that perspective, everything is a lottery. Sorry, you worked your ass off doing good things for your fellow humans, here's a tree branch falling on your head.
The standard of living has improved massively. I agree wholeheartedly that there are issues (e.g. people are giving more free time, but they don't know what to do with it and engage in unhealthy habits to kill the free time they've been given), but generally, it's not even close.
There is nothing stopping you from working 10 hours a week and living like a person in the 1920’s. Local doctor who will put a $1 poultice on your skin cancer, no AC, no car, 10 to a house.
I'll say it again because apparently no one's listening.
We're working more and getting paid less for that work. This isn't because of the standard of living. Standard of living can still increase while pay tracks productivity, and it does in other developed countries.
This is the most frustrating HN discussion I've seen in a while. People are coming here to peddle this "quality of life" argument with zero evidence. You're not even stopping for a second to consider that the US isn't the only country in the world.
If you compare the American GDP to other countries, the average individual is getting very little bang for their buck as far as quality of life goes.
People prefer the better quality of life than what was had even in the fifties. That’s why they work more. Houses are bigger, multiple cars are had, people travel, people have elective surgeries, dental cleanings, the Internet, college educations, etc.
You’re proposing that people should be happy with what we had back then by reducing output. I’d rather work full time and have the better quality of life, thanks.
>Sorry for the caps but we need to collectively get into this mindset. We're more productive than ever with very little to show for it. We've been having labor outright stolen from us for decades.
Speak for yourself. Not everybody's comfortable spending most of their time lounging around doing nothing that anybody else even values enough to pay for.
The thing is... you can have the choice. Sometimes you need the choice, things can go south for any of us. The choice can also free you to take risks... it makes it easier to start a business, it makes it easier to fail.
I've been literally working without an unemployment gap since I've been 14. I worked 60+ hours a week through most of my 20s. I didn't have a choice. It took me half of my life to reach financial stability and normalcy. I still get stressed about healthcare costs despite being healthy. It doesn't have to be this way for anyone.
Even if you want to work all the time, most people aren't being paid appropriately for the time they put in. None of us are really experiencing the benefits of society's dramatically increased productivity.
> None of us are really experiencing the benefits of society's dramatically increased productivity.
You're just not seeing it. I remember the days of manual typewriters. Make a mistake, type it over again. Put in an envelope, mail, wait weeks for a reply. Write the letter by hand, even worse.
Today, shoot off a text or email with automatic spellchecking.
Those examples save us minutes but don’t make humans more free or happier or safer. Better examples would be increased lifespans and lower infant mortality. Stuff that ties into the standard of living definition. Which is the point: our standard of living has not increased at the same rate as productivity.
Ohhh by “it” you mean lifespan not quality of life or standard of living which are the relevant measurements of what we should be gaining from productivity. I didn’t realize you were going to nit pick a couple of very specific examples among many.
p.s.
also didn’t expect you to nit pick examples I gave that I thought would better serve your original point: big life changing stuff has improved. I expected us to move on to discuss what is of major value that we should expect from productivity.
I remember my mom helping my dad write his book. She did a lot of the typing. Make revisions, retype the whole book. I thought that was hell even as a child watching her work.
Today, just do the edits, hit [print].
Hours, hours, hours saved.
Ironically, my dad told me in the 70s that the two greatest inventions would be a TV you could hang on the wall and a typewriter where you could edit without retyping the whole thing. To think some people think we don't live in a wonderland!
(He missed the calculator. What a marvelous time saver that was!)
Walter You can go on and on, but you're talking about an illusion. You are literally working more and getting paid less than previous generations. It's objective data. People had cars and televisions. Your cellphone doesn't cost the lifetime of productivity gains that are being stolen from you.
Money isn't wealth, money is just a common & convenient representation of wealth. You don't need to look into people's paychecks to see wealth. You can see wealth in the buildings and streets, in health and technology and culture.
People work tirelessly to create & improve that, and you can see that society is improving bit by bit. That's not an illusion.
Stagnant wages likely signify an actual problem in valuation worth fixing, but it's silly to solve that by being less productive. Lowering total productivity may generate lower surplus value for greedy employers, but it's a weak revenge. You still earn less than you should, and society is poorer for it. There are many other ways to address the root issue.
You're working more and getting paid less than people did, 10, 20, 30 years ago... meanwhile the wealth gap has increased dramatically. Where do you think it's going? It's not hyperbole whatsoever.
Sure things have changed and the wealth gap is a problem, but it is not stealing. If it were, you could take them to court for paying you only min wage and making you work 40 hours.
One could read as many books as they like. Learn to play an assortment of musical instruments. Learn woodworking. Sailing. Write novels. Compose songs. Complete their magnum opuses. Master languages. Study art. Create art. Improve their athleticism. And so on.
>One could read as many books as they like. Learn to play an assortment of musical instruments. Learn woodworking. Sailing. Write novels. Compose songs. Complete their magnum opuses. Master languages. Study art. Create art. Improve their athleticism. And so on.
Those would all be very fun things to do, but very self-focused. I'd love to spend my life writing a novel, except it'd probably be a pretty shitty novel, and it'd be hard for me to find satisfaction in having spent my life on something that contributed very little value to anybody else in society. At least with work I know somebody values what I'm doing.
Spend more time raising your kids. Volunteer in your community. Restore the environment. Take care of the elderly. Grow healthy food for your neighbours. These all sound much more valuable than my job, but no one is gonna pay me to do it.
And you're making the argument that the effort of aspiring novelists is wasted. It's not. Or else we would have no novels.
There are jobs for all the things you mentioned. There are people who are paid to take care of the elderly, to grow healthy food, and there are even jobs for taking care of the environment.
Also, I think you missed the point about novelists. It is more about if you suck at writing novels, sitting around and writing one for yourself isn't very valuable for society. There are some people who have natural talent, but the average Joe sitting around not working and instead writing a novel for fun will likely not be producing much value--at least, not as much as if he were working.
Sure they might pay low, but you dont get to just decide the value of your work on your own. At least in a market you get paid for your time put in and there is pressure to deliver value vs. you just deciding to get off of your couch once in a while and still getting paid ubi.
For the writers, I didnt say dont try. There is a difference between trying during spare time while off work vs. doing it as a hobby while not working and thus not contributing to society yet taking money from it.
I think we just disagree about what value means. I'm of the opinion that you can easily find a job to be paid to create no value, or even destroy value, and you can easily create value that no one is willing to pay a living wage for. I have no trust in the market to determine what is or is not actually good for society... Because the activities I listed in an earlier comment would be paid well in that case.
If they are so valuable then why are they not paid well? Markets are just people deciding what value is with their money. Perhaps you think a service is valuable, and you can pay for it. But if no one else wants it and will not pay for it, then it is by definition not valuable to society.
Sure there are issues with the rules of the markets like anything--but markets in general are pretty good for determining value.
I think we're starting to see all the various ways the market can completely screw up the relationship between price and value (in my definition, that being how much an activity contributes to the wellbeing of society). See, for example, the lack of pollution pricing or the insane low price of meat. If you view value as something external to "whatever the market decides," the market is a terrible way to create a hierarchy of value. Why do CEOs get paid so much? It's not because they're contributing the most to society.
It should be very obvious that raising children well or taking care of the elderly are hugely valuable activities, yet the market almost completely ignores them.
I agree that pollution pricing is a good idea, and that meat may be over-subsidized. I think those have to do with corruption rather than something intrinsic to markets. Regardless of what system is in place, corruption will always be a problem to reckon with.
And yeah, raising children and taking care of the elderly are certainly important. I know that in tech cities that childcare can be very hard to find and incredibly expensive, so maybe it is becoming more valued? But the key is that the value of the service itself is not based solely on how 'important' it is, but also how many people are performing it and how much is needed (supply&demand). Or maybe a better way to say is that importance is also a function of supply and demand. Take oxygen, for example--super important, but I'm not buying tanks of it.
Software development is pretty hot right now, but if almost everyone in the world were trained to do it, the price of that labor would be quite low. This is another feature of markets--it helps to allocate resources (jobs) to what is needed at the moment. With UBI, I think you would be missing out on that to a large extent.
I don’t understand how UBI forces you to stop working at your job. Wouldn’t you potentially be paid even more if everyone who does that job but hates it stops? And the compensation to do it increases to compensate?
Vain and selfish people probably aren’t going to sit around and live on the basic level. It’s more about providing for the ignored, the sick, and enabling people to take risks in the market without putting their family’s lives at stake.
You will have option to do what you want. That's the whole point.
They won't pay you enough to buy a Ferrari. But it will be enough money to spare time to cook well, exercise and spend time on relationships. Or do whatever you want to do.
Different people want different things. Surely your choice of tech work will be very different when you know losing your job won't starve you to death.
Suppose that automation has greatly advanced, and our material needs are fulfilled as a given, as if Earth were now our own Eden, tended to by robots. About the only work left for humans to do, that is to say producing goods and services that other humans deem valuable, is researching and developing heroin. The robots don't do this because they know that heroin use is quite harmful to human well-being, but of course we find great value in being high and are willing to pay for the experience, thus creating a market.
In such a scenario, to what extent does working involve the creation of value? Would you, and should you, find satisfaction in performing this labor? And in what ways is it different from working on the next big social media app to dethrone TikTok?
That is a very weirdly specific scenario that won't ever happen, so why bother asking about it? Humans will always find new things to be valuable. There will never be a time when there is no work left except for producing heroin. People will always want what something no one else has, or something that someone else has that they do not. Humans will strive to create new things, thus creating value. I can see you are trying to pigeon-hole the conversation in a social media vs. heroin comparison, but that just isn't a good representation of the issue.
The people on space ships all have a form of UBI and choose a profession so that they can accomplish something of meaning. Space exploration is one of those.
Sure, but how the economy works is not explained. It's basically that first contact was made, humans realized they weren't alone, so war, poverty and money ended within 50 years, somehow. I'm sure it helps to have transporters, replicators and computers approaching AGI. But how everything inside the Federation just works is not discussed. I guess everyone just naturally wants to do what works out for society, somehow.
You might have here answer to the ”Where is everybody” question. Space is not economically viable. Not for us, not for the others. Not even in a billion years, literally.
It isn't discussed because the closest equivalent it can be compared to is communism, which is the last thing any network or studio wants to be seen as advocating regardless of how accurate or realistic or good or bad the depiction may be.
That doesn't fill me with confidence. Communism has not been successful, so it's not clear why or how it inexplicably works out well for Star Trek society.
You can work as much as you'd like. But which would you rather - being obligated to work 80 hour workweeks as an "integrations architect" for a shadowy .com company that will sell and gut its workforce (including you) in a couple of years so that each VC gets a nice payload from the sale? Or would you rather choose to work 80 hour workweeks on your very own homesteading project, building your house from scratch while not having to worry about the cost of food, receiving just enough for basic sustenance all the while?
This is not how a market economy works. There's no preordained pool of work that you can run out of. It's practically nonsense to say there's not enough work to go around.
People always want more, and you can always find work fulfilling those wants. There's always demand for stuff. Can you honestly look around you right now and think "there isn't much room for improvement"? Well, people need to work to improve stuff, that's useful and valuable work. Do you really think "welp, my life doesn't have any more problems to solve". Well, people need to work to solve those problems, that's useful and valuable work.
Whether or not people are given what they need to survive is irrelevant to UBI. Welfare does that. What makes UBI worse is that it provides no incentive to work and create value, and that's a tremendous waste of human capital and it worsens inequality.
> There's no preordained pool of work that you can run out of.
But this is a point the article somewhat addresses - the graph for marketing-budgets shows that pretty nicely in my opinion.
At some points, its just easier to make more money/profits by trying to increase demand for your product than by improving it (or reducing costs of its production). And I think that's what we're seeing more and more on an ever increasing scale right now: "Actually productive" jobs (e.g. manufacturing) are already outsourced, and the gains from the cost-savings are spent on e.g. marketing.
This might make sense economically (in terms of profits, emplyoment), but arguably less from a "benefit-for-society" point of view.
I think David Graeber adresses this quite nicely (but rather aggressively) with his 'Bullshit Job'-theory.
As you said yourself, UBI's increased demand doesn't really help from a "benefit-for-society" point of view, which is the only point of view that matters. We don't encourage people to maximize profits because money is good, we do it because you usually need to create actual value/benefit in order to do so. When something makes sense economically but doesn't benefit society, that's an economic failure.
I have heard about the Bullshit Jobs theory and I find it unconvincing (I admit I haven't read the whole book). The meaningfulness and value of a job is not determined by the laborer - as suggested by the "do you think your job makes a meaningful contribution to the world" surveys he cites - but by the employer.
The value of something has always been determined by other people who want it. It doesn't matter what David Graeber and his unhappy laborers think or say, something isn't bullshit just because they say it is. Many of the examples he mentions (doormen, content curators, PR) are valuable things that people want enough to pay for, yet his opaque judgment deems them "bullshit" simply because he or someone else thinks they're worthless.
History shows us economies that failed because some people thought they could plan them with isolated judgments of what society should value. UBI as a solution for Bullshit Jobs follows in the same tradition by personally judging whole swaths of jobs to have no value, then proposing a plan to get rid of them.
Thats why the definition is what it is. He knows it's a subjective phrase that means many different things to many different people. He also admits there will be some people who find value in the same job someone else does not.
I think it's a bit strange to hinge your opinion on this definition though, its really only defined that way so it doesn't piss people off, the book isn't about how you define bullshit jobs, the book is about what we should do now we know they exist.
Which you're sort of ignoring.
What do you think we should do since we do know bullshit jobs exist.
But bullshit jobs don't exist, which is my point that you're ignoring. Jobs that people in society value could never be bullshit. Quite arrogant of you to assume that the work that some do is bullshit and challenge me to do something about it. I don't really care what anyone calls "bullshit", the concept is nonsense because the value of work is determined by the people who want it. I don't plan to get rid of such work.
Look at a basic case, a single farmer is able to produce enough food for 100 people.
There is no need for 99 people to work for there food in this simplistic case.
Yes, these people may want iPhones, and maybe they need to work for them, but the basic income component is covered by a single farmer.
I'm not saying there is some static pool of work available.
I am saying there is a static pool of life sustaining work available.
This is why ubi works mathematically, and people not working are not a problem, for the maths.
> Whether or not people are given what they need to survive is irrelevant to UBI. Welfare does that.
What are you talking about, this is the point. And no, welfare does not do that adequately. Welfare is an incredibly inefficient means of wealth distribution.
> What makes UBI worse is that it provides no incentive to work and create value, and that's a tremendous waste of human capital
I have zero concerns about the incentive to work, that is a fud argument that doesn't hold up when looking at the studies we've seen. Work is meaningful in and of itself, you don't need to be paid to receive reward from it.
> and it worsens inequality.
This is what I'm afraid of too and have not heard any ubi proponents address this in any meaningful manner.
Ubi would quite likely create a proletarian class.
On the flip side, I'm not really sure how this is very different from what we have with capitalism right now.
At least with ubi welfare is adequately taken care of.
You simplistic case is too simplistic. Assumes that advanced tech required for such farming comes from nowhere. Now for farmer to produce so much you need GPS (ability to build and maintain one), oil/energy, millitary power, modified grains, etc. to have this you need some people who spend more on thinking rather than being most of waking day the in field, so you need all the support jobs.
From my POV having job as au pair for example is still better than working hard in the field.
IMO we should focus on reducing much duplication od work, so I am happy that OSS, Wikipedia, SciHub, KhanAcademy, MIT, translations services, open hardware design and similar efforts are in progress.
IMO more focus should be shifted into education. I guess education problem isn't solved in western rich countries only because it's easier to brain drain from less developed ones, so people don't feel the pain.
When this will start I hope they start taxing more at very top and shift economy to more valuable stuff than zero-sum Tinder clones.
BTW in my country(Poland) they introduced small version of UBI (like 500$ per child per month for family). It cost 5% of whole country budget. It's quite controversial but IMO it was good move but we still need to see long term impact.
Then get a job, a hobby, or volunteer. Contribute to open source projects. Create a startup. Spend more time with your kids. Take care of your aging parents. Sit around and play video games. UBI creates so many opportunities.
No, but a massive, disproportional share of your population caring for the elderly is a real weakness. A market economy would weigh and value "caring for the elderly" in balance with other priorities, whilst UBI volunteers are free to care for the elderly too much, sacrificing limited resources that are needed to keep a society competitive in other areas.
Isn't it better to be happy than to be "the best"? Would you really rather draw meaning in life from your country's position in the global economy than from your own happiness? Do you even matter at that point as a human being or are you just a gear in the machine to crank up the economy of your country. You're disposable.
That's a rather emotional and wishful take on the matter. There are real benefits to staying competitive in the global economy. Countries with weak economies have less resources to invest in the health and happiness of their citizens. They are less resilient to crises. They are easily exploited by others and more susceptible to corruption. They lack the geopolitical strength to achieve long term goals that would benefit their citizens.
Building the #1 best economy obviously shouldn't be one's sole purpose in life. But if you really think it doesn't matter at all, why not leave the developed nation you probably live in and find happiness in the third world. Or just ask one of the many people who seek a better life in the first world every year.
There's a troubling number of people in this thread who seem think that wealth creation and strong economies is some pointless goal that we've been tricked into caring about. Let's not forget that we work to build wealth for ourselves and our children. We've already worked so hard to build wealth into our buildings and streets and health and technology and culture. Apparently that's why you can dismiss the value of a strong economy from the comfort of your laptop/desk in the first place.
Question though: would companies just move to Brazil, which doesn’t have UBI, and save all of the money from the now-even-more-expensive American workers? Maybe not immediately, if there are more skilled workers in the US than Brazil, but over time I’d worry about high value companies just leaving.
So you’d need to prevent that, but in order to prevent it you’d have to become somewhat isolationist, right? Sounds bad.
Though I’m curious if anyone has thought about how to prevent all of the expensive skilled jobs from leaving.
> Isn't it better to be happy than to be "the best"?
Have you played Civilization? If you don't strive to be "the best", eventually you're the guys with spears or even muskets being bombed by F-15s. In other words, lag behind the leaders for long enough and you can say goodbye to your freedom. That's basically how the XVI-XIX century colonization happened.
Giving everyone the ability to exercise their creativity, pursue their passions, take care of their families, while simultaneously eliminating poverty would make the US less competitive globally? I just don't see how.
You're only looking at the idealistic pros and none of the cons. Competition is about who's working the hardest. Imagine two companies, Company A in which workers are extremely hard working and Company B which workers are free to pursue their passions and only work when they want to. Which one do you think wins out in the long run? And I'm not talking about a version of Company A in which everyone is unhappy, worked to death, etc. I'm just saying more work = more productivity, which is what competition is about
"Work" means we know we're doing something valuable to society because someone in society is willing to pay for it. If we're doing something nobody values enough to pay for then we may well be contributing nothing of value to society.
Why does his choice for how to spend his time offend you so much that you need to directly, overtly insult him for it?
Do you feel a need to control him because his values apparently differ from your own? Fortunately there is no one right way to live, no singular correct set of values.
The ire is because they are saying this in a context where they are implicitly talking not just about their personal preferences, but furthermore about the opportunities that should or should not be made available to others. They are saying this in a context where it functions as an argument against Basic Income, on the grounds that leisure is bad and everyone should be made to work as much as possible, to provide as much for society as possible.
>Despite minimum wage, there is extensive child labor in agriculture in the US, because there is a gap in child labor law. Which suggest that minimum wage didn't make child labor obsolete, banning child labor did.
That is of course not true, because as you yourself point out, there is still child labor going on. Banning something has nothing to do with it existing, just look at drugs.
Minimum wage law made child labor mostly unprofitable, is what I should have said.
> That is of course not true, because as you yourself point out, there is still child labor going on.
In specifically the area where it wasn't banned.
> Banning something has nothing to do with it existing
Odd, then, that child labor has been vastly reduced in exactly the domains where it is prohibited, and not where it isn’t.
> Minimum wage law made child labor mostly unprofitable, is what I should have said.
Were that the case, and not prohibition being the limiting factor, you'd expect child labor to exist where minimum wage is inapplicable, but not where it is, even independent of whether it is allowed.
But in agriculture, where it is prevalent and not prohibited, minimum wage applies and hasn't limited it. Yet it's not found in most of the other places it existed before being banned, and where it is, in fact, prohibited. It's prohibition, not minimum wage, that did it in.
Although there is a technical sense where “minimum wage law” is the deciding factor, because it was actually the same law (though the applicability of the minimum wage and the child labor prohibition pieces differ) that implemented federal minimum wage and the child labor prohibitions and restrictions, the Fair Labor Standards Act of 1938.
> Were that the case, and not prohibition being the limiting factor, you'd expect child labor to exist where minimum wage is inapplicable, but not where it is, even independent of whether it is allowed.
Banning and prohibition are just ways of increasing the cost of hiring children: they now have to pay the wage + fine. And it only works if that is too expensive compared with the alternatives.
Machines made child labor mostly redundant, is what I should have said.
Where it exists is because machines have not been introduced, or are too expensive (see minimum wage laws).
Also, to the OP Milton Friedman's 'Negative Tax' is the same thing as UBI - in the end, 'rich people' would not get a cheque in the mail because on the whole, they'd make too much money.
Also - the top 10% taxes would have to go up radically in order to pay for UBI.
>I do think people radically underestimate the unforeseen consequences of a free guaranteed income, even if it was low.
But for every you, there's a me. I get satisfaction out of working. I had a job in college where I completed all of my work in the first week and did absolutely nothing for the next 6 months and I was MISERABLE. I needed a task to complete, a job to finish, to feel productive.
Furthermore I like having things - whether that be a boat, or a nice car or insert whatever. And that's not some "you've just succumbed to the capitalist monsters" - I buy things that I get enjoyment out of, I don't get enjoyment out of buying things. Quite frankly I feel disgusting anytime I buy something, so if it isn't something I enjoy I have borderline permanent remorse. The car I bought at 16 still hits a nerve because it was a pile of garbage I paid too much for.
I completely understand and respect and quite frankly envy people that don't want things, don't need to work to feel "complete" and can get by doing nothing all day. And with all of that said, the fact there's a you, and a me, tells me there's a very good chance UBI can work. People that don't care about having nice things can do fuck-all and get enough to survive, and people who want more can work until they have it.
Everyone agrees that there will be people who will want to work, and people who won't. The question is what is the ratio, and is it enough. No one can predict this with a high level of certainty. We all just have "a feeling", which coincidentally happens to align perfectly with whether or not we believe in UBI.
Sorry, I have a REALLY tough time believing automation can't replace a minimum of 50% of the current human workforce - we just haven't done it because there are large swaths of population willing to work for slave wages.
Whether you agree with UBI or not you better have a solution for how those people are going to survive when they are eventually replaced by a machine. The alternative will be endless war and famine or genocide.
I know these are anecdotes but I already heard several cases from my circle of friends and families where they just chose not to work because of unemployment checks. Instead of practicing music or learning programming or doing something productive during their period of unemployment, they decided to watch Netflix and play games all day.
Creating is hard work, studying is hard work. Just like having information and online videos/articles/courses at their fingertips do not make people more educated but instead chose to believe what they believe. Having money and time alone do not motivate people to study or create.
UBI will probably benefit most to those who already have inner desire to succeed. But for majority of people, I have my doubts.
Were these cases people who would otherwise have engaged in some creative endeavour (music, programming, art, tinkering, whatever)? Or were they otherwise engaged in menial repetitive jobs that should probably be automated anyway?
If the latter, what's wrong with them watching Netflix? We don't need every human to work.
Also if I gained a perpetual stipend that covered my basic needs, you bet I'd take a couple of months off just to relax and recuperate. Inside three months I'd be going insane from boredom and start building things again for the fun of it. And I bet they'd be better things, too.
Yup. This happened to me and after around three months I started working hard on some interesting things. A month and a half later I haven't made money from it yet but it's been better than the somewhat repetitive job I had before.
> Were these cases people who would otherwise have engaged in some creative endeavour (music, programming, art, tinkering, whatever)?
Exactly. Those who will be driven to work anyways will still work. Jobs that need staff, restaurants, manual labor, etc. will pay more, or figure out how to operate with less staff.
Do you consider parenthood and learning as work towards good?
Do you think subsidizing everyone including "lazy" or stagnant people would have a net benefit if it reduced the amount of violence, crime, and suffering? Or do you not factor that type of balance into your reasoning?
I don't think the reaction of anybody on that short of a time scale tells us anything. And that's not even accounting for the inherent weirdness of this time in particular.
Of course most people, presented with the opportunity to do nothing for the first time in their adult life will take it for a while. Especially people who know that they will not have the opportunity again in the future.
I think the timescale matters. I agree when out of work for a few weeks or months most people will take time to relax and do nothing. But when you don't have to work for a longer period of time (say 6+ months) many people will get bored of just consuming and start making more productive use of their life.
I don't have evidence to back this up though, I would be interested in seeing this studied.
Long-term unemployment is a big thing in Germany, and they are essentially getting a UBI-equivalent (generous housing including utilities, health care, TV etc, cash, ~1000€ a month in total on average). While it's hard to quantify "productive use of their lives", it's certainly not productive in a contributing-to-society kind of way, and there's also no creative explosion happening.
I believe the big misunderstanding is that intrinsically motivated people assume everybody is like them. But most people are not like them at all, so what might work for you will probably not work for them.
I expect so. Creating things are hard. Creating new things, even with little difference from the existing things, are also hard.
By the way, I'm curious about that. Won't people that have generous everything utilities will not just produce more babies? Or there is no correlation between UBI and population boom?
I agree. Many people will react exactly the opposite way and just quit working and doing anything useful. they might fall into depression and hopelessness.
Counter-intuitively it might make everyone more worse off and more demanding. They might then ask "why is my universal income only $1200", "why isn't it $2400?" so that I can afford this and that.
Once you think about it how does not scale up, why isn't the UBI 100K per year? you'll understand why it does not scale down either.
If everyone gets $1200, then new zero value will start at $1200.
I can confirm, I have a few friends who are on unemployment for the first time in their lives and find it eminently livable and enjoyable (mostly just watching Netflix and such though). Some have openly declared their intent to ride it as long as they are allowed too.
However, unemployment right now is paying much more than UBI proposals. I know people who are paid more on unemployment currently than the median household income in their State. I’d probably do the same if I was in their shoes.
I have seen the same firsthand. The idea that there is a latent poet or artist inside everybody and UBI would unlock that is highly dubious. If implemented people would be lamenting how rent plus utilities are now $1000 per month higher. The handouts and demands for ever more will not end.
To be very honest, these times should not be taken as data points for normal behavior. Stress is extremely high, optimism is low, and its just very hard to find a job these days.
I'd take the anecdote more seriously if there were many opportunities on the market and they still said the same thing.
- Today, where despite massive productivity improvements over the decades, we all are kept busy with commensurate bullshit work
- UBI horror couch potato land, where there's a tiny working aristocracy and everyone else is a TB drone
I would surely choose the latter. At least in the latter I have the guaranteed option of doing something meaningful with my own time and being recognized for it.
Also please recognize that behavior/culture doesn't happen in a vacuum. If people have heard welfare be demonized their entire lives, never had a change to work/hobby something productive and meaningful, and are generally scared/depressed about the pandemic, I doubt they are emotionally prepared to become some basement dweller programmer savant.
That the threat of being homeless forces people to work, against their will? - and that this is better than the alternative for a significant chunk of the populace?
Maybe. That seems quite narrowminded. It certainly is [citation needed].
No; people would no doubt pay no or far fewer taxes if it was entirely an optional affair.
There's plenty of research out there that shows that people as a rule want to work, even if they don't _need_ to do so for subsistence. It helps, rather a lot, that it gets you access to more scarce goods that you want, but that does not change in UBI.
There's a lot of evidence of people choosing not to work if welfare provides a living that's comfortable for their tastes. I have a neighbor (in his forties) that is among that group, he's quite content watching tv, playing xbox and listening to music all day and getting drunk every few days, which he can afford on welfare, and he has a large-ish flat (same one I do), all paid for.
I wouldn't want to live that way, you probably wouldn't either. But he would and he is. UBI would certainly not be lower than today's welfare programs, and it wouldn't even have the modicum of incentive ("you must be looking for work" vs unconditional), so how would it not have a built-in disincentive to work on people that are fine with living their lives that way?
In my opinion, and I know this is controversial, it is wrong. Of course it depends on your philosophy, but this is just mine.
I believe that we can't expect for humans to just exist without being productive and just being consumer and sustainable, for this Earth and the environment.
Most of what we do drains the earths resources. If a large portion of the population takes the easy route, they'll end up consuming less. Less consumption means longer lasting resources.
Part of the reason we're tapping out the earth is trying to keep up with everybody around us. If people can choose to live simply, they'll normalize a less consumer-driven lifestyle
No idea. I’d like to attribute that with genetic but also with family upbringing as well. I lived in 2 countries so far, one developing and one developed, we have unmotivated people everywhere.
I like how the article pointed out the biggest economic problem I see in post-industrial society - instead of almost everyone being a small business owner, we have huge corporations reaping massive profits, and poor replaceable corporate drones barely making ends meet.
That said, I completely disagree with the proposed solution of UBI and here's why. We humans have a rather nasty bug in our firmware: when we do not have to work, we turn tribal. We form cliques and our meaning of life becomes to bite, or at least to bark at the clique on the other side of the fence.
If you want some evidence, look at the correlation between cold climate (forcing people to do serious agriculture) and economic development in many countries. I also suspect that the recent spike of divisiveness and outrage in our society has something to do with people having more free time from lost jobs, and not desperately trying to learn a new marketable skill, because of the COVID-19 support.
Mind you, I'm not saying that COVID relief is bad, but I seriously suspect that the recent unrest is a preview of what the society would turn into if we eliminated the need for people to work.
I wish we could instead figure out a system for taxing scale or subordination levels. So that having a couple of owner-operated grocery stores in every neighborhood would become a viable alternative to centrally managed Walmart with armies of corporate zombies miserable at their jobs. Of course, it would reduce the overall efficiency, but I would happily pay an extra dollar to live in a society where people are putting their energy into producing objects of value and making others happy, than see endless infighting about who deserves that extra chunk off someone else's table more.
> I wish we could instead figure out a system for taxing scale or subordination levels. So that having a couple of owner-operated grocery stores in every neighborhood would become a viable alternative to centrally managed Walmart with armies of corporate zombies miserable at their jobs. Of course, it would reduce the overall efficiency, but I would happily pay an extra dollar to live in a society where people are putting their energy into producing objects of value and making others happy, than see endless infighting about who deserves that extra chunk off someone else's table more.
I think one solution is to end private land ownership. Put land ownership in the hand of local communities and let them lease out land (maybe based on money, idk, no reason for there not to be somewhat of a market). Let the communities create rules for land use, but one major rule should be that land can only be used by people within the community. No Walmarts coming in and using land.
Maybe an even better rule is that land can only be leased to the people who work it - and this means all people who work it. Meaning that you can only open a business on that land if all the workers will own a chunk of that business.
1) What about IP? Companies that do not work with land, but tech, science and ideas. This scheme would not be a barrier for Apple for example to appear.
2) This (as well as the parent comment's) idea is similar to tariffs and trade wars. "Yeah, you are smart and efficient, but you work 200km from here? Fuck off."
3) It confines businesses to think small. Big projects would have to be handled by governments and entities that are exempt from locality laws. Sometimes there are good reasons to own large swaths of land in multiple locations, without being a trillion dollar company.
I feel like you are merely trying to make capitalism less efficient and hope that this would make it magically nicer to participate in. What was the main problem again?
> 1) What about IP? Companies that do not work with land, but tech, science and ideas. This scheme would not be a barrier for Apple for example to appear.
What about it? Apple still needs factories to build their products, wants offices, and needs datacenters. For any of these their workers need to get a (fair) share of Apple. Apple could respond by having workers work remotely, but I doubt many workers would take that deal if they could go somewhere else and be a co-owner.
> 2) This (as well as the parent comment's) idea is similar to tariffs and trade wars. "Yeah, you are smart and efficient, but you work 200km from here? Fuck off."
Yeah pretty much, for land use. How can you possible use land if you live 200km away?
> 3) It confines businesses to think small. Big projects would have to be handled by governments and entities that are exempt from locality laws. Sometimes there are good reasons to own large swaths of land in multiple locations, without being a trillion dollar company.
Maybe somewhat, but it's still possible for companies to do this. They just have to have workers own a (fair) share of the business. Say there is a Walmart, and they want to open a new store in another town. Sure, they can do that, if all of the employees at that new store get a fair share of Walmart ownership.
I have been a small business owner my entire adult life. I can appreciate the small corner stores. But Walmart wins in one way on predictability - as a consumer, I know generally what will be stocked and when it will be open. They have the scale to justify processes and systems that can be useful (ordering in from other stores, as an example).
But from the other side, a small business owner can be chained to their desk or counter. I'd bet that many small business owners are miserable too. If they aren't at a scale to have staff, when do they get a holiday or break? If they hire someone trustworthy enough to run a store for weeks on end, they often have to pay more than they typically pay themselves.
Part of the recent unrests were the George Floyd protests, which lead to numerous changes against systematic racism, including the reformation of numerous police departments. These changes have only been incited because people are not on their normal day-to-day routines, and have the time to go out and protest, and thus to socially contribute to the betterment of society.
UBI is not a replacement for work - we do have to work under UBI. It just lessens the imminent need of working, affording a lot of people the ability to take more breaks from working to relax and recharge.
I agree that a permanent state of non-work is bad for society, but UBI is not advocating for that at all.
Well, if we don't want to make it permanent, why go for UBI at all, rather than improving unemployment insurance?
IMO, a much better solution would be to segregate subsidized housing between quiet people who are actually trying to study, and the abusers that make such places unlivable.
I really don't think enough thought goes into the affordability of a UBI when it comes up in discussions.
Just a quick estimate, assuming that we're talking about the UK here
The UBI pays out to 53,000,000 people (very roughly the number of people 18 and over).
The amount the UBI pays out is £1,000 a month (whether you could really live on this is debateable, but it's certainly not possible in most of London for example).
So a UBI would cost pretty much as much as the entire UK national budget (healthcare, education, defence, infrastructure, welfare etc.)
I'm all for increasing taxes, but assuming that you replaced welfare with a UBI, you'd still have a (roughly) £400 billion shortfall - just where does that money come from?
It's affordable at a lesser amount, sure, but at that sort of level, what's the point?
This is before even getting to other arguements (if you want to use it to replace a welfare system, then in my opinion, it's essentially a regressive scheme, because everyone is getting the same payout, regardless of need).
I don't mind if my tax goes up by the same amount I receive as UBI. In that case it's neutral for me and for the national budget. How many of those 53M people would fall into the same category?
I'm not entirely convinced by UBI yet either, however I think there are arguments that could made against your headline cost calculation.
It could eliminate/save other huge portions of the budget. It would also probably have to be adjusted based on location, or as you said it wouldn't do much good in expensive cities, which might reduce that cost further. And a huge chunk of that money is going to people who will immediately spend it on taxable goods/services which could be a big revenue/jobs boost.
It's still a huge cost though, and while I like the idea from a philosophical standpoint and some of the small scale tests have some promising results. It's still seems like a bit of a blue sky idea that could have some really bad consequences at scale.
UBI would force them to move away from cities. UBI would inflate housing costs, but more in urban areas and much less in suburban and rural areas. This would allow us to use land more efficiently. Right now poor people have to crowd into cities in hopes of work. It should not be "cost of living" adjusted. We want it to cause a massive re-organization of our society.
Let's be generous and round it up to £250 billion, as some other savings might possibly be made in other areas.
The total government spending each year is £842 billion, and the cost of the UBI above (£1,000 a month) is £636 billion.
We're still about £380 billion short ... not far off half the current government budget.
Your point about cities is a good one, but I think this would actually increase the cost. It would be pretty difficult to live on £1,000 a month anywhere, but it would be impossible in some cities (definitely London!).
And while your point on revenue from other sources is valid, as VAT is about 20% here, I imagine the extra returns would be marginal.
Infact, when you consider reduced income taxes through some choosing to cut back on work/not-work, you might see these gains completely negated.
I'm not necessarily saying a UBI is a bad idea in and of itself, but it just seems impossible to implement a decent UBI due to budgetary constraints (it seems unfeasible to me).
You could feasibly pay out a UBI of something like £400 a month if you just replaced the current welfare budget with a UBI, but £400 a month isn't much, and this also ignores the fact that this would massively disadvantage people who were previously reliant on the welfare system for all of their income (perhaps due to inability to work).
> It would also probably have to be adjusted based on location, or as you said it wouldn't do much good in expensive cities, which might reduce that cost further.
Why not just let people move to cheaper places? If they need UBI to survive, NYC is probably not the best place to live.
Otherwise you will have fraud where people have an NYC address so they can collect a large UBI check, but actually live in Oklahoma (or overseas) where their money will go further.
This is a huge point, people debating UBI are often talking about different numbers. 1000/mo is probably too high, 400/mo is probably a better level and you're right its hard to live on that in a big city, you'd have to move out.
I think you're right that most people are talking about different levels. What frustrates me often is that when a UBI is discussed, very rarely do amounts seem to be discussed; whether in terms of montly payments, or overall cost of implementing such a system.
In terms of £400 a month. I think that is feasible (although still a very large amount of money!).
Although £400 isn't enough to live on, at all (I'm not sure if that's what you mean in your reply, or whether you're talking about 1000/mo?). It could still have other benefits - reducing poverty, allowing for extra leisure time, more risk taking in terms of setting up businesses etc.
I'd be much more open to a lower level of UBI than something that is "enough to live on without working". I think any large UBI just becomes incredibly difficult to fund.
In principle there's no difference between a negative income tax and UBI funded with progressive taxation. Either way, some people pay more than they get, and some people get more than they pay. The net cost as a function of income can look identical for each.
What I mean is that negative income tax is just a way of implementing a particular kind of UBI. It's not a distinct thing. In what way are the incentives different? You must be referring to a particular kind of UBI which is distinct from negative income tax.
Is the incentive to work different? I thought it worked like this:
Under UBI if you earn $1 you are always $1 richer. Under negative income tax, if you earn under some threshold, when you earn $1 you are < $1 richer because the govt will hand you less.
The government just credits accounts. The money doesn’t have to come from anywhere other than the government’s decision—that’s why it’s called fiat currency!
To make sure there’s demand for money. It’s certainly not because the money is a scarce resource for them, since they are the monopoly issuer of the money.
A UBI paid for with a carbon tax would both save us from the worst consequences of global warming and stimulate the economy. It's hard to find a rational excuse for not doing it.
Planet Money did a great episode on this idea over 7 years ago:
One of my best friends is an academic economist working in this space, so while I won’t pretend to be an expert, I have spent a goodly amount of time discussing this with one.
With no disrespect intended to you personally, this policy you propose makes no sense. Without putting words in your mouth, it looks to me like “two things I as a progressive like the idea of”, rather than a coherent economic policy.
Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.
With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is orders of magnitude more than a carbon tax could ever hope to raise. It’s orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point.
It’s fine to like UBI and it’s fine to like carbon taxes, but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence, and there’s certainly no reason to link them as part of a single policy.
If we're going to have an academic debate, then we should have an academic debate. One academic economist doesn't make a debate. I mean no disrespect to you either but I was friends with a Ph.D at Intel who said the economics were all in favor of general-purpose computing, and therefore, realtime raytracing was the way to go. Embarrassment was on me. I parroted his lines for quite a while. None of us are infallible. Having a Ph.D merely means you know how to do research, in a narrow, focused area.
If we are going to have an academic argument – and we really should, if we aren't to just be blabbering off here – we need to see some numbers. We need to know how they are calculated. What's the carbon footprint of these Mexican laborers getting to work 3 to a small-cab truck, or on bicycle, or on BART in the wee morning? And have that compared to the guy in Hamptons with his giant 22-room house here, and other houses elsewhere.
Maybe the Mexican guy's taxes will be close to mine. More than is comfortable. That is fine. Carbon taxes don't have to be the only source of income for the government. But until we can see the actual curves, and the total output per segment, etc., we can't actually crunch out what an effective policy is, and we're writing off what's arguably necessary if we're to fix the problem, because we're probably going to have a hard time cutting back emissions until we associate an economic cost to them.
Agree with this. From a political perspective, tying a carbon tax to any other progressive or conservative policy makes it less likely to succeed.
Ideally the carbon tax should fund...nothing! A pure dividend, all monies repaid to everyone. Climate change requires long term thinking, which means it requires an enduring institution, like Social Security. It must not be entangled with the vagaries of the political moment.
The change will be incremental, policy makers will have time to see that the funding is evaporating and identify alternative sources. For example, increased GDP from an economy no longer plagued by pollution and the devastating weather events caused by climate change.
"With respect to UBI, the amount of revenue needed to sustain anything other than a token payment is ... orders of magnitude more than could ever be raised by any realistic tax, actually, but that’s rather beside the point."
I disagree strongly that the cost for UBI would be untenable in the general context.
For example nordic countries already have UBI in all but name due to all the support the society gives to those in need. We just don't call it UBI because it's split to several parts. And there is political opposition of course based on the strawman that UBI "would make people lazy". Maybe in some "other" cultures it would (I have no idea where, though), but not in the nordics. So no those in need are forced to go humbly from government desk to the next.
"It’s fine to like UBI .. but acting as though either of them would have a significant positive economic impact is completely unsupported by either theory or evidence"
Disagree again. Poverty reduces peoples life outcomes. Having a scheme that reduces generational poverty will improve educational results, thus increasing life time wages, thus increasing consumption and taxes.
" there’s certainly no reason to link them as part of a single policy."
Strongly agreed! UBI and carbon tax should have nothing to do with each other.
> For example nordic countries already have UBI in all but name due to all the support the society gives to those in need. We just don't call it UBI because it's split to several parts.
that's basic "social welfare". it's not really universal, it's more for those who qualify. in certain countries you can even opt out of this safety net.
you mentioned "nordic countries", in reality only Finland tried a small UBI experiment that failed.
True, most of Europe has some sort of social welfare system. But that system has a massive cost overhead: to determine who qualifies and who doesn't, to support it there's a complete system of lawmaking, administration, monitoring and fraud detection and prosecution (and probably a cottage industry of fraud assistance as well). I have seen some back-of-the-envelope calculations detailing how those costs don't cover the whole cost of UBI, but I don't think I've ever seen a comprehensive overview. But regardless of the cost, UBI would results in a smaller government apparatus than the current system.
Finland tried a small UBI experiment that failed.
Failed on what measure? The people in the program reported less stress and more happiness.
> but that system has a massive cost overhead: to determine who qualifies and who doesn't, to support it there's a complete system of lawmaking, administration, monitoring and fraud detection and prosecution (and probably a cottage industry of fraud assistance as well). I have seen some back-of-the-envelope calculations detailing how those costs don't cover the whole cost of UBI, but I don't think I've ever seen a comprehensive overview.
The back of the numbers estimates make it sufficiently obvious that the claim that these costs are a miniscule fraction of the additional cost of a UBI for UBIers arguing otherwise to have never attempted to produced a comprehensive overview. Assessing whether people are looking for work is relatively expensive in terms of administrator time, for example. But the administration system ensures that only 2% of the working age public actually get that benefit, not 100% of the population (or even the 20-30% of working age people who aren't economically active but aren't actively looking for work either). There's a reason nobody's doing studies to understand whether you could cover [most of] the costs of paying a benefit to 100% of the population by removing some of the admin staff that check the eligibility of the 2% currently receiving it, and it's the same reason perpetual motion machines aren't tested.
Figures are based on UK [pre-UC] JSA claimant figures, but there's nothing particularly unusual about them globally; looks like the non-COVID figures for US unemployment benefit claims are lower and non-participation in the workforce higher. Unemployment benefit is the eligibility tested benefit UBIers universally agree should be entirely replaced with UBI payments [UBI advocates' views on retaining separate, variable disability allowances are more mixed, but there remains same basic logic that only a small fraction of the population currently receives them].
The existence of eligibility criteria ensures that unemployment benefits are, in normal times, paid out to only a small fraction of the population, because only a small proportion of the population is unemployed and looking for work. Eligibility testing admin isn't cheap, but it certainly isn't more expensive just paying everyone.
For comparison purposes, according to it's own stats the entire DWP admin bill is in the region of £6b, including all admin for all types of benefit to all ages of people and a typically overpriced new govt IT project. Even if UBI could get that down to zero which it clearly can't, it wouldn't pay for many people to receive a UBI.
The general idea is that the benefits are worth the cost of paying for it, more so than existing welfare schemes. That might be a subjective test, but it evidently didn't pass because it wasn't renewed.
"that's basic "social welfare". it's not really universal, it's more for those who qualify."
In Finland everybody below certain threshold of financial means qualifies. Addict or criminal, no matter what.
"in certain countries you can even opt out of this safety net."
Of course you can opt out. Enforcing a safety net against an individuals choosing would be against basic human rights.
From economic resourcing point of view it's more or less universal and everyone is included unless they really wish to get away from the system. Drug addict or not, criminal or not. Nobody is forced to take the dole, but from resourcing point of view there is no biological poverty (hunger or lack of housing). Nobody can force you to take this aid. And mental illnesses and addiction always create additional problem no high level scheme can likely address.
So it's not a 100% solution to everyone's woes but close to 90% I would say.
"you mentioned "nordic countries", in reality only Finland tried a small UBI experiment that failed."
You are looking this from a too narrow perspective. What I meant was that the social welfare system in Finalnd (my home country and other nordics) effectively already encompasses a UBI scheme. A defacto UBI scheme, in Finland for example, should replace most of existing social welfare schemes except for medical treatment and child allowances.
The basic thesis is this: the society already uses quite a lot of tax funds for social welfare schemes, some of which are administratively complex and expensive. People can have housing and food. Yet they mostly choose to work when they can.
So the typical counterpoints to UBI - it's too expensive and would make people lazy - don't really apply.
The only thing missing in the Finnish model left is to merge the various wellfare schemes into one UBI scheme.
The experiment you commment was not really. It was "the current social system plus some UBI cash". And I would claim it was a success. People said they felt better. This is a tremendous thing! Mental illness problems are becoming a huge issue. Making peope feel better actually helps to combat this, and may even support people enough that they can heal and be able to work again.
Healing from long depression can take years. The UBI experiment was far too short to actively track these individuals.
To "qualify" you basically have to come in to the office and claim that you have problems paying your bills or finding a job. So in all practical meanings, it is exactly like UBI, there is no reason to think that if the name itself would change, there would be any difference in the outcome.
The whole point of UBI is that you get income (the "I" in UBI) wether you have other sources of income (aka a job) of not (the "U" for Universal in UBI).
The social welfare in nordic countries is mostly not income (housing, free healthcare, ...) and is certainly not universal (you lose access to it once you have a job, or you have to pay for it through taxes, and some of the fees are waived for people with low income).
I rally love the social welfare of Sweden et al. but calling that "basically UBI" is missing the point.
This is a red herring that keeps being brought up with respect to UBI way too often.
"Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally."
Yes, but rich people consume and release carbon at a much higher rate than poor people. As a result, rich people would pay into consumption taxes/carbon taxes much more than they would get back in a flat cash payment funded by such means.
When a poor person has to pay a regressive tax, that is money that would otherwise go towards necessary housing, food, healthcare, child care, transportation, etc. Poverty means going with out some or all of those things regularly. Whether or not rich people pay a higher tax percentage of a regressive tax doesn't change those circumstances.
Net change for person = (average tax paid) - (tax paid by person)
If that poor person tax burden is lower than average (even if it's higher percentage of income) redistributive properties of "fee and dividend" scheme would actually lead to increased income.
Let's look at some of some sectors and who would spend more on it.
Energy: the richer you are the more you spend on heating and cooling (just due to bigger homes), some extra appliances, etc.
Food: the most greenhouse intensive type of food is probably meat[1]. The more price sensitive you are the more you will switch to alternatives: either poultry (25% as bad as beef) or more plants.
Transport: unclear: older cars may have worse fuel efficiency, but I would expect more travel with more money
FWIW I think the argument isn't that the net change isn't beneficial for the poor, but that the tax is effectively regressive in proportion to income in that e.g. Jeff Bezos could fly a private jet to and from work every day and still pay less for carbon in proportion to his income than someone poor driving to and from work every day.
So while it is a tax that benefits the poor, the poor are also paying a higher portion of their income to support it while the Jeff Bezoses of the world remain largely unaffected, can use this disparity to further widen the wealth gap and—for any carbon tax rate that the poorest half of the population could at all afford—continue eating their beef and heating their houses for an infinitesimally small portion of their income.
Meanwhile, the Jeff Bezoses of the world probably have the best means available to lower their carbon emissions. Their wealth could be used to provide public transportation and green energy developments, so I believe that there are more efficient ways to reduce carbon emissions than consumption proportional carbon taxation. Progressively factor income and profit into it instead, and lower other income and profit based taxes to simultaneously reward successful businesses/people with small carbon footprints and make those that benefit the most from poor people driving to and from work pay for it.
Again with this red herring,
"Jeff Bezoses of the world remain largely unaffected".
Jeff Bezos consumes and releases way more carbon than the average person. Private jets, multiple mansions, a fleet or cars, a private rocket company. He would pay way more into a VAT and carbon tax than a median American. If the UBI is large enough to notice, Jeff Bezos would definitely be affected by the means to fund it.
Meanwhile a person living near the poverty line would get more back than they had to pay in increased prices. On top of the net transfer, they now have a guaranteed safety net without means testing, application procedures, and waiting times that they would still get even if they have to quit a job due to a crappy boss. They can also move cities/states without the fear of loosing their benefits.
> Jeff Bezos consumes and releases way more carbon than the average person. Private jets, multiple mansions, a fleet or cars, a private rocket company. He would pay way more into a VAT and carbon tax than a median American. If the UBI is large enough to notice, Jeff Bezos would definitely be affected by the means to fund it.
Yes, but again, I don't think his carbon footprint has increased proportionally with respect to his income, which if it holds true generally means that a carbon tax in proportion to consumption is regressive in terms of proportionality to income, in which case the poor would be disproportionately affected.
I don't know why you consider it a red herring. Possibly because you haven't understood the argument for why it can be considered a regressive tax (you certainly haven't acknowledged it), but in any other case, instead consider those only a little richer. For example, I can afford living in a large city, near essential services. I can afford living near my workplace. This means I can afford not having a car at all, and if I wanted to, I could afford an electric car. I can afford conscious consumption. In that sense I have better means to minimize my carbon footprint than someone that lives in a rural community, works several tens of miles away in the city because they can't afford to live near opportunities of employment, can't afford an electric car, can't afford to buy locally produced food etc.
The poor may be getting more back than Jeff Bezos (thank god) but the middle class will clearly be the immediately obvious winners in a scheme like this, funded disproportionately by the poor.
(not sure if you are still reading this thread but I would love to convince you)
So if the poor get back more than they put in, how can they be disproportionately be funding it?
A carbon tax+UBi is not regressive, if the rich pay in more than they get out and the poor get back more than they put in. That is the red herring.
The break even point should occur somewhere in the upper middle class. If it was just a tax by it self you would be right. But the effective tax discount through the UBI makes it progressive.
Carbon taxes should be applied to carbon intensive industries not individuals.
Sure, the cost gets passed down, but you can only charge consumers so much. If it turns out that industry can't get costs down enough such that they make profit and consumers can afford it, then that is kind of the point of the tax. They need to "spend" less carbon or die out to businesses that can.
You are forgetting that the idea is to give ALL the money taken in by the carbon tax back to the people. Everyone gets the same amount. That means, if you use less than the average amount of carbon, you will make money.
Poor people use less than the average amount of carbon, therefore they come out ahead. Rich people will pay more carbon tax than they get back in UBI.
So carbon tax + redistribution towards the poorest (e.g. with the income of said carbon tax). This is not a problem that is technically complicated to solve.
> "Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally."
I would question that very much and guess that overall the opposite is true.
I don't however have any data, except national aggregates showing that there's a correlation between GDP and carbon emissions (even before accounting for the fact that arguably quite a lot of the emissions of less wealthy nations come from production of stuff for more wealthy nations).
Do you have data?
Also absolutely wrong. The fact that it stops scaling at millionaires would only be worthwhile discussing if a large share of the population were billionaires.
"This tax works great for 99% of the population, but there are some billionaires that should be taxed higher" is more of an endorsement than a counterargument.
Now, I'm sure there's some inaccuracy here, and it's a bit of a stretch to say Bezos is personally responsible for all of Amazon's emissions, but he's pretty clearly in the same order of magnitude as having a million times the carbon emissions of the average American.
Amazon literally serves those average americans, why the carbon footprint is on Amazon's account? It would hardly produce any footprint if there were no people ordering stuff.
That’s not what’s being argued. Rather, the poor are going to pay less in carbon taxes than they receive in UBI. This is simply a matter of how power laws and averages work.
> Carbon taxes unquestionably fall hardest on the poor
the central point of your argument is flawed: the rich use orders of magnitude more carbon than the poor do.
further: even if it were true, the goal of a carbon tax is not to be progressive, but to disincentivize fossil fuel production, and to drive behavior toward less harmful alternatives.
The impact of a tax is measured as a share of your income - if a tax represents a growing share of your income as you grow richer, it’s called progressive, otherwise it’s regressive (ie falls harder on the poor).
This is the case for consumption taxes in general and carbon taxation in particular. This is not contradictory with the fact that the top income decile emits more per capita in absolute than the lowest one.
This is especially manifest for gasoline consumption: richer households consume significantly more of it, but it represents less than 2-3% of their income, while it can reach more than 10% for poorer households.
Indeed, this can and should be offset with a full redistribution of the tax proceeds - either flat or targeted at lower income households - to compensate the inherent regressivity of carbon taxation.
Source: my PhD was on the distributional consequences of carbon pricing.
Exactly. Coupled with the dividend, it is no longer regressive.
This page (https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288.
If you take a flat percentage small enough that poor people can afford it it's not even going to be close to enough for UBI. Sure poor people will profit more (if you assume they have a smaller CO2 footprint), but only at a scale of like a couple bucks.
Agreed on the framing, coupling and on carbon tax generally. Carbon taxes are a sort of economic theory gone rogue as it hits the political scene. I am extremely frustrated that the green side of politics is pushing this so hard. It's a dead end.
Disagree totally on UBI. A rational UBI plan would recover 25%-50% of the UBI somehow. Income tax, a VAT or other mechanism. In addition, a UBI takes pressure and saves costs of other social programs. Directly reduce poverty. Have less poverty. Spend less on other poverty reduction programs. There is also a strong "stimulus" effect. UBI generates economic activity. That get taxed. Government revenue increases.
Considering the benefits, I think it's a no-brainer for countries with a strong enough economy to support it.
A lot of the benefits are unknown, but I suspect some of the biggest wins will be in some of the most intractable problem areas. A big one currently is the town/city dichotomy. Successful cities are very successful. High salaries. Career opportunities. Low unemployment. Unfortunately, much of that is eaten up by inflation local to these cities.
UBI is geo-agnostic income. The effects on cheap, lower income areas could be very profound. Bear in mind that this problem is a graveyard of failed policies. A lot has been tried. Little has worked. This has much better odds.
> Disagree totally on UBI. A rational UBI plan would recover 25%-50% of the UBI somehow.
Fine. UBI of $1000/mo for 200 million people (2/3 of US population) costs over $2 trillion per year. Recover half of it and that’s still net $1 trillion per year. That’s more than 1/3 of the current federal budget. And there is no possible way that it replaces that much in existing spending.
I agree there's no likely way to make UBI revenue neutral.
That's not what I meant. It costs something. I think it's a cost that is worth it, and I think it's a cost that's feasible. Nothing is free.
If you want to get into the feasibility of a specific plan, take a look at Yang's proposal, or some other proposal that has been subjected to (and adapted by) technical criticism and analysis by multiple parties.
I'm not saying you'll reach the same conclusions as me, but even highly oppositional analysis don't come to vastly different estimates of net cost. $100bn ballpark differences, not a trillion.
Note that yang's proposal is for a 10% VAT. Most wealthy economies that have a vat, have a 15%-25% rate. The plan is pretty conservative on the taxation side. Also note that nearly all the analysis uses "orthodox macroeconomics," the mix of keynesianism and monetarism that seems to be falling apart as a consensus atm. A different take on money creation (almost any competing theory to monetarism) yields much better estimates on cost.
All that said, you have to consider UBI an economically transformative plan. If you don't think it is, then you probably won't conclude that it's worth it. Impossible is not a rational solution, IMO.
Of course you could fund it by introducing new taxes. But it’s still trillions in spending above what we’re doing now, and there’s a rather extreme lack of imagination if paying people to play video games is the most creative and productive use you can think of for over a trillion dollars per year in new government spending.
> Also note that nearly all the analysis uses "orthodox macroeconomics," the mix of keynesianism and monetarism that seems to be falling apart as a consensus atm.
Ah, the old “money printer go brr” theory. I wonder how much 1000 Zimbabwe dollars or 1000 Weimar marks or 1000 Venezuelan bolivars will actually buy you.
Some savings are automatic. If a social program targets low income thresholds, and UBI raises some people above that threshold then fewer people draw on it. It costs less.
> Carbon taxes unquestionably fall hardest on the poor, as do consumption taxes generally. Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.
That's exactly why we would want to link it with a transfer like UBI. If UBI requires too much cashflow for your taste, we could always use an expansion of EITC instead. If tax incidence on unemployed is too worrisome, then we can start shifting the EITC more towards a regular NIT.
And with due respect for your best friend, the consensus is overwhelming among prominent economists that a carbon tax is fundamentally a good idea:
> Carbon taxes unquestionably fall hardest on the poor,
Just last week I read an article about the wealthiest 10% causing 50% of the emissions or some similar figure. It's well known that richer countries pollute huge amounts compared to developing ones, but within a country I think it was also shown and seems to make intuitive sense.
> Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.
Since when are buses and trains more carbon intensive than cars and jets? Or bulk products versus luxury, perhaps even custom ones? Plus that poor people don't have the time to go on holiday in Fiji for two weeks every year (exceptionally so in the USA with no minimum leave).
> Carbon taxes unquestionably fall hardest on the poor
what? how? if we're talking about the real poor, they typically don't even have a car, take public transportation, or even walk.
meanwhile the very wealthy have private jets or yachts and would be paying a significant carbon tax when using those. so I'm genuinely curious how you got to
> Everything from the products purchased by the poor to their modes of transport are more carbon-intensive than the rich.
Honestly only way to address this is more intrusive data collection, so like the first X no of essentials you purchase will not have carbon tax (based on sustainable lifestyle calculations) while everything thereafter will be have it. It could be something like a tax deduction i presume ?
Well, they _do_ if the tax is not coupled with a dividend.
To a fist approximation, the carbon tax you pay will be a fixed fraction of all the money you spend in daily life.
Poor people spend essentially all their income every month. The better off you are, the lower a fraction of your income you have to spend each month.
So a poor person will pay X% of their income, while a well-paid software professional might pay X% of 25% of her income.
That's regressive.
But a carbon fee & dividend, taken as a whole, is progressive, rather than regressive, because the poor receive a dividend in excess of the fee they pay, while the wealthy pay more fees but receive the same dividend.
Quite bold statements there without linking to any sources. "I won’t pretend to be an expert" Yeah, you definitely shouldn't.
Also, you are missing the target on the parent comments argument. The carbon tax wouldn't affect the poor as much because the UBI is there to compensate for it, that's kind of the whole point. There's nothing about being poor that forces you to emit more carbon when compared to other people, as far as I know.
ie., c. 4 Trillion USD / yr or c. 20% of GDP (20 T)
The total amount taxed in the US is already at that level (4T).
For the carbon tax to raise 20% of GDP, it would need to raise as much as all present taxes do (income, sales, etc.). Levying that much on consumption (ie., obtaining the present total amount of tax merely from products people buy) would raise prices catastrophically.
Only about 30-40 million people would likely net extra income with a UBI. i.e. If you increase my income taxes by $1000 but then give me a $1000 UBI check, its a wash. For some reason folks struggle to wrap their head around that part. Which is why I think a negative income tax is better mechanism.
Wait, so my taxes would only double? Not being sarcastic at all: this makes UBI sound possible even without a carbon tax. The top bracket would still be lower than what it was in 1960.
Assuming that most of the 4T comes from taxing the activity represented by retail sales (a very safe bet), you need to get most of 4T from 6T. Ie., you're basically doubling the prices of retail goods -- including food.
To extend on that, the US releases about 5.1 billion tons of CO2 in a year. Each gallon of gasoline release roughly 20 pounds of CO2. That means that 1 gallon of gas would be taxed at $7.84 if we pollute at our current rates.
Tbh, I would be very much in favor of this. I know it's not a popular opinion, but things that pollute this much should not be the easiest/cheapest solution.
Don’t forget that $1T of that total $4T is just spent on social security — this could potentially replace social security, so that number could go towards UBI instead
It means more than doubling the federal budget, which already exceeds tax revenue considerably. UBI of $1000/mo might be doable in Zimbabwe as long as you don’t care what 1000 Zimbabwe dollars actually buys you....
Back of the napkin calculation is not a source. Economy is a bit more complex.
edit: Imagine being downvoted for asking for a legitimate source on HN. Because rejecting UBI by making a simple multiplication is a sufficient explanation instead of researching all the secondary effects that a UBI would bring. Yeah, we've solved it there, I guess! Economists should go find some real jobs /s
> There's nothing about being poor that forces you to emit more carbon when compared to other people, as far as I know.
Being poor means having less or no choices. Low income, no or negative capital. You practically have to go with the cheapest at the moment, even if it is more expensive in the long run.
So, a low upfront cost gasoline car Vs a more expensive electric car with potential lower TCO.
And that doesn't account for the fact that they have no discretionary spending. If everything becomes more expensive, the rich person can simply buy less.
I still think it's a sensible idea, simply because the currently socialised costs (co2 emissions & poverty related ones) become explicit.
Cheapest option is to not buy a car and or go by public transport or a bike.
And the reason why gasoline cars are as affordable as they are now is that the carbon tax is not here and cars are heavily subsidized in general. Carbon tax isn't even really a tax, it's more akin to removing a subsidy (you cannot pollute for free anymore and make someone else pay the costs)
Hi, I read once somewhere about it that, if (big if), if we make large transaction to make digital and tax of digital transaction like transaction fees/banking fees, for every transaction we make there is x% of tax is taken by government.
It may cause people to not go digital but encourage black money, but if government i.e basically us make a decision that's(non digital translation) are not legal in country. What do you think about it?
I see black money, barter system creeping in but in bigger picture what do you think about it
This form of tax will take people with more spending to tax more, so people who live beyond their means will be taxed more and poor people will be taxed less.
I don't see how this would really work. A carbon tax in an ideal situation is just a consumption tax. This means that it's the consumer that pays it. Rich people don't eat more food nor do they drive dozens of cars at once. If we want this carbon tax to offset our greenhouse emissions then that means it will necessarily disproportionately impact poor people.
And then you want to turn around and pay that money back to people as UBI? It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI.
In an unideal world it will just be gamed to all hell instead. Also, good luck getting people to swallow a doubling of their tax bill even if you give it back.
Rich people may not eat more food, but they may eat food that is shipped in from all over the world. They don't drive dozens of cars at once, but they do have lots of things delivered, and tend not to take public transport as much. They also tend to fly a lot more (which is a big source of emissions), and live in big houses with lots of lights and area to heat and cool.
I agree with your point that a carbon tax would not serve the purpose of a UBI. Now I'm gonna go off topic a bit and focus on carbon taxes.
I volunteer with Citizens Climate Lobby. The bill we're trying to get through the House of Representatives, H.R. 763 aka the Energy Innovation Act, is a carbon tax, but it's not like you imagine, I think. It taxes fossil fuels at the point of production, and therefore allows normal market mechanisms to adjust the prices of everything. No change to individual tax bills. Some things would get more expensive, but we would all get a check in the mail to offset. If you pollute more than average, the check wouldn't make up for the increased prices, but if you pollute less, you'd benefit. The change in prices will shift consumption away from the emissions-intensive goods and services, toward those that are greener.
The poor would disproportionately benefit from this. Not just financially -- carbon emissions and pollution that affects health are of course closely linked, and it's poor people who suffer the most from pollution, because they can't afford to move somewhere else to escape it.
It's not just about individual behavior -- companies would feel the same shift in incentives. Another way to think of the tax, from an economist's point of view, is that it's just correctly pricing a market externality.
The weird thing about a carbon tax like this is that a majority of Americans support it, but most of us don't think that it's a majority! It's already popular, we just have to convince Congress.
> Rich people may not eat more food, but they may eat food that is shipped in from all over the world.
Or they may eat farm-to-table and shop at local farmers' markets. On the other side, step into any Wal-Mart or dollar store, and almost everything there was manufactured and shipped from Asian continent.
> It taxes fossil fuels at the point of production
How does it work with fossil fuels refined in Middle East and delivered to China?
> tend not to take public transport as much
The first thing that happened after California approved driver licenses for undocumented aliens is that used car sales surged and public transport dropped (LAMTA and Metrolink specifically). For a lot of lower-income customers buying the car was aspirational and signified the rite of passage. In their price segment they're not typically shopping EVs either.
> If carbon is used in the making of it, then it's X% tax.
That gets tricky - how much carbon was used in manufacturing an iPhone, a toy truck or that shrimp of questionable origin from a fast food place?
Every participant in that chain has an incentive to under-report their emission to make the final price more palatable. The larger the manufacturing sector, the larger the incentive to under-report and cover up any issues at the national level.
It’s not actually tricky. Simple ask foreign manufacturers to voluntarily submit to Western inspectors (so e.g. the US can control their production process same as it would if they were based in the US ... this of course shouldn’t only happen for CO2, but for other environmental & labour standards as well) and slap a 20-50% import fee on all that don’t. The problem solves itself!
That way local manufacturers aren’t being penalized, while foreign manufacturers can still be more competitive because of lower labour costs. Levelling the playing field.
Not only is what you described as 'tricky' - it's considerably too expensive and unworkable. We have a hard enough time agreeing on basic things, let alone get into the operational details of 'inspectors' from 'foreign countries' waltzing around.
We can't even do with money ie where it really matters. There are no real generally accepted accounting practices in large swaths of the world. And even then - things get tricky and ambiguous.
No - just tax the fuel and that's it. The fuel gets a harmonisation if it's taxed somewhere else and coming into the country and that's that.
Nope, we can do with money. Why do you think Swiss banks are so averse to open accounts for US persons? They don't want to be subject to US reporting rules. It gets harder with paper money
I agree fuel taxes are best. But the issue remains - how will you know that the manufacturer is buying taxed fuel (not black-market, untaxed oil, or untaxed oil that China is importing from Venezuela with a bilateral agreement)? Inspections.
It would be complicated, but the West (US + EU + the rest) are big and powerful enough to make it happen.
The US having digital access to financial records of citizens in Switerzland, is not comparable to the scale of government entities overseeing the entire global manufacturing base.
The US/EU could feasibly make some kind of trade pact, whereby producers are required to indicate the carbon used in each product, but there is no feasible way to oversee it.
COVID masks are literally being made by people in 're-education jail' in China. Safety and operational standards in many parts of the world are simply non-existent.
>Or they may eat farm-to-table and shop at local farmers' markets. On the other side, step into any Wal-Mart or dollar store, and almost everything there was manufactured and shipped from Asian continent.
This is my main concern. The reason the gillets jaune were protesting was due to taxes that had an outsized effect on low income and rural earners.
The pollution problems with bunker fuel are primarily local and short-lived, however, whereas CO2 emissions spread through the entire atmosphere and stay there for a very long time.
OT: This website is on a new (to me) level in the cookie wars. After I "change my preferences", which is already hidden behind purposely confusing wording, it has to "save my changed preferences", with a progress counter, that seems to get stuck on 90-something percent for a long time, with a big, handy "cancel" button visible.
It's hard to interpret this as anything other than maliciousness.
> Shipping by ocean is surprisingly low in carbon emissions.
Surprisingly low emissions per amount of cargo transported, yes. But the absolute amount of emissions is still huge and the amount of cargo keeps growing, so I don't think this measure is very relevant.
Cargo ships are better for the environment than shipping the same amount of goods from China to the US via trucks. But as the latter isn't possible anyway, this is not a very tangible benefit.
What would benefit the environment was shipping less goods.
> Or they may eat farm-to-table and shop at local farmers' markets. On the other side, step into any Wal-Mart or dollar store, and almost everything there was manufactured and shipped from Asian continent.
Good point. Rich people who live environmentally sustainable lives are not the problem, in this context. I don't have a problem with them being rewarded.
The way I look at it is, right now, even if you want to reduce your emissions, it's really hard to know how to get the biggest bang for your buck. Should I get a new fuel-efficient car, or drive this one until it dies so as to avoid the emissions of manufacturing a new car? Should I swap out my gas stove for an electric one? Etc. Adding a carbon tax is almost like magic, in how it piggybacks on all the normal price optimizations we do every day. The prices will change to reflect the environmental cost, so you don't even have to try to change your behavior, you'll just adjust naturally.
> How does it work with fossil fuels refined in Middle East and delivered to China?
I should clarify, it taxes fossil fuels produced in America or imported into America. It doesn't solve the problem for the whole world -- if only it were that easy. But it does solve one half of the problem where the US and China can point at each other and claim that the other one should make the first move while the problem gets worse and worse. The USA isn't the biggest polluter per capita, nor the biggest in absolute terms, but it's pretty high up on both, and we've been contributing to the problem for a LONG time.
> The first thing that happened after California approved driver licenses for undocumented aliens is that used car sales surged and public transport dropped (LAMTA and Metrolink specifically). For a lot of lower-income customers buying the car was aspirational and signified the rite of passage. In their price segment they're not typically shopping EVs either.
So... all I get out of that is that people who are not allowed to drive drive less than people who are allowed to. I don't think that is evidence that poor people take public transport less than rich people.
> The way I look at it is, right now, even if you want to reduce your emissions, it's really hard to know how to get the biggest bang for your buck.
This is absolutely true, and it misses an important point: lowering emissions not your own is almost always more efficient.
A very tangible real world example.
I invested xxxxx € making my little house super energy efficient. Meanwhile, in Riga, Latvia, close friends had central city heating, but not even a valve for turning off radiators. They'd just open a window at -30°C. I could have bought thermostatic valves for the entire building and made ten times the ecological difference for a tenth of the price!
Even without a carbon tax, that alternative would have made a lot more economical and ecological sense for both myself and a lot of other people!
> Rich people may not eat more food, but they may eat food that is shipped in from all over the world.
Everybody, except for people in the poorest and most isolated of developing nations, eats food from all over the world. Most African nations aside from the land locked sub Saharan nations have access to the global food market. Almost all of the worlds cashews come from Vietnam and almost all of the worlds Almonds come from California. Much of the fruit consumed in the US is grown outside the US, especially in South America. Likewise South America imports most of its locally consumed fruit from the US.
I am currently living in Kuwait where fresh fruit is available everyday. If not for a global food supply the only fresh fruit available here would be a single variety of date available during a single 6 week window. Even then those date trees are completely dependent on irrigation to survive.
Growing up in Texas perhaps the only food dependent upon local growers were pecans and watermelons.
But doesn’t that show that life is not sustainable in that area? Your arguments make it seem like it would be a good idea to leave Kuwait, not that we shouldn’t tax carbon. Obviously we need a transition time, but there’s a lot of environmentally unsound practices-including living in deserts.
People were sustaining in Kuwait for more than 200 years before they had access to cheap international commercial food. My understanding is that Kuwait is only slightly less sustaining than Southern California which is also a desert and also contains Death Valley.
Another point of reference: Israel is 80% desert & is mostly (aside from grains imports) food independent. Food is expensive in Israel (2-3x German prices, anecdotally) but availability and diversity are good.
Modern agriculture makes local production possible almost everywhere, it's just not as cheap as importing.
I would say that basic availability is ok(except for the egg shortages during the COVID rush), but there are shortages in butter, and in fruits and vegetables around the High Holidays season - and they are already importing a lot of food for it.
Also, seasonal fruits appear only in their season(which can be as short as three weeks), and are expensive(look at the price of any berries).
Also higher prices is a (market) form of shortage-demand outstrips supply.
I think a lot of these issues are political (whether farmer lobbies or kosher keepers), but yes you're not getting 100% the same availability as if you could import everything but it's mostly fine. And this is in a small, very densely populated & arid country.
If Israel can get 90% of the way there with mostly minor annoyances like what you listed than most countries can probably get even higher (with the drawbacks of higher prices & the rare lack of availability of a non-crucial commodity).
Also keep in mind that the low cost of imports is partially because externalities like pollution are not being accounted for.
Local producing of almonds in greenhouses would be way more carbon-intensive than shipping them from California. This would mean growing only local crops
I wonder if we might be underestimating just how much rich people can burn carbon though. A 1-hour speed boat run with 2 marine V8 engines chugging at it is probably one person's gas consumption for a month. Who knows how much all those private jets burn. All those rooms in the mansions, that need to be kept at some temperature level. You could probably sell it just by noting that Larry Ellison burns 50x as much carbon as one of the Mexican laborers who trims the lawn and rides back home on his bike.
In any case, there's probably some math / clamping functions you could use to incentivize the general population into doing their part, and that we don't end up in a perverse situation where carbon-burning is incentivized through fuel subsidies. And direct funding into battery recycling. Top-to-bottom this strikes me as a bunch of technology and math problems, which we can do.
A B737 burns about 750 gallons an hour for 200 passengers.
A Lear Jet 45 burns around 165 gallons an hour for upto 8 passengers.
If both planes are full the Lear Jet uses about 6 times as much fuel per person.
If the Lear Jet has 1 passenger and the 737 has 4, the Lear Jet is better.
A Lear Jet gets about 3mpg, with 8 passengers that's 24mpg, a similar fuel efficency to a Ford F150 with a single passenger.
> You could probably sell it just by noting that Larry Ellison burns 50x as much carbon as one of the Mexican laborers who trims the lawn and rides back home on his bike.
A big issue with CO2 per capita is that imports of CO2 emissions often don't count. If China uses 10 tons of CO2 to produce a dohicky which is then sold to a German consumer, that goes down as a China emission rather than a U.S emission.
Sure, but I think the bone of contention is whether a carbon tax is a viable mechanism for funding UBI.
The reason why a carbon tax works well to efficiently reduce carbon emissions is pretty much the same reason it can't work well to transfer wealth.
EDIT: Another way to understand the relationship is that because consumption increases faster per additional income dollar as you move down the income scale[1], any actual wealth transfer is likely to result in greater carbon emissions.
The wealth transfer mechanism can be designed to account for that. For example, a negative income tax would work.
Another thing to consider, the tax is on the producers of the fossil fuels, not the consumers. And those producers are increasingly competing in markets with non-carbon alternatives. So it is unlikely that they can pass the full cost onto consumers, more likely the tax will be eating into their profits. And what does show up on the consumer side will likely show up as mild inflation. In an economy with an effective UBI, wages are more likely to track inflation as the labor market will have more negotiating power.
FWIW, I have no idea if a carbon tax alone is enough to fund UBI (or negative income tax). But it is certainly one source of revenue that I would fully support tapping into.
Unfortunately, airlines avoid taxes on aviation fuel because of the Chicago Convention. It could be difficult to enforce a carbon tax on fuel for international flights.
Nitpicking: one transatlantic flight emits 2 tons of CO2 per passenger, a human emits 4 tons per year per capita on average.
> Unfortunately, airlines avoid taxes on aviation fuel because of the Chicago Convention. It could be difficult to enforce a carbon tax on fuel for international flights.
Why can't airports be taxed based on the CO2 generated by planes landing at them? The airport can recover this from the airlines however it wants, including incentivizing lower polluting planes by charging lower landing fees.
How does this deal with the border-adjustment problem? I used to be a strong supporter of carbon taxation, but ultimately concluded that a good policy (that doesn't have perverse incentive consequences for imports/exports) would be an extremely difficult policy to implement, and beyond the current scope of support for climate policies.
H.R. 763, as I understand it, puts taxes on imports from countries that have not implemented similar carbon taxes, in an attempt to avoid disadvantaging domestic businesses. Goods exported to other countries will allow a tax refund as well.
So if I understand what you're saying, you're worried that domestic producers will focus more on exports, rather than selling their goods domestically? I think it would tend to shift things in that direction to some degree. Do you feel that that would negate a lot of the benefit of the bill? I feel like there's more to what you're saying that I haven't grokked.
If the border tax is just for countries without a similar tax, let's consider one example, say steel. Foundries in countries that fall under the taxed regime then have an incentive to produce the cheapest (and dirtiest) steel, since they get no benefit vs the other foundries (you could rightly retort though that this is largely the way it is today). Maybe the tax then should try to evaluate the relative carbon intensity of each supplier, rather than just by region/country, but good luck avoiding cheaters around the world.
I guess overall I have a hard time imagining that you could create a fair tax/duty for carbon intensive industries that accounted for all of these potentially perverse incentives unique to each industry (just take a look at the US tax code), given how hard it is to write and pass policy without succumbing to special interests.
It sure wouldn't be perfect, but I don't think that's enough reason not to do it.
Hopefully, if we import a lot of steal from a country, our border adjustment would be incentive enough for that country to adopt for themselves this very sensible fee & dividend system, after which each steel maker would actually be taxed the appropriate amount.
> Rich people may not eat more food, but they may eat food that is shipped in from all over the world. They don't drive dozens of cars at once, but they do have lots of things delivered, and tend not to take public transport as much. They also tend to fly a lot more (which is a big source of emissions), and live in big houses with lots of lights and area to heat and cool.
I think it may be the other way round. Rich people are able to buy locally sourced, sustainable grown groceries, whilst poor people have to settle for cheaper, intensively farmed ones. A good example would be meat. Meat of local, free range animals is way more expensive than meat of intensive animal farming. Same with cloth; poor people aren't able to choose between cheap or ethical/biological fair trade cloth. They have to choose that, which they can afford.
Hi! I regularly donate to CCL, but I haven't seen a way of volunteering that I felt would be an effective use of my time. (I'm not especially eloquent or charismatic in person)
What do you do for them?
And why can't HR 763 get any republican sponsors? I vaguely recall this policy seeing more republican support in previous session (though I could be misremembering).
How do you handle import/export? Every pollution tax I've seen always gets bogged down in details when they have to account for other countries who don't have it.
Food that is shipped in 'from all over the world' is typically more fuel efficient than food that is delivered from 'local sources'. Cargo shipping is actually very efficient. Your suggestion is not grounded in reality.
rich people can buy teslas and green energy. you’re wasting your time thinking this will help poor people. it won’t. it’ll reduce the rich’s consumption but everyone else will still use poor people tech and end up getting carbon taxed. maybe redirect your efforts to something useful.
Implementations vary, but the most efficient design is to tax carbon as far upstream as possible (e.g. oil refineries), rather than at the manufacturer or household level. So, it’s not a direct tax on consumers the way a sales tax is. In theory, this cost is then passed on down the chain in the form of higher prices for carbon intensive products and processes.
A carbon tax is overwhelmingly considered to be the most efficient solution by economists for Econ101 reasons—pricing negative externalities (correcting a market failure is more efficient than doing nothing), and enabling competition and comparative advantage (more efficient than command-and-control policies).
The idea of taxing things we want less of is known as a Pigouvian tax, by the way—and it’s considered a no-brainer even by the most conservative economists (e.g. Mankiw).
> good luck getting people to swallow a doubling of their tax bill even if you give it back.
Not so! Public opinion on climate change has shifted dramatically in the last several years. This poll from last year (and from a top Republican pollster to boot) found that people support a carbon-tax-and-dividend policy 4-to-1. 75% of GOP voters (!) under age 40 support this type of policy. Read all of the results, they are remarkable. It’s a winner in the eyes of both economists and the public. https://www.clcouncil.org/media/Luntz-Carbon-Dividends-Polli...
Stop deliberately misrepresenting the truth and make an actual argument. “It will never happen” is not a logical argument. Clearly, the level of action is below what is needed—but that does not imply it is impossible. The US is the major domino that needs to fall (and has been for decades).
* “As of April 1, 2019, 57 carbon pricing initiatives have been implemented, or are scheduled for implementation. This consists of 28 ETSs, spread across national and subnational jurisdictions, and 29 carbon taxes, primarily implemented on a national level. In total, as of 2019, national and 28 subnational jurisdictions are putting a price on carbon”
* “Of the 185 Parties that have submitted their Nationally Determined Contributions (NDCs) to the Paris Agreement, 96—representing 55 percent of global GHG emissions—have stated that they are planning or considering the use of carbon pricing as a tool to meet their commitments.”
Initiatives implemented or scheduled for implementation:
* National ETSs: Australia, Austria, Belgium, Bulgaria, China, Croatia, Cyprus, Czech Republic, Germany, Greece, Hungary, Italy, Kazakhstan, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, the Republic of Korea, Romania, and Slovakia.
* National carbon taxes: Argentina, Chile, Colombia, Japan, Mexico, Singapore, South Africa,
and Ukraine. Both national ETSs and carbon taxes: Canada, Denmark, Estonia, Finland, France, Iceland, Ireland, Latvia, Liechtenstein, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. Subnational ETSs: Beijing, California, Chongqing, Connecticut, Delaware, Fujian, Guangdong, Hubei, Maine, Maryland, Massachusetts, New Hampshire, New York, Nova Scotia, Québec, Rhode Island, Saitama, Saskatchewan, Shanghai, Shenzhen, Tianjin, Tokyo, Vermont, and Washington State.
* Subnational carbon tax: Prince Edward Island.
* Both subnational ETSs and carbon taxes: Alberta, British Columbia, Newfoundland and Labrador.
Note that an ETS (emissions trading scheme, aka cap-and-trade), is effectively equivalent to a carbon tax in terms of economic theory, though their implementations obviously differ.
You’re right, that is the technical terminology (because the government does not directly collect the sales tax from the consumer, the stores do).
Still, from the point of view of the consumer it’s “direct” (in ordinary language, not economese). As in: “concretely and transparently makes product X more expensive for me”.
With an upstream carbon tax, it’s unclear how it affects the prices of consumer goods since it has to filter through the entire supply chain first. It’s not like “this pack of gum produced 3.14 pounds of C02, so you—dear consumer—will be taxed an additional $0.42”. That would be a nightmare to administer.
There are two big reasons you can't fund a full UBI exclusively with a carbon tax.
The first is that the size of the carbon tax would be problematic. If you wanted to fund a UBI from e.g. VAT, or income tax, you might need a rate of something like 20%. If you wanted to fund the same sized UBI from a carbon tax, the rate would have to be thousands of percent, because burning carbon is not that huge a proportion of all economic activity. And then that would be very disruptive, because rather than some kind of gradual phase out of carbon, everyone would abandon it immediately to avoid the incredibly high tax.
Which is the second problem. Even if you used a less oppressive rate so that people would phase out carbon over some number of years rather than some number of weeks, that's eventually what would happen, and then your tax base dries up. It inherently can't be a long-term funding source because its purpose is to make carbon go away.
It is, however, a brilliant way to distribute the proceeds of a carbon tax. The "UBI" would then be a smaller amount (or require additional funding from general taxes), but it would effectively moot the entire economic impact of the tax (everyone is, on average, getting all the money back) while still creating a good incentive to be the first to stop burning carbon.
> This means that it's the consumer that pays it. Rich people don't eat more food nor do they drive dozens of cars at once.
Rich people may not consume more in proportion to their wealth, but they do consume more in absolute terms. WRT carbon tax in particular the rich do consume substantiall more with plane rides, so the tax side would be more progressive than a plain VAT.
Also, they buy their kids cars.
> It'll be a slight redistribution of wealth from the wealthy to the poor and that's it. It won't fulfill the role of a UBI.
Maybe it's not enough but that doesn't make it a bad thing. One could combine a bunch of externalizes taxes (carbon, land, etc.) which together could create a better UBI. Or yes, throw in VAT Yang style too.
> In an unideal world it will just be gamed to all hell instead.
"gaming" is finding ways to maximally consume / Cabon impact. Yes, please game this as much as possible!
> Also, good luck getting people to swallow a doubling of their tax bill even if you give it back.
By definition only the people that consume 2 / punative-rate the average double there taxes. I'm sure these few rich people will raise a fit and have outside political power, but this applies to any progressive tax.
Consumption based taxes are regressive, not progressive, though, even if the rich consume more in absolute terms. The key is they consume less in relative terms.
That page is a bit misleading. That's total consumption of aviation gasoline, which is what powers aircraft with piston-based engines. Aircraft with jet engines use a distinctly different fuel aptly called jet fuel, which isn't accounted for on that gasoline page.
If you go to this[1] page, it buckets all aviation into a category, and shows it accounts for 9.4% of US transportation energy consumption. Still significantly lower than the 54.5% that light-duty account for, but a substantially larger proportion than the gasoline page leads one to believe.
One thing to keep in mind for [1] is that it doesn't differentiate between consumer and commercial usage. And there are a lot of non-consumer vehicles that'd fall into it. A few examples likely to be large contributors to that category due to sheer volume and time on the road: last mile delivery vehicles, taxis, and police cruisers.
When the carbon tax was introduced in Australia the tax free threshold was increased from $6000 to $18,000 and additional tax benefits were given to low income and welfare recipients. Anybody earning less than $80,000pa at the time were better off under the carbon tax, and anybody earning above that were in a position to make purchases to lower their impact.
You're neglecting that the carbon-intensive activities would now be at a disadvantage compared to carbon-free ones -- which would shift consumer behavior.
To correct this slightly, a carbon tax changes the relative price of goods (rather than a consumption tax, which is typically flat). The primary industries affected tend to be industrial, rather than than consumption based (e.g. energy, freight, mining, and smelting).
I'm unsure how you would go about doing that. You would somehow have to be able to assess the carbon emissions of every company. This gets quite difficult, because you have to start answering questions such as "do we count the carbon emissions of the individual employees?" It might seem like a silly question, but this could have an impact on which types of businesses people invest in.
It would probably just be easier to have a general carbon tax that gets paid back to people. Then separately you could have a UBI paid for by capital gains taxes or something along those lines.
I work for a fintech startup. I'd be very surprised if we had to report emissions. Yet, we are definitely a method for the rich to get richer through investments. And we currently benefit from a particular kind of carbon footprint - somewhat indirectly.
No but they may have to declare that they have nothing to declare or those who do need certain kinds of operatimg licences that your company doesn't.
Obviously they know who's running refineries, paper mills and things like that.
Why would they? If they export their goods they get the tax back and if they wanted to import after moving to a different country they'd have to pay at the border.
The best estimate as to how much carbon the product released times the price of carbon of course. I'd guess the estimates would be on the high side to encourage domestic production.
> In an unideal world it will just be gamed to all hell instead.
I suspect that as the carbon tax incidence of certain groups changes over time they (or others) will lobby for commensurate changes in UBI (or any other similar compensation schemes).
The result will be that both measures will be rendered ineffective.
Short answer: let's say shipping a single person costs 100$ to an airline, and the airline sells the ticket 120$; but then you require that the airline pay 20$ in taxes per ticket they sell: at this point the airline will sell its tickets 140$.
There's some wiggle room (eg maybe some airlines get too much profits and with the right incentives you can get them closer to the market price), but generally speaking, taxes to corporation trickle down directly to consumers.
That's something people don't understand, because they visualize giant mega-corporations as extracting immense amounts of wealth from the poor and giving it to their rich CEOs, but in practice these corporations benefit from economies of scale, and their margins are fairly tight.
Even though there is no difference economically speaking, there is definitely a psychological difference. We have studies that prove this fact.
It is a gross oversimplification to ignore the perceived difference of an airline raising their price because of a tax, and a consumer having to have to pay an extra tax of their air tickets.
Producers are taxed, however the tax is passed on the customers in the form of increased price. Because the companies costs increased (due to tax) and it wants to maximalize its profit.
I get your point but I think sending the right signals to the market about carbon use is more important.
If we need to tax the rich more we tax the rich more. If we can’t control global warming poor people have much worse things than taxes coming to ruin their lives.
Every few years or so people pick on Al Gore because of the size of his carbon footprint, basically rich people use more resources and resources in our world get very much linked to energy usage - a good non Al Gore bashing look at it https://www.greenbuildingadvisor.com/article/the-truth-about...
No. A UBI paid for by pigovian taxes would be redistributed right back to the people, counteracting the problem you mentioned that led to the Yellow Vest protests. It would align the public’s incentives with increasing the tax, thereby increasing the cost of the negative externalities!
UBI is a very powerful tool for aligning the public’s incentives with collective action that may otherwise be intractable.
If tax money is redistributed back to the people why collect it? Obviously it's not evenly redistributed, hence the plunder.
Public incentives and interest don't exist to begin with.
My personal interest is to not pay any tax I don't want to (I'd pay some for defense and justice), for example.
1. To counteract the UBI and withdraw money from the economy
2. To use fiscal policy to make certain externalities more expensive, thus making people choose to transition to their alternatives. Collective action problems can’t be solved otherwise.
Couple of things: the wealthy absolutely emit more carbon then everyone else. Second, from a macroeconomics point of view, it doesn’t really matter if you tax the supplier or the consumer — in theory, it balances out the same.
> the wealthy absolutely emit more carbon then everyone else
Probably true, but probably not proportionally so. If you are 10x, 100x or 1000x as wealthy as me, you are probably not emitting 10x, 100x or 1000x more carbon than me. This makes an emission tax still disproportionate in some sense.
It actually can be proportional. What do rich do with their money? More money with factories, mines, refineries etc they own directly or via funds, and exactly these are taxed.
But the rich don't pay those carbon taxes. That simply gets rolled into the price of whatever they produce. It's the people buying the end product that pay for it.
A wealthy person could also simply not invest in these businesses. They could invest in nothing at all.
The point about it not mattering so much whether you’re taxing the supply side or the demand side is that higher prices ultimately lead to lower sales, effecting the producer.
That’s the whole point of a carbon tax — to make carbon unaffordable. While at first that will likely be “regressive” (since most consumption is carbon driven), over time it would lead to decoupling carbon from the supply chain through innovation.
I wonder how much "money you'd save" by having near zero paperwork for eligibility.
Also, while those jobs would be gone, those people could then do more economically "productive" things.
It's nowhere near enough to fund a UBI that most people could live on without additional assistance, but that's no reason not to do it. It just means you need to fund your UBI with other sources of revenue too. Really, I think the GP used the wrong word when they called the dividend a "UBI".
And it _really_ is the best policy. Even if it did nothing to reduce emissions, it's a matter of justice. I won't tell you that you can't fly across the country every single weekend or emit a gigaton of carbon mining bitcoin but, if you do, you _really_ should reimburse me and my 2-year-old daughter for the harm you're doing to our futures. Likewise, when I heat my ridiculous suburban mansion to 80F through the New York winter, I'm harming you and your children, so I should reimburse you.
But it WILL have a great effect on emissions (if ever implemented). Probably more than any other policy we might enact.
Some of the comments around here complain about how regressive a carbon tax is. But in fact it is only regressive when not combined with the dividend. The price of a poor person's carbon footprint as a fraction of their income or wealth IS larger than that of a wealthier person. But the fact is that most poor and urban working class people's dividends will be greater than the carbon fee they pay, while people who have giant houses, travel by air a lot, etc will pay more in fees than they receive in dividends.
This page (https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288.
Lastly, this policy is currently a bill in the US House of Representatives (https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D...) and is currently "sponsored" (whatever that means) by 18% of the house. Sadly almost all democrats. I think the policy saw more republican support during the few years before the current administration, but I can't find the data too easily at this moment.
This bill and past ones like it include a schedule for the price of emissions to start low and increase over the next several decades. The tax itself is to be collected at mines, ports, and oil refineries, where fossil fuels first enter the economy. Regular people will only see it in the form of initially-very-small increases in the price of goods and services. And they'll get their dividend check or direct deposit every month. I don't think I know anyone who wouldn't love getting that check in the mail.
Yachts, for example. Or private jets. Or even huge houses. We could tax the snot out of all of these. It would probably make them only more desirable status symbols, and thus stimulate the tax.
you have no sense of math. if you forcefully took back every mansion and giant boat from the rich and sold them at auction for double their value, you wouldn’t even fund the medicare/medicaid budget for more than two years.
Henry George had it right: Use land value tax to fund UBI. Abracadabra, all the birds get killed with one stone: Real estate prices calm down, income inequality calms down, environmental costs are valued into use, and poverty is eliminated.
There are grandmas around me in the bay area who own houses worth $1mm they bought for $100k. That means they made $900k. They can afford to pay the $10k in property taxes for 90 years, as long as we give them the option to defer paying until they sell the property and cash in.
If it’s a $10k land value tax, they can construct an ADU on the property and not have their taxes go up. Seems like a good incentive structure to help the housing shortage.
Property taxes are calculated on the value of the land and the value of the structures. So current land value taxes would be about $2000. If a state were to pass a land value tax, it would calibrate it so that it offsets a reduction in the tax on structures. The granny would probably pay $5000 in land tax and $5000 in improvements tax. Only in an extreme case would she pay something very different, like maybe she lives right next door to a train station. In which case, she could probably sell her property for $10mm. I’m sure policies could be designed such that she would not be forced out until she died and then some of that $10mm gain would be collected in back taxes.
But that's not how a land tax would work. The idea is that it captures most of the value of the land (removing the rent seeking ability). So the tax would be at a level that makes owning the land itself not very profitable, it's the improvement upon the land that offering return on investment.
So you'd likely see a $1M plot of land taxed at $100,000+ per year. It would make zero sense to sit on the empty plot or build a single family home. It would incentive someone to building a $10M building on it.
Ideally, IMO. Simply owning land is not a meaningful contribution to society. Rent from land ownership therefore disincentivizes meaningful contributions to society by creating reliable sources of income to those that don't contribute, disproportionately among the rich (who otherwise have the best means to contribute) because they disproportionately own land from which they can extract rent.
> If they sell it won't that just mean they have to pay 800k in taxes on their 1m house and then have to find another house for $1m?
Well, if land value was taxed on sale, grandma could just sit on the property until she died and not be affected by the policy at all. This is IMO not ideal because much of land value will then be lost until the next generation comes along. LVT should instead be collected on a regular basis.
Ideally, with single-tax LVT, land value is completely consumed by taxes. Any money grandma makes on the sale will be from the value of her own development and the excess value over land value the buyer expects.
That said, I believe that there are important criticisms that can be raised against Georgism. I believe that it would have to be accompanied by strict zoning laws to avoid displacing people and exploiting natural resources. I'm less concerned about grandma's little house than I am about a tax that makes things like fracking or deforestation to extract what makes the land valuable inevitable.
Say Grandma bought that house in 1960 for $100,000 (it's a really nice house). With inflation, that $100,000 is $870,935 today. Maybe that's still a return on investment, but not really that much. If Grandma had put even 1/10th of that into Apple stock, she'd be a billionaire today. I don't know where I'm going with this.
Also, she doesn't actually have the money. She has to live somewhere. Sure she could downsize, but I think it's considered pretty mean to make old people move house just because property prices got expensive around them.
This is trivially solved with a home equity loan. (If this proposal were broadened, non-recourse home equity loans for purposes of paying this tax would need to be expanded.)
I think it's worse to force somebody to sell chunks of the house to the bank, just so they can pay taxes on it, until eventually they don't own the property at all anymore. The bank then sells it to somebody else and you have nothing. You'd be better off downsizing and just avoid the tax.
> it's worse to force somebody to sell chunks of the house to the bank
You're selling part of the upside. That's the point of the land value tax. Someone who owns a $1mm house from a $100,000 purchase didn't do $900,000 of productive work. Those gains are rents, in the economic sense, not income. Giving those up--or downsizing, as you suggest--isn't ridiculous and is the point of the land value tax.
That's called inflation. Its not her fault that properties became so expensive. All she wants is a 3 bedroom house. Downsizing is not ridiculous no, but we do generally consider it unfair to push old people out of the houses they lived in their whole lives for ideological reasons.
I would rather we deflate house prices by making it unprofitable to own a home that you don't live in, and have a massive oversupply of new homes.
If she's living on a prime plot, yes. "I was here first!" only sounds fair to toddlers. She'll be able to live in comfort (probably with more comfort) elsewhere with the proceeds from the sale.
In my state of Louisiana, there is a homestead exemption where if the property is your primary residence, you are exempt from a good chunk of property taxes. It doesn't always make it zero and it doesn't stop taxes from rising at a somewhat reasonable rate (though some would disagree), but it keeps it from having the California problem of taxes being essentially fixed at the purchase price while still protecting owner occupants. There are lots of other variations on this that work just fine.
But that’s not the discussion. A land value tax captures pretty much all the value of the land. So a prime spot in a major city might cost $500,000 but have annual property taxes of $100,000.
The goal is to make the land unattractive unless you optimize the use of the land and build high density.
> The goal is to make the land unattractive unless you optimize the use of the land and build high density.
That's right and it should be that way. The value of the land is a function of the success of the local community - it shouldn't be captured by a private investor while workers continue to pay income taxes to service and improve that land.
But if your only objection is that elderly/disabled landowners shouldn't be pressured to pay taxes many states already have laws like that in place, eg
https://www.state.nj.us/treasury/taxation/ptr/
I don't know how the numbers work out but I imagine there are enough people using property as an investment that the above could be implemented with an exception for 1 single family home per tax household, and still generate a lot of money.
I agree it sucks to force people out of their primary residence, even if they would be nicely compensated. But residential property should be more focused on the residential part than it is these days.
Grandma moves to an apartment, her children move to apartments, her grandchildren move to apartments. Apartments are now actually affordable.
Otherwise your argument is "children and grandchildren of her everybody else pay $50,000 annual tax so she can keep living in this single family home and god forbid it were a multi-family or apartment building".
Yeah, this is currently a big problem with property tax in some places and a land value tax would only make it worse. I think it would accelerate the move to big multi-story apartment buildings that can get more revenue per sq.ft of land. Which I guess if you're worried about the housing crisis could be a good thing.
If people really want, there are common provisions in laws that protect old people who have lived in a place for a long time, but still has these land taxes.
You are assuming people actually make money on rental properties. I have had 3 rental properties and you don’t make a profit until the mortgage is paid off which is practically never. What you propose would hurt more people than it helps.
It's disingenuous to claim you are not making money as landlord.
You are building equity - maybe your monthly profits are 0 early on, but your total value is increasing m/m. You can sell your rental property once your mortgage is paid off. If you back calculate your monthly profit is essentially ~ (selling price) / months owned.
Or, just abolish any ownership of property except demonstrated by active personal (or organizational) use. We could have been planning cities decades ago and avoided the current real estate hellscape.
Or don’t do any of that, create a ridiculously simple tax (LVT) that has no dead weight loss, incurs no inefficiency, distorts no prices, reduces no ones freedoms, has no additional overhead (these values are already assessed/taxed in many places), and get all the same benefits.
The basic problem with funding a universal income with a carbon tax is that the graphs are pointing in the opposite directions.
Population is going up, and inflation is carefully managed to be persistently slightly positive, so you'll need to grow the nominal size of the UBI fund every year. But taxing carbon emissions will result in decreasing carbon emissions; in fact, this is the entire purpose of taxing it! So your revenue from taxes will go down as your outlays go up.
Philosophically, a universal basic income is intended to be a "forever" government program, like Social Security or Medicare. In contrast, we hope to bring our carbon emissions down dramatically and keep them down. Funding a forever program with a revenue source we hope goes away does not seem like good long-term planning to me.
Disagree strongly that you should combine UBI and carbon tax to same policy framework.
Carbon tax needs to function globally. An UBI scheme will be - for the foreseeable future - a local policy enacted within the borders of a sovereign political entity.
The economic actions of every human being must somehow be encompassed in the carbon tax scheme.
UBI on the other hand, is about how local governments wish to split and spread the dole.
Were you to combine these two into one, it would mean massive capital flows from the rich countries to the poor. It did not work well in the scope of development aid. You could say development aid has only made third world poorer.
If you could give this "global UBI" to people personally it might work better - stimulating local markets and entrepreneurs. Because everybody likes to get rich, and once you have UBI-loaded consumers everywhere, suddenly it makes more sense to offer services and products that were economically untenable before.
So if you could in some non-dystopian scifi future give direct UBI payments to people personally, then maybe this would make sense. But while we are seemingly moving towards a world with unconstrained financial services for everyone, we are not there yet! And we need carbon tax yesterday!
How are we not there yet? Well, according to the Economist, for example only half of the people in Latin America have a bank account. We can imagine that we can leapfrog to a future where everyone has a bank account through mobile banking services, but - not there yet!
Carbon taxes tend to be regressive. Using a regressive tax to fund "ubi" sounds cunningly evil. Are you familiar with the yellow jacket protests in France?
Since any UBI schedule can be adjusted to be more or less progressive, you simply sum the impact of carbon tax + UBI as a package and tweak until you get the desired net result.
By the way, this is already a very standard analysis that economists do, and the Congressional Budget Office (CBO) is well-funded, non-partisan, and is probably the best institution in the world for doing this sort of work.
Obamacare, the Trump tax cuts, tweaks to Social Security, all these proposals get evaluated over a long time frame by the CBO and the results are public (for example https://www.cbo.gov/publication/45447).
I was curious about the numbers. According to the Fresno Bee, "This legislation would initiate a fee of $15 per metric ton of carbon, rising by $10 per ton each year. All revenue would be paid out equally to every household. In 10 years, a family of four would receive an annual 'carbon dividend' of about $3,500."[1]
Based on those numbers the tax per metric ton would be $105 ($15 + ($10 * 9)) in year 10.
Per capita emissions in the U.S. are about 16 metric tons and slowly declining.[2][3]
As everybody gets paid an equal amount, if consumption remained steady then in year 10 an average family of 4 would be paying 4 * 16 * $105 == $6720 in carbon taxes. Since the expected payout is $3500, they seem to be assuming carbon consumption would drop by 50% to ~8 metric tons.
Even if you tried to make this scheme more progressive, I can't see how you could bring in enough revenue to get anything close to even a mini-UBI, and especially not a UBI that could begin to replace existing government services. After subtracting higher prices from UBI payments, and considering the fundamentally regressive nature of the tax itself, you'd be lucky to get into 4-digit territory per year for an entire family of four unless you did something extreme like only paying the bottom quintile, but then you're effectively adding a hefty tax to the middle class. And at $105/ton consumption already drops by half, so there's no room for increasing the tax to increase revenue.
A carbon tax is one thing; pretending it can fund a UBI seems like a pipe dream.
UBI == Universal Basic Income. $100/year might be universal, but no kind of income, not even a mini basic income. The term is at best meaningless at such paltry figures, but I'd argue it's disingenuous and misleading to use it that way.
H.R. 763 seems like legislation I could get behind, but not because it's a UBI. It's not even a good wealth transfer of any kind. The payments are just a way to soften the blow of the tax, but the reality is that it would disproportionately impact those lower on the income scale, especially in climates that require significant A/C, or for those in rural areas spending a high proportion of income on automobile travel. And that's before considering issues like delayed remuneration, which also has a strongly regressive effect, even if payments were month-by-month.
A carbon tax is regressive, period. It's a well established fact. There's no way around that. See consumption graphs, here: https://www.lse.ac.uk/granthaminstitute/wp-content/uploads/2... The phrase by definition means it's a horribly inefficient mechanism for wealth transfer. The lower you go down the income scale, the more carbon emissions are created by each dollar spent. That means you pay more tax as a fraction of income the lower your income. And don't forget, there are a ton more poor people than rich. Ultra-wealthy can't help you because marginal carbon consumption basically flatlines at the top. Furthermore, consumption elasticities means it's easier to switch away from high-end carbon intensive goods and services (e.g. sushi shipped from Japan) than low-end goods and services (gasoline, heating), so a carbon tax has the effect of becoming evenworse at wealth transfer the better it works to reduce emissions.
If we do institute a carbon tax, and I think we should, we'll need another mechanism to offset the additional burden imposed on the working and middle classes. For example, increasing income taxes.
I'm not saying it's a livable income. I don't think there's anything in in the definition of "income" that says a person needs to be able to live off it. It just means money that comes in. Anyway, the prefix mini should indicate that it's smaller than normal UBI.
>The payments are just a way to soften the blow of the tax, but the reality is that it would disproportionately impact those lower on the income scale, especially in climates that require significant A/C
Why? Wouldn't the poor person use less A/C than the rich person? The the poor person would overall profit from it.
>That means you pay more tax as a fraction of income the lower your income.
Sure, but paying the money back a fixed amount per person leads to an even more extreme fraction of income of money gained by the poor people. You've got a regressive tax (carbon tax), then a much more regressive tax (fixed dollar amount per person). Except the second one is a negative tax, so overall the 2 taxes together are progressive.
Yeah, sorry. I should be clear: I didn't in any way mean to imply that a carbon dividend would come close to being a UBI, just that it works the same way: a fixed chunk of money for everyone, every month/quarter/year. A nano-UBI, really. We'll still need a real UBI.
I also don't want to imply that the bill in question is primarily concerned with wealth redistribution or UBI. Its main objective is to allow the free market to find the most cost-effective solutions to emissions reductions.
We've had such a carbon fee and dividend program in Canada for 1.5 years now and yes, by and large poor people benefit more than rich people for the reasons outlined by Thorrez.
Using a regressive tax to fund a UBI makes it....not regressive. What's evil is the rich people distorting this plain mathematics.
Was the French gas tax redistributed such that below x (where x > 50%) percentile consumers would come out ahead? The Canadian carbon dividend is the ideal example.
I don't see how a carbon tax on its own solves any environmental issue. By itself it just means it costs more to buy things without changing how they are actually produced & that production's environmental impact. A carbon tax might be used for remediation after the fact, which isn't as effective, but such remediation funding would leave little room to fund UBI.
If you want the costs of products to "bake in" environmental costs, it needs to be done at the production stage. Producers need to either spend more money on reducing emissions or more money on remediating their environmental impact, or both, which raises product prices instead of very indirect tax. Trying to do it as a carbon tax doesn't offer producers any reason to change.
People respond to incentives. People don’t like to pay taxes and if they can save money by spending $10 to save $15 in taxes, they will. That’s the point.
Let’s say I own a power plant and I sell electricity to the power company for $X/kilowatt-hour. It turns out the best way for me to make a profit is to burn natural gas in my power plant because I make enough money per kilowatt-hour to afford fuel, and the economics of natural gas outperform nuclear and renewables. I can use renewables during the day well enough, but I’m not gonna buy a ton of batteries to store solar power to sell overnight when I can just burn natural gas instead.
As soon as I have to pay a carbon tax for burning natural gas, my incentives change. Do I build a nuclear plant? Batteries? A carbon capture system to plug into my existing natural gas plant? Or do I keep paying the carbon tax? If the carbon tax is high enough, I will absolutely change my system to save money. The same is true if I own a trucking company: I might buy more fuel efficient trucks, which helps a little, or maybe I become an early adopter of electric trucks, which helps a lot.
Most importantly, those grandstanding nincompoops in DC don’t have to figure out how to reduce carbon emissions. They just put a price on it, and all of a sudden every cold-blooded, cost-cutting bean counter in the country starts doing it for them.
There are lots of ways to do things carbon-neutral these days. The technology exists, or is very close to existing, to maintain our exact standard of living except carbon neutral. There’s just no reason to do so in terms of cost-efficacy because the downsides of carbon emissions aren’t priced in. A carbon tax changes that and provides a very real return on investment for change.
In the scenario you describe, the carbon tax would have to be high enough to make burning gas more expensive than renewables. Maybe that would work in this scenario? I don't know. That model is also a bit harder to implement for products rather than direct energy production. It also is reactive, rather than proactive. Tax is levied only after environmental damage is done. Given "politics", it is also highly likely that the tax might never be used for environmental remediation. (Just like lottery money generally never results in increases in school spending, instead just acting as a pool of cash that lets the government keep "normal" taxes lower)
From both an economic, environmental, and political impact perspective, it is significantly more efficient to put the burden of environmental action on producers of products rather than consumers. Don't given consumers an incentive to consume renewables and products made from them, give the producers who would otherwise use less environmentally friendly products an incentive to never create those products in the first place
It deals with the problem at the source, instead of indirectly.
Also none of this helps with a UBI. If we're taxing less responsible consumption or production, that money needs to be used to offset the environmental impacts the 1) are caused by that consumption/productions and 2) the environmental damage already done.
If you think we should have a UBI, that funding would need to come either from raising a purpose-built tax for it, or cutting spending in some way. In the US there are about 15,000,000 households in poverty. Giving them 500/week would cost about $410,000,000,000 per year. However many programs for the poor use income cutoffs between 130% to 200% of the poverty limit to be eligible for benefits. If those people were included in a UBI, the cost could raise to as high as $1 trillion/year, which would be a near doubling of the national budget. Even if carbon taxes were, irresponsibly, diverted from actual environmental remediation, I don't think they cover that bill.
> In the scenario you describe, the carbon tax would have to be high enough to make burning gas more expensive than renewables. Maybe that would work in this scenario? I don't know.
It’s possible the tax isn’t high enough. And it’s also possible that for some applications, people will choose to simply pay the tax rather than change their energy source because there isn’t e.g. a more economical source of jet fuel yet. But having a tax will tip the cost-benefit balance for a lot of people, and if it doesn’t do enough, a higher tax might.
Also, it might turn out in this scenario that building nuclear plants or capturing my gas plant’s carbon emissions end up being cheaper than switching to renewables. The point, from a policy standpoint, is that the government doesn’t care to second-guess how carbon emissions are reduced so long as they are reduced.
In theory, a cap-and-trade system—in which the government simply mandates how much carbon can be pumped into the atmosphere and auctions off tradable permits to do so—would work as well. This is how a lot of emissions are currently regulated in the US. A carbon tax is just a different mechanism to apply the same market forces.
> It also is reactive, rather than proactive. Tax is levied only after environmental damage is done.
I would also favor a carbon tax credit for actually extracting and sequestering surplus carbon from the atmosphere for this reason.
However, I think you’re implicitly missing the whole point of the carbon tax. A carbon tax, like any Pigovian tax, is most successful when it collects the least revenue. The most cost-effective mitigation for climate change is to stop emitting so much carbon. The goal isn’t to make people pay the carbon tax; it’s to make people change their behavior so they don’t have to pay the carbon tax.
> Given "politics", it is also highly likely that the tax might never be used for environmental remediation.
That’s not the point. In fact—since carbon taxes behave like consumption taxes and overwhelmingly impact the poor—many people favor a revenue neutral carbon tax that returns every cent collected to taxpayers in the form of a universal tax credit.
> From both an economic, environmental, and political impact perspective, it is significantly more efficient to put the burden of environmental action on producers of products rather than consumers. Don't given consumers an incentive to consume renewables and products made from them, give the producers who would otherwise use less environmentally friendly products an incentive to never create those products in the first place
Yes, that’s exactly how a carbon tax works. It wouldn’t be paid directly by consumers, except for fairly obvious things like taxes on gasoline or propane.
When I’ve been saying “people”, remember that producers are people too. In fact, producers are often more governed by the sort of bean-counting, cost-minimizing behavior that carbon taxes are meant to influence in the first place.
> Also none of this helps with a UBI.
I agree, for reasons I’ve outlined elsewhere. I don’t really care since I see them as separate issues though.
The Planet Money episode is about a revenue neutral carbon tax. UBI funded carbon tax doesn't make any sense to tie those 2 things together. Carbon emissions would decrease with a carbon tax, but the amount of revenue needed for UBI would stay roughly the same. This means we would need to tax carbon even more. This would create a feedback loop where energy is prices explode uncontrollably. Basically, if you live in Alaska and need to heat your house and drive a truck, you're basically screwed.
Yeah, it's crazy, I feel like it's been some kind of pre-programmed talking point. Say with a 10% VAT, even if you eat all of that in sales tax (which you won't, companies will eat it too), you'd have to spend 120K+ a year to offset, say, $1K/month UBI.
Not to mention that many variations of UBI proposals specifically exempt the kind of purchases most lower income people make most often. You can easily exempt normal groceries, clothing under a certain value, rent or utilities under a set value and many other essential items. UBI can be easily shaped to target luxury purchases.
> It's hard to find a rational excuse for not doing it.
Well the numbers being off by an order of magnitude is a good reason. The US tax revenue would have to double just to pay for anything that resembles UBI.
The carbon tax would have to be obscene to gather that amount of money (another $25k in taxes on a middle class US family). Even if people survive the initial shock, the rapid drop in demand for anything with a carbon tax now means that UBI has a budget shortfall and has to be cut.
It’s horrendously stupid to tie something we want to be dependable (UBI) to revenue from taxation on things we want to stop.
The majority of the M0 money supply, that bit of currency we use to get things done in our economy, is created by fiat at any of the ~4500 commercial banks (in the USA). Every time they give out a loan they create the money out of thin air as debt on their balance sheets. They are only required to have a tiny fraction of the money they 'loan'/create (fractional reserve).
If instead of letting only these banks create money, if the new M0 money supply was distributed to ~300 million human people instead of ~4500 corporate people, there'd be plenty for basic income. It'd be universal basic income then instead of commercial bank basic income. And banks could just be banks and get by on their actual services instead of being money machines.
... and that's not even acknowledging what the NY Fed have begun doing since October of last year, 10s to 100s of billions a week swapped for worthless items from corporations who can't pay their bills in Reverse Repo operations: a shallow attempt to pretend it isn't just giving money away (https://apps.newyorkfed.org/en/markets/autorates/temp).
So how many of the assets owned by the FED have become worthless if these corporations “can’t pay their bills”? Should be pretty significant if what you’re saying is true.
Even ignoring that tenuous claim, UBI is not a loan like the money that goes out via fractional reserve banking. The only way it would be similar is if every single entity who received a loan via a bank spent the money and declared bankruptcy.
Whether you fund UBI through printing or not is unrelated to the function of banks. Society still needs to divert extra cash to people who are extra productive with ideas and businesses. But how do you know how much extra money to give to whom? You make a dedicated layer in society who's sole function and incentive structure is to distribute that money to those most likely to use it best and name it "banks".
I'm with you. Eventually people would probably create something like banks from their pooled M0 created by fiat. But unlike the current system everyone would be aware it was their money and not some intrinsic value of the banks' so there'd be significantly less nepotism, corruption, etc. Just the initial sheer distributed nature of it would significantly help.
Those extra productive ideas and businesses generally aren't. It's just that money begets money and then people confuse being wealthy with positive traits enabled by having money, like productivity.
Most estimates on a carbon tax raise at best $200B a year in the US. For the ~150M adults, that would be a UBI of about $100 a month. Not much of a UBI. It’s also paid by the same people as explained elsewhere in this thread.
UBI proponents don't think the state provides basic living necessities. Personally I prefer targeted assistance instead of the ham-handed approach of UBI since targeted assistance better allocates limited resources.
The only way a UBI makes sense in terms of increasing equity in society is either a) printing the money to intentionally induce inflation, which american economic common sense seems allergic to, or b) reclaiming the wealth from the wealthy directly, which seems unlikely to be effective in the near future.
I certainly don’t want to put the idea of carbon neutrality and solving wealth inequality at odds, that doesn’t make any sense.
I am not a fan of using a Tax of something bad to fund something we want to have. The Tax should be directly related to cleanup efforts of the Bad thing™, otherwise you get a dependency where the Bad Thing™ is required to keep up funding.
You tax something you want to reduce. Since carbon emissions are associated with most travel and great-tasting food, it sounds like paying people to sit at home, watch TV and drink themselves into depression.
Sure, but presumably they’re both more expensive than fresh produce, which has a fraction of the carbon emissions.
Furthermore I really doubt that the carbon emissions of transportation dominate the carbon output of beef production, so the local vs imported beef cost seems irrelevant to the overall correlation of price and carbon output.
It's hard to find a rational excuse for not doing it.
Aside from we haven't figured out how to actually pass a carbon tax despite, what, twenty years of trying. I used to be enamoured with the idea, but now I'm growing to believe it's a distraction and a waste of time & effort that just isn't going to happen in any meaningful timeframe.
There are other ways to skin this cat, and the ones we stand a prayer of implementing are the ones we need to focus on.
As I recall, if you paid more carbon tax you got more back. That is not, I think, how UBI is supposed to work (e.g., those paying more taxes don't get a higher UBI).
Everyone gets back the same amount. You can't even know how much carbon tax you paid, because it's levied at the source. It's a redistribution scheme at the expense of polluters.
"It's hard to find a rational excuse for not doing it."
Just the opposite, it's hard to find any rationality for doing it at all.
If a 'carbon tax' is really just going towards reducing carbon, but not going into R&D for carbon reducing technologies, then it's probably just as efficient to simply limit carbon use in a variety of areas. Taking vast amounts of money from businesses is an indirect way to stimulate R&D on such things.
The simultaneous effect of severely limiting productivity, with a gigantic wealth transfer to those at the lower end of the economic spectrum, would be a 'double inflation whammy'.
A more extreme version would be: "No more cars or busses, and by the way, we're now going to grab your wealth and transfer it over to those people over there"
It's best to consider them as separate activities.
Solve the climate problem with effective technology and regulation, solve inequality by getting people into the workplace and by helping to more evenly distribute surpluses.
In particular, low interest rates are causing massive inequality in wealth due to home appreciation, which is absurd.
I feel like this conflates two issues, and politics should be conducted in all the clarity it can get. Also a carbon tax should probably be used to support the planet, e.g. sustainability projects.
Carbon tax isn’t a sustainable source of revenue. The whole point of a carbon tax is to reach carbon neutral, at which point there’s no carbon tax revenue.
It's nowhere near enough to fund a UBI that most people could live on without additional assistance, but that's no reason not to do it. It just means you need to fund your UBI with other sources of revenue too.
And it _really_ is the best policy. Even if it did nothing to reduce emissions, it's a matter of justice. I won't tell you that you can't fly across the country every single weekend or emit a gigaton of carbon mining bitcoin but, if you do, you _really_ should reimburse me and my 2-year-old daughter for the harm you're doing to our futures. Likewise, when I heat my ridiculous suburban mansion to 80F through the New York winter, I'm harming you and your children, so I should reimburse you.
But it WILL have a great effect on emissions (if ever implemented). Probably more than any other policy we might enact.
Some of the comments around here complain about how regressive a carbon tax is. But in fact it is only regressive when not combined with the dividend. The price of a poor person's carbon footprint as a fraction of their income or wealth IS larger than that of a wealthier person. But the fact is that most poor and urban working class people's dividends will be greater than the carbon fee they pay, while people who have giant houses, travel by air a lot, etc will pay more in fees than they receive in dividends.
This page (https://citizensclimatelobby.org/household-impact-study/) has a nice chart showing the fees and where they come from for an average household in each income quintile in the USA. The expected fees for each quintile (under a $15/ton carbon fee) are $173, $219, $252, $292, $381. On another page on the same site, you can find that the expected dividend (which just depends on the number of adults/children in the household) is $288.
Lastly, this policy is currently a bill in the US House of Representatives (https://en.wikipedia.org/wiki/Energy_Innovation_and_Carbon_D...) and is currently "sponsored" (whatever that means) by 18% of the house. Sadly almost all democrats. I think the policy saw more republican support during the few years before the current administration, but I can't find the data too easily at this moment.
> It's hard to find a rational excuse for not doing it.
Unless you’re economically literate. Here’s a tip: if you unironically use the phrase “stimulate the economy”, your economic theory is garbage with zero predictive power.
The basic problem is that efficient producer types make terrible consumers. From my industrious friends to Warren Buffet, they don't care to spend the wealth they accumulate. The dollars move more slowly, often to the hands of rent-seeking institutions. When they do consume on a large scale, it funds innovative of extravagance. Its fundamentally ineffective and inefficient relative to other models.
Given resources, consumers are remarkably efficient at consuming. My neighborhood is alive with home improvement projects, enabled by direct cash payments. The money isn't going idle. These dollars are flowing throughout communities into places that large money cannot reach. The velocity of these dollars is at least an order of degrees faster than sitting in an individual's offshore account. This invigorates production, adaptation, and research in ways a grant or tax discount cannot.
I often hear we live in a consumer-driven economy. If that is the case, its only prudent to empower consumption across the broadest possible base to grow the economy. The more I think about it, the more it seems like excluding people from being able to earn and spend money is actually sacrificing macroeconomic growth in exchange for social control.
The elephants in the room are the extremely cheap labor that already undermines the legit goods and services:
- extremely cheap prison labor
- undocumented laborers who have (almost) no legal rights and who take difficult jobs
- ex-cons who have to pay a portion of their wages to employers who are willing to hire them
- jobs where wages must be subsidized by government programs (eg. WalMart encourages their lowest paid workers to sign up for SNAP)
UBI is nice, but the markets are already distorted and without addressing these issues, UBI just distorts the markets more.
That said, even if we can't address these issues, I'm happy to support modernizing the American (federal, state, and county) welfare programs -- including giving recipients the option of taking the cash value.
The market is also distorted by us humans' inelastic demand for food and housing, which means sometimes sellers can charge higher prices for things such as these that people cannot go without if they don't like the price.
I'm not sure if UBI would help reduce that distortion or not, but ideally it would be nice to have a consequence be that participation in markets and in transactions (such as housing) is more voluntary.
Yes the "U" is crucial. We must raise the price of labor, and the only way to do that without creating a market is to sidestep "labor" altogether and set a consumption floor for everyone.
Thank you for pointing out that elephant, but that's just the sort of thing UBI in fact aims to address.
Yeah, I would prefer we fix them then deal with either UBI or fixing welfare programs, but with the current state of Congress, I have little hope that this is a probability.
I understand and agree with how a UBI will benefit those that are currently falling between the cracks and not receiving any assistance. I can also see the benefits of greatly simplifying the social security system. (If it was implemented in a way that was actually simple. i.e. no distinction between sick, unemployed, old, lazy)
But I don't understand why people don't believe the UBI will just become the new definition of poverty. People will still be miserable and feel like they have nothing when comparing themselves to those who get UBI and have a job.
> But I don't understand why people don't believe the UBI will just become the new definition of poverty. People will still be miserable and feel like they have nothing when comparing themselves to those who get UBI and have a job.
We don't know that people will 'still be miserable', let alone the ratio of misery in the current versus the proposed economy. My expectation is that fewer people will be in poverty / misery, but that's just as speculative as your opinion.
In any case, it's not cause to avoid considering a UBI. We should not be constraining our goals to a perfect first attempt [1] - merely to obtain some improvement over the current arrangement.
I agree with the notion of not waiting for a perfect plan, and for moving forward to improve the current situation. I consider myself "progressive" in that way.
But if I was writing some code and there was a problem in my algorithm where some people had nothing and some people had too much, I would just take some from the top and give it to the bottom. The UBI seems like a re-writing from scratch.
The troubles with that approach are that a) we've tried it, and it doesn't work very well, b) it's complex - how much is 'too much', how much do you 'take from the top', and how much do you 'give to the bottom', and c) it's expensive to administer, because a lot of time it spent working out the numbers and scheduling (and monitoring to prevent fraud) involved in the (b) bit.
As I understand it, UBI isn't about making people feel better, it's about providing a floor for income. It would be intended to assist those who struggle to pay their bills and afford basic necessities. There are homes today that don't have internet because of financial reasons. Additionally, it could enable those who'd want to pursue entrepreneurial ventures but can't afford to go 2-3 months without a paycheck to do just that. All UBI would be doing is establishing a floor. Right now, that floor is zero and results in many very unfortunate situations.
> There are homes today that don't have internet because of financial reasons.
Homes today don't have internet because of market reasons. Artificial monopolies, lobbying, and decades and billions of dollars spent by the government in failed and incomplete projects have created the current situation. And now without net-neutrality, it's getting even worse. This is all because of policy not finances.
> All UBI would be doing is establishing a floor. Right now, that floor is zero and results in many very unfortunate situations.
The floor today is not zero. Go to a village in Africa, or the Amazon rainforest if you want to see what zero really is.
Also, getting rid of gigantic perverse incentives induced by welfare thresholds helps people find their way back into the working world. UBI isn't about making poverty more desirable, it's about making poverty less sticky.
The difference is the same as having $0 and having $20,000 in monopoly dollars.
The number printed on the notes is irrelevant, the only thing that matters is what you can get with them, and if an apple costs 20,000 monetary units because there is so much money in the system (as it does in many countries) then everything else readjusts to match those levels.
I always hear the argument that UBI will essentially subsidize people's ability to pursue work that gives them meaning/purpose, particularly if it isn't highly valued (economically) by their local market.
It's a bit more nuanced. UBI just gives people more options.
The narrative is that people who live paycheck to paycheck are forced into undesirable jobs because they are under time pressure to make money and can't be choosy. UBI will reduce the time pressure and make them be able to be a bit more choosy in what kind of job they get. UBI will also allow them time to invest in themselves to be able to land higher skilled jobs.
It will also allow people to more willingly enter low pay, higher calling jobs (teachers, etc) if they enjoy it because it has been bumped up from "too little" to "just enough" with UBI.
The US would benefit greatly if the people serving as teachers, daycare workers, healthcare technicians, retail service providers, and similar roles had a UBI.
Exactly. And to ensure people have the freedom to pursue the training and development, search time, or simply freedom to explore, a UBI would be immensely and wonderfully beneficial. Many folks will end up pursuing that which makes them the most happy, not solely the options on the table (which for many in current society is crumbs).
Over time I would imagine that due to inflation and the increased cashflow that everyone will have the prices of basic necessities will increase to the point that UBI just covers them, or worse that simply living will require UBI + a job?
I don't mean that in a snarky tone, it's something I'm trying to wrap my head around as far as UBI discussion goes.
The same way all government spending doesn't lead to rampant inflation: by scraping money out of circulation largely with taxes.
Money is created by central banks, circulated by the government (including with 'entitlement programs' like UBI would count as, but also through things like spending billions on fancy jet fighters) and other banks (and there multiplied by fractional reserve banking).
It's then 'destroyed' by taxes and encouraging people to buy into government bonds and other things that slow down the flow of money.
These are all policy instruments that control how much money is flowing through the economy, and inflation is a product of that flow.
So the answer is, because they would raise taxes on it. A large portion of the money given out would just go straight into taxes from high income earners also getting UBI.
But also they could do things like lower the reserve ratio banks are required to hold to reduce the flow of money into the economy, instead choosing to create money through people instead of banks.
I can absolutely see how it would enable a certain type of very creative, very hard working person to peruse something they couldn't originally due to hard circumstances. But that seems like a minority case.
Inflation is not flat. When the money currently chasing luxury items like exotic cars or fine art switches to rent, produce and other basic goods their price will rise, it just will.
Real inflation does not require an expansion in money supply because inflation is not flat across all areas of the economy.
That is not the case.
If under UBI, which is reallocation of capital, luxury housing frees up it will not mean the uber rich move away and now the rest of us enjoy more selection without any other repercussions (though that will happen at first to an extent), it will mean they'll relocate to less expensive properties, thus chocking the market from both sides.
Why does someone's purpose in life defined by their job? What if someone wants to make music or art? Or pursue some kind of other field that doesn't pay particularly well. Why do all Americans think that the point of your life is to work at a job for a majority of it?
>Why does someone's purpose in life defined by their job? What if someone wants to make music or art? Or pursue some kind of other field that doesn't pay particularly well.
The question is why the people who do work at a potentially unsatisfying job to earn money should be forced to support the people who don't want to do anything in their life that anybody else values enough to willingly pay them for.
Because we have certain shared values, including that folks shouldn’t starve to death due to lack of work.
The United States already supports millions of citizens via a backdoor welfare: disability. This simply takes away the corruption and bureaucracy and gives it to everyone.
Macroeconomics 101 shows that public welfare creates a demand floor, reducing the severity of recessions and lessens the boom bust of the business cycle.
I would argue that jobs that give meaning to life are the exception not the norm. There is a not insignificant portion of society that would quit their job today if they had any other option.
Hobbies and unpaid creative pursuits are more likely to bring meaning than employment in my opinion.
"Create more jobs" the whole reason why Andrew Yang is a proponent of ubi is because he tried doing this for 8 years and realized that the Economy just doesn't work like that.
Exactly. The exceed money from UBI will create more demands thus more jobs will be created. The jobs will be much more `meaningful` than those empty, bureaucratic jobs created by a central entity. Isn't it the basis of capitalism?
This. There is compelling evidence that UBI, over the short term, really is effective at distributing money to a lot of people in need without a cumbersome burden of proof placed on assessing that need. That's why the treasury department used it for stimulus checks in the US. But long term, we don't understand if UBI is an effective tool for dealing with poverty. In effect, UBI would be like arbitrarily adding $15,000 to every persons annual salary. Over the short term this would be great. You'd be able to cover the costs of your bills with that additional money and live a little more securely. But in time, the market would absorb this expansion of the money supply as inflation. More surplus money in some people's pockets would lead to increased demand for goods and services. Increased demand would lead producers and retailers to charge more for goods. Renters would get charged more for desirable property. Gas stations would charge more for gas. And over time, your UBI check would need to get bigger and bigger to carry the same purchasing power that it did when UBI first started. There are examples of what this runaway inflation looks like in countries that pump free money for extended periods of time into their economies. Venezuela comes to mind.
To be effective, UBI might work better if it's distribution were random. And the duration of payments were irregular. Something that a market couldn't set it's watch by and producers couldn't game. If this sounds a ridiculous long term solution to poverty, it's because it is.
If producers are able to totally game a commodity market and control prices so completely than you have bigger problems than just poverty.
And yea, we do. If we had UBI tomorrow and people wanted more apples because they could afford more fresh fruit the apple cartels of today would collude prices up and use regulatory capture to block competition from entering the market to supply the elevated demand for apples.
But thats basically saying "hey, you want a government in your interest, you should probably get to a democracy first". If businesses control the legislature you don't have a democracy to begin with and should probably get that first before talking about... pretty much anything else. Because any other conversation is eminently pointless if you aren't influential upon your government.
> If producers are able to totally game a commodity market and control prices so completely than you have bigger problems than just poverty.
Game is probably more strongly worded than what actually happens : a shift in the demand curve. It's not that a cabal of producers are colluding to raise prices. Its more that, in aggregate, producers will decide to independently raise prices when consumer demand increases [0].
Except if its just a price shock than the increased profitability of apples will attract investment in apple farming to produce more apples because of unmet demand and fair market conditions. The price would go up, the profitability margin would be exploited by increased competitive production up to near break even costs, and prices would fall back to where they are today just with way more apples being grown.
In practice in pretty much every industry in the US incumbents put up regulatory barriers behind themselves to prevent competition from emerging.
The market and production gaming UBI will inevitably happen. It's just people's money.
Actually, in Alaska's UBI program, alcohol and drug abuse go up by 15% after all check day (but crime also goes down significantly as well).
So yes, the payouts of it will create some sort of twisted marketing schedules. I think it would be really cool if the payout was daily (if they can make that happen). It would likely encourage the immediate spend of it into small items (like food)... but also probably drugs.
UBI will become the new definition of poverty, and this is a great thing, poverty being you are on UBI is much better than any other definition of poverty in history.
Per the article (and I agree with this) UBI is not meant to uproot capitalism, it's meant to optimize capitalism. A capitalist system where the poorest person is still able to participate on the demand side is quite novel.
I can’t help but think that UBI would distort job markets. Let’s pick an example of a “sucky job” (and I say this as just an example, I realize these guys work hard and are vital). A garbage man. He get’s paid $42k a year because they have to find people who would be willing to do this sucky job and need to pay higher than minimum wage to do so. At some point of income, people would be willing to accept the suckiness.
Now let’s throw UBI into the world. Everyone is getting $2k a month. Now a garbage man says “I’m not gonna be a garbage man anymore, I can do something I love now, like a music teacher that pays $30k”. Now we have no garbage man and the wage would need to increase to find new people. To cover that, taxes go up. Higher taxes are a regressive solution to giving people more money.
Or crappy jobs should have to pay more. Handling stinking garbage all day sounds like a job that should be high paying given how miserable it is. But due to desperation, people without other options are willing to accept very low amounts of money to do it. With UBI, the price of hiring a garbage collector would equal the price necessary to fairly compensate someone for having to pick up garbage.
I pay about $25 a month for my garbage pickup. How much of that is to compensate the garbage man who spends about 30 seconds at my house? If he makes $20 an hour, then it's about 17 cents or so. Let's double his wage to account for benefits, employer-paid payroll taxes, workers' comp, etc. Hell, let's say the all-in labor cost for each garbage truck driver is $50/hour. That's still $0.42 I'm paying as my share of his time. Roughly $2 a month. Let's triple-ish that to account for the other personnel at the landfill and transfer stations.
If my garbage bill goes up by another $5 each month, I'm way ahead with the UBI check.
Unless you can find 399 other things in daily life where wage increases will wipe out the UBI.
Of course a universal income will alter markets. Jobs that suck will have to pay more. That's a feature, not a bug. The alternative is that we enjoy low prices on ditches dug, because those doing the digging are desperate for the work. I'd rather live in a society that doesn't fight to preserve that dynamic.
A nice side effect of UBI is that this scenario you describe, plus the hundreds of other undesirable jobs that people are forced to do now to have shelter that thus subsidize their real costs would be hugely pressured to automate them.
In a UBI economy the economic pressure to get self driving trucks would be an order of magnitude greater, creating financial incentives for Google et al to pour more money into AI research to achieve it because the market value is so much greater when truckers are demanding much higher pay to justify the labor when they have a choice in it.
The same would apply to an automated garbage truck that can use CV to scan refuse and collect it via a standardized bucket system rather than having two impoverished desperate humans cling to the back of the truck being paid dirt to do one of the most dangerous jobs in the country.
UBI would probably be the most beneficial policy to spur the R&D that gets us to singularity the fastest.
If UBI is implemented minimum wage could also be removed.
At present we have a situation where there are probably many very non-sucky jobs that could be done, but it’s not commercially viable to employ people for them at minimum wage.
Maybe some of the existing sucky customer service type jobs are only as bad as they are because companies are forced to extract $x/hour. e.g. if McDonalds could maybe they’d hire more people at a lower rate and make the job less stressful, resulting in happier employees and customers. As things are McDonalds must extract $x/hour or they will not be profitable, this ensures it’s a terrible place to work, and usually understaffed.
Replacing minium wage with UBI is definitely a net good.
Don't buy the "companies will start treating you humanely if only they could pay you less". Corporations, particularly publicly traded ones, are in competition for profit. In most sectors exploiting your employees to the fullest presents a positive return on quarterlies no matter how much or little you pay them. Maximizing return on dollars committed is fundamental to growing revenues.
UBI helps improve worker condition by making the negotiation between labor and capital more equitable. So long as one person comes to the table for their needs and the other comes for their ones the former is always disadvantaged and ripe for exploitation.
But that’s exactly what he’s saying. The crappy jobs will have to pay more in order to attract people, and in order to compensate for the increase in labor costs, the cost of garbage collection goes up.
Basically, increased labor costs drives up cost of goods (inflation), which offsets the benefit of the UBI in the first place.
It also increases mobility. Now any 18-year-old kid can pick up trash and the guy getting paid more can be a supervisor or a technician. Repeat when the 18-year-old goes to college or decides to rise the ranks into waste management management.
I kind of get that, but on the other hand, you could say "Existence is like having a gun to your head. You do what you've got to do."
Because you need food and shelter to survive. There's been no point in time where we didn't have to acquire it. We're just now getting to the point where the production of it requires nominal effort.
You're inferring more than I'm implying. I'm not saying "existence is suffering". I'm saying existence requires maintenance and for all of human history, it's been up to one to do that maintenance on their own.
We've never lived in a time where the majority could exist in the non-working class. Having the majority be in the non-working class raises certain issues. Like, who is going to be in the minority.
I'm not worried about what happens at 100% automation. I'm more worried about what happens when there are too few jobs to reasonably distribute among the people. There's an icky issue of essentially slavery we're going to have to confront.
I wasn't given a vote when we decided to hand out all of the land and resources to them in the first place, so I hardly see how the system as it stands is in any way voluntary.
If we made it voluntary, almost no one would volunteer, certainly not enough to be viable. Taxation and the rule of law aren't opt-in for the same reason.
Because we are not living in an era of such abundance that we have the liberty to do that.
Do the math: 300M people, $2k/mo, 12mo/yr is 7.2 trillion dollars. Even to first order that is unaffordable, and that’s without factoring in that UBI would decimate the tax base that’s supposed to support it, or the consumer price inflation that would result in that $2k not going as far as you’d expect.
> if salaries for essential, dirty jobs must go up, i am all for it
so all goods and services that require said "dirty job" in the supply chain will go up in price. This eventually negates the UBI benefits, because the level of UBI no longer can sustain purchases of all the goods and services that it originally could due to the increases in prices.
So do you increase UBI to counter this? Or do you let it be, and UBI no longer pays enough to maintain the same level of living standard. In which case, people are now once again, forced economically, to work "dirty jobs" despite not wanting it.
>so all goods and services that require said "dirty job" in the supply chain will go up in price. This eventually negates the UBI benefits, because the level of UBI no longer can sustain purchases of all the goods and services that it originally could due to the increases in prices.
Isn't this the same argument that's used to argue against increasing the minimum wage? "if you increased the minimum wage, then the costs will go up for those businesses hiring minimum wage workers, making the goods more expensive for those workers, and canceling everything out!". But empirical evidence has shown this has not been the case[1]. Because of this, I'm wary of any hand-wavy arguments like these that just mention some effects without attempting to quantify the magnitude of those effects.
"Change in employment: -500k" It's not just that costs could go up, it's that jobs could also disappear. What's the hardest part about entering the job market? Proving that your labor is valuable. It's hard to build a resume when the wage floor is set so high.
Unlike UBI, minimum wages don't affect everyone and aren't purely inflationary. Some workers earn more gross income, some get fewer hours and earn less, and some get laid off. I think I support UBI but it clearly cannot be raised to fully compensate for every price increase.
Perhaps partially. But you have no evidence to support your implicit assertion that it happens totally, or that your argument defeats UBI on the merits
You make some interesting points here, but I think your logic is fundamentally limited. There are alternative, imaginative ways to solve this problem that don't necessarily involve capital. In _The Dispossessed_ by Ursula K. LeGuin, for example, able-bodied workers are required to perform essential work like agricultural work and other "dirty jobs". Much like we conscript people in times or war, we could do the same with regards to needed work that isn't getting done.
if garbage person labor shortage is a blocker, i will personally sign up for 1 day per week garbage duty. if that’s the cost to pay for a more equitable society, why not leave the keyboard for a day and perform that noble and necessary duty. i’m sure i’m not the only person on HN who feels this way.
the world isn’t all bad. it’s getting better. but it only gets better insofar as we ourselves become better. it is this striving towards higher harmony that propels us forward.
so do you currently volunteer your time for social work (or any other work for which there is a shortage of people due to low pay and hard to perform)?
Even if you _would_ do as you have proposed above, most people won't. A labour shortage is still likely the result, esp. if said labour is not high paying, but the doing of which is still relatively important to a functioning society.
I'm not against UBI - i would want it, even if it means a higher tax! But i just don't see how it is implementable atm, and also whether there are any negative consequences.
The unemployment benefits that have been paid out in the USA so far has many talking about how it is a disincentive to go back to work - because they are paid more than their original job. I can't see how this won't be the same under a UBI system - so the only way for a worker to _do_ work they wouldn't ordinarily do is to pay more!
To me, it seems like man's constant fight against the brutality of mother nature will never end. As long as we need food, need medicine, and entropy destroys what we create, we will need a lot of people working to solve problems.
Any conception of basic income where we can freely give out $2000 a month to everyone has a net present value roughly equal to giving each person a lump sum payment of $500,000. There's not enough wealth in the world to sustain it.
Sure, give someone 500k and they might try to buy some luxury goods and inflate prices of various things. Give someone enough to not be destitute on a monthly basis and you’ll have a huge boon to the economy - because they’ll buy the essentials. People will always want more than just the basics and thus work.
Money is not equal to wealth, money is a device. That's the first and most common mistake in economics.
UBI is a way to reshuffe the cards of modern economy and hope that'll fix some of the current problems. It certainly won't allow everyone to drive a Ferrari.
As is often the case in economics, the scarcity is not an absolute lack of resources, but a result of inefficient allocation.
The world's mean income is about $18000 adjusted for purchasing power parity so it's not a complete stretch to get to $2000 per month for the whole world https://www.bbc.com/news/magazine-17512040
The USA has a mean income of about $72,000 so in theory UBI could be $6000/mo without bankrupting the country.
It would be very interesting to see what kind of crazy spending-led boom you could achieve by redistributing wealth exactly evenly across every American citizen.
I don't understand what you mean by this. UBI redistributes income - wouldn't it obviously be funded via taxation? USA would be able to afford a much higher UBI than Sierra Leone would because US income is higher. What determines how much UBI can be issued if aggregate income is irrelevant?
If you fund by a 100% income tax, everyone would quit instantly. There would literally be no point in working for money. UBI cannot be funded by the thing UBI would eliminate.
American households own $98 trillion in net worth. Averages to about $340,000 per person. And this is just household wealth. So yes there is enough money out there.
the only wealth that isn't "household wealth" is public assets. I guess there might technically be enough to give everyone $500k (or $2000/month), but do you want the government to provide any services?
$2000 per month is with wealth right now. It will be more than affordable in the future since the country will have more wealth in the future. Pretty much everything in current economics relies on wealth growth (pension funds, 401ks, etc), so adding this into that mix is very reasonable.
the relationship between the two figures is that $2000/month is roughly the safe withdrawal rate for diverse $500k portfolio (ie, the most you can spend without risking that you use up the principal over several decades). if you use the almost all the returns from the nation's capital to pay out $2000/month, there isn't much growth to speak of. of course, it's sort of a naive analysis to treat a nation's wealth like a retirement account, but the idea clearly doesn't pass the "back of the napkin" test. there would have to be some powerful knock-on effects to make it halfway viable.
Growth where? If you "pay out" returns from the nation's wealth to its own citizens, the wealth still stays inside the nation and wealth growth still happens.
It will definitely change job markets. I see driving for Uber as a "UBI" in the sense that it allows you to make money if you have a car and know how to drive (I know not everyone can front that money, point is just for illustration). Now what has happened to the broader labor market? Well, if you don't like your minimum wage job at present, you can always drive Uber (and at any time you want at that). That would make crappy jobs have higher wages (for the sacrifice in flexibility, intensity of labor, etc) and I think that's fine – it's just the market correcting for the alternatives people have to make money. I think actual UBI will help motivate us automate these mundane repetitive tasks in the long run that we currently employ humans for. Although there is still a lot to do, eventually people will have the choice to do repetitive, laborious work. Instead, they can focus higher level creative work everyday for something they enjoy.
People who driver Uber for a living aren't duing it "anytime they want" though. They have to time their working hours to places and times of high demand to actually make money.
The argument against that is base wages may drop as business pay less because people can afford to take lower paying jobs, or as low as minimum wage allows.
My country (NZ) pays most families a weekly amount based on how many kids they have and their household income (Technically it is a tax break and so only applies to people who earn money, but for most people it might as well be a payment).
Some have claimed this has suppressed wages and is a subsidy to businesses from the government. Minimum wage rises counteracts this. I am not sure if this theory can be proven.
Regardless I would expect a wage/price spiral causing inflation initially:
UBIs also have the capacity to expand the workforce. As I age, I find my social circle increasingly includes people who can't work a traditional 9-5 job -- whether that's temporary (caring for an ill family member, early parenthood, etc.) or permanent (illness, disability, harmed on the job).
At least in New Zealand, those who can claim a benefit from the Government end up in a welfare trap, because we reduce welfare payments as you regain an income. There's no immediate financial benefit to you, the welfare recipient, in working 10-20 hours vs. not working at all.
There's a whole philosophical discussion involved in whether those people should have to work, but rightly or wrongly, a lot of societal and personal value is derived from employment. A UBI deletes the welfare trap, and allows people who exist on the margins/are incapable of full-time work to find and immediately benefit from employment again. Maybe the garbagemen will need to be paid more, but we should also see more part-time workers put their hands up.
A UBI would certainly change job markets; I'm not sure whether "distort" is the right word.
It's up to the free market to make jobs attractive to labor. UBI means employers won't be able to press-gang workers into anything just because a job needs to be done or because people need to eat.
The garbage companies would have to pay more, but the result would be that instead of no garbage man, the garbage man now just works 20 hours a week and takes more vacations. And because this vital job is no longer as "sucky", other people have joined the profession too and also put in 10-20 hours a week thereby distributing this type of hard physical labor across a larger pool of people.
Yeah, we don't need people to work. This will incentivize people to automate work where possible. The ideal world is everything is automated and EVERYONE benefits, vs what we have now: much is automated and the rich benefit while others have to work shit jobs or die.
I'll do it. Building robots sounds dope. I'd imagine a good chunk of people on HN would love to live in a post scarcity society where they can spend their time building and repairing robots.
Thanks for volunteering! Gonna need you to come in for a 12 hour day since no once else is available. It’s your spouses birthday? That sucks. Maybe next year!
Most Americans will take the UBI and do good things with it, not quit or change their job. It will boost the lower tiers up a notch and allow people to explore better options, ie Music Teacher, but that is nothing but beneficial. People that dont like heavy work shouldnt be doing it. It will give workers a bit more power of choice, but that isn't something to be scared of. There will always be workers to fill those jobs with good pay, no skill but they may rotate out more frequently. Blue collar workers -like me- normally find certain comfort in their jobs being outdoors, hard labor, and not contained to cubicle (or a room of kids lol).
On the margin, some people will retire earlier or work less. Financial independence becomes feasible for more people at a younger age. These are the same choices you might make if you have money. That doesn't seem like a bad thing, and it would be pretty hypocritical for those of us who can do it to deny it to others.
But it seems like there is some risk that young people who have never worked might not get in the habit of working? The ambitious will want more than just to barely get by, but I don't think we can entirely rule out a slacker lifestyle becoming popular. I think we should still try it and see, but the plan might need to be adjusted.
Or they have to improve the working conditions on those jobs. Garbage workers have been treated poorly for a long time, and so have meat-packing workers, and Amazon fulfillment workers, and other "sucky jobs." If those workers have access to UBI they will have significantly more bargaining power in the workplace and would be less beholden to their employers for daily lives.
Taxation is not necessarily regressive. Where I live, income tax accounts for almost all of the tax I pay, and income tax is very much progressive.
But also where I live, the garbage man is not a public employee, but an employee of a private garbage company. So my taxes don't need to change, instead my garbage bill goes up. That would be regressive, since a garbage bill is a higher percentage of poor people's income. But some poor people just don't pay the garbage man, and instead take their garbage to the landfill themselves, which is way way cheaper.
Incidentally, you can make the same argument about minimum wage increases - the cost of getting low wage work done increases, so prices increase. I don't want to get into an argument about the effectiveness of that, but the evidence generally suggests minimum wage works better than conservative naysayers sometimes claim.
There may also be ways to rearrange the labor if insufficient people wan to step up. For example, there are places where garbage trucks lift trash cans to dump into them. If that is too difficult, one could setup dumpsters at the end of neighborhoods and have a truck that goes dumps that stuff into it. So more work for the individuals.
Similarly, if there were not people to clean offices, then have the office workers do it (assuming there are offices, of course).
For things that are really essential and cannot be done away with, the cost would go up. It seems reasonable to pay more for vital services. That may mean higher taxes or some other payment arrangement, but it is only regressive if the taxes are done in a regressive way.
A UBI would change the job market. But whether it is a distortion or fixing some externality cost that was distorting the market is certainly debatable.
Now a garbage man says “I’m not gonna be a garbage man anymore, I can do something I love now, like a music teacher that pays $30k”
"wait it's gone to $25K... to $15K.. aand it's gone". Other people might have the same idea and if more people want to become music teachers, music teacher salaries go down and garbageman keeps picking garbage.
Garbage men are working one of society's most important jobs. They're deserving of respect for the hard work they do. If UBI results in underpaid people leaving, employers will have to raise wages to match the true value of the job or they'll invest in automation. Either way would be good.
Pretty hard, have to solve self driving trucks first, there's already just 1 person on a truck operating the remote arm in places where roadside bins work (ie basically anywhere other than the urban core).
Ever seen all the kinds of things people put out for the trash, and how dumpsters can be overflowing in various different lots? It won't be easy to automate.
This is a good thing, not a bad thing. I would say it corrects job markets, turns them from slavery due to lack of options, into fair competitive markets on both supply and demand sides.
It will not affect day to day life very much unless you've been underpaying for a vital service (in this case, you're the slave owner). Then all the slave owners will just have to pay more for services that they want.
The problem is that we don't know how many people have no interest in working at all at any salary. Some people would choose to not work than to get paid 62k a year at a job they hate. People who oppose UBI are afraid that no one will fill jobs that they think are essential.
UBI is not about "not working". It's about "here's some basic money so you don't have to worry every day about starving to death". Want to wear clean clothes everyday and drive a car? You're gonna have to work.
Having nearly unlimited free garbage removal is probably more than a problem than people realize.
UBI means you can actually evaluate the system you live in and determine what's necessary (and then pay more for it). At the moment it's all "jobs jobs jobs" - we have entire federal agencies that are essentially jobs programs (Homeland Security is a great example... they've done almost literally nothing).
Funding UBI isn't the issue. A sovereign currency issuer can literally create money out of thin air, taxes aren't necessary. The only real limiting factor is a collapse in productive capacity and the attendant inflation. The problem with paying people to do nothing is that it directly reduces productivity because hey why work if you can get just as much money doing nothing? Arguably most jobs today aren't really productive anyhow though. If 80% of HR Business Professionals were instead paid to watch Netflix and look at Facebook, what would change?
This is something a lot of people just don't understand. Our entire monetary system isn't predicated on exchange or store of value like they teach you in school, it's a system of coercion. That sounds ugly, but it's observably true. Taxes, in particular property and income taxes, impose a requirement on everyone to participate in the state's ledger game. The question becomes is that coercion eucivic or not? A society without coercion isn't an option. Nature abhors a vacuum, and human societies abhor a power vacuum. Given our present level of technology, the alternative to monetary coercion is closer to gulags and plantations than it is to Star Trek.
The coercive aspect of monetization is perhaps most clearly seen in the example of imperial British Kenya. When the Brits rolled in they wanted the local to work in the mines. Local Kenyans, quite reasonably, said screw that we'd rather not. The Brits then imposed a head tax on every Kenyan adult payable in Pounds Sterling. And, in that economy, the only way to get Pounds Sterling was working for the British government. So maybe you could get a job as some kind of functionary, but the vast majority of jobs were, you guessed it, working in the mines. In this way the sovereign currency issuer was able to coerce the behavior it wanted, namely the dirty, dangerous and unpleasant work of mining, without any overt violence.
UBI proposals typically set the value at just enough to live on, or what someone who successfully claims unemployment + housing benefit would be given. At that level, the extra cost of UBI is because it's paid to non-claiming dependants, but there are savings from dismantling the bureaucracy which decides who is entitled to unemployment benefit and investigates fraudulent benefit claims, so it would be close to revenue neutral, so net tax rates shouldn't change much.
Assuming the revenue source is income tax, those already working would, on average, have their higher gross tax rates offset by receipt of UBI. There are other sources of taxation, e.g. corporation tax and a tax on land so a proportion could be taken from those.
The more you tax them, the less they work and save, and the more they make, find, and exploit loopholes and shelters. Top tax rates have been as high as 90% (during the Eisenhower administration) and revenue has never significantly changed as a function of GDP.
So what’s the exact math on this? About 209 million adults in the US times 12k a year, so $2.5 trillion. The current tax revenues look like it’s about $3.3 trillion per year.
I don’t think there’s enough people in the top 5% to get the amount needed without literally taxing them into oblivion. We’d need corporate taxes to pull this off, and those bastards cleverly hang out in tax havens, and I wonder how much more clever they’d be willing to get once we tax them more.
The US population has 199M adults[1]. Let's say a decent basic income is $40k. That's 8 Trillion that the government has to find every year.
The US federal tax revenue was of 3.86 Trillion last year[2]. Half of which comes from individual income, and another third from payroll taxes. This is before the effects that UBI will have on the economy.
Maybe my 10 minute research is wrong? It seems like a quite central piece to address in an article promoting UBI.
Where does the money currently come from? Take $1000 of each monthly salary and put a "UBI" sticker on it. Everybody currently employed now gets $1000 UBI for the total price of nothing.
For a person earning $3000+ per month nothing changes, except that their salary now reads $2000+ (same money to spend etc.). For a person currently earning $1500, negotiations with their employer will be different because the salary reads only $500 and losing out on just 1/3 of your income while looking for a new job is doable (if still painful).
But what about a person currently working a job but earning less than $1000? This person doesn't exist because of the "B".
But what about a person earning $1100, won't they simply stop working? No, again "B" and never happened in any of the trials done thus far.
> The expression 'negative income tax' (NIT) is used in roughly the same sense as basic income, sometimes with different connotations in respect of the mechanism, timing or conditionality of payments
Would the initial 1000$ UBI be paid by the state or by the employer? Assuming that the employee is above threshold.
What about the person currently working part-time for $500? It seems like it wouldn't make any material change for them as it would be swallowed by UBI.
I support the idea of UBI in principle, but I think it needs to be combined with a land value tax in order to work as intended. Rents are charged at the highest the market will bear, so the UBI could just flow into the hands of landlords, and the people who it is supposed to help being no better off.
It’s wrong because it’s inefficient and leaves the UBI recipient no better off. In San Francisco, as an example, rental rates track remarkably close to the after-tax first paycheck of the month for the median tech worker. Every year rents and salaries go up in lock step. At the end of the day only the landlords are wealthier.
If UBI were X per month, we would see rents go up by X very very quickly. This is just what happens when a real estate market is inefficient and supply constrained.
Land value tax punishes the underutilization of land, creating a reason for property owners to redevelop underutilized land and add more supply. It also creates an incentive for the average homeowner to be more amenable to extra housing, as that homeowner doesn’t want their taxes going up due to increased land value.
You can see this in practice in Texas vs California. Texas has very high properly taxes (2.5-3%) and reassesses annually. California taxes are closer to 1% and essentially locked at the purchase price of your home no matter how much if appreciates.
As a result, homeowners in Texas are a lot more supportive of new housing compared to those in California who almost universally oppose it.
I'm not convinced that UBI doesn't just continue funneling money from the hands of working class people to the existing billionaire class. UBI doesn't guarantee housing, UBI doesn't guarantee healthcare, UBI doesn't guarantee college.
Even with UBI, the existing 1% would continue to sit on more wealth than the entire working class combined.
I'll try and reframe your argument using slightly less incendiary verbiage.
UBI will continue to funnel money from the hands of consumers to the existing producers. Even with UBI, the existing producers would sit on more wealth than the entire consumer-class combined.
That producers are the ones that become billionaires is a feature of our society, not a bug. That anyone who is not a producer is at risk of starving to death is a bug of our society, and it's the bug that a UBI aims to solve.
Also these groups aren't static. Even today, who is in the top 1% changes every ~10 years. With a UBI, the mobility within those groups may be even more dynamic. A net-consumer that has the time and space to improve their skills that also doesn't need to worry about starving to death has a much higher likelihood of eventually becoming a net-producer than the same individual today.
> UBI doesn't guarantee housing, UBI doesn't guarantee healthcare, UBI doesn't guarantee college
You're right about this, and a UBI is useless unless it's also accompanied with reforms to address the rising cost of all of those things.
Do you sincerely believe that UBI is the difference between a working class individual and a billionaire? Let's assume that UBI spurs previously non-business owners to become business owners. Without a severe economic system change, like draconian oversight on acquisitions, how would you expect a sudden surge of presumed new businesses to not be immediately gobbled up by the existing defacto monopolies in their respective sectors?
> Do you sincerely believe that UBI is the difference between a working class individual and a billionaire?
Um, no? I don't know where I suggested that. All I said was that while UBI further enriches the producers of the world (who are overwhelmingly likely to be billionaires), it at least ensures that non-producers aren't at risk of dipping below some minimum standard of living.
> how would you expect a sudden surge of presumed new businesses to not be immediately gobbled up by the existing defacto monopolies in their respective sectors?
I wouldn't necessarily expect that — all that's being suggested is that it improves economic mobility because it allows a member of the working class to decide to take on the arts or entrepreneurship without worrying about starvation or going into credit card debt. That's the thesis behind any form of welfare, be it government-provided services or straight cash.
Also, most monopolies eventually reach obsolescence and die out or cease to be monopolies. It happened to DEC, IBM, Microsoft (which, hilariously avoided anti-trust scrutiny in 2020 through the genius move of not creating a business with dominant market share since Office). Not all monopolies engage in acquisitions — even non FAANG companies have M&A operations. Acquisitions can also be a good way for founders / early employees to realize wealth, which is especially beneficial in a UBI regime where entrepreneurial risk taking isn't life threatening. M&A and anti-trust has a lot of nuance. It's complicated.
What the UBI proponents are really simultaneously suggesting, is total regulation of all aspects of life and economy - which is a necessary consequence, as you've noted given the obvious outcomes of UBI.
If you give everyone UBI, dramatically boosting incomes, in order to achieve the desired net gains in quality of life for the lower classes you will have to drastically increase the regulation of all prices, all assets, all economy, all consumer activity, all production in order to attempt to control the negative consequences of UBI. This attempt will fail horrifically, resulting in catastrophic destruction to the economy.
We've already solved the quality of life problems that UBI claims to solve: countries like Finland, Germany, Austria, Denmark, Japan, Australia, Sweden, Canada solved it to a large degree long ago, entirely without UBI. They have relatively extraordinary standards of living, and have made extraordinary progress over the last half century. We already know how to do it, we already have something that works, and we should be focused on improving that further. At its best UBI is entirely unnecessary.
I haven't seen this discussed as much, but I am worried about population rises along with a UBI.
Especially amongst poorer communities where extra children are viewed as financial stability. Already with free schooling and meals, there is a mindset that you can raise kids and let the state take care of them to some degree.
But I guess UBI is far more likely to be implemented in places which don't have population problems to begin with.
Most proposals don't give UBI to dependents. You get UBI when you are no longer the obligation of someone else because then you are truly on your own.
It is important not to inadvertently incentivize those without the financial means to raise kids to have them. Its better for their mental health, society as a whole, and the children if they economically prosper first and reproduce later.
Comparing UBI to the welfare system, UBI's upsides:
U1. Simple to administer
U2. Efficient spending since the UBI beneficiary has the most information about what he/she needs
But downsides:
D1. Will inflate cost of everything, including cost of housing and healthcare
D2. Some fraction of beneficiaries will spend it poorly, meaning we might still need a welfare safety net for them (which itself might incentivize spending UBI poorly)
The alternative is an even bigger welfare system, let's call it Universal Basic Needs. That should include Universal Basic Healthcare, Universal Basic Public Housing, Universal Basic Food (aka food stamps aka rations), etc. It's diametrically opposite to UBI, and the upsides of one are the downsides of the other.
With UBN, there's no need for unemployment insurance, which is a problematic part of the current welfare system because it incentivizes not being employed. Defining the 'basic' level isn't easy, but it should be good enough that each member of congress or parliament wouldn't mind living at that level for a day per year.
I find either of these opposite options better for the future of society than some middle ground of welfare benefits.
Honest question - how does one prevent inflation with UBI?
If the market price of an apartment is $500, and suddenly everyone gets UBI, the landlord would raise the price as much as he can, say $1000.
People on UBI are in the same relative position as before. They still can’t get the apartment because there’s enough people who have the UBI plus something else and can pay $1000.
It could cause inflation because the money velocity would increase (if you’re a disciple of Milton Friedman). The presumption is that the money taken from rich peoples (and company’s) savings, that they’re not spending, and giving it to people who would spend it every month would increase the velocity and potentially cause inflation.
'inflation' is probably not the right term; money is created and destroyed more or less at will by the financial system as set forth by the nation's laws. UBI is not 'funded' by just turning on the printing presses and letting 'er rip.
But, yes, of course, if there is a scarce good (there isn't enough for everybody) and due to UBI now everybody can afford this scarce good, then... guess what, no they can't.
But that's economy at work, and entices the populace to work, so they can supplement their UBI and get scarce stuff they want.
Perhaps you mean that certain goods are so price elastic they will just cost whatever it needs to cost to squeeze every buck out of the lower-income populace.
That IS a risk, but I'm not sure the current common western economic model is any different; the _vast_ majority of these economies do have a minimum wage already, and the majority of the workforce... works, or otherwise enjoys an income that is somewhat close to minimum wage at least, leading to the same problems.
Seems silly to put the onus on UBI to solve problems that aren't particular to UBI, no?
Note that these problems are solvable, and UBI can actually help solve them: Due to UBI it is _much_ simpler to just pick up your stuff, and move to a place that is in the toilet, economy-wise: A backwater with extremely low housing prices, nearly free land, and no jobs. With UBI, hey, you can make a decent living because your UBI bucks go a lot farther out in these boonies, which should push said boonies up.
It also moves negotiating powers to the workforce: Instead of companies that are offering jobs have to compete with the notion of being either destitute/homeless, or having to jump through hoops to prove that you are unable to find work (which is how many western economies are set up today), the job offerers are competing with 'no job, live on basic UBI'. This should allow the workforce to for example demand that they get to work from home a lot more, opening doors to letting them live in places with cheaper housing.
And then, if the -entire nation-, from stem to stern, has rents set up to gauge those living on UBI alone or on UBI+scraps, there's something very wrong with your nation. Go make some laws.
Not sure if this is directly answering your question, but UBI doesn't mean that everyone spends money the same way. One person might put that money towards their kids' education, another towards household groceries, and another towards higher rent.
I feel like this is the perfect example why everyone should at some point be required to start a business. Because some of these ideas stem from to many people not understand the economy in a real sense because they are always workers and see the world through that lens.
That would assume wealthy groups in america start businesses are higher rates than all other groups. But poor immigrants with no safety net what so ever start businesses at a much higher rate.
This is completely anecdotal but in my experience this is because wealthy people have high paying jobs and don't really see the value in starting a business unless they just want to be entrepreneur. I've lived below the poverty line and everyone I've met in those circles had a side hustle, business or second job. You gotta grind 10x as hard to get out of those circumstances.
I've always assumed part of that is that immigrants find it hard to get their foot in the door and get a job here. Imperfect language skills would be to your detriment in job hunting, but less so if you had an ethnic restaurant or a business catering to those in your community in a similar position.
Not necessarily there are tons of other things that depress business creation: debt load, health insurance, risk. Without a real bottom in the US even with a solid plan and decent savings building a business is extremely risky compared with just continuing to work at your current job.
You don’t need to make an attempt as a business owner to understand why the economy is broken. A change in perspective doesn’t fix a broken system.
Edit: I am absolutely biased against a system that favors the wealthy at the detriment to your average citizen. “Look at how well this system works for us while the rest of you suffer!” is not helpful.
A change in perspective gives you idea of how the system work. The system isn't broken. Any system you don't understand probably seems problem.
Like how people call the US government broken. When it was meant for the very beginning to mangle federal power. The only thing broken about that system is federal power isn't more limited. But a lot of people call that system broken.
Why would the rest of the world finance us (the citizens of the United States) to sit around and watch Netflix all day? Put another way, someone has to buy the debt we are issuing. Today our debt is sold to savers in China, and to other hard working individuals across the world. We have no means of paying back the debt we are issuing, so we are monetizing the debt through a mechanism known as QE, otherwise known as a printing press.
If we are debasing the savings of hard working people, why would they want to continue to lend to us? We could raise interest rates, but with the levels of our national debt, servicing the debt would become impossible. So that isn't an option. If trust is lost in the dollar as a reserve currency, we will become very poor very very fast.
It won't matter if we print more money, or if UBI is 1,000 or 1,000,000 per month. The dollar will have less value.
It's better to focus on improving productivity and making stuff. There can't be consumption without production.
Oh, you're one of those people that worries about the value of the US dollar like it's not entire world's reserve currency already or a measure of American "strength".
I think what he means is if you give some one $1000 for free, they will only do a job that pays say $2000.
Because people want more salaries, it costs more to produce/service a thing. Therefore you have to sell your products/services at a higher prices. Now the $1000 you gave for free is less valuable.
Now come to think of this if your $1000 is less valuable. How much is $26 trillion worth debt valuable now? The people to whom the debt is owed are screwed.
Also once you do this you will have a hard time raising money next time when you need it.
Basically. Things like UBI aim to be the 'perpetual motion' equivalent of economics. The fundamental problem seems to be you can't pull anything out of nothingness.
Its status as the world reserve currency makes the US dollar very resilient right now, but what happens if or when that stops? Do you think it will always stay the reserve currency forever and ever?
Let's not forget how the US dollar became so strong in the first place. It probably wasn't because we gave a lot of people money to do nothing of value, and it wasn't because it started its life as a reserve currency from the very beginning.
This is just ignorance. Almost all US treasury bonds are owned by hedge funds, and most of the rest are owned by governments. Retail investors are a tiny share. Whether the hedge funds and governments continue to buy them is not related to how many hours of Netflix Americans watch. US govt can honor its treasury bonds because we have a productive economy. Consider the total assets of the United States, valued at over $200 trillion vs our tiny debt of $20 trillion.
People don’t need money. People need basics like housing, food, and medical care. No UBI scheme is going to work in an economic system like the one in the U.S. that isn’t capable of providing those things. It’s not like there’s a shortage of food or shelter now and yet we still have homeless people while homes sit empty. We still have hungry people while farmers are destroying their crops.
A UBI normally trades away the safety net and social services for a stipend. Perhaps one explanation is the US has partly done away with that net in exchange for a stipend of $0/mo.
I bet everyone reading this has at one time or another met someone who is completely incapable of managing money at even simple levels. Or thinking ahead even. Not everyone can wisely use XX a month. Or even eat with it. Then what?
The fixation on money is a little nearsighted imo. It didn't always exist. It's just a tool for determining access to good and services. What if everyone could get a healthy meal and a clean safe place to sleep at any time and a shower and some net access or whatever is deemed necessary. Would that cost less or more then UBI?
(I still think some form of UBI might be a good idea for the present, just, we should think bigger and outside of the current economic stack for the long term.)
That would be my reservation also. Give people regular money and some subset of the community will still run a life gauntlet that is effectively poverty. Squalor, poor food choices, poor relationship or parenting choices. Compounded by mental illness. They're not secreted away, so what changes in your neighbourhood?
During this pandemic situation, many Australians are getting $750/w virtually no strings attached. I know of people bumming around the house waiting for their perception of the economy to improve, and I know of others working more than usual to bolster their bank account with the influx.
A lot of states do. Maryland and California have housing and food programs for the poor (google "Maryland HOC"). Yet it doesn't seem to help much in terms of breaking out of inter-generational poverty - you just have poor people living in middle class houses trashing up the neighborhood and devaluing all the properties around them.
But in society as it exists today, money is essentially equivalent to all of those things. UBI can ameliorate all three of those issues while helping to avoid the issues that crop up when trying to provide those necessities to people directly.
The article attempts to argue for UBI from the stance of being pro-capitalist and working within the existing capitalist framework, and I think the author would answer your criticism with something like "By providing money to people, they can allocate those resources wherever is most efficient for them- to buy the food and housing they need if they need it, or other things if not. The person receiving the money is the one with the most information about where money needs to go in their life."
UBI won't be real until there is a political will to relinquish control of poor people. The first step towards UBI is changing this culture of control. People don't even like school choice with vouchers, I doubt we're going to just give people large sums of money to be spent however they like with no strings attached. We spend about $15k/yr per public school student. Let's see how popular it is to cut a $15k check to each family per kid, you can spend that money however you like. It doesn't even have to be spent on education. Convert public housing to a check with no strings attached. No more food stamps or WIC cards either, just a check. Unfortunately we just don't live in that kind of culture.
Ooo! Thank you for pointing it out. I've always wondered what tool bloggers used to make their neat diagrams. I feel like doing some graph theory stuff now for kicks, or just general illustrations.
Similar arguments were made during our agrarian period, there's only so much farmable land so there is a limit on population and growth. Productivity gains and innovation remove that issue.
Surely sooner or later as we run out of resources (and destroy the planet enough) we have to move away from the idea of growth and toward sustainability. These are mutually exclusive goals.
Unlimited resources,
No, but technology can overcome any perceived resource shortage. Think of the discovery of fertilizer by the Germans around the same time that people were claiming there wasn’t enough food to feed everyone. People still claim that, but we can even foresee the technological changes coming to fix that - genetic engineering of crops, mass produced, lab grown nutrition, insects for protein, on and on.
GDP isn't just physical goods produced it includes services which make up a large portion of the GDP of most advanced countries. These don't inherently require resources beyond energy and people's time so GDP can continue to grow.
But GDP isn't a natural resource, it is an artificial number extracted from insanely complex valuation of fiat currency, debt, policy, and subjective worth, all of which are subject to geopolitics and whims.
I completely agree that nature eventually puts an end to exponential growth, but I don't see how it puts an end to exponential wealth.
these statements don't need to be mixed. GDP is bad because a hurricane raises GDP because you have to build a bunch of shit that got destroyed again. this is totally independent of resources and growth.
the split between quality of life and gdp and these variously with resource consumption is the issue.
How about Universal Basic Employment? Drop minimum wage to $5/hour, and everyone gets and extra $20 x 30 hours a week if they hit minimum employment.
This would aim at efficient production, and have the side effect of efficient consumption.
1. Better Service - economics keep pushing the service quality bar lower as humans are an expensive way to satisfy customers. We do better with a human bagging your groceries than having you bag your own groceries and pay for an idle human.
2. Experience Ladders - people being interested in their own careers leads to more experienced people. For example, a corner store might hire someone to create a promotion if its cheap enough. The person hired might become good at it.
3. Crazy Startups - with survival being possible, people can start a company at high risk, hiring their friends at a cut rate. If it fails, they can give up and work for their friends.
So what exactly is the genesis of this income that's to be doled out? Is it still wealth redistribution underneath where productive individuals make it possible for others to live off whatever largesse they create and without those individuals no one has anything to be circulated? Where does it all begin precisely?
Is UBI predicated on anything exactly? Can it be employed in Mexico or Cuba or Libya the same effect as it would in Japan or Australia?
Can everyone stop working or would there still be a requirement that some percentage of the population work or is there a premise that some fuzzy unquantified percentage of the population would always chose to work regardless of it being mandated or optional.
UBI can partially replace the piecemeal social funding we already provide but with much less bureaucracy.
The assumption is that most will still work. I'm fairly convinced that would be the case. Society seems to revolve around a 40 hour week when we could all certainly put in less time and survive.
As long as people think that paying people will disincentivize them from working this is not going to happen. It's a great idea but I feel universal health care should be a first step. That will unlock majority of the gains argued about UBI. Healthcare is the biggest cost outside of housing for majority of the people and that is where the biggest ROI is IMO. Unfortunately in the US it will never happen. The healthcare insurance industry is the biggest one in the country and is worth trillions. They will never let it happen.
The hypothesis that we are in stagnation is flawed since it looks only at the lower socioeconomic levels in the developed countries. What happened with globalization is that the lowest socioeconomic levels in other parts of the world were lifted from poverty. So the world as a whole hasn’t stagnated.
Because of the transfer of labor to the developing world, you had stagnation for the lower and middle class in the developed world. You see the same pattern everywhere in the developed world: Japan, Europe, United States, etc... It is only the end of capitalism 1.0 if you look just there.
Automation may eventually destroy jobs but probably more will be in those developing countries. The developed countries have already partly transitioned into service economies (especially anything that is low skilled and can’t be done elsewhere).
Some developed countries seem to have de facto UBI to cope with this stagnation. However some countries have been in a malaise for decades with no real signs of uptick. This would also counter the hypothesis that plain UBI would lead to greater productivity.
I think that there needs to be much greater emphasis on supporting learning and doing (not necessarily in a university setting) to develop the greatest resource (human potential). We just need to keep leveling up.
- Government provided meals. This can be in the form of communal kitchens much like British Kitchens [1]. This can then be used to ensure that everyone gets fed, that it is nutritionally sound and that it uses home grown produce. That way, it in effect subsidises farmers which means we can remove farm subsidies at the same time.
- Free public transport. Make all buses and trains free to use for everyone. This will help to reduce reliance upon cars and ensure that everyone can get around, so that it is possible to get to work.
UBI sounds wonderful, but it seems to be more of a subsidy to landlords, and those who are involved in selling. It would potentially provide for everyone but we'll then have the same problem as now where some children are going hungry [2] because there is no way to make sure that they are being fed. Without subsidised public transport, you have to use some of your UBI to get to work before you get your first pay cheque. This is a disincentive, as you are effectively investing up front for a future payout when you can just keep the money and enjoy it now.
> Even the most hardcore anti-capitalists have to give respect to how the combination of capitalism and technology has worked to lift most of the world out poverty and provided us with the security and comfort only kings enjoyed just a few century’s ago.
No, they wouldn't. Any more that they would have to "respect" that the combination of Stalinism and technology lifted Russia out of poverty and post-war destruction. That's because it's quite easy to imagine that Russia could have been electrified without Stalinist terror.
> Free-Market Capitalism has always outperformed top down economic control because those at the top can’t manage all the information about the economy, such as who is best at what, and where the most efficient areas to allocate resources are.
Citation needed. On the surface, this claim would seem completely absurd to anyone familiar with 20th century history. I'm writing this from South Korea, a country that developed "miraculously" under completely top down control of a military dictator working from centralised 5-year plans. One needn't search too hard to find other, similar, examples. It would be interesting to see a single large-scale counter-example that actually existed on planet earth in our timeline.
Edit: maybe I'm just being ornery, but I just couldn't get past the platitudes in the front-matter to the meat of the article which I no doubt would be heartily agreeing with. Hah.
I came here for this. What a way to start an article with a foregone conclusion.
This is quite typical of discussions on this matter: Every discussion of "where to go from here" immediately asserts that "where we are is great!" which often leads to conclusions of the kind "therefore we should proceed in the same direction, but with this one weird trick."
> I'm writing this from South Korea, a country that developed "miraculously" under completely top down control of a military dictator working from centralised 5-year plans.
South Korea's prosperity is almost entirely attributable to its economic liberalization.
This is an interesting argument. I would like to see this broken down from a economic perspective.
My concerns:
1. Inflation - A UBI would touch into an increased money supply and higher wages which I think could push us towards demand-pull inflation. Possibly completely negating or at least partially negating the money earned through the program.
2. Funds - How would a successful UBI be funded? Would taxes increase? Maybe we just tax captial markets and use those funds? Could this somehow be a new role of the fed?
3. Social Programs - Currently, there are many unemployed making more then those working part-time and at minimum wage full time work. (This having to do specifically with the COVID relief added on top of original amount for unemployment). How would this effect incentive to work? Could it potentially impact GDP growth? (and by no means am I arguing that this is the only metric that matters. I am interested in the long term effects this could have. Obviously, "What are the long term affects of not having a home, to be able to afford education and food?" is the relevant counter question.)
I am opposed to UBI. I want smart people to have more money. I want less smart people to have less money, provided they have enough to live on. A smart person might invest in books, study and self improvement. Then those industries that create these will be stimulated. That is what you want. Less smart people might spend their money on lottery tickets, junk food, booze etc. Those industries would be stimulated by UBI and that is what you do NOT want.
I came to this conclusion when my state had its first statewide lottery drawing. They interviewed all the final contestants. And when they interviewed the biggest idiot of the bunch, I told the person next to me that he would be sure to win. And that person did. And I had visions of him running out with the winnings and buying expensive sports cars, drinks etc. I was sure the money would be gone in a month. And the net effect was that a lot of poor people lost money on their lottery tickets and the money went up in smoke.
> running out with the winnings and buying expensive sports cars, drinks etc.
I'm not entirely sure if you know what UBI is. It is not giving everybody enough money to buy a sports car. By a long shot.
> Less smart people might spend their money on lottery tickets, junk food, booze etc.
That's an incredibly narrow minded view. It is also irrelevant, unless your intent is that your 'less smart people' have so little money, they are homeless. The general idea behind UBI is that 'subsistence level' workforce at its base isn't going to change a whole lot in buying power. They can elect to stop working entirely and still live decently enough (but certainly not if they spend it all on lottery tickets. Junk food tends to be cheap; if anything, UBI will help there) – this is good, as it pressures business that can automate, to do so, vs. making someone spend their life doing an easily automated job.
> I'm not entirely sure if you know what UBI is. It is not giving everybody enough money to buy a sports car. By a long shot.
Really? Because according to this[0] I can make loan payments on a Tesla for $1000 per month. If I started getting an extra $1000/month, why not drive a Model S?
So... you're jealous that the winner of a lottery got the money without merit and therefore oppose providing subsistence income to poor people?
Intelligence and wealth are correlated, but not nearly as cleanly as you think. More importantly, taste for the various vices of life are not at all correlated with intelligence. Except maybe positively.
Desperation is the key ingredient to participation in lotteries. I realized this when an entire cohort of mathematics phd candidates at a top program bought lottery tickets. They understood the odds. They also made 20K/yr and faced the worst job market in a century. Desperation with basically zero meaningful opportunity cost. What are they going to do, invest it? They aren't even invested in fucking social security after 6 years of 80 hour weeks.
I want compassionate people to have more money. I want less compassionate people to have less money. A compassionate person will invest their fellow humans. A person lacking compassion will buy themselves trinkets and hoard wealth. I came to this conclusion when reading this borderline hateful comment.
Why? Shouldn't it be "people who have a more positive impact on society should have more money"?
Being smart isn't anything, it's like being tall. You got it because you were born with it.
Also, what about those who weren't born "smart"? Should society just tell them "tough luck"? Shouldn't we think about everyone and how they will all do in our future, more perfect country/world?
Are you really suggesting that it’s not possible to cultivate intelligence in an age where even the lowest classes have instant access to the sum of human knowledge? You either agree that all men(humans) are born equal or you agree that some men(humans) have a right to rule. You can’t assert that everyone deserves equal rights while also asserting that some people are simply smarter by nature, obviously smarter people need to be making the decisions right? Or are we already at the point that we’re calling intelligence subjective
I think what're you're saying is built on top of many faulty, and frankly, pretty classist assumptions.
You want "smart" people to have more wealth and income than "less smart" people, making an argument for a intellectual based meritocracy or something - I think ignoring all the other factors that determine success in a our economy like luck, family wealth, and business smarts. There are plenty of smart people that aren't rewarded for their skills by markets (researchers anyone?) and plenty of "less smart" people who are successful simply because of the prior success of their family.
Meritocracy may be ideal, but having it as the foundations of your economy thinking seems pretty ignorant.
And then I think a silly correlation between higher wealth & income, and spending habits are made. More successful people don't invest their money to improve their future financial prospects. There are plenty of rich people who piss away all of their fortune or still manage to live paycheck to paycheck, and there are plenty of lower income people who vigorously penny pitch for a retirement account they won't see until they are 70.
Furthermore, frivolous items of consumption like alcohol, gambling, and fast food is present across all classes. Wanting to have a good time doesn't depend on your income. Higher rates of consumption may be seen in lower classes, but I would chalk that up to lack of opportunities and lack of information than inherent stupidity or something.
You seem to be assuming that there's a simple, one directional causal relationship between "is smart" and "has money" (and also that people who are more intelligent somehow deserve more comfortable lives). Consider that things other than inherent intelligence might be making poor people spend money on junk food and lottery tickets.
So someone born into an environment not conducive to academic development, or with mental challenges etc does not deserve enough to live off? That's exactly the problem UBI would aim to solve, but you seem against it.
No SWE makes as much as top sports players, even though the first group would be, on average, smarter than the latter. Is that unfair?
UBI gets rid of a lot of such gatekeeping, and aims to give people enough to live off. What you do with your time is then up to you, and who knows what the net effect would be. Maybe your local janitor finally gets some spare time and money to reduce work hours, and start a hit podcast. Maybe they spend it all merely supporting their extended family. Maybe they blow it all on drugs. Are we really in a position to dictate how people live their life? I'd rather everyone gets a base level of opportunity in life, and then they can further lift themselves upwards, should they choose to.
The entire point of the UBI is to provide enough to live on.
Assertion: capitalism 1.0 as implemented in the US today, rewards sociopathy more than intelligence or work ethic ( or any other sort of ethic for that matter).
Sociopathy I use loosely in both its narrow technical, and lay, uses.
Lemma: many of the current "unicorns" lionize sociopathy under the pithy cover of "breaking things," such as laws, not least through exploitation of societal and legal zero-days. Their fully disclosed business model has been to exploit the slow response time of legal and societal remedies long enough to burn VC buying customers and building a defensible monopoly.
The point of the UBI is to provide a defense of last resort for citizens of one of the wealthiest, and rapidly stratifying and polarizing, cultures on the planet.
We are likely agreed that it shouldn't be the only and first source of income,
but it should absolutely be the last.
That it would also help prevent the absolute devastation looming from this pandemic, not least by allowing businesses to remain solvent during black swan events,
makes it more pressing, and obviously beneficial, than ever before.
For my next rant, I'll address why single-payer healthcare is in the same situation.
The point of UBI is not to reduce the economic output of smart people. In fact, in some sense it could improve since bright minds could reasonably deal with loss of income while pursuing entrepreneurial endeavors. Think of all the smart people wasting their life in a do-nothing job for security that we could liberate to follow through on their best ideas.
At the same time not smart people or disadvantaged won't be ignored or fall through the cracks. Over time as productivity rises through automation we can ramp up the UBI and make sure all human life is valued and give people real opportunity. Even with a UBI that doesn't require you to work to live doesn't preclude a capitalist persuit of resources to make your most grand ideas come true. Let's just make sure we tax externalized cost appropriately.
Will some smart people choose to not work eventually? Sure, but if our automation can support them, who cares?
I think Yang came up with an eloquent phrase for this - UBI is capitalism that doesn't start at 0.
UBI isn't (necessarily or even generally) isn't generally communist (in the strict sense). I'd argue it's a bit of practical captitaliasm, game theory style --- rising tides lift all boats?
You can keep your big boat - let's make sure everyone's got some way to stay afloat?
And not because it's "good" - though maybe it is - but because the ecosystem is healthier/better for it...
I will give two quotes from Baudrillard -- UBI is great, but it won't solve the spiritual problems of the west, nor it's obsession with eliminating death -- a compulsion borne of a constant internal struggle with nihilism.
“Americans may have no identity, but they do have wonderful teeth.”
― Jean Baudrillard
“You have to try everything, for consumerist man is haunted by the fear of 'missing' something, some form of enjoyment or other. You never know whether a particular encounter, a particular experience (Christmas in the Canaries, eel in whisky, the Prado, LSD, Japanese-style love-making) will not elicit some 'sensation'. It is no longer desire, or even 'taste', or a specific inclination that are at stake, but a generalized curiosity, driven by a vague sense of unease - it is the 'fun morality' or the imperative to enjoy oneself, to exploit to the full one's potential for thrills pleasure or gratification.”
― Jean Baudrillard, The Consumer Society: Myths and Structures
>I worry about three things with UBI though and they're more social than economic.
I worry about one specific economic factor - where is this $12K/year for every American adult and $6K/year for every American child going to come from? If you take per capita GDP ($65K), subtract out the government expenditures that aren't going away like the military, Social Security, Medicare/Medicaid, interest on the debt, running the government, etc. (~$13K), subtract out non-residential fixed investment which is basically business capex to keep their operations running ($9K), that leaves $43K remaining per capita. Now assume 210M adults and 120M children and you need to take ~$10K of that $43K to fund it. So an ADDITIONAL tax of ~23% across the board.
Note: I'm not criticizing the theory of UBI, which I think is sound, I'm asking how we fund the specific amounts that often get thrown around.
Why do you include Social Security in the list of things that won't be eliminated? I'm not American but in my understanding UBI would almost completely eliminate Social Security, along with putting a big dent in the need for Medicare and Medicaid.
I don't think anyone has seriously suggested replacing Medicare with UBI, as replacement health insurance premiums for people 65+ would almost certainly be a multiple of $1K/mo.
If the only thing that matters is GDP growth (as the article tells pretty openly) and if UBI really only has the purpose to keep lower classes in the consumption loop (not because they need anything but so companies can keep selling stuff, so their revenue will grow, so the GDP will grow), couldn't this all be structured a lot more efficiently by automating consumption?
You could imagine an army of robot consumers who are each allotted some amount of monthly UBI and who are programmed to automatically buy products chosen by certain criteria (or at random).
Then you can combine this with fully automated production and you finally have a fully automated economy where the GDP growth rate is just a line in a config file...
It's called the subscription economy for a reason. Automated consumption exists and is constantly growing. The money spent on subscriptions grew in the US by >50% from 2010 to 2015.
Amazing idea, Tim! Just one minor, downright trivial question: how much money should you take away from your fellow citizens to accomplish this plan, and do we also preserve the existing entitlements?
As many here have noted, UBI still leaves in place a power structure, or material relation of dependency. I just think there are a lot more nuanced and interesting approaches to this problem.
For instance, what would it take to devolve ownership of essential infrastructure for social reproduction (practically: hospitals, farms, housing, schools, etc) at the local level? How could we blend small forms of cooperative ownership into an economy that still has room for entrepreneurship? What's the right amount of state capacity to safeguard against disaster? IMO, these question of ownership were thoroughly excised from US political discourse for a mixture of reasons, some understandable (revulsion to Soviet totalitarianism) and some frustrating (lack of information because the conversation threatens entrenched power).
US political culture has an emphasis on personal liberty that I would never want to lose, but I'd love to see more Americans engage their capacity for invention toward resolving the tensions between individual freedom and collective wellbeing. In my opinion, Gar Alperovitz's work around the concept of a "Pluralist Commonwealth"[1] is a really interesting stab at this problem.
> devolve ownership of essential infrastructure for social reproduction
I think you might want to pull the vocabulary back to conventional terms if you really want to discuss this productively.
With almost all of those, there are existing practical examples in the real world: the UK NHS covers hospitals, lots of US municipalities have experimented with public housing projects, public schooling is The Way It Is Done through most of the US already, one could argue that existing subsidy regimes all over the world constitute state "ownership" of farming, etc...
Frankly I don't think there's much mystery at all in what you're asking. Try picking a specific policy and arguing for that.
Thanks, I appreciate that feedback. That was definitely a jargony phrase. Mostly I'm wishing for a term to discuss these policies at the level of abstraction where UBI is situated, and I don't see one in conventional discourse at the moment.
Universal Basic Income is never going to work, we all live in a universe where everyone wants to build or create something. The average person isn't going to build or create a damn thing, they aren't going to do anything productive for society they are going to tear the whole country down or sit on their asses watching Netflix all day long. Every time I see someone mentioning universal basic income I start to wonder how much contact they've had with the outside world.
That is my primary fear too, although I'm optimistic. I wish there were more, larger and longer term studies to check this.
What if you get 1000$, but you are allowed to use them only for food, health and shelter? Any kind of luxury would require you to work, or educate yourself to work better. I feel kinda bad for suggesting it, but can't articulate why.
This is just the same old keynesian fallacy. You can only consume if you produce. If we produce nothing it doesn't matter how much money we have. There is nothing to consume.
I'm all for UBI. However the cash UBI suffers from significant flow, where the surplus is captured by landlords.
That means if everyone gets $1,000/month, then the rents go up by the same amount, which pushes prices of real estate and thus the mortgages. So after some period of adjustment, the money would be lost again.
I have not found an answer, but my gut says that it has something to do with the base of Maslow's hierarchy of needs. Meaning that UBI should somehow provide shelter, security and food.
It might be easier that it seems. Most nations already have monopoly on violence (police).
Food is more tricky. We already do subsidize farmers, so maybe this could be extended and basic food could be provided by the government (bread and such) or subsidized in full by it.
Shelter is the trickiest. There are some interesting cases across the World where governments have strong regulation around housing. One idea could be that every new development of multi-family housing or condos has to "donate" 10% of them to the municipality. These are then held by the city, that can "rent" it out to people who need them. They can't sell it. This would push the cost of these developments by 10% but it would essentially wipe out homelessness.
There are some ideas that I thought through over the years. As I said, I unfortunately don't have the answers.
You might find interesting experiments on housing in Asia. Specifically Singapore has a housing subsidy system such that basic housing is subsidized to be affordable for all. In China land is rented from the government on a lease. This does tend to have the weird side effect of encouraging massive build-outs as it's how cities raise money.
One of the more interesting ideas I heard is that zoning is a cause of developers only building luxury apartments in US cities. If there were no minimum apartment size, a building could be split into smaller spaces such that the profitability per sq ft remains the same.
> then the rents go up by the same amount
I can believe that rents go up. I am skeptical that specifically rents go up by _exactly the same amount_ and in every neighborhood when a portable income source is introduced, such that it perfectly cancels it and we're back to nothing. I don't hear this criticism brought out for a minimum wage hike or tax reductions.
They don't, net, unless UBI is fully monetized rather than paid for through either current taxes or borrowing, either one of which takes money from some group of people to redistribute.
I think Singapore is really ahead in the affordable housing front. They have nice places where people actually want to live. I am not sure if and how it is possible to replicate this on a larger scale.
California has requirements that developers have to designate certain units for low income. However, for larger developments, they found a loophole, where multiple developers pool all of these units and put them in a separate building.
I think it completely beats the purpose. The whole point of this should be so people that hit the bottom don't feel like outcasts. We would be so much better off if we helped them to get on their feet so they can be productive again.
> Won't most of the extra wealth just be captured by rent-seeking?
There is no (first order; reductions in bureaucratic inefficiencies and social ills probably provide some as second-order effects) extra wealth, just a compression of the income distribution compared to the status quo ante.
If you want to do UBI, the correct implementation is:
- Give the same amount to everybody* , with no means testing to avoid it become a political football. Bill Gates gets it too. This also removes any dis-incentive to work while also collecting UBI. Otherwise congress with write up a 9000 page law about who gets how much and when, which they then hold everybody hostage to.
- Pay for it with a flat tax on all income from all sources, including capital gains, dividends and carried interest. All the money goes into a separate off-budget pool for immediate monthly distribution. Like SSI, but with no 'investing' in treasuries or anything else. Don't let the politicians get their hands on it. Money comes in and immediately goes out. This makes it self-balancing. As people reduce their work, the pool shrinks, causing some people at the margins to re-enter the workforce. As we become more productive the pool will increase, allowing more people at the margins to reduce work if they want to. The tax rate can be adjusted as necessary as we see how it's working out.
* "Everybody" certainly has nuance to it that has to be defined. Children? Green card holders? Illegal Aliens? Felons? Inmates? Citizens living abroad? This is certainly an important definition, but less important than the overall idea.
I love the intent behind UBI, but second-order consequences seem seldom to be considered.
For example:
If we give everyone $X, where is the money going to come from? Taxes from people making > $X dollars. But, how would those people have utilized that money, if they _weren't_ taxed? Perhaps in ways much better than its utilization for UBI, which leads to a net loss on balance for most.
If we give everyone $X, what is that going to do to low-income work? Say a person, previously could only get a job _making_ $X / month. Their incentive to work is now diminished. We may _think_ that they will will be spend time learning / etc, but this is an ideal, not reality. The person would most likely _choose_ not to work. This would deprive both them and society of the value they would have produced
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> The first core component of capitalism is the understanding that when everyone performs the work they are best at, then trades with each other, everyone wins.
^ This is not quite true. Capitalism works through evolution: It simply rewards people for doing work that _other people want_, not necessarily work they are best at.
When you look at capitalism through the lens of: this is an opaque, higher-order process that allocates capital through evolution, you end up wanting to change some if it's core components less.
It seems that the current model of of the economy with inflation and growth targets is ripe for revision.
It has pernicious effects of causing 'growth for growth sake' including a vast infrastructure of wasteful spending - e.g. crop subsidies, fuel subsidies etc., millions of bullshit jobs[1] and an overall bias to create and foster consumption based economies.
That model was fine for a time of population expansion and little concern for co-ordination problems (e.g. environmental impacts, labor exploitation). In a time of rapidly slowing population growth (in developed and even many developing countries) and to avoid disruptions due to climate crises, the focus should be to improve the efficiency of the workforce, and direct that workforce to work on the several jobs that desperately need to be done - restore infrastructure, research and deploy efficient and clean technology and remediate (to the extent possible) the environment. If there is still productive capacity left over, it could be spent on reducing tail risk (e.g. viruses)
What mechanism is proposed for determining eligibility? I have multiple citizenships but have not lived in any of the countries I'm a citizen of for quite some time, meanwhile I have lived in more than 20 other countries.
Is UBI proposed to be given to:
* every citizen of a country that implements it? (then, can I get more than one?)
* every resident of a country that implements it? (right now I have legal residence in three countries, but I know people who have zero.)
I’m for UBI as long as it is actually universal and EVERYONE receives it and we remove all other government sponsored financial aid and remove all the other supporting institutions. It would mean we no longer need to pay people to decide who receives money and who doesn’t.
I support this because it’s fair for all and much harder to game.
I also support this because it would be a net neutral outcome . Basically people would just get their money back.
If you can provide a receipt for accomodation/rent and utilities, you are eligible for the UBI up to the value of your accomodation and utility bills (with limits).
The UBI can subsidise classes of certain foods up to a certain value if you keep the receipts, but can not subsidise confectionary, soft drinks, smokes and alcohol. Only fresh food, milk, etc. with a nationally recognised UBI code on the packaging can be subsidised.
The UBI is not money that you can spend on barista coffee, lego, computers etc. You need a job for that. It’s a tax return for living that’s claimable each month and doesn’t rely on actually paying tax. Processing the UBI creates jobs and encourages people to organise their spending. But in this manner, any reasonably organised person can get off the streets or bootstrap their own business without anxiety about starving.
Social services would help people with low means (ie can’t read or write) to organise their affairs to make use of the UBI. Benefit payments for unemployment and for kids would be suspended. Naturally, taxes would be increased to support the UBI, but most of the cream that you make could be used on “nice” things.
This balloons administrative costs and leaves rooms for loopholes - never underestimate the cost of having to patch policy loopholes. It also creates mini games around the UBI system, making it central in people's minds. Ideally you want UBI to be an afterthought, simple and clear, and let people focus on what they really want to focus on - their own work or life.
Makes me think - and ignore for a fact that this would never get over the line in the USA - what if it was only paid to a government debit card and funds on that card could only be spent directly, not withdrawn as cash. Further, they could only be spent on subscriptions - rent, utility, vehicle lease with built in mechanical support, health insurance. Try to remove a lot of the financial unpredictability that wrecks people (car breaking down, for example). Provide a clear monthly or live (digital) report of where the money was going. Of your $1k, $200 is x, $150 is y, $20 is z, etc. Build in budgeting/awareness to encourage people in the right direction.
This will be similar to the college fees conundrum, no? An increase in financial aid resulted in colleges spiking up their fees (one of many factors - but definitely one factor). So won't landlord be similarly incentivized to increase the rents they collect?
Maybe a better example of what i'm referring to was a recent blog about why amish people get away with low medical expenses (one of the reasons being - their not being part of the insurance that the rest of the folks have..)
I watched the recent antitrust congressional hearing involving Facebook, Amazon, Google and Apple.
From it, it's clear that many small businesses have fallen prey to anti-competitive behavior at the hands of these corporations.
But the problem seems to be that these corporations are so large that they are not even capable to stop their own employees from engaging in these anti-competitive behaviors even if they had the will for it and even if they had policies in place to try to prevent it.
In other words, these companies are not able to regulate themselves.
We don't let people get away with transgressions, why do we allow corporations to get away with them?
If corporations are to be treated like persons under the law, they ought to be held to the same level of accountability as persons too.
If a person committed minor transgressions against millions of people, they would be held accountable. Why don't we do the same for corporations??
As it stands today, corporations have more rights than people. To change this, it's crucial that we put power back into the hands of people and the best way to do this is by giving people money.
UBI, like block-chain, is a solution in search of a problem. It has the following problems:
1) Does not solve the issue of 'meaning' and 'purpose'. That is, now that UBI (and automation) has gotten rid of the need to work for a living, what is left? Said another way, why not fall into alcoholism, drub-abuse, and crime? We don't have any good examples of large populations living off the government dole and thriving.
2) UBI isn't actually that much of an improvement over a well-funded welfare state, which leads to #3 ...
3) Does nothing to help developing world. First-world countries don't actually need UBI. They already have deeply funded welfare states. How does UBI help a laborer from a developing world compete when his labor is no longer required? How does UBI help a government of a developing nation build prosperity?
3) UBI is ill-defined. There is tepid acceptance of it on the left, but only with the implicit assumption that it doesn't replace most (or any) current welfare programs. UBI's support on the right almost always comes with the assumption that it will replace much of the welfare state.
> Does not solve the issue of 'meaning' and 'purpose'
For an engineer, it absolutely does.
How? By giving a broader range humans the ability to shout "This problem matters to me. Please build something to solve it" into the economy.
---------------------
Suppose it is 2013. I build a tool that helps a luxury hotel in New York do bespoke guest relations slightly better. They have customers who have money, so they have revenue, so I get revenue.
Suppose it is 2013. I build a tool that helps a food truck in Flint, Michigan run their operations. Their customers don't have money, so they don't have revenue, so I don't get revenue.
Helping people get fed and create community, or polishing a luxury experience for a very few -- Which job has more meaning and purpose?
>"This problem matters to me. Please build something to solve it" into the economy.
That is a property of the free market. We're living in that world. UBI does nothing to improve that.
I'm not saying nobody will find meaning and purpose in a world where you don't need to work for a living. I'm saying huge swaths of the population will not and it will lead to major societal problems and unrest. Some of those problems will be drug addiction and crime. We don't have good examples of large populations succeeding (by any measure you choose) where nobody needs to work for a living.
>Helping people get fed and create community, or polishing a luxury experience for a very few -- Which job has more meaning and purpose?
Your examples are contrived and just plain odd. For one thing, UBI does not mean unlimited resources. People will still need to discriminate between option A or option B - so your food truck business in Flint isn't guaranteed to succeed in an UBI world because people may opt to spend their money elsewhere. Similarly, your luxury New York business is also not guaranteed to succeed (just because a profitable New York hotel has money, doesn't mean they will buy from you). Second, business needs a stable climate in order to operate. If you have crime, and riots and social unrest, that's not a good climate for businesses to operate in. UBI does not solve it, and in fact, probably aggravates it. There is more incentive to riot when you have nothing else to fill your day with.
Huh? "line-of-business software for foodservice" and "line-of-business software to do customer relations" seem like incredibly mundane examples.
> your food truck business in Flint isn't guaranteed to succeed in an UBI world because people may opt to spend their money elsewhere
Yep! So the food truck would fail not because it is in a community mired in poverty, but because it didn't make good business choices or achieve a worthwhile purpose _as judged by those whom its work impacted_.
The core of your thesis seems to be that if given the freedom, people would turn naturally to behavior that destroys themselves and others. I'll grant thats true for up to 4% of the population, but what's stopping that 4% from silently spitting in your hamburger nowadays? You can't make a riot with 4 shitheads surrounded by 96 non-shitheads who have a sense of ownership of their community.
(But if the commercial real estate is owned by Berkshire Hathaway rather than your pewmate's uncle? Well, then fuckit. Why intervene?)
Generally, people are not total fools. They make tragic and silly choices sometimes, especially under stress. I've been to enough meetings of Alcoholics Anonymous to attest to that. But a free people left to their own devices will seek meaning and purpose by investing in relationships and churches and passion-projects. Or are you unaware of the phenomenons of people gardening and babysitting for relatives or teaching free community classes?
They are. The contrived part is your characterization of succeeding in Flint vs New York.
>So the food truck would fail not because it is in a community mired in poverty, but because it didn't make good business choices ...
Which is the case today!! There are businesses succeeding in low income communities. There is no level of income low enough that a market cannot operate in. UBI does not improve that. What business needs is a stable climate and business friendly policies. If a low-income community has issues with crime (or war, or civil strife) or the government is hostile to private business, that's a bigger factor than the fact it is a low-income community.
>The core of your thesis seems to be that if given the freedom, people would turn naturally to behavior that destroys themselves and others
Not 'freedom'. If the people's ability to work and provide themselves is taken away, then yes, it will lead to major societal issues. UBI does not solve that. There is something that changes when you go from providing for yourself, to have some other entity provide for you.
The Wikipedia article says that the Iranian plan pays $40 per month, which seems very low for consideration as a UBI compared to numbers like $1000-2000 per month that people throw around for the United States. I don't know much about Iran, so I'm not sure if it's 25-50x less expensive to live there.
The only numbers I found on the Saudi plan is $533 million per month paid to 10.6 million people [0]. This works out to about the same individual payment.
I think investigating the effects of these plans in those nations is worthwhile. Separating the effects of the plans from the specific situation in the Middle East would be challenging.
Say you can be a chef, cab driver, plumber, electrician, carpenter, welder or whatever for 1000 riyals a month. And the government is already paying its citizens 1000 riyals a month. No citizen really wants to be a chef, cab driver, plumber etc anymore. No one wants to do a job, the pay equivalent of which you already get for free.
Now some one has to do those jobs, there are two options now. You either pay people more, and therefore now products/services cost more[Inflation]. Or you get people from outside to work at same price you would pay.
This has led to the situation where Middle east is full of South East Asians. Pretty much any skill based job you see is being done by Indians/Pakistanis/Bangladeshis. On the very long run you turn your whole populace into freeloaders. Or worst the laziest kind of freeloaders, who just won't work no matter what. It will eventually precipitate to everything. Given you don't plan to do a job, why would you want an education anyway? Eventually you will arrive at where UAE or Saudi Arabia is today.
Spot on, having lived there for so many years this is exactly what I saw. People pushing for these things dont realize that there are countries where these policies are implemented for decades. Look and them and study. Most of these people have never lived anywhere else
It leads to more nationalism and youll be wishing for the good ol days of today when you go down the path others have gone down.
UBI has never seemed like a good idea to me. If the current system is being exploited (corporations like walmart paying below a living wage to workers because they know foodstamps/gov't assistance will cover the rest) it just never made sense to me that the current class conflict gets solved by the losing side (workers) gets free money to pay to the winning side (capital holders). I also haven't heard any convincing arguments for the basic counterpoint that UBI won't lead to just an increase in prices across the board for everything and inflationary pressure (free market competition is a myth in a lot of current-day markets, regulators are asleep at the wheel).
You could argue that we already have forms of UBI in practice right now, but the UBI that gets referred to in tech circles with no significant tax structure changes just uses the government to guarantee more wealth accumulation for those already at the top. As the gulf between the workers and the capital class widens, it gets harder and harder for anyone to make the leap, and then we get the societies we see in Sci-Fi (ex. Elysium). It seems so absurd that people are pushing for UBI in a world where the US doesn't even have nationalized healthcare and a reasonable healthcare system. Talk about putting the cart before the horse.
I think the right-ish solution in the US can be oversimplified to:
- Reduce ludicrous defense spending in peace time
- Increase corporate and top end taxes to what they have been historically
- Resurrect unions
- Fix job displacement with investment in education and job retraining programs with extra support linked to enrollment
Unfortunately, getting any of these things done requires an insane amount of political know-how, political will, coordination, and effort, and someone to lay out a plan and lead the effort, not even including all the problems with today's hyper-partisan political climate.
The poorest person in a certain place has 10 income. The richest 10^1000. Prices reflect that - some goods are exclusive and have a price relative to 10^1000, whereas others reflect income as low as 10. Why? Mostly because there's a market of people earning 10, so, as long as you can produce goods with less than 10, you'll profit. Still, those with 10 have little access to important goods like housing.
Now, people have UBI. Let's say, 1000? Prices now reflect the poorest person with 10+1000 and the richest with 10^1000+1000. Goods and services that targeted the 10 income market are now priced for the 10+1000. Housing goes up, food goes up, everything goes up.
The power of money is relative. Adding money to an economy adds inflation, and adding money até the base of the pyramid inflates crucial goods and services.[1]
So, unfortunately, the solution isn't as simple as UBI.
I wish someone would challenge the premise that a "basic income," a basic standard of life is something that can even be identified. I challenge the idea that people can point to some standard of living and say, "that is the basic standard of living that people, and we should provide people with that standard of living."
The problem is that Americans, and most societies in the West in general, have totally lost touch with basic human existence. For example, in New York right now, people are delivering pre-cooked, packaged food in single-use containers to poor people[0]. If you can't provide food for yourself, are we to assume that this is the standard level of living that you are entitled to? I wouldn't be surprised if many people say: "Yes, this is what people who can't provide for themselves need."
My opinion, however, is that sustaining people in this way is completely unsustainable, a form of terrorism on the environment. You can't just give people free endless takeout and say that that is the basic standard of living they need to advance in life. But that is how this is being done right now, because the people who think UBI makes sense, I find, are by and large the same people who consume prepared, plastic-packaged foods all the time. These people, largely, live unsustainable, intensely capitalism-based lifestyles, and think for some reason that it makes sense to bring the rest of the world into their divorced for nature-reality existence.
Giving people a "universal basic income" so they can live the destructive Western capitalist lifestyle is a plague on our species, human culture, and worst of all, on the environment.
A single land tax that pays its surplus out to the citizens is my vote for Capitalism 2.0:
Some libertarians advocate land value capture as a consistently
ethical and non-distortionary means to fund the essential operations
of government, the surplus rent being distributed as a type of
guaranteed basic income, traditionally called the citizen's dividend,
to compensate those members of society who by legal title have been
deprived of an equal share of the earth's spatial value and equal
access to natural opportunities. (See geolibertarianism)[1]
If you give every resident a nice check every month (the universal basic income) and have open borders, your country will soon be overcrowded with immigrants. And if you give the universal basic income to citizens only,
it it not universal any more.
There is an easy compromise that does not require means testing:
*Citizens-by-birth (regardless of whether it is acquired territorially or by blood-line) are eligible past majority age, as long as they reside in the country (short interruptions up to a year may be considered acceptable for this purpose)
*Naturalised people and immigrant residents become eligible past residency of equal length to majority age, subject to the rule above
I definitely need to research this topic more, but after reading everyone's arguments for and against UBI, I think maybe the right solution is somewhere right in the middle.
Instead of giving everyone $X,000 a month, what if there was some sort of secondary currency or credits that all Americans receive (call them Patriot bucks or whatever) that could be used for necessities like food, public transportation, etc.
I don't think the currency should be used for housing costs, but I could maybe be persuaded otherwise. Ideally though, by having the necessities covered, it would free up income earned through working to cover rent, and thus working would still be encouraged.
This seems like something that's easily doable and doesn't solve poverty completely (there are still other costs like health care), but this would help a lot of people and be a step toward UBI in the future maybe.
I hear you, it's just such a difficult problem. I was just thinking of what the bare minimum is we could do to ensure no one is really living without basic necessities, until the point where our political climate makes it actually feasible to blindly give everyone X,000 a month.
I'm sure there are issues with welfare coupons, but being able to go into a grocery store and buy items you need without having to apply for anything has to be an improvement. Like I said though I need to research more so I could be wrong.
Why charge for public transport at all? Issuing everyone credits they can use to buy rides seems like a way to funnel money to big consultancies.
Similarly for housing; offering very basic housing to anyone who wants to live in it solves 80% of homelessness (the last 20% is harder than you would think).
Food is harder, but something akin to a soup kitchen can still help a lot.
Transportation I could see, but for other things like food I just like the idea of making people choose how they want to spend their credits, if for no other reason than to remind them that scarcity still exists.
Having a grocery store with a "take what you want" policy feels like it won't last long
If it was effectively a soup kitchen, it would be hard for anyone to hoard. They'd be served a single meal, or per family member they'd elected to represent. I don't think they'd be walking out of supermarkets with a trailer of flour packets and racks of lamb.
Honestly I was moreso relating it to my meal plan in college. I didn't have to jump through any hoops to get food, but yes I was limited as to what I could buy. It was far from steak and lobster everyday, but I also didn't starve :)
This article forgets to mention that right now the Fed is printing and giving free money to corporations via pretend-loans. The interest rates are so low that, in the hands of large corporations, the loans pay themselves off through stock price inflation which the loans themselves create (including future loans).
You know what? We have no idea what would happen. We should just do it and see. If it becomes a mess it will be our mess and be ours to clean up.
We can no doubt think of a million ways to calibrate the process when the need arises. Some ideas (probably not the best but its something):
Require everyone to apply for jobs and create a formal formula for it. Interviews with 1 employee, 1 employer, 1 government employee. 1 application per year seems the minimum. Permanent fines if employer or employee intentionally screws up. (not a real job opening, not showing up for the interview 3 times, etc)
Create a gov agency to repair rental homes cheaply or for free and zero interest mortgages for landlords - then hammer down rents dramatically. Invest in public transport in-to/out-of major (expensive) urban and industrial areas. Build lots of new houses fromwhere people can reach those urban centers.
I just googled "advertising as fraction of gdp" and the two top results are 19% [1] and 1.17% [2], respectively. It's almost as though random pages on the web are not to be trusted.
The OP's argument, to a large extent, would seem to me to hinge on this number, though I'm not sure I can work out the relevant math on my own. (If anyone else can, I would definitely like to see it)
Won’t it just be negated with increased cost of living? If people get 1000 a month free, you better believe that rent starts at 1000.
The free money will never do what it’s supposed to do in the long run. It’s better to just give the actual service for free (healthcare, college, transportation).
1. Inflation is primarily a monetary phenomenon. So as long as you pay for UBI through increased taxes rather than by borrowing or printing the money, it won't cause overall inflation. Certainly it will cause local distortions -- some stuff will go up in price but that should be balanced by the stuff that goes down in price.
2. Another possible theory is that UBI will allow people to move away from expensive cities to areas that are cheap to live in. $1K a month won't go far in SF, but you might be able to live on that in the middle of nowhere without having to fin a job. So decreased demand for housing in expensive cities means that UBI might cause housing prices there to go down.
3. Housing problems are fairly orthogonal to UBI. In pretty much every other market supply can rise to match increased demand so that prices stay close to their marginal cost of production. We need to fix our housing pricing problems UBI or no UBI.
Probably the biggest change I expect is very undesirable jobs will either become automated or high paying because you have people thinking "I hate working as a toilet cleaner but it pays so much its worth it" Or we will end up with self cleaning toilets. There is no longer a whole class of people who will work any job no matter how shit and for the minimum wage because they are forced to.
Is that totally guaranteed though? It’s important to remember that the landlords as well will be getting the 1000$ UBI. So yes, there will be landlords starting their rent at $1000, but there will also be landlords who start lower because they too have become more enriched from the UBI and don’t need to squeeze the margins as much anymore.
Fair point, but if I had to counter I’d point to egregious wealth accumulation in our society, which is in it’s distilled form is just greed.
The greedy could siphon away most of the UBI, bringing us back to square one. UBI suffers from the assumption that we have a system with the right incentive structures. We kind of don’t from what I’m seeing.
but the only way to pay for the dividend is through taxing the greedy so even if they do that's a plus, again the greedy/enterprising are what make everything we love like these devices.
They get it and then it is instantly removed via taxes so their overall profits from UBI were $0. The only difference between UBI and unemployment/welfare is you don't have to apply for it, its simply calculated and distributed by the tax system.
Of course it would. Over time UBI would destroy the value of our currency, and those who use the dollar as their reserve currency would get wrecked as well. IMO an Implementation of UBI would require the creation of a new currency.
Won’t it just be negated with increased cost of living?
Not unless landlords collude to fix prices. Competition will keep prices down, the same way that gas isn't always $4/gallon even though people will buy almost as much at that price as at $1.
That's a very hand-wavy and ridiculously over-simplified way to just dismiss an idea out of hand. May I suggest learning even the first thing about a new idea before so confidently asserting it could never possibly work?
The rent prices are high (low supply), so whoever has the most money gets it. If you only have 1000 from UBI, but the guy next to you has 1000 plus the 1000 from UBI, guess what the new price is?
Build another house, and then problem solved. Why start with the assumption that supply needs to be low forever? That is actually a very new problem in housing due to regulatory capture, a long history of terrible zoning laws, and a tragedy of the commons that there are always many people ready to oppose a new house but no resident of the unbuilt house able to counter that force and argue for it.
With better policy we really could end the current housing shortage in our biggest & richest cities.
But in America there are more empty houses than there are homeless people. Supply is not low. Maybe rent would go up in some markets (eg Bay Area), but people can move somewhere else. That’s the point of having a market system.
Yes UBI decreases market inefficiency, but the effect would be smallest on inelastic markets like housing. You’d see the biggest impact in the markets for the life-improving items/services that people with less money can’t afford right now, everything from fresh/healthy foods to nice shoes. The prices of those things would go up, but it would reflect an increase in demand.
Not every week. Eventually the poeple paying for UBI will leave or guillotine over their head will be used and body will be looted. Rinse and repeat every-time equity is tried.
that's an awfully sad and ill-informed perspective. egalitarian communities have existed to varying sizes and durations for the existence of humanity. if anything we are wired for altruism.
From some of the comments here, and from talking to people in the past month, it occurs to me that 2020 seems to be causing people to remove their rose-colored glasses. It's hard to believe that the web page for the link below may, in some ways, have actually underestimated just how bad things would get in 2020:
Of course, only some of the disasters of 2020 have been beyond our control. However, in the face of so much calamity, it's soul-crushing that so much of the suffering in the USA in 2020 is self-inflicted. Think I'm overreacting?
life is a process, pain is a constant, struggle is a constant. the fact we are witness to so much of others pain when individually we are comparatively spared means that progress is being made. And remember could be we'll see the yellowstone caldera could blow or a gamma ray burst wipe us out.
UBI reminds me of Bagehot's statement on the English Constitution being split into two parts: the dignified and the efficient.
It's also useful to think about the economy as being divided in two halves: one that keeps people alive by making available basics like food and shelter (the efficient), and the other that is where we pursue our hopes and dreams (the dignified). UBI plays in the first half by making sure people can at least subsist. They may then choose to what degree they participate in the second half.
If you just want a few extra creature comforts, then you can do gig work when you need it. If you dream big, then start prepping to interview at a FAANG while UBI pays the rent on a modest apartment.
I support UBI broadly speaking, but one thing I worry about with UBI are the unforeseen consequences on immigration. Say UBI is in place for citizens, but not for greencard holders. You've created a massive incentive for non-UBI workers to enter the labor force, and a massive incentive for companies to import as many workers as they can (who do not have access to UBI, and therefore cannot negotiate a higher wage). I'm not sure I want to live in a country where UBI "citizens" pay for cheaply produced goods and services made by non-UBI migrants desperate to earn citizenship, that seems like precisely the kind of two-tier economy UBI is designed to avoid.
I find it very sad that we live in a society where there appears to be no way of gracefully changing fundamental paradigms.
Money was invented in a time of scarcity and it was a very useful tool then. In some situations it still is today, but for many things we have more than enough for everyone, so maybe those should be provided without the need to go through the money system.
Anyway, I don't know what would work, but it still bothers me that we don't try to constantly improve our systems and if necessary change them in radical ways. We just implement systems that then become controlled by a few people who greatly benefit from it and thus have no incentive to change it.
>I find it very sad that we live in a society where there appears to be no way of gracefully changing fundamental paradigms.
That is a feature, not a bug.
Society is incredibly complicated and is an intrinsically chaotic system resulting from the beliefs and actions of hundreds of millions of individuals. The system has generations of iterative 'fixes' to problems and with delicate balances negotiated and fought for by various groups across tens or hundred of years. What makes you think you think you can rebuild it better? What makes you think you can account for all the things that the system does well in your new 'paradigm'? We saw with various revolutions (e.g. French, Russia, and Chinese) that when you try to upend even a bad system and rebuild from scratch with a 'new paradigm', it leads to something much much worse.
The problem I see with the revolutions you mention is the people implementing those changes believe (or at least act like) their new system is perfect. I'm advocating precisely the opposite! I would like for people to view their system in terms of trade-offs and deliberately experiment with new ones and asses the results and not just in an incremental way, but also in radical ways. Because right now, all I see is a sort of headless chicken running around destroying everything with zero regards for the consequences.
Even the article's author doesn't appear to conceive of anything better than capitalism. The solution is to consume more! Really?
So I guess what I want is less of a religious view of the social systems and more of a engineering view.
>Even the article's author doesn't appear to conceive of anything better than capitalism.
Because through blood, sweat and tears we've landed on a system that is based on market-economics coupled with welfare state to provide a safety net. Changing any of that would require a wholesale destruction of our current system and is no better than the Russian revolution. Our system has a lot of slack. You can adjust market and welfare policies across elections. There's a lot you can do within the system - your problem seems to be that policies you like are not pushed through the system ... but that's Democracy for you. It takes effort and negotiation to make societal level changes.
>So I guess what I want is less of a religious view of the social systems and more of a engineering view.
Social systems are not engineering systems. They are messy because they are fundamentally composed of messy individuals with historical baggage to boot. You cannot create a clean top-down plan without it looking like Soviet-style communism. Democracy is messy and requires give and take and negotiation, compromise, and horse-trading between all the thousands of different stakeholders and groups. You cannot clean that up with an engineering schematic. You're falling into the trap that all ideologues fall into.
I don't think there is any good or service for which we have transcended "scarcity".
Even with food production, actually manufacturing food is dirt cheap now, but it's the transportation and logistics that's the hard part — I.e. the scarcity is in the supply chain. The pricing system works remarkably well at addressing this scarcity, provided the buyer has money to pay for things. Per the OP, the diminishing returns might be overcome by fixing the "buyer does not have money to pay for things" constraint.
When you have manufacturing moving almost to the other side of the globe in order to increase profits I think it is hard to see how there is a transportation and logistics scarcity. Most of the scarcity I see is artificially induced by the people that want more profits.
Removing money from the equation and just leaving the resources, I don't see much scarcity.. maybe in some battery components and such, but certainly not in housing, electricity, food and water. It's just that under the current system, if there is no profit to be made, then it doesn't happen. Same reason we haven't colonized the moon and mars.
> Most of the scarcity I see is artificially induced by the people that want more profits
There's just no empirical evidence for this. The general profit margin for most enterprises in competitive markets is between 5-10%. For food it's actually much, much less than that, but let's use the higher figure for the sake of your case. Even in a world with 0 profits, if you produced everything at cost and redirected profits to more production, you would only be able to meet the needs of 10% more people, at best. And that also ignores that without profit, there's no incentive for people to actually start the enterprises that have resulted in our current levels of production.
> Removing money from the equation and just leaving the resources, I don't see much scarcity
The scarcity is in the labor. We absolutely have the raw materials to make stuff for everyone, but you need to convince the factory worker to show up everyday, the ship operator, the strategic planner, high skill workers, etc to all move where needs aren't being met and actually show up to work. In that regard, we absolutely have a scarcity.
> It's just that under the current system, if there is no profit to be made, then it doesn't happen. Same reason we haven't colonized the moon and mars.
This is a bit of a self-refuting point. You're exactly right, it doesn't happen if there is no profit to be made, because the profit is the incentive for the enterprises to produce and distribute the goods & services. Insofar as there exists people whose needs aren't being met, it's because they are unable to provide the incentive, I.e. the revenue, for the profit-seeking producers. The UBI is the cleanest and most straightforward solution to this problem.
== I find it very sad that we live in a society where there appears to be no way of gracefully changing fundamental paradigms.==
People who have benefited from this paradigm have most of the power and aren’t going to give it up easily. Typically, things need to get very bad before significant changes are made.
Tbh, it seems like the author does not understand the basic principles of economics and history of economics.
The core problem regarding UBI is the fact that throwing such amounts of money to economy will create an enormous inflation, which will basically mean we would only improve our well being by margin, since more money won't let us buy more goods.
Furthermore, the ones that will benefit most from UBI are those, who have reached en equilibrium, meaning they will generate even bigger profits without investing more money. As the author states - we need to have more money, so that we could consume more, but in the end, the ones that end up with more money are the top 0.01%.
Rather than UBI, why not add supplemental salary to important industries? Instead of handing out a ton of money for free, we could ask citizens to work in the industries with the best long-term pay-off for the economy, things like education, research, maintenance, infrastructure, healthcare, environmental restoration, energy improvements, etc.
If these jobs were more highly paid, our brightest minds might be pulled there instead of to companies whose goal is to capture our attention and display ads. And an influx of talent and more workers to these areas would surely improve quality of life, resiliency to future epidemics, literacy, belief in science, etc.
One possibility is to discourage advertising. As the article points out, it's zero-sum. 78% of Americans are spent out. Make advertising no longer a deductible business expense. It's like multilateral disarmament. There are too many products where most of the cost is advertising.
As for universal basic income, someone wrote that the 21st century has been the move from career, to job, to gig, to universal basic income.
How about enforcing an 8 hour day, a 40 hour week, and a good minimum wage? That's a start. And make "time theft" by employers a crime.
> Instead of continually trying to optimize supply, with diminishing returns, we need to optimize demand by giving consumers more money to spend on things they desire.
> If we can give companies overwhelming demand so they have to scale up production instead of spending all their money on advertising, we can have both happy companies making profit hand over fist, and happy consumers who get everything they desire.
> everything they desire.
This seems very bad for the environment? The article seemed to make some interesting points, but I got concerned here. These paragraphs seem awfully gung-ho about runaway hyperconsumption
Thought experiment. Suppose 10K people have the technology and willingness to volunteer enough worktime to provide the essentials for all of the US. Some basic income program is implemented to distribute these necessities. Possible? Yes. Sustainable? Yes, bounded by science and political stability. Good? Yes on quality of life floor and economic freedom. Conditional yes depending on competitive accessibility of the system (anti corruption/abuse). Fair? Better if more people share the work burden.
Wise governments should set policies to help this transition.
I find it interesting that an article celebrating UBI as a panacea goes to the top of the queue, while articles critical of UBI are flagged and removed. Is this what intellectual curiosity looks like?
You can already do that in most places by just applying for welfare payments and making a fake effort to get a job. The thing is that working a real programming job pays a lot more.
Not if you genuinely don't care about impressing anyone. A real programming job involves convincing someone your work is valuable enough to pay for. A welfare scam involves convincing someone you deserve free money. Both are too much social involvement if you prefer a hikikomori lifestyle of writing code nobody will ever use.
Zero users and loving it! is not necessarily hyperbole.
Under a UBI you would not have to fake anything since the only qualification is having a low or no taxable income.
Again, this is how it works in most developed countries under welfare systems without issue. The majority still seek real jobs because they want to live above the base level of income required to live. A UBI won't be paying for your overseas holiday and fancy car.
UBI is not bad. But without a better housing infrastructure in cities, UBI will be mostly a voucher for landlords, who will disproportionately end up quickly receiving a large fraction of this cashflow. Affordable housing, education, and healthcare need to be addressed. UBI will just kick these cans down the road. That being said, if we are committed to not solving those more fundamental problems, as we seem to be in the US, I welcome UBI as a great alternative to doing absolutely nothing.
UBI will really take off once automation has completely replaced all the essential grunt work jobs which would make food and shelter abundant. Once that happens then everyone can do whatever they want and not worry about trying to have enough money for groceries or pay rent. We're not there yet but maybe in the next decade or two. My concerns with UBI right now is that it'll incentivize businesses to raise their prices and make people more dependent on government.
The issue with ubi is that it will never be implimentable with the type of winner-takes-all government of the US, UK, Australia etc. There will always be a slim majority to cross out the Universal part and give people like them (almost) double and everyone else nothing. This is why we have insanely high pensioner benefits and no funding for working people at the moment.
If you cannot implimented a good policy, it doesn't matter how good it is, it's a unicorn.
This article is absurd. Capitalism 2.0 != Capitalism. Nominal GDP growth != real GDP growth. UBI != ending winner takes all.
UBI to all is pure, unadulterated inflation. More money is chasing, the same goods and the same winners will suck that money out of the system. If the money is given to everyone, there will not even be a redistributive effect.
Hell, you might even have fewer goods being produced since there could potentially be less incentive to work. Couple this with a boomer population that's exiting the workforce, and a nightmare could potentially unfold.
So yes be prepared for GDP to skyrocket... because of inflation.
Now if you want to pitch employment guarantee programs and better social services, that's worth a discussion. Otherwise, injecting pieces of paper into the system does nothing for real growth in the economy.
In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money, there was nothing our money could buy,
And the Gods of the Copybook Headings said: "If you don't work you die."
I still have reservations against UBI but I think some form of it is inevitable and perhaps necessary.
I am not sure even OECD nations have sufficient production capacity for everyone and carrying capacity can solely rely on automation in the near future.
I think a short “draft” (2-3 years) of people into various community and defense activities should be mandatory for all healthy young adults before they are eligible for UBI.
I am busy in the field of fractal arithmetic and quantum logic. Thanks to an incompetent advisor I was dis-advised to follow an academic schooling and missed the boat. With UBI I would have finished the basics of these two fields long ago and published them for the good of science releasing a trove of new techniques, insights, algorithms and hardware designs. Now I have to scavenge for work and waste my time.
Breaking arithmetic down to a single operator represented as movement and a single value represented as null/zero. Because there is no variation in operator or value you can remove them from the equation so only the structure remains. You can use that structure to create fractals storing information, manipulate and navigate through them. Working on the final prototype now and got rough designs to implement in hardware but its getting severely delayed because of absence of UBI.
There are two types of higher education here, academic and applied. School adviser had no clue and advised to walk the applied path because it would get me into computer science one year faster. Yeah, applied CS, but I needed academic. Tried to get back onto the train, did hardware and software for a total of 9 years but in the end the gap was too large to get recognised and make the jump. One advantage though, it allowed me to think outside the academic box.
Not necessary, I can emulate in software which I am doing now.
I'm not sure if validation software works as intended because the concept isn't quantum physics and for traditional it has no explicit and/or/xor gates. Quantum might be a dangerous word now as the meaning has been hijacked, I should be more careful. This design has a new type of gate which is more like a vector of switches. It doesn't differentiate between the logic type because those have been broken down into terms of that switch. It's all about connection. Memory is also different, more like bit sequential memory. But ultimately I do hope to get it running on dedicated hardware. Also dreaming of the possibility with polarised light and crystals because of the uniformity of the switch.
An important part of the article's argument is that giving money to the people directly is best, because they know best how to allocate resources over a top down approach...
I'm sadly not convinced this is the case right now in the U.S. People do stupid things with money, especially 'the house's money'.
For UBI to be a palatable choice to me, it would have to come with a mandatory financial education.
A UBI seems to me like an overly complicated way to just give everybody a free food, cloths, shelter, electricity, internet, and medicine. Why don't we just make that stuff free.
Every person can just go to a special Costco like store and spend x credits a month taking whatever they want. That way we can just make that stuff as efficiently as possible, rather than messing with the whole economy.
Because the logistics of government bodies trying to guarantee essentials while somehow getting them as efficiently as markets in optimal conditions can is anything but simple.
The IRS sent me a $1200 months ago via direct deposit in the bank account it already had on record for me. Setting up public bank accounts at post offices so every citizen has access and having the tax apparatus that already collects all your financial information reverse the process for 12-24k a year is extremely easy to implement compared to establishing entirely new branches of government.
There might be an argument that the food stamps program can be made universal for a fixed amount for everyone as a compromise position. IE you get 800 instead of 1k a month in UBI but get $200 on an EBT card to buy food with. But a UBI lets you simply abolish the bureaucracy of food stamps altogether.
Here in Australia we are mostly there with a lot of these things. Medicare could be extended to dental. We have housing but there could be more of it. Food and clothes seems easy.
It might be harder than just handing out cash, but it would be significantly cheaper, and could be implemented in small steps.
Staff and fund it properly. Have a good corruption watchdog. Run government departments against each other with bonuses for "the winners".
UBI isn't "expensive". Its not a sunk cost. Its wealth redistribution, not destruction. It makes your states books look massive to implement - "wow, the government is taking for trillions to cover its expenses, thats so much!" but if one of those expenses is guaranteeing the minimum standard of living to everyone that is stimulative.
Compare that to US defense spending now. Of course, 2.4 trillion a year in UBI payments is still 4x more than the US spends in the defense budget every year, but defense is a monetary black hole - the return on investment is awful because unless all the personnel and equipment commitments correlate directly to substantial amounts of economic enablement (and they really don't - the most direct example is exposing oil markets in the Middle East through occupation in recent years, but pretty much no country on Earth is lining up to pay what would functionally be protection money to the US military mob for being global police) then you build the tanks, bombs, trani the troops, run the bases, etc to do the equivalent of dig and fill ditches. There is no realized productive value in having the weapons capacity or entrenchment internationally the US military has.
That is the kind of money drain in government that can wreck a nation through siphoning of its profitable yields. Most would spend UBI on immediate goods requisite to human survival, that is a huge capitalization opportunity. Tremendous growth. The rest would be paying more in taxes than they get in UBI anyway to cover the costs.
Yes, but the government buying essentials for people in need is "stimulative" in the same way. Money goes to farmers for food, manufactures for clothing etc. People in need are still choosing and buying things in a market, but is a subset - just the essentials.
The point I was trying to make is that you don't have to upend the entire economy to help people in need.
I find it peculiar that Americans even discuss UBI prior to having universal healthcare. The whole idea of universality in this context is to eliminate the requirement to work in order to live a reasonable healthy life. If you implement UBI without healthcare then you maintain a form of economic slavery which more or less states that employment is required to have medical coverage.
UBI might work overall, the humanity has accumulated too much wealth, stuff and automation powers. Supply is overweighting demand historically for the first time. Why not redistribute wealth evenly, so that economic well-being becomes a new norm. Because, guess what happens, when one doesn't have to work to survive anymore? Happier, healthier and more creative people overall.
maybe i'm an idiot, but i really don't get the whole UBI argument... we already have it, it's called welfare and you see and how that has been taken advantage of and what a sh*t storm it is.
we don't a UBI, we need the government to stop dipping their hands in everyone's pockets and free up money.
1) stop taxing social security checks. these people have worked their entire lives and now you're taxing them on money THEY put in.
2) stop taxing disability checks. these people DEPEND on that money cause they can't work.
3) speaking of SS. we need to end it at some point. a good way of doing it would be to automatically put 25% of their SS contribution into a ROTH IRA.
4) you should be allowed to contribute an additional 20% of your salary to a ROTH IRA instead of the 6K it is now.
5) stop taxing people who make less than 40K per year.
these are just some of the ways i can think of to put more money into people's pocket without killing the economy, but that's just me talking out loud. maybe i'm wrong.
In the future, robots theoretically can do everything, and yes ubi would be needed.
What level are we at now? I don't think a ubi should be very much, maybe a dollar a day. Maybe 2. Considering we have all the other social programs for needy people.
5 bucks a day, who knows. The problem is people wanting to start it at some real high number.
Of all the things on my make the world right shopping list, I absolutely do not see UBI.
Renters need help. My priority would be housing rights. What I want is for the government to stop tiptoeing around and implement real regulation.
Minimum square footage per person. Minimum building standards to guarantee peace at home. Guaranteed rights, as a tenant, to remain in the property until you decide to leave. No more annual renewal fee stress when the estate agent threatens to replace you with someone (plucked from the free market) who will pay 3% more.
Regulation to prevent dense tenant battery farms. No more conversion of three bedroom homes (with two large living spaces) into six bedroom slums for common-licensed tenants. Oftentimes the kitchen is the only common living space and your bedroom has a lock on it. This is a horrible way to live.
It also drives down wages with a race to the bottom for lowest possible housing quality at the maximum possible price.
I’ve lived in — and seen my friends live in — various slums in the US and England over the years. In the very crowded rental markets of major cities and popular towns, tenants are treated like cattle, but without the animal rights.
And in most states there are minimum square footage requirements that, when too high for the incomes of the population to sustain them in housing, are going to be ignored by said population.
I find one of the more interesting benefits of UBI that stay-at-home-moms would be paid at least something compared to the status quo nothing-unless-your-company-has-really-great-benefits.
Alternatively, if the UBI pays for children, that subsidy could help more moms go to work by effectively subsidizing day-care.
FTA : "To reverse this trend of stagnating growth, we must put more capital in the hands of lower income consumers, who will then spend it on things they desire and increase GDP."
Why on earth should be reversing the trend ? Why not just accept zero-growth and organize the society accordingly ?
For the same reason I don't "just accept" that I'm going to die, or that there is no justice in the universe. I want to live longer than my parents, possibly forever. I want to impose my sense of order and justice in the world, because I don't like chaos.
I want live more comfortably than my parents and my kids more than me (and thus growth). Of course I accept anything, but why should I? Isn't being human making sure you always progress?
But you are going to die. This[1] is a very thorough walkthrough. Wanting to live longer than your parents is one thing, but "forever" is a long time. I'd go as far as to say that if you think you can live forever, you don't understand forever.
>no justice in the universe.
Justice is an idea created by humans.
Wanting to improve yourself and the world around you is a central human trait imo, but there are some things we will never completely fix. One of them is death.
What would happen if UBI was instead Guaranteed Work and Wage?
I'm thinking if tax dollars were shared in the form of education, training and entry level exposure to trade skills, and jobs that may not typically pay above a minimum threshold for poverty but are subsidized to make them comfortable.
It would seem there are gaping holes here - No mention of size of government. No mention of government creating the very distortion of big companies mentioned (competition is stifled by regulation). No mention of what UBI will do to pricing in the longer term (Cantillon effect).
In disbelief at this thread. People work because they WANT TO. Work is a natural human desire. It's easy to say we'd all just sit around playing games, but after a while you'd go insane. Work is never going to stop under UBI, or any sort of social welfare program.
> I’m a huge fan of capitalism and free trade, as laid out in Adam Smith’s genre defining book The Wealth of Nations.
The fact that he included an Amazon link to a book that came out over 200 years ago and is available on Project Gutenberg[0] certainly backs up his credentials as a "huge fan of capitalism".
The argument doesn’t seem very solid to me (e.g. I don’t see sharply increasing marketing budgets in the graph indicating more businesses are demand constrained), but the conclusion still seems likely to be correct. I’ve had similar thoughts for a long time now.
I don't know what UBI is, but as long as you are not allowed to print your own money, you must be allowed to participate in the (unique) economy, so yeah, somebody must give you a job no matter what. Or, if they don't have one, they can give you UBI.
I'm not sure why the biggest benefit of UBI is not promoted, in that it dramatically reduces the cost of providing state benefits? No more big IT companies changing crappy old systems to meet new requirements. Just a cheque once a month.
> I’m a huge fan of capitalism and free trade, as laid out in Adam Smith’s genre defining book The Wealth of Nations.
> Strangely, even though we’re in a golden age of hyper-efficient production and trade, the overall GDP growth of the USA is slowing.
We don't have pure capitalism and we certainly don't have free trade, couldn't those be valid reasons why GDP growth has been slowing? Rules, regulations, and laws have only been increasing and corporatism is winning. It's a memory leak. This isn't the result of capitalism, this is the result of businesses colluding with government to create coercive monopolies. Natural monopolies don't exist in this country, they are all spawned out of the nation states' monopoly on force.
I also disagree with the premise that wealth inequality is necessarily bad. If everyone's quality of life is increasing over time, that seems good for everyone, right? It's a terrible metric to base economic policies on.
Having said all that, I'm a reasonable person. If we replaced the current welfare programs with UBI, I'd be excited to see that experiment play out. I think eventually the cost of basics (in particular rentals) will increase to meet the new income floor, and people will inevitably say "UBI doesn't meet basic needs anymore, we must increase it." Haven't we heard this before? We read about it all the time with minimum wages. After reading the arguments for it (which seem bountiful and raises red flags for me), I'm ultimately skeptical, but I'd be willing to give it a shot and I think it is better than the systems we have in place today.
The economic problem is that advertising and capturing a bigger chunk of the market is more effective then lower prices.
This is good in one way because markets are getting bigger. But players are not incentivised to lower prices.
What happens in UBI when people who are still employed leave the state and by virtue of Internet remain employed in their new low tax state? Would UBI again not concentrate wealth outside and remove wealth from the system?
Free basic food + government housing + free schooling should be better.
And more importantly how do you promote equal opportunity to the kids? Still have to make sure that somehow kids from poor cities/districts get proper education.
What happens when your landlord realizes that you have extra $1K to spend every month? What would their incentive be to not jack up your rent? I fail to see any. The prices on most things would just shoot up overnight.
I prefer Yanis Varoufakis' idea of a universal basic dividend. A percentage of all shares should go into a public equity trust like a wealth fund for society, the dividends from which are paid as basic income.
Where do you get the UBI from? Taxing reach people and companies? Which ones? Can they avoid it, even with a complex sequences of numerous administrative steps, clever legal interpretations and social engineering? ...
Now suppose you have UBI, it means some (formerly) poor people receive some money, in exchange of no work from their part, to spend on things they "desire" ("need" would be better here): so you end up having fake prices on those things, precisely what you wanted to avoid. And who can benefit from UBI? Could some not really poor people apply to it, even with a complex sequences of numerous...?
The only way is to have complete globalisation of finance while keeping localism for (most of) production and political decisions. Transitioning to that model won't be fun.
As is often the case this completely ignores the cost and the financing, which are key but paint a much less rosy picture of UBI (which meaning must also be clearly defined in any discussion).
I've always wondered if UBI would not simply lead to inflation.
I cannot imagine that prices would not increase if suddenly everyone had additional funds and could "pay extra".
In complex systems, it's tempting to look for a silver bullet: If we only did "this".
This Capitalism 2.0 would also need to be a system of things that enables a new direction - whatever that may be - based on the fragile regression to the mean of what an expected aggregated view of that looks like.
UBI can or cannot be part of that system, but by itself it can quickly become irrelevant.
Most economic theories of capitalism are based on (mostly) rational behaviors of the majority of market participants. Social studies will show that in topics related to finances/money, behaviors are all over the place.
Want to drive towards Capitalism 2.0? Start with financial education, support systems, relevant incentives (maybe UBI is one of them) and a good shared vision of what that 2.0 is.
The whole system of benevolent governance is built on consent. I’m not sure how you’ll ever roll out a system like this with the consent of the governed.
The argument was not convincing at all.
He focuses on how UBI will let poor people to consume more. But will it help them produce more? I believe it will, but that needs explaining.
> If we can give companies overwhelming demand so they have to scale up production instead of spending all their money on advertising, we can have both happy companies making profit hand over fist, and happy consumers who get everything they desire.
lol... Consumers won't be able to buy "everything they desire" with UBI. And the UBI will be funded with the taxes payed by the companies, so not all of them will actually make more profit.
> The second solution is some sort of socialism, ...
> Even the most hardcore anti-capitalists have to give respect to how the combination of capitalism and technology has worked to lift most of the world out poverty and provided us with the security and comfort only kings enjoyed just a few century’s ago.
The article starts with a fallacy.. It should be: only technology has improved our lives, not capitalism. And there are still insane amounts of people suffering and living in poverty because they do not have access to even the most basic resources, let alone the latest technology.
In fact "the combination of capitalism and technology" has opened the door to horrific new ways to suppress and exterminate people.
Here is another fallacy:
"This led to massive accumulations of wealth and the biggest wealth gap in history.
This in itself isn’t a bad thing. After all, we’ve all become wealthier in the last few centuries even if some have become unimaginably wealthy."
There's nothing wrong with Capitalism 1.0. It's all the 'Crony Capitalism' upgrades that we need to uninstall.
UBI incorrectly assumes its capital that has kept people from producing, when it's skills. And then you're assured people will use UBI to acquire skills, but capital isn't what's preventing people from acquiring skills either.
UBI is, at its core, taking money from people producing and giving it to those who aren't. And that's not a recipe for economic growth.
There's certainly a place for public assistance, but UBI looks an awful lot like putting lipstick on the pig of wealth redistribution.
it’s not the only way and i think there could be massive, negative side effects. economic localization is the way forward. it would help with carbon reduction, offset job loss from automation, counteract the loss of human scale with regards to the interconnected, toxic mass consciousness by moving our realities back to our communities.
But money does not create wealth. Money is just a tool of trade and a measure of the value of goods and services produced in an economy.
Airdropping money will not transform this world into a utopia where everyone is wealthy and can live without working. At the end of the day, we need plumbers, electricians, garbage men, software engineers, nurses, lawyers, etc. to maintain this civilization and this will not be changed from the top-down by inflating the money supply.
Yes, nominally they will be paid more money. However, the same amount of goods and services will be produced in this economy, so an increase in the money supply will In reality be worthless.
> However, the same amount of goods and services will be produced in this economy
It has often been shown that giving money to the poor generates more trade and consumption. Poor people have a restrained budget, so they naturally reduce their spending. If you you give them money, it easily generates a lot of economic activity.
> > However, the same amount of goods and services will be produced in this economy
> It has often been shown that giving money to the poor generates more trade and consumption.
Goods and services need to be produced before they are traded and consumed. More money chasing the same amount of goods and services is bound to create inflation. This UBI is a just a roundabout attempt at economic stimulation through currency debasement. The same thing was tried many times before in many different places, and the result has always been the same.
> Poor people have a restrained budget, so they naturally reduce their spending. If you you give them money, it easily generates a lot of economic activity.
I think you have a misconception about what money is. Money is just a relative measurement of value and a tool of exchange. Yes initially poor people will be able to increase their spending. But most prices are elastic and will increase quickly until the poor are in the same situation as before, even with the additional UBI income.
No, the UBI is a simplification of welfare, to reduce the cost of poverty.
It's mostly about social problems than economic problems. Inflation can be controlled.
> The same thing was tried many times before in many different places, and the result has always been the same.
Do you have sources that are comparable with UBI experiments?
> until the poor are in the same situation as before, even with the additional UBI income.
No. Unconditional money, whatever the amount, is what matters.
Generally there is a critic that economics tend to focus too much on the math, and not on the political, social, psychological and human side. Ideologies have always affected economics. It also does today.
It's utterly disappointing to see the top voted story on hacker news is am economics story (which is great!) on such an interesting topic written by a developer who from reading from his introduction has an undergraduate level of knowledge of economics, surely we can do better for sources and expertise in subject matter.
And this is not personal against the author a brilliant blog post (but note it's a blog).
Try not to rely on appeals to authority, it’s not about where information comes from, it’s about the logical validity of that information. If you’re taking everything you read at face value that’s okay! Keep in mind that many people here are taking it into deep consideration and evaluating what is said based on its logical merit, who the author is does not play a role in that consideration. Regardless of whether the author is a scholar of economics or a homeless person, the content of the writing is all that matters. If it helps you can just pretend that it has no author
I understand what you are saying however... logical analysis only gets you so far.
What was logical to a medieval mind is not logical today with no difference in intelligence in the thinker the only difference being a far superior knowledge base.
And my main point is we have the internet we have access, we have access to economists who have the baseline of information to provide a considered argument I can trust.
> "Even the most hardcore anti-capitalists have to give respect to how the combination of capitalism and technology has worked to lift most of the world out poverty and provided us with the security and comfort only kings enjoyed just a few century’s ago."
I really don't have to. The best tools in software are free and open source, and if I contrast that with the tools which aren't it's really obvious that there are externalities from competition i.e. anti-cooperation. You also need an explanation for progress in communist countries besides "they would have been better off with capitalism." Maybe, but the premise is that capitalism is the reason for "comfort only kings enjoyed just a few centuries ago"...or one century ago in Russia. Research, engineering and trade are some of the real reasons for rapid growth.
A big problem with UBI is that it gives up on dealing with concentration of wealth and power into the hands of a few ceos, often for no benefit to anyone else. This is especially true of the version of UBI with a funding model like Andrew Yang proposes. I think a better path forward for "capitalism 2.0" is to require companies give much more stock equity to employees - all employees, including low wage and contractor. An extreme option would be to force every company to reform as a coop. And neither of these are mutually exclusive with UBI.
>Research, engineering and trade are some of the real reasons for rapid growth.
And how is that not the combination of capitalism and technology? Trade is capitalism and research and engineering create technology, as you point out, funded by capitalism.
One thing I've recently rediscovered is most thinkers of the enlightenment time including some founding fathers seem to mention that inheritance tax are a necessity of a liberal democracy. And I've been pondering on that.
Kind of like in sports, you need to reset the seasons once in a while. Otherwise last year's winner starts with too much of an advantage and the competition degenerates.
Now maybe you have to reset this throughout someone's lifetime, or maybe only at their death on inheritance I'm not sure. Like maybe you tax people for how long they've had their money for. If you've been sitting on that billion for X year, then you get taxed Y times X amount on it where X is the number of years you've had it. This would include asset holdings.
And maybe this tax goes to pay UBI.
What I like about this is, it retains the capitalist idea of having the right to enjoy your profits. If you've earned yourself the best of steaks, you are allowed to eat it. But you can't just get out of the game and continue to earn. If you are so self made, you should be able to make it again next season, starting from the same footing as everyone else.
I think it would require getting the right weights and equation in place. Like obviously you want to allow for retirement. And you don't necessarily want to reset things too often, people should be allowed longer period to acquire momentum and succeed. And maybe you want something more complex than just a multiplier of years. And the reset over one's life doesn't need to be to zero, same for the inheritance, though I'd imagine the inheritance one honestly could get close to zero.
Thoughts? This isn't something I'm clamoring for, still thinking about it, but I found the idea interesting. If you acrue a billion dollars, good for you, but why should your children get to start with that money? Unlike you, they didn't provide value to society. Why can't others have an equal footing with them? And even you, do you just get to sit on the company you setup for the rest of your life just taking money from it? Seems ridiculous, the amount of risk taking and effort being put year over year no longer corresponds with the reward. Why not let someone else a chance to shine, prove yourself that you're still this valuable ten year after?
Universal Basic Stake would be more in tune with the idea of Capitalism 2.0
Instead of everyone being born with nothing (except that provided by their parents), everyone would 'own' a share of the national wealth. This share would provide a UBI, and eventually transition into a retirement fund. The bulk of the capital in the share would be in safe income bearing assets (interest rates will need to go back to ~5% for this), but a potion could be allowed for spending at the discretion of the individual, to cover large purchases such as deposit on a house, or a car. You would be able to pay into your stake if you wanted a better retirement or to save for something.
This would be financed through a sovereign wealth fund, constructed from taxes on natural resource extraction (e.g. Norway), but also heavily progressive wealth taxes (perhaps increasing up to as much as 20% each year on personal wealth above 5MM USD). Such a wealth tax acts to counterbalance the natural accumulation effect of capitalism, i.e. the rich getting richer only because they are rich.
People will see it not as a handout, but as a way of participating in the capitalist economy. If the economy does well, then the stakes will increase. There would be a sense of ownership and (hopefully) a stronger feeling of social responsibility flowing from that connection.
However a UBI/UBS should only come after universal benefits in kind: Healthcare, public transport, professional policing, transparent and democratically accountable governance, education according to ability not ability to pay, high quality housing stock, consumer protection standards, environmental protection standards...
Whenever I read something about capitalism the piece always points out how capitalism increases humanity's overall wealth but fails to mention that it rips off some people so hard, their wealth benefit is negative. For example, workers in low-income countries might receive some technological advancements via capitalism but the exploitation they have to endure is not at all justified by the benefits.
Here's a "hot new idea that no capitalist has ever thought of" (it's phrased a bit provocative but I honestly think it's a good point): Wealth can be a bad thing if it's not shared. If I have a higher living standard in one country (or society, group, whatever) then my freedom to move to another country decreases because I wouldn't want my living standard to decrease. Differences in wealth make barriers which also disbenefit the wealth-bearer. In extreme cases, a difference in wealth can also lead to envy, hatred and, sometimes, escalation from the non-wealth-bearer side (as the article points out).
I feel like the author has a weird conception of what capitalism (and socialism) is. They seem to conflate market economies with capitalism, when capitalism is just a mode of economic production where the means of production are owned by people other than those who operate them. It's an economic system where you have a Capital - Wages - Profit cycle.
>is some sort of socialism, where the government introduces new laws and systems to redirect money to attempt to balance the system manually
"The government doing things" is not socialism. Socialism is when the means of production are socially owned (usually by the people who operate the means of production). What the author is talking about here is "welfare statism" [1], and IMO UBI is just welfare statism taken to an extreme.
That being said, I'd definitely agree that UBI (under a capitalist state) is a way to keep capitalism ticking along.
For the advocates of a UBI—the problem of capitalism merely concerns the distribution of wealth, whereas the production and measure of wealth under capitalism are never interrogated.
No form of universal basic income can free us from capitalist exploitation, since only wage labor in the service of profit can generate the wealth that is distributed in the form of a UBI.
The less our lives are exploited for the sake of profit—i.e., the more we devote our lives to the public goods of the welfare state or to non-profit projects supported by a UBI—the less wealth there is to finance the welfare state and the universal basic income. This practical contradiction in the redistribution of wealth is unavoidable under capitalism, since the measure of value is socially necessary labor time rather than socially available free time. The more we emancipate ourselves from the exploitation of living labor time, the less wealth we have to support our state of freedom.
How employers would reason when their employees start getting UBI? "Hmm, I was paying my employees say $1000/mo that was barely enough to survive. Now government gives them $500/mo. That means that I can can subtract $500/mo from their salary".
At least where I'm from, poor people typically don't own land. They rent. I guess the argument can be made that the landlords would put the rent up to compensate.
I've heard this claim before, but have never seen it supported. Anecdotally, across decades of experience, it's typically not the poorest people I know who own much land, if any at all. Where they do, they own only a little, rather than a lot. Can you speak to your evidence for your claim?
For most middle class families the most expensive asset they own is their house. Do you really need evidence of that? It should be pretty self evident.
Classically [0], land taxes aren't on the value of the house, but of the land underneath. But, let's say that both the house and the land underneath get taxed, as is currently done. As a middle class homeowner, my total property tax bill is a small fraction of my income tax bill.
Let's say the US collects 6 Trillion/ year in all taxes [I'm probably off by some percent, but not too much for an internet comment.] Let's say there are about 1.5 Billion acres of taxable land in the US (Reverse engineered from "The federal government owns about 640 million acres of land in the United States, about 28% of the total land area of 2.27 billion acres." [1]) That works out to $4000/acre. For my ~sixth of an acre lot, my Federal tax bill would be about $700. That works out to be less than what I pay in income tax, so it looks like a deal to me.
It doesn't, I was replying to the comment that assumes that a property tax wouldn't hurt the poor because middle class is infinitely closer to being poor than they are being rich and this type of tax would hurt those people the most thereby causing them to fall into poverty.
For the 30% of Americans who rent it's not any of their net worth. But I agree it's weird to pick real estate as the only asset class. Introduce a progressive wealth tax and eliminate capital gains taxes in favor of taxing all income at one rate.
Land tax is one of those things that you can value easily and collect on easily. It also hurts people who just sit on land, waiting for the value to go up. It also stops negative gearing which drives up housing prices (see Australia)
I think taxing wealth is harder and then defining it is hard (how do you value illiquid shares, options, etc).
You can also have an exemption for the first $1m so that family homes are excluded from the tax.
I think a straight wealth tax should be the next step, because you will need to figure out how to stop people dodging it. Taxing someone who has a ton of debt and wealth might lead to issues.
How often outside a few cities in the world are people just sitting on land? How is the land valued? Where I live there’s an appraisal board to value land - they’re terrible at it and need investigations have shown their friends get lower appraisals.
I am afraid UBI completely ignores the human psyche produced by millions of years of evolution. We have evolved to conserve our energy and do the least amount of work necessary. In general, motivation comes in two flavors: carrot and stick. But it seems that in general population, stick is a much more prevalent form of motivation.
Thus if you give people UBI, you rob them of the most basic motivation to get out there and improve themselves. I am sure if I had UBI when I was young I would've stayed at my parents', smoking weed, jerking off and playing computer games all they. The fact that I couldn't afford these things made me go out, get a job and educate myself towards making something out of my life.
So, am I wrong? I hope so. I really want UBI to succeed, it seems like such a wonderful idea. But so did communism and we know how that turned out...
The big risk of UBI is that it can lead to a rise in populism.
This is very obvious in the former communist countries of Eastern Europe. A large part of the population is fully dependent on the state for pensions or some sort of basic income and lots are even working as civil servants. This sizeable section of the population is very susceptible to populist promises or scares. “If X wins, they will cut your pension” type of rhetoric.
This has very perverse and non-intuitive consequences. People vote for obviously corrupt leaders in the hope that they would share the spoils with them, and to some extent they do.
If a western country adopts UBI, I can easily see a similar path. Maybe not immediately but over 20-30 years as more and more people become dependent and know nothing else.
This is a very slippery slope.
>Even the most hardcore anti-capitalists have to give respect to how the combination of capitalism and technology has worked to lift most of the world out poverty and provided us with the security and comfort only kings enjoyed just a few century’s ago.
I reject this premise, because it is not true. Extreme poverty is a different topic (and also defined at below $2 a day), but overall, poverty is not decreasing, it's just leveling out.[1]
In a way this is what the neoliberal vision of UBI does, so I guess that's pertinent to the thread even.
>The first solution is some form of nationalism, where countries enact tariffs and attempt to bring all production back to the country instead of producing it overseas. This will create higher paying jobs for those whose work was previously outsourced to cheaper countries. However, this creates less wealth overall as work is no longer given to where it’s done most efficiently. This breaks the primary component of capitalism.
On the other hand more countries learn to make things more efficiently, instead of relying on the industrial monopoly of a few efficient factory-countries like China, Japan or the US (with which they might even have competing interests).
More efficient product != more efficient society using said product.
It needs to be called for what it is in a capitalist framework: a _dividend_, not merely an income.
It is a share of the nation's wealth, which you receive as a legitimate co-owner of that nation. The only difference with a company stock is that you cannot sell it, citizenship is unalterable. This safeguard prevents a lot of extortion schemes.
And when discussing the amount of dividend to grant (a political discussion which must be repeated regularly), the tradeoffs are the same as for a company: you want as much dividend as possible, as long as it's not detrimental to the nation's future wealth.
Many opponents to such schemes wrongly perceive it as communist, it's important to present it in a way that debunks that misconception.
I agree with all the problems and analysis this article does, but disagree with (most of) the solution. Socialism seems to be the answer to me. Not the top-down, government controlled socialism described by the author, but a form of socialism that still has markets for most things. The only major difference in this solution vs. capitalism is that workers would own the companies they work at, not rich shareholders who have no interest in the well-being of their workers beyond what is necessary to keep productivity up.
UBI may still be a part of the solution, but applying UBI with the current system will be capitalism 2.0, and therefore won't fix anything long-term. It'll simply be a band-aid.
Summary: UBI should be introduced to grow the GDP as the poorest 78% in the USA live paycheque to paycheque thus can't spend more. The wealthiest companies spend on ads which is a zero-sum game, not growing the GDP.
This argument is incredibly flawed. Who will fund the UBI? The poorest 78% can't, so it will be the wealthiest companies. But for every $1 dollar they spend on UBI, they can only get back less. (Taxes, payment & postage fees, cost of production, cost of ads, etc.) Then they are better off simply giving away their products for free.
UBI may have interesting upsides - this is not one of them.
I don't get UBI. If everyone in my town gets 100€/month on top of their regular income, how will that not drive all rents/mortgages 100€/month up?
I think there are more options for Capitalism 2.0 that can be explored:
- Make healthcare fully free for everyone (e.g. including dental, eyes, etc.)
- Make university education and evening courses free for everyone
- Disclose compensation company-wide: This would likely also fix the gender salary gap, since women could compare their compensation to "that d00d that does nothing all day".
> If everyone in my town gets 100€/month on top of their regular income, how will that not drive all rents/mortgages 100€/month up?
Because the issuer of UBI is going to pay for it somehow, and pretty much every plausible mechanism makes it, in net, a downward redistribution of wealth, not a flat increase. If you could guarantee everyone will rent only and exactly the same unit they rent before the policy, so that competitive forces weren't a factor, it would simply compress rents and, sure, even though it would be a flat increass, the opportunity for monopoly rents you just assumed would allow landlords to capture it all.
But realistically you don't have that kind of lock in, and local competition does play a role in pricing, so not only won't any induced increase be a flat across the board amount, it also won't capture the full amount of the increases (or decreases, depending on where you look) due to UBI, leaving the net income change still resulting in net change in what people can afford in the same direction (though not the same magnitude at pre-policy price levels) that the change in net income would suggest.
I think I understand what you mean, but I am unsure rents are competitive. There is finite space around good locations (where "good" can roughly be defined as close to hospitals, groceries, services, transportation, high-speed Internet, parks and jobs). Wherever I lived I encountered two ways of setting rents:
* "Real" market pricing (e.g., France, Germany), where rent prices can pretty much go as high as needed (subject to some regulatory constraints). My experience is that rents eventually converge to 1/3 of the average income of people that want to live there. If you cannot pay up, you need to head for "worse" locations.
* Controlled market pricing (e.g., Sweden), which essentially means that you need to wait forever to get to the "good" locations or hope that a new "good" location will be built. The former is inaccessible to most people, the latter usually starts rents at 1/3 of the average income of people that could move in.
All-in-all, I suspect that UBI would eventually lead to increased prices in "good" locations, so the net benefit is negligible. Maybe people living in "less good" locations could benefit from UBI, but I feel that would still not help with the "flattening of wealth" that UBI tries to achieve.
> If everyone in my town gets 100€/month on top of their regular income, how will that not drive all rents/mortgages 100€/month up?
it depends on how UBI is implemented. If it's done via printing money out of thin-air, then yes, it will drive up inflation on goods that cannot be substituted (like rent).
If UBI is paid for by taxing the rich, then it won't drive inflation, because the demand for some goods/services from the rich would drop correspondingly, and so it's inflation neutral.
> Even the most hardcore anti-capitalists have to give respect to how the combination of capitalism and technology has worked to lift most of the world out poverty and provided us with the security and comfort only kings enjoyed just a few century’s ago.
Except capitalism had nothing to do with it. Technology, sure. But capitalism has only hampered this lifting out of poverty, not helped.
And yes yes, i cant wait for people to go "but what about USSR????", and i fully admit, dictatorships also don't work.
UBI is transfer payments, plain and simple. It is socialism. It is a rich man’s trick to delete the middle class.
Why hasn’t any coalition of companies or rich people created a utopia with UBI? They could easily buy up tens of thousands of acres of property and do all of this fantastic stuff... but they don’t. Why? Because they are the ones who produce. Socialism is about taking from those who produce and giving it to those who don’t. The only way to keep that going long-term is by force.
Using UBI as a band aid on the societal wounds caused by Capitalism, is in my opinion, ignoring a bigger issue. That's not to say UBI isn't a good idea, though.
We're in the midst of an ecological catastrophe, where our very existence as a species is at risk. We're driving towards a cliff edge and the discussion here largely focuses on a strategy to get more fuel in the car. We need to change our fuel, rethink our metrics of progress and change our course.
To my mind, the essential problem with UBI is finding a just way to fund it. Making people contributing to a capitalist economy support those that aren't, in order to keep them from ever contributing to it, is greatly unjust.
There is no fair way, as far as I can tell, to implement a non-capitalistic program within a capitalistic economy. What the UBI concept might do, rather, is sway the debate towards exploring alternatives to capitalism, instead of reform.
UBI + a wealth cap (on say 10 million USD) is socialism 2.0 :)
Changing the UBI will make people less/more inclined to do bullshit jobs, changing the wealth cap will make people less/more inclined to "make a killing". People with more wealth than the wealth cap should be deemed an undemocratic force in society (they go lobby --use money instead of public opinion-- for their interests), and hence should be deemed undesireables.
I see people here saying $1k or even $2k a month. How should you calculate that amount and why? Will it be adjusted year to year? How so?
One practical problem right _now_, some conservatives are going bonkers that we're basically paying some part of workforce to NOT work as they're making more now not working. Pretty sure you're not going to convince them to vote for UBI.
> To reverse this trend of stagnating growth, we must put more capital in the hands of lower income consumers, who will then spend it on things they desire and increase GDP.
I have some better ideas to increase GDP, using the author's chain of reasoning.
1. Use the military to break every window in every major city. This will force consumers to pay money to window manufacturers, thus increasing GDP!
2. Rob every poor person at gunpoint, and distribute all of the money to someone interested in funding a giant hole digging expedition. It will increase the GDP!
3. Threaten every rich person with the following ultimatum: "give me 50% of your money, or I will kidnap you from your family and lock you in a small cell for several years". Distribute the money to the poor, who will consume more goods, thus increasing GDP! <-- This is just a restatement of the author's position, since rich people who refuse to pay for a re-distributive tax are literally sent to prison.
In all cases (i) the economic fallacy is equating an "increase in GDP" with an "increase in wealth" and (ii) the moral fallacy is assuming it would be justified to take people's money from them without their consent.
In the long-run, it is the supply-side that increases societal wealth (not the "demand-side"), since long-run wealth is generated by entrepreneurs and investors who take risks to coordinate economic activity and invent new technologies. New technology, especially, is created by investors & entrepreneurs on the supply-side. So even if it weren't immoral, redistributing wealth from suppliers of capital and technologists to consumers doesn't actually create any new wealth. It is instead literally the consumption of wealth made by the suppliers of it!
The moral case against redistribution is the following argument: (i) it would be wrong for me or my gang to personally rob you of your money, even if I/we had noble plans for how to spend it; (ii) there are no morally relevant differences between individuals doing this and the state doing this, therefore, (iii) forceful redistribution of property is wrong. The details (and nuance) of this argument are supplied in Michael Huemer's "The Problem of Poltical Authority", which I highly recommend: https://www.amazon.com/Problem-Political-Authority-Examinati...
If wealth redistribution is wrong, why are you encouraging us to give our money to the richest person in the world?
Wealth is redistributed all the time, and because of an economic system that rewards already being wealthy, most of the redistribution is from the non-rich to the rich. UBI is an attempt to mitigate that imbalance by providing for people's basic needs when the market has failed to. It doesn't solve all problems but it's a start.
I agree with you that GDP isn't a good metric of success to optimize for, though.
The difference here is that the wealthy became wealthy by providing something of value. Wealth redistribution does the opposite, take from those that are providing value and give it to those that aren’t.
UBI is Communism Lite. Very likely ends badly, as voters seek to increase UBI to infinity. Politicians will get reelected on the basis of how much they're willing to increase UBI. Probably causes a currency crisis as well. Unfortunately the Silicon Valley crowd seems to be beholden to this flawed idea. Voters and politicians will not restrain themselves if this tool is made available.
Communism is when the government owns all property and all factors of production. UBI does not involve the government taking over anything.
Very likely ends badly, as voters seek to increase UBI to infinity.
Considering how much doubt there is among UBI in the first place, I don't know why you would assume politicians and voters would just want to endlessly increase the size of monthly payments.
Sure it does. In this case the money for UBI has to come from somewhere. It will come in the form of extremely high taxes. If the government gets to keep more than 50% of your income, then they are a majority shareholder in your individual output. They retain extraordinary power and control over you. And that could ratchet up all the way to 100% theoretically under the UBI system. There really is nothing stopping it from happening other than voter sentiment.
There might not be favorable sentiment now, but sentiment can change. But I do suspect that if you implement such a system, society will become dependent on that system. And it will be ratcheted up to pander to populace. It would be a powerful tool for politicians to garner favor. I've seen it done in other countries that openly embraced socialism and populism. It ends in economic catastrophe for nearly everyone.
I'm incredulous that an article which states, "Even if you're still doubtful you can see it's the least worst [sic] solution we have to make capitalism work in the 21st century." is getting this many upvotes. HN has a reputation as an evidence-valuing rational community that appreciates articulate arguments. I guess that these principles do not apply when we are talking about UBI (or when accusing Apple of business practices they do not engage in, apparently https://news.ycombinator.com/item?id=23995750)
It's obvious that the author doesn't have more than an introductory macroeconomics course under his belt. The article reads like something an idealistic first-year undergraduate might try to pass off. It is full of cliches and incredibly bold statements with no citations used to prop up a flimsy argument.
For example:
"[The increasing size of markets] is why wealth inequality soared when capitalism went global in the 20th century."
The increasing size of markets may be a factor in inequality, but it is certainly not the only one. Also, a graph would be nice. Inequality was higher in the late 19th century and took a dip in the early-to-mid 19th century. Without seeing this data, it is foolish to make sure a sweeping generalization.
"If we can give companies overwhelming demand so they have to scale up production instead of spending all their money on advertising, we can have both happy companies making profit hand over fist, and happy consumers who get everything they desire."
First, the phrases "Happy companies", "profit hand over fist", "happy customers", "everything they desire" sound like they were written by a 12-year-old.
Second, money is an abstraction used to allocate goods from production to consumption. When production does not match consumption, this causes either excess inventory or shortages - neither of which are desirable, but both of which tend to resolve themselves quickly. One of the often-stated goals of UBI is to free workers from unfulfilling labor. However, labor is an essential factor in production, and by "freeing" labor, we will reduce production. Since consumption is equal to production, workers will not be able to magically "get everything they desire." In fact, they might get less.
how about US is USSR 2.0.
law is replaced with political views, ideas to improve economy been replaced by some social dreams.
Seriously I can only here socialist debates among democrats. Not trying to create jobs, bring talents to country to support those rose dreams.
Nah that's to boring.
By automating and modernizing construction business you can have lots of government money. US infrastructure is lagging behind any fist world countries. Let small businesses innovate and you'll find so many people not depend and simply waiting.
Instead you have light drugs allowed from one side, heavy opioid epidemic from second and approaching universal income from another and country still rulling by big business interested not to innovate but keep rates expensive.
To me it sounds like something so dangerous but nobody cares.
Are you really that socialistic drunk not to see that in current reality people just jump into drugs world with passive people happy to be on a basic income.
"Even the most hardcore anti-capitalists have to give respect to how the combination of capitalism and technology has worked to lift most of the world out poverty and provided us with the security and comfort only kings enjoyed just a few century’s ago."
wut? "most" of the world? does he mean most of the usa? statistically, most of the world lives in poverty.
One thing I'd like to see more discussion on HN of is the size of UBI. People seem to be very hesitant to throw out any actual dollar figures and stick to them and defend them.
Furthermore, I find it interesting how a lot of the UBI studies concerned substantially lower amounts than the amounts currently discussed in American politics. I hear amounts usually ranging from Yang's US$1000 as a "starting point" to $2000 monthly, but there are many people throwing even higher numbers out there.
There's also a decent amount of straight up lies, mistruths, and misrepresentations of UBI and previous experiments. Articles about Mincome, the Canadian experiment, like to say or imply that it paid out a substantial amount (I've seen several people claiming that it was $16,000 of today's CAD a year for a single individual), but the reality is that it was far lower. From a paper about Mincome, the calculation for how much Mincome you got was 60% of Canada's low income cutoff [0], which was $3386 in 1975 CAD for a single person living alone and $4907 in 1975 CAD for a family of two. The official Bank of Canada CAD CPI inflation calculator puts that at 16130 of today's CAD (12092 USD) and 23375 of today's CAD (17523 USD). I suspect this is where the erroneous $16k figure comes from. Doing the correct calculation, using the Canadian CPI inflation calculator and multiplying by 0.6 would give 7255 USD per year for a single person and $10513 USD per year for a family of 2.
That, of course, completely changes the game. Nobody's going to retire on $600 a month in America, or $875/mo for 2 people. But take the lowest of the UBI proposals of 1k/person/mo - aka give a young couple 24 grand a year, guaranteed by the federal government in perpetuity - and I could definitely see them dropping out of the workforce. I just took a look and found plenty of entire houses for rent in the Midwest for $800/mo or even less. That leaves 1200 a month for food, transportation, and entertainment in a low COL state. You could totally make that work (ha ha.)
You increase that UBI even further, to what some congresspeople proposed recently of $2000/mo, and that young couple is now making $48,000.00 a year sitting on their couch. Assuming that's tax free, as most UBI proposals are, now your average couple is now making more than the median US household income. Now, you don't even have to live in flyover country; that's enough to live on for two people in nearly all of the country, minus a few cities. Keep in mind that the costs of working also evaporate when you don't work: commute, time to cook and find deals, flexibility in booking things etc. In the median household, everyone could quit their jobs and enjoy an _increased_ standard of living.
People like to dismiss the UBI attack of "people won't work" by citing Mincome and a slew of other experiments from the Alaskan Permanent Fund of $1200/yr to Iran's $40/mo. But giving $1000 - $2000 a month, permanently, over an entire society? The $24-48k/yr that a couple would receive would blow away the $10k that they would have gotten in Mincome.
> increase our free time, empower workers, and ensure everyone has food and a roof over their head.
All these things are terrible for capitalism, because it would increase expenses...
Capitalism 2.0 is just shedding any pretense toward any common good coming out of it, and accepting being ruled by concentrated capital protected by the state, with little to no social mobility.
UBI seems to be socialism in disguise. Redistribution of wealth from the ultra rich to the poor by adding additional taxes on robots, carbon, etc. in order to create a more balanced society where the poor have better living standards and more expendable income to fuel the economy. Am I missing something?
Universal Basic Income does not address ANY of the underlying reasons for wealth inequality - it is license for the economic abusers (exploitative capitalists) to continue business as usual, but with every mark they play now having more disposable income for them to fraudulently take.
Seriously. If a group of vampires have been sucking so much blood that everyone's anemic, the solution isn't to have "universal basic transfusions" to make sure all the victims aren't tapped out and die when the next extraction rolls around.
In modern capitalism, a humans worth to society is determined by their ability to consume, not create.
I fully agree with the idea that currently our economy is constrained by demand, because people do not earn enough. I don't believe we can fix this by using an UBI, which would create an even worse power dynamic between rich and poor as well as working and non-working people, but by increasing labours share in generated profit.
We need to put more money in peoples hands, instead of shareholders and stock markets. And we need to use money to lift people from poverty, instead of using it generate real estate bubbles.
Send me a message if you have an idea how to do that ;)
I did not read all the posts completely, but I missed one point here. Our system only works because we are wasting resources through unnecessary production.
Just today there was a fitting reddit post about what I mean.
UBI is for the last nail in the coffin that justifies our current economic system. It just prolongs the eventual discussion about real changes.
I am not close to understand the current economy. As I see it, the thing that somehow works is FOSS and the path it took to succeed. People believe in free distribution and usage. People devoting their time to produce software for the community and participation in such projects.
Economy experts will always try to convince us that capitalism and the growth problem can be solved, but this only under the assumption that we continue exploiting and wasting resources, both natural and human.
Over last the couple of month I have been reading statements to be not that much productive. The argument is, that if we automate too much, how can the system live on?
By handing out income via UBI? All the unclear points have already been pointed out here and it does not solve my initial statement and that is that we are producing too much and development and with it production cycles are too short. New devices, new products just come with minor changes and those maybe because of the short development time with a shorter lifetime and more problems.
We are used to a certain way of living. It is time to overthink our lifestyle and then start a real discussion on how to solve our problems.
The author seems to assume that people make the most efficient decisions under capitalism, and idea that is provably false. There is simply too much information for a consumer to make the "right" purchase in markets where capitalism has failed, e.g. healthcare.
This isn't a fully formed idea, but it kind of feels like even the _option_ for UBI is based off the exploitation inherent to capitalism.
The statement in the article: "Because we all become wealthier when goods are produced by those most efficient at making them"
reads to me more as 'we become wealthier when we offload work to the nations that are more willing to take advantage of their people by treating them worse'
Of course these things are complex topics, but it feels like one of the reasons for recent explosive wealth is the offloading of negative externalities. I've never really thought this through, but maybe UBI is just an extension of that. I know this isn't strictly a US topic, but I wonder if it's even valid to think about UBI in a US-centric way or if it has to become a global concept, otherwise it feels like just another way that advanced economies siphon wealth out of developing nations/disenfranchised people.
Noting that "I’m a huge fan of capitalism and free trade" in the modern world seems questionable. If it was capitalism that lifted the world out of poverty, what is it that is pulling the US (and others) back into poverty through massive inequality?
UBI has always been a no-brainer. It's economically sound, the research is clear. But it's just not popular enough, because people are scared of the socialist undertones. Look at Yang's treatment in the last election.
The sad part about capitalism is that it’s working so well because we exploit and (ab)use the earth in such an efficient way. There has to be some more balance to this aspect for the human race to be truly sustainable.
Capitalism only works with entropy. There is only dead trees: coal, oil and gas! Scarcity is about to change things in ways most people don't understand, because they don't want to understand it!
There is not going to be a Capitalism 2.0. Capitalism was progressive for a time, but it has gradually created the conditions for its replacement by democratic socialism. Those conditions are highly socialized production processes (not individual crafts) plus a gigantic class of wage laborers with an interest in a collective approach. A democratically planned economy is entirely possible and would outpace the massive waste and duplication of efforts that capitalism requires to function. Even the bureaucratically degenerated USSR grew to an economic superpower. Imagine what genuine democracy in the plan could accomplish in terms of meetings peoples' real needs.
Sounds like an absolute nightmare on anything but the most local scale.
Think about the number of economic decisions made daily by individuals in a free-market economy. That’s many orders of magnitude more than the number of decisions that could be made by a democratically elected group of representatives at the federal level, even if assisted by computer systems. And that’s not even considering secondary effects.
Command economies have been tried many times and have never worked well. Beyond a certain limit, the larger the scale the more colossal the failure. The USSR was only able to go as long as it did because Stalin was shipping trainloads of grain out of the Ukraine leaving millions of people starving.
That video is so funny, no one is on their phone! Did they not have smartphones in 1989?
While command economies have numerous documented failures, including actual fucking famine during eg the Great Leap Forwards, crowd-sourcing is a very real phenomenon, enabled by the Internet, even under capitalism. Right now, however, we're witnessing the failure of a free-market economy to provide for their poorest citizens. At least the people that starved under Stalin didn't have a Safeway on their block that was filled with food.
Markets are so efficient that even socialist food banks[0] use a "market" on the backend. That doesn't mean that an infinitely free market is infinitely efficient.
Whatever form of government and economy that arises most directly and naturally from the first principles of land and property ownership, the freedom to work, sell, and buy, and especially that “all men are created equal and are endowed by their Creator with inalienable rights to life, liberty, and the pursuit of happiness”—which include freedom of speech, religion, the press, assembly, arms, etc.
Unfortunately, every other large-scale form of government that’s been tried has badly trampled on the personal rights enumerated in the USA’s founding documents. If anything should change here, it should be a dismantling of all the laws and institutions that have grown up like weeds since the late 1700s that are trampling on those rights.
That’s not to disparage some great things that have happened in the mean time: freeing the slaves, illegalizing discrimination by the government, women’s suffrage, etc. But each of those things I’ve named are good because they apply those first principles to areas of government that were lacking application when the country was founded.
> This is why wealth inequality soared when capitalism went global in the 20th century... This led to massive accumulations of wealth and the biggest wealth gap in history.
Is he saying that wealth was better distributed in prior centuries ? Is he discarding the huge social progress in the 20th ?
> The third solution is a Universal Basic Income, where countries distribute some wealth to all residents equally.
Who's paying ? "The countries" ? Charming way to say "the middle class".
In the event we did go socialist, UBI would be a much more effective way to allocate goods and services than a centrally managed economy. Let people determine what they need most, and use 'credits' to get it -- save the paperwork for less ordinary needs / circumstances.
Capitalism has ended poverty at a faster rate in the past 20 years than anytime in history. Capitalism is why we have nice things. The destruction of the environment is more extreme in non-capitalist countries that are poorer. A clean environment is something that people value, they just value it less than basic survival -- which seems to make sense to me.
In fact, if UBI slows down growth and progress -- it will in fact do more damage to the environment than not having it.
The best argument for UBI is that we already have it in some form. Most modern nations have lots of issues but the poor starving is not one of them. In fact, obesity due to over consumption seems to be correlated with (relative) poverty in many countries. The reason for this is that we have all sorts of safety nets that collectively mean that you are taken care of one way or another. Food, shelter, and to some extent health care are pretty much taken care off in most countries. It's almost universal with some notable exceptions.
Introducing UBI properly is basically just simplifying the status quo and has useful side effects in the form of it being overall cheaper, simpler, more effective, and fairer.
More importantly, it can act as an economic stimulus as well. Yes, there's a cost but it's not different than any other economic stimulus. The current corona crisis is basically a good example of governments printing a little extra cash to help out businesses and people. We're talking trillions here. Economies are not closed/circular systems and increasing the supply of money is routine. The role of central banks is to control the rate at which we print new money to keep inflation in line with economic growth. So people waiving the cost argument without considering the benefits are being disingenuous. Bailing out a bank is no different than bailing out an unemployed person. If we can do one, we can do the other. And we routinely bail out banks and other industries to the extend of trillions.
From an economics point of view, more people with disposable income is actually great because it increases spending. It's a particularly effective form of economic stimulus. Perhaps more effective than bailing out a few wealthy individuals could ever be. The current model of all the wealth accumulating with a small group of people is actually bad because while they spend some of it, a lot of the wealth just disappears abroad via off shore accounts, spending in other nations economies, travel, etc. Increasing incomes at the bottom by a few percent on the other hand basically feeds almost entirely in the local economy. People spend it and they mostly spend it locally benefiting local businesses. You could argue that our current system of sucking the lower classes dry so we can provide tax benefits to the rich is actually killing our economy and is actively harmful. This form of reverse robin hood style handouts is not new either. It's basically how feudalism used to work. Capitalism is reverting to feudalism.
The argument of stimulating the economy also can be used to motivate raising minimum wages; which of course become redundant with a UBI. This is another advantage because it reduces the cost and risk of employing people for employers. They can pay market prices instead of having to overpay a minimum wage for someone that they have to commit to keeping employed long term. It's a big reason why outsourcing to low wage countries is popular. So, UBI can potentially fix this too.
But again, we already have it. All we're talking about here is how to do it better and get more economic effects out of it.
Let's say I'm a landlord. If you give my tenant $1000/month, I'll just take it. Their rent is now R+1000 next year.
You could tax the $1000 back away from me, but that doesn't stop the price from rising. It actually just boosts my incentive to take every last cent of the $1000 that I can extract.
I think you all need to think more about the economics. You have to be willing, on rational grounds, to step away from free markets in some other way in order to make this viable.
Let's say I'm a different landlord. If the other landlords are raising their rents, I know that by not raising mine, I can attract more tenants and increase my occupancy rate. Maybe I'm at 70%, and I need 80% to cover my costs. I know that if I raised my rents by $1,000/month, I would lose tenants to the landlords who didn't.
Maybe if you're a landlord in an empty town. But if you're a landlord operating at 70% occupancy, then you're not in a major city of most advanced economies. Cities have demand-driven pricing. 80% of Americans live in an urban area, according to the Census Bureau. There is constant and ever-growing demand, so there is no downward pricing pressure in cities -- Corona aside. I, as a landlord, can take any price the income levels will bear. That is why urban incomes and housing costs must, in tandem, rise unbounded.
UBI is extremely dangerous as long as governments exist. Take what China is doing with their citizen score and it's not hard to imagine what could go wrong.
"...imagine how easy it would be for such a government that was also providing a basic income to its citizens to manipulate their citizens based on that basic income that they depended on. If they can deny citizens access to things like public transportation based on their ‘citizen score’, they can also deny those citizens (part of) their basic income depending on how ‘good’ their behavior is. So if you were too critical and thinking too independently, you could very easily be denied your basic income, and this could be a serious problem especially if you were brought up to be dependent on the government and to (heavily) rely on the income they provided."
You’re right that a UBI effectively vastly increases the power a government could wield over its citizens.
One of the most important sets of principles the US founders relied on were the facts that power corrupts, that it (unfortunately) has to be wielded by someone in a governing sense, and that the best ways to keep government from becoming corrupt and abusive are to (a) limit its power to that which is essential for rule-of-law, representative government; and (b) divide that power among different people who have checks and balances on each others’ power.
Therefore it seems to me that a UBI is likely not a good idea because it vastly increases government’s power.
Note that the US government already wields a ton of power not explicitly granted by the constitution in the form of federal grants...
That’s literally the “universal” part of it. If you don’t have that, you don’t have UBI. The fact that the government has the physical power to withhold a hypothetical UBI might be an issue, of course, but every government has the physical power to do pretty much anything to any citizen, so there’s nothing unique there.
Until we are in a time where I can't find a disturbing number of people who are willing to deny someone UBI for saying the wrong things--and willing to vote for someone who will do that--then UBI should never be seriously considered.
How does that change anything besides making a "ha, gotcha!" point? That's your definition of universal, which is (I assume) limited to citizens of the USA who are adults.
EDIT>> Also there is plenty of precedent for limiting things which are worded in such a way as to suggest they cannot be limited, eg: "shall not be infringed"
It’s just weird to say that you don’t support a policy if there a lot of people that don’t support it. Surely that’s true of every taxation and welfare system in every government, for instance.
The tautology you see is in your own phrasing. The problem being raised here is that UBI is easy to abuse. Voters and politicians and bureaucrats can more easily hijack a deceptively simple UBI system after it's enacted, and no amount of "but that's not what Universal means" hairsplitting will help you then.
Welfare, on the other hand, is better understood and more narrowly focused. And even there you still have a ton of bullshit. I think UBI's deceptively simple yet vaguely broad scope will be tussled & twisted even more.
"Universal" is a lot vaguer than you claim. Even though you claimed that it means "no restrictions", you probably implicitly accept basic restrictions like "only for citizens" or "only people residing in the US" or "only people who bothered to register". "Universal" has practically never meant "free of all restrictions", but everyone who sees it thinks they know what those restrictions are and should be. Someone right now is probably thinking "obviously it doesn't include people who are in prison for life".
Beyond that, it's also ripe for political agitation because UBI would have fewer restrictions than welfare. You can already find provocative "news" segments about how disgraceful and undeserving welfare recipients are because they found one dude buying some crab meat or something using foodstamps. Imagine the outcry when people buy weed with UBI. The pressure to start policing and controlling UBI recipients would be enormous, even more than welfare which already has so many restrictions.
> Even though you claimed that it means "no restrictions", you probably implicitly accept basic restrictions like "only for citizens" or "only people residing in the US" or "only people who bothered to register". "Universal" has practically never meant "free of all restrictions", but everyone who sees it thinks they know what those restrictions are and should be.
Yes, and it's only for humans too. Raccoons and shrubs don't receive the basic income.
A very good example of how bad and wrong things can go with governments is comparing what the founding members of the USA fought for, with the status quo. Basic rights that they fought for back then are almost completely gone today, including freedom of speech, where you can get cancelled for simply speaking your mind and even the truth. Not to mention personal taxation which brought everyone back to slavery -- something they warned about 200 years ago.
It is not difficult to see the train coming at the other end of the government supported UBI tunnel.
That’s equating all governments and forms of governance with China’s government. To be able to say that, you have to also say why you think this has a non-negligible chance of happening in a democratic society for example.
Do you feel the same way about foodstamps? This isn't an argument against UBI, it's an argument against any kind of government provided assistance at all.
Not only that, it's an argument against all forms of taxation. What if the government starts setting your tax rate based on your "social credit score"?
It's purely speculative FUD. It would be terrible if they did that, so make sure they don't. But it's a completely independent problem.
I don't know, I kind of love the idea of basic sustenance being a hassle-free given and "money for food" being limited the realm of pleasure or entertainment.
Not to make any argument for the feasibility of the idea, of course.
So, to be clear, non-universal foodstamps (what exists now) are ok, but if there were universal foodstamps that then became non-universal, then those non-universal foodstamps would not be ok and also proof that universal foodstamps are bad and scary?
'Ok' is tricky — we're weighing an unhealthy reliance on the government that gives it a dangerous amount of power against the well-being and guaranteed sustenance of our fellow citizens.
If people truly need to rely on the government for food, it would be absurdly inhumane of a society to let them starve.
Simultaneously, promoting reliance on the government and attempting to make that reliance universal has the potential to take away our freedoms.
Food stamps is an acceptable principle to Americans because it's meant to be temporary and need-based, and if you remove those two characteristics, it isn't just a reductio ad absurdum argument of taking the same concept further; it's entirely different.
I find it rather hard to take seriously the writings of someone (Karel Donk) who believes that Hitler was good and that the holocaust never happened.
But I'll answer this anyway. UBI is unconditional. If a cash payment depends on the recipient's behaviour, it wouldn't be UBI. The same amount would be paid to everyone of working age.
Is there a meaningful difference between a government withholding basic income in a UBI world and a government fining away some traditional income in normal capitalism?
Everybody should pick garbage on 'rotational' basis https://en.wikipedia.org/wiki/Numerus_clausus
And UBI should lead everybody to https://en.wikipedia.org/wiki/Self-actualization
Most of my work is motivated by the desire to become financially independent. If someone just hands me financial independence, why should I work? If most people are as lazy as I, where does the money for UBI come from?
UBI feels like Communism with extra steps. With UBI, we're saying "You still have a choice on where you apply your skills and labour," and contrast it with systems where the choice is removed; or people are filtered via school and tests to things to 'the best of their abilities'
But who exactly will do the farm work? There are things we may never be able to automate, like picking green chili peppers. You may say,'Well those jobs will higher salaries,' but then the end product has a higher cost. I feel like you end up in the Animal Farm situation where, when you begging to stretch out all the cascading changes, someone will always find a way to either game that system, or just work insanely hard within that system, and end up on top.
This also doesn't address people with extreme wealth (Gates, Bezos, Zuckerberg) who don't really care about the money, but only the insane power it wields them. Their wealth can't be pure luck. How much was merit? Is the merit worth the power they've acquired?
What about undocumented workers? Do non-residents of a nation get UBI? Do we create a new lower class, similar to the ones who rose up in Libya (a nation that now has a slave trade due to US bombings). Prior to the bombings, their citizens had dividends paid from oil wealth (similar to Alaska), and the government subsidized power, houses and education.
You will always end up with a group without UBI, unless you find a way to apply it to the planet. Otherwise your peripheral nations, and workers within your own nation, will rise up, and history repeats itself.
I think UBI is a pipe dream with the current power structures. A proper UBI that covers all basic living expenses - meaning that you could actually live a dignified life solely on the UBI - would radically shift the power balance from capitalist/business owners to workers. I just can't see capitalists willingly dismantling their own power and leverage.
For this reason, I think that any sort of UBI will likely be woefully inadequate and may even be intentionally devalued over time, especially if it's used as a reason to dismantle welfare services.
> However, this creates less wealth overall as work is no longer given to where it’s done most efficiently. This breaks the primary component of capitalism.
Does it bother anyone that many of these places where the production is 'efficient,' are often not bastions of democracy? One of the biggest players is obviously the Chinese Communist Party, which literally has reeducation (and possibly forced labour) camps for certain ethnic/cultural groups.
Wait--the root of all evil is me trying to work hard to leave something for my kids so they can have a better life than I do and, with any luck, pass on the genes that I've given them?
When your policy proposals require extinguishing desires built into our minds and bodies by millions of years of evolution, you should go back to the drawing board.
The root of all evil is unqualified, absolute, extreme statements, and the people who fervently believe in them.
- Desires to hit people you hate and fuck people you find attractive are built into our minds and bodies by millions of years of evolution yet most people find not running around assaulting and raping to be pretty easy.
- Most terrible things people do are for the gain or preservation of resources and most people either have kids or want them. Piracy, animal poaching, bear bile farms, kidnapping and ransoming people, making and selling hard drugs, organised crime in general, war, telemarketing. Most people doing this aren't millionaires looking to buy yacht number 4, it's largely people just providing for their kids and we rightly hate those people anyway. So again not really a defence.
> Desires to hit people you hate and fuck people you find attractive are built into our minds and bodies by millions of years of evolution yet most people find not running around assaulting and raping to be pretty easy.
You're equating assault and rape with leaving money for your kids.
I think it's obvious why not doing the first 2 is pretty easy and not doing the last is pretty hard.
No I'm not. I'm choosing two particularly bad activities that would be justified by their choice of reasoning if it was valid, to show that it's not valid. They're the ones that brought up millions of years of evolution as if it doesn't apply to all behaviour.
If it covers rape and murder it's not exactly a good defence for not being bad for society.
Well, the discriminating structures in society are the result of people acting mostly rationally in their own interest, not necessary malice. If we're serious about ending discrimination, we'll have to accept not always getting what we think we deserve.
Land ownership is a fairly recent phenomenon and we got along just fine with out it.
Singapore uses this system today and is a capitalist powerhouse.
The desire to build generational wealth is natural. The enormous downstream consequences of allowing people to do that will eradicate all of the wealth anyway through violent upheaval or economic collapse. It’s happened dozens of times already, and it’ll happen again.
You can still own land in Singapore, they call it estate land I believe. The HDB homes are basically government owned housing that is leased back at a lower rate so the average family can afford it. The homes tend to lose value later in the lease term as it’s unclear what happens when the lease runs out (many are 99 year leases and some are 50+ years in already).
Not that different than low-income housing in SF that people purchase. The price is artificially low and appreciation (for the owner) is capped.
Right. My point was the system is not really that unique. There is also land in the US and Canada that is leased from the state (national parks) or Indian reservations.
I agree but preventing parents from providing security for their children is a form of harm. One could then argue that if all wealth were recycled, the state would be so strong that parents would feel even safer for their children in such a system - but then you're back to state vs. individual, socialism vs. freedom, etc., etc.
Yes, but if you argue a policy, even status quo, you're responsible for it's externalities. Wealth accumulation over generations creates real harm too.
People need food, clothing, shelter, access to healthcare, education and communication, and jobs only because employment provides the income necessary to purchase those actual necessities. No one riots for jobs simply to have a job to do.
Actually, no. People need jobs to occupy their time with something "good" and productive. Otherwise they will fuck around and do stupid shit. This is severely exacerbated by the existence of social networking, as well.
I will agree that people do not need to work as much as they currently do, but they do need to be useful to society. Idle hands are devil's workshop. That much should be clear as a day by now, even to the skeptics.
Your comment defines a person's benefit to society as being strictly equivalent to their utility to the market. But society is more than the market, and a person can be productive and create value for society beyond that created for an employer.
The point of UBI is that work should be a choice. People who aren't capable of finding value in life outside of work can work, and find that fulfillment. It just shouldn't be necessary for survival.
A person's utility to the market is the best tool we have to measure a person's benefit to society. The measurement is not perfect, market valuation obviously has blind spots, but what's UBI's alternative? Throw it all out, let people choose whatever they want?
I agree that grueling work shouldn't be necessary for survival. And people who can't or won't work for whatever reason shouldn't be left to suffer horribly or just die. But that's why I support welfare. UBI doesn't pressure or even incentivize people to create value for society. Doing no work at all should not be an easy choice.
I did not say _anything_ about "the market". "Society" is not the same as "the market". I'm talking more about the need to productively occupy people's free time so as to not let them spend it on harmful bullshit instead.
Work should absolutely NOT be a choice. If it is, easily 90% of people will never get off their couch, because why the fuck bother, and you can't survive on the productivity of the remaining 10%. I know because I'm one of those people, and so is my wife (who currently spends easily 8 hours a day scrolling through Instagram and watching Netflix). Eventually you will run out of other people's money. Not only that, but it'd also destroy people psychologically and make them feel worthless.
Work should be a requirement for all people who are able to work. Again, clearly the amount of time we currently spend on work is unreasonable. At present, if you work you can't properly raise children. This is fucked up. But to make it a "choice" is a clear path to societal decay and eventually unrest.
Even communist societies understood that: "from each according to his ability" doesn't mean what people think it does - it means that if you're able to work, you must work. In the USSR it was, in fact, against the law to not be employed if you're able.
only if you put on the same blinders that the author does, and ignore things such as:
- no mention whatsoever of any existential threats e.g. climate change. full faith and credit in Mr. Market to get us out of that rut, i guess
- some definitions of "efficient" involve avoiding policies in one country (say worker and environmental protections) by moving to other countries where those same protections don't apply. so efficient seems to also mean unlawful, to some extent
- we'll trust these UBI recipients to "do the right thing" and goose up the economy immediately, instead of say, investing in infrastructure (education, health, science) that we know is a far better investment in the long term future of the country (but can't really be done by a couple grand per month, more like... i dunno... a government thing)
By making sure each person has their minimum needs met, one can then have a better chance at having support for solving big problems that require government which requires popular support.
There are schemes for UBI which don't actually cost much more than we are spending. It can just be reallocation with more clawback in taxes. If one wants to.
Its the opposite of truth. Which isn't a lie its just saying the opposite of facts.
The fact is less people suffer every year, the economy in the west had its biggest expansion every, and there more fruit especially in america than ever.
Every single thing we know about redistribution of wealth does the exact thing he said. Where is his proof.
Not to mention the fact that you believe giving more money to someone who is addicted to alcohol or drugs will be better instead of worse. The only thing you've given them is money money to buy alcohol and drugs with no extra motivation or responsibility so they'd stop doing those things.
Well, you are labelling a prime example of what Marx calls “bourgeois socialism” as Communism 2.0, so you clearly don't understand Communism. Which you'd really understand better by reading a slim volume on the topic like the Communist Manifesto, and not thick volumes centered on critique of capitalism like Das Kapital, which is more about the problem (on which Communists generally agree with other crítics of capitalism) and not narrowly focussed on the solution (on which they differ.)
I actually liked his critiques at the time and I think capitalism should be constantly kept in check through government. (such that they balance each other out)
My unsubstantiated opinion would be that Marx probably would of changed his mind at some point about making it some sort of collectivist movement.
The UBI is also basically the welfare system most countries have without the expense and pain of trying to find the "cheaters" (See Australia's RoboDebt).
Its still capitalism and you still benefit from seeking a higher paying job but once most jobs have been automated it lets people easily train for better jobs without having to constantly report back to some defective government department and randomly getting their payments cut off.
> The UBI is also basically the welfare system most countries have without the expense and pain of trying to find the "cheaters" (See Australia's RoboDebt).
Basically.
> Its still capitalism
No, the modern welfare state is not capitalism, it's a socialist reaction to capitalism. Now, you can argue that it's “bourgeois socialism” that tends to reinforce the class relations of capitalism and which inevitably reverts to capitalism, as Marx—before it actually became the thing that completely displaced old-school capitalism in the developed world—did. But it's not, itself, capitalism. And the longer it is the dominant system of the developed world without a wholesale reversion to unmitigated capitalism, the harder to pure form of the Marxian charge against bourgeois socialism is to defend.
Promising people a never ending supply of money that they didn't earn will render people children dependent on mommy and daddy(government) to provide for them. This will stunt the growth and potential of many people.
Read the finnish experiment. All that happened is that people relxed and chilled on other's people money. They had no incentive to be productive so they weren't.
> Targeted basic income instead of a universal one
> The Finnish experiment was about partial basic income targeting able-bodied people without work, it was not about universal basic income. That has been a source of major confusion around the experiment and a source of critique of it.
It’s hardly fair to take as definitive one limited experiment in one country when it doesn’t even properly employ what they’re testing.
> All that happened is that people relxed and chilled on other's people money. They had no incentive to be productive so they weren't.
From what I recall from previous conversations on the topic, people in these experiments tended to take the time to invest in their own educations instead, so they could have better jobs and a better standard of leaving upon returning to the workforce. That’s far from “relax and chill”, and makes it a smart move when you know the money will stop coming in because it’s not really UBI.
We can extract good and bad things from the study and give emphasis to whatever narrative we want to pursue. Your own link mentions several caveats and shortcomings from the study; pretending it provides conclusive evidence of the failure or success of UBI would be disingenuous.
The best academic I know is dyslexic. It isn't me. The guy just finished the second of a planned five volumes on PhD level mathematics that, in my view, will become the mathematical encyclopedia for applied mathematics in coming years. He has to work 5X as hard as me and others I know to write. He is one of the most prolific mathematicians I know (averages ~1 paper/month).
Your complaint is a book-cover issue. The quality of the argument is independent of an occasional typographical error.
I am confident your colleague works 5x harder because he/she does not want to get the spelling of century wrong. This is not a simple typo.
For me, these mistakes are equivalent to Van Halen’s “Brown M&Ms” (see trending HN article: https://news.ycombinator.com/item?id=23985817), and I stand by my original assertion. If you cannot get this right, I do not trust any analysis or conclusions in your paper. Someone who hasn’t taken the time to proofread their work likely rushed the analysis and conclusions as well.
No. Absolutely no. UBI is Socialism under a different name. Why do people keep bringing up this topic? Why do people want the government to do everything for them? They are spectacularly sucky at everything.
Take from others to give to "poor." We aren't doing anyone service by giving them something for nothing.
I can see it now:
"Whelp, $40k isn't enough now that rent is higher. Now I need $80k"...and on and on.
Nobody is stopping proponents from giving someone else "their" entitled UBI. Use your own money though, not mine.
Better to teach independence & self reliance. Grow a garden, hold a job, work hard, love your family, respect others.
"Nothing has done more to lift humanity out of poverty than the market economy" https://fee.org/articles/capitalism-is-good-for-the-poor/
> Even the most hardcore anti-capitalists have to give respect to how the combination of capitalism and technology has worked to lift most of the world out poverty and provided us with the security and comfort only kings enjoyed just a few century’s ago.
Having air conditioning and modern medicine as well as clothes not patched together from potato sacks brings you pretty close to king level of comfort.
The difference between a peasant and a king in the middle ages, and a peasant (e.g., a worker today) and a king (e.g., Bezos, or the Saudi king) is night and day.
A middle ages peasant has access to a tiny sliver of the goods and services available to the king. A modern day peasant has access to pretty much all of the goods and services available to Bezos today. It's not like the food Bezos eats is any better than any body else's. The clothes he wears is not much better than anybody else's. The computer he uses is not much faster than anybody else's.
So the gap in availability and access of goods and services between the rich and poor is lower today than it was in the past.
Kings back then had to shit in a chamber pot, were driven around by horse back, were treated with blood letting and leaches, had to wait weeks or months for news and goods from distant lands to make their way, with no guarantee of accuracy or delivery. Scientific understanding was poor. They had no electricity, no refrigeration, no vaccines or penicillin or X-Rays. The list in which middle class modern people are better off goes on and on.
A few centuries ago we didn't have lighting, refrigeration, microwaves, electric ovens, clothes washers and dryers, cheap food, even fruits were only seasonal whereas in many capitalist-favoring places in the world now you can buy them year round. You can eat meat for every meal.
The view from the kitchen alone makes us look like we live like kings from centuries past.
Not to disregard the downsides of capitalism - rent seeking being just one of many. But to say we aren't living in the luxuries of capitalism is disingenuous IMO.
I think UBI would be disastrous for society even if it's perfectly implemented, which in a democracy is nigh impossible because there are too many stakeholders fighting for a piece of the pie. To think that you could replace entrenched welfare schemes with a flat sum sent to each citizen (?) and for it to be relatively successful is a pipe dream. For example, our disastrous healthcare system is a direct result of an afterthought FDR-era program. There are simply too many negative externalities to consider.
You don't need to reinvent the wheel in order to "fix" capitalism. Our current problem is that the 1% are taking too much of the pie for themselves. This has led to increased corporatization, reduction in competition as companies merge and there's less players in any particular field, this results in the white-collar service class being beholden to their corporations, making it unable for them to save enough money to spin off and start their own small and medium sized businesses which would create more jobs for people lower on the economic rungs of society. In effect capitalism is working a little too well/efficiently as the owners of capital are using their entrenched power to squeeze more production/efficiency out of employees, which forces employees to stay employees instead of business owners.
This problem can be fixed by tweaking the tax code and some other small changes at the federal level. You don't need to effectively reboot the system to make capitalism work again for the 99%.
It is so unfortunate so many young people (I assume majority of this site’s visitors) are either rooting for or in support of UBI. You all should read one book - Road to Serfdom.
As a rich person I am happy to pay for UBI as it lowers the likelihood that I will be the victim of a possibly violent crime by someone with not enough to lose. The one modification I’d make is that a violent felony conviction docks 5 years of UBI and a second conviction nixes them permanently.
https://news.ycombinator.com/item?id=23993259&p=2
https://news.ycombinator.com/item?id=23993259&p=3
https://news.ycombinator.com/item?id=23993259&p=4
https://news.ycombinator.com/item?id=23993259&p=5
https://news.ycombinator.com/item?id=23993259&p=6