
Finland’s basic income plan could change everything - joeyespo
http://www.businessforscotland.co.uk/finlands-basic-income-plan-could-change-everything/
======
vinceguidry
I'm cautiously enthusiastic about basic income. I want to believe that it
really can change everything, until that nagging doubt of "but human nature
just doesn't work that way!" inevitably kills the buzz.

The idea behind basic income is to remove day-to-day struggle from people's
lives. If only they didn't have to worry where their next rent check is coming
from, then potentially a huge groundswell of human capital could rise out of
nowhere and carry us all into a new age.

But we don't need to actually implement basic income in order to test that
out. Plenty of people already receive checks from the government every month
that they live on, in exchange for no real work responsibilities. Like, a
whole lot of people. There should already be a not-so-huge wave of
accomplishment coming from all these people. Not to belittle them and their
abilities, but there isn't. Just about everything that we consider a real
advance comes from people working the system that exists using their own
ingenuity, not from people allowed to escape the system by providing them an
inalienable source of income.

Modern Western societies are rich enough that smart, motivated individuals can
mostly rise to the level of their own ability. To do better than that we need
to build a better society, not just make the one we have richer. Basic income
could be an important step, but it's only one step.

~~~
lukev
Except that there are strong social incentives for anyone who is _capable_ of
getting a paying job and going off welfare to do so.

If it were socially acceptable for an artist, scientist or entrepreneur to
fall back on "welfare" for some amount of time to work on a project, improve
themselves or bootstrap a startup, I think you'd see that more often
(including outcomes that end up contributing back to society.

Which is why basic income is such a good idea. If it's unconditional, and not
tied to an assertion that "I am poor and cannot feed myself otherwise", I
think you'll start to see more capable people leverage it for uses other than
basic survival.

It still doesn't answer the question of whether that investment (as a society)
would pay off, but its a fair bet that it would at least be a different group
of people leveraging it.

~~~
dawnbreez
>Except that there are strong social incentives for anyone who is capable of
getting a paying job and going off welfare to do so

Debatable. In the US, many welfare programs are designed to cut off anyone who
actually gets a job...even if that job pays less than what you'd get from
welfare. This problem gets even bigger as you factor in the fact that multiple
welfare programs exist, making it nigh-impossible to prevent that drop from
being catastrophic.

This is a major incentive to stay on welfare.

Meanwhile, with a BI, a person who seeks a job will earn more money than one
who does not. That's it. No complicated math involved, not even subtraction; a
guy who works will have more money than one who does not.

Assuming all the participants want more money, the second set of rules will
lead to more work than the first.

~~~
stevesearer
One question I have about BI is if it replaces other forms of social welfare
(food stamps, unemployment, etc...), what happens when some percentage of
people inevitably make decisions and still cannot afford the basics of what BI
should cover? Will a new set of social welfare programs replace the ones that
were previously removed?

~~~
beat
If BI isn't enough to replace existing welfare systems, then it isn't enough.
You can't half-ass something like this.

~~~
flubert
I don't think you've captured the nature of the question. If you give everyone
a cash handout, some percentage of them might spend all of their allowance on
alcohol and lottery tickets, and not have enough left over for food or rent at
the end of the month, leaving them hungry and homeless. Under BI, is this
situation acceptable, because it is their own fault for "wasting" the money?

~~~
beat
If someone is so disabled that BI alone won't save them, then yes, other
things will step in. This is a great opening for private charity, in fact.
Given BI as a baseline, the conservative dream of having private charity
handle things might actually work, because it would be limited to the
exception cases.

------
petke
I'm from Finland and the only place I keep hearing about this "plan" is from
foreign media. Its just a experimental study. I'd be surprised if anything
came out of it. Finland is not some utopia where magical things happen. We are
in a long recession and the govt is cutting social benefits left and right.
This thing is a fantasy only foreign media takes seriously.

~~~
MrTonyD
Denmark is also worried about growth. But they have started a program to
reduce hours at some select hospitals - to see if they could convert some of
the GDP growth into higher quality of life for those workers. And I read that
Sweden has been trying a similar program - reducing working hours at some
public institutions in order to convert the past decade's GDP growth into a
better life. Really, a program for basic income is neither Utopian nor magical
- it is just a reasonable thing to try.

------
nugget
I'm a fan of the theory of basic income but it seems incompatible with an open
border/immigration policy. Given how many refugees are already migrating into
Europe (many for economic reasons), how would a basic income change the
incentives and migration patterns even further?

~~~
ZeroGravitas
Why do you see it as different from any other positive thing about a country?
Good educational and job opportunities, lack of pollution, effective
healthcare and so on, your children not having bombs dropped on them, pretty
much anything that makes a country better for the people who live there will
make it more attractive to immigrants.

~~~
nugget
Basic income would become a part of the whole picture, for sure. But take
Norway as an example: 5 million people and around a trillion dollars in
sovereign wealth, which could yield ~ $8k per person (man, woman, and child)
per year in perpetuity. All Norwegian citizens now own a share of ''Norway
Inc'' as their birthright and receive a healthy dividend. Now 5 million people
- that isn't a lot, and it's easy to imagine that over a generation, at least
another 5 million immigrants would be interested in migrating. Now we're at 10
million people and our benefit is cut in half. If we're Norwegians, does the
entitlement to basic income make us a little more defensive and nationalistic
than we otherwise would be? It seems that, while many forces in Europe for
decades have successfully pushed towards more open borders and more flexible
immigration policies (ultimately spurring GDP growth), the transition to a
basic income economy (if it occurs before the developing world catches up to
the west) could act as a strong headwind in the other direction.

~~~
warfangle
On the other hand, those 5 million additional people probably aren't going to
sit around doing nothing. That's not how human nature works, either - most
people are happier doing something rather than nothing! Self actualization and
all that.

So are they going to contribute as much to the sovereign wealth that funds the
basic income as the citizens?

And is the basic income extended to guest workers / temporary residents as
well as citizens? I would think it would be limited to citizens.

So you would actually have immigrants contributing to funding basic income
without benefiting from it until they obtain citizenship.

~~~
CountSessine
_On the other hand, those 5 million additional people probably aren 't going
to sit around doing nothing. That's not how human nature works, either - most
people are happier doing something rather than nothing! Self actualization and
all that._

This is really the core assumption behind Marxism; perhaps not so much the
sclerotic centrally-planned dictatorship of the proletariat 'Marxism' we saw
in the 20th century as the idealized communal society that Marx envisioned,
but un-monetized self-motivation is still required for either.

Does that make it wrong? _I_ don't think so; but at least we should think
carefully about how we arrange incentives for work in our shining city on the
hill. Even if most people aren't working, we still need for that motivated and
creative minority to be putting in some hours and to be happy about it.

~~~
istjohn
Un-monetized self-motivation is not required, here. They would be have the
opportunity to earn above and beyond the basic income. It's not Marxist or
communal at all. We are not talking about abolishing work for pay. We are
simply talking about an un-earned payment in addition to whatever they earn in
conventional jobs.

~~~
CountSessine
The previous poster made the point,

 _On the other hand, those 5 million additional people probably aren 't going
to sit around doing nothing. That's not how human nature works, either - most
people are happier doing something rather than nothing! Self actualization and
all that._

I don't think that it's completely relevant to the BI debate, but what if
everyone actually did just decide to sit around doing nothing?

~~~
existencebox
I think the general response is, in a real world it's never an all or nothing
proposition, and even if it were, the fewer people contributing, the greater
the opportunities for those who do. (greater uncontested target market share,
less competition, more demand, less supply.) The economics 101 supply demand
curve hopefully helps incentivize ENOUGH people at sufficient levels to do
what productive work needs/is desired to be done.

And if then everyone STILL decides to do nothing, I think we have bigger
problems than a matter of economic policy :)

------
digitalsurgeon
Finland is in very early stages of "just thinking about it". it probably will
not be implemented. International media can not even get this story about a
country in Europe right. Imagine how bad or incorrect their news reporting
about "other" countries is.

source:
[http://yle.fi/uutiset/kela_to_prepare_basic_income_proposal/...](http://yle.fi/uutiset/kela_to_prepare_basic_income_proposal/8422295)

------
1024core
Why wouldn't inflation swell up to soak up the UBI? If I'm a landlord in a
poor(er) area of town, charging $500/mo for an apartment, and UBI is $1000/mo,
then why shouldn't I raise my rent to, say $1000/mo because my tenants now
have extra money? (Ignore rent-control for now).

~~~
arebop
Inflation is generally believed to be caused by an imbalance between the
quantity of money and the goods & services in the market. BI per se doesn't
change the money supply; it can be done by redistribution of existing money
rather than debasing the currency.

~~~
1024core
I would disagree. If, for example, I take $1B each from every billionaire in
the SV (for a total of, say, $20B) and gave each resident of SV (say, 2M
residents) an extra $10,000, won't the prices go up? People will go on a
spending spree, buying up TVs and cars and games, driving up their prices?
There is a reason why gas costs more in SF than in, say, San Mateo.

~~~
arebop
Then perhaps TV prices will go up, but jet prices will go down. That sort of
mixed change in prices is not consistent with the usual definitions of
"inflation."

Do you still like your argument when you think about quartiles rather than
comparing the top 20 data points against the bottom 2 million? I think it's
hard for most people to trust their intuitions about the spending habits of
billionaires.

------
codyb
As I've been growing up I've realized increasing population, automation, and
globalization are going to force some sort of change in how we distribute
wealth and resources in nations, and in the world.

The study of the town in Canada is a favorite of mine. The results are
staggering and nearly immediate.

Why we haven't moved towards solutions which in the long run may actually save
us money through better educated and less stressed citizens sooner is an
interesting thing to think about to me.

I've never tried to do the math though, it does get expensive quick.

------
rm445
Lots of comments and everyone is debating based on their intuition. Basic
income is a fascinating idea, but it seems like advocates would love to see a
huge place like the USA commit and pile in, when a small trial run would be
much more sensible.

Finland would be a _fantastic_ place to trial basic income. It's a rich
sovereign nation with a population of under 6 million, a GDP of less than a
quarter of a $trillion, and close cultural ties with lots of other rich
countries. If basic income were the worst thing to ever happen and people were
dying in the streets, friendly neighbours could bail the country out. And if
all went well, it could be a nice template for larger countries to safely try.
Ideally other countries where the idea has support should offer Finland a
guarantee of support-if-needed in return for going first.

~~~
drawkbox
Trying it in decimated cities like Detroit would also be interesting.

------
frankus
"Businesses would have to raise wages to above the living wage to attract
people to what are currently lower-paid jobs – assuming that means they will
have to pay living wage + 5%"

I could see the opposite happen. Assuming you also did away with minimum
wages, people could engage in as much or as little casual employment as they
wanted to, because they would have their basic income to cover essentials. Not
unlike many US teenagers who pick up a summer job for spending money rather
than for survival.

------
rbrogan
Would anyone, personally, take something like this as an opportunity to do
open source work and/or research projects? Or do you feel like you want/need
money as a motivator to be your most productive and a way to keep score in the
game?

~~~
manyoso
Yes, I would. And frankly that is a feature not a bug! It would allow people
to contribute to the economy in ways that are self-motivating and not for fear
of starving. And well motivated people do better work and contribute more
which has been empirically validated and also common sense.

------
mschuster91
I'm worried if this will provide an incentive to rent hikes - landlords can
easily raise rents by pointing out that everyone has additional 800€ per month
to spend.

~~~
habosa
That would require collusion between landlords. Otherwise one landlords rent
hike of $800 would be countered by another one who is only raising the rent by
$750 ... etc until you get back to logical market pricing.

Yes some landlords would definitely try it, but I think they'd be quickly
corrected by the market.

~~~
kaybe
I think it would depend on the level of demand. Just look at San Francisco..

------
Mz
I am really skeptical. My understanding is that every Utopian scheme to
provide equally for all citizens without expecting them to work ended up
having to ultimately declare "You don't work, you don't eat."
[https://en.wikipedia.org/wiki/He_who_does_not_work,_neither_...](https://en.wikipedia.org/wiki/He_who_does_not_work,_neither_shall_he_eat)
This is what Lenin ultimately declared after The Russian Revolution
[https://en.wikipedia.org/wiki/Russian_Revolution](https://en.wikipedia.org/wiki/Russian_Revolution)

In a nutshell, Russian communism was supposed to be something that benefited
the commoners -- the workers -- and ultimately it did not accomplish its goal.
Russian communism is kind of a famous failure of this sort of thing. Russia
ended up staying rather poor for a long time.

I see no reason to believe that it works better in an automated society where
we increasingly face shortages of enough people who are adequately skilled at
administering the automated tech. Historically, societies dependent upon a
complex, educated bureaucracy to make their system work went through cycles of
failing and resurging, then failing again. If we have no means to motivate
people to get educated enough to run the fancy automated tech and the tech
upon which our wealth depends dies, then the wealth goes away and the society
built upon it ends suddenly and catastrophically.

I am extremely skeptical.

------
benten10
Chris Blattman quotes this really nice research that says that employment by
itself does not explain inclusiveness.

Link:
[http://marginalrevolution.com/marginalrevolution/2015/11/ide...](http://marginalrevolution.com/marginalrevolution/2015/11/identifying-
barriers-to-muslim-integration-in-france.html)

Here's the money quote (posted elsewhere in the thread too):

>Here is Verwimp:

>Belgium has a very elaborate welfare state. All citizens have health
coverage, schools and universities charge no or few fees, child benefits,
unemployment benefits, pensions, are all in place. But this comes at a cost of
a closed labour market, meaning a labour system that heavily protects those
who are in, but makes entry for newcomers very difficult.

>It does not seem to be poverty, but exclusion. Philip wrote to me:

>One of my students from African origin, graduating from our MA program, told
me (before the Paris attacks) « it is easier to get unemployment benefits in
Belgium than to get a job ». He decided to move to Canada. That summarises it.
Migrants and their families have full access to the allocations of the welfare
state, but face daunting challenges when they want to get ahead in life.

>…I am not looking at individual factors to join IS, as young adults across
European cities many share similar reasons, but for ‘structural’ factors that
make the situation different in some countries compared to others.

------
gwright
> If only they didn't have to worry where their next rent check is coming from

Is that really what basic income is all about?

I'm sure there are more ways to look at this but broadly speaking I see two
types of arguments for basic income being made:

1) Unconditional provision for basic necessities (food, shelter, clothing,
health care, education) in the absence of _all_ other income.

2) Administrative simplification of core assistance programs such that a
beneficiary could combine their basic income with the income derived from a
basic job (for example, entry level full time position) and be able to provide
for their own basic necessities.

In scenario 1) there is assumption that individuals have _no_ responsibility
to provide for themselves.

In scenario 2) there is an assumption that individuals do have a
responsibility to provide for themselves but that basic assistance will
provide a basic level of security and assistance to make things easier.

I find the idea of basic income very interesting from an efficiency point of
view (best way to deliver assistance) but I'm wary about the disencentives
towards personal responsibility that might arise.

------
ck2
Yes it will guarantee housing prices for rent rise to the guaranteed income.

Just like college prices magically rise to the amount of available loans.

~~~
bryanlarsen
Why? It doesn't change supply, and I don't think it would have much of an
effect on demand, either -- it's too cold for Finland to have much of a
homeless population.

~~~
Natsu
When people are able to pay more, businesses charge more.

Also, demand is affected, because people will have the means to buy more, at
least until inflation kicks in.

------
cmdkeen
This is all tied up in the Scottish independence debate, a "once in a
generation vote" which is set to be replayed in the next few years because the
"wrong" outcome happened. The economic argument for independence has collapsed
since, especially with the collapse in the price of oil.

That given this background the article could say things like there being
benefits to the health system from "ending poverty" given the article also
took savings from not having pay benefits any more sums up this approach. The
60% of the median calculation used for the poverty* line requires ~£10k annual
income, so if you don't have any children this payment would still put you
firmly below the poverty line if you didn't / chose not to work.

A basic citizen income is incredibly expensive and essentially a massive
benefit to the richer classes.

* That's leaving aside issues with absolute v relative poverty rates

~~~
redblacktree
Could you explain what you mean by this?

> A basic citizen income is incredibly expensive and essentially a massive
> benefit to the richer classes.

How does it benefit the rich in particular?

------
xlayn
This is taking the objective of taxes to an extreme: redistribution of
resources from the wealthiest to the poorest.

From wikipedia: "Governments also use taxes to fund welfare and public
services. These services can include education systems, health care systems,
pensions for the elderly, unemployment benefits, and public transportation.
Energy, water and waste management systems are also common public utilities."
... "A nation's tax system is often a reflection of its communal values and
the values of those in current political power. " [0]

[0]
[https://en.wikipedia.org/wiki/Tax#Purposes_and_effects](https://en.wikipedia.org/wiki/Tax#Purposes_and_effects)

edit: extend comment and provide support

~~~
ones_and_zeros
Taxes are whatever the electorate want them to be. Plus the modern day idea of
taxes is relatively new... I mean, income tax in the US is barely 100 years
old. The whole basis of the US tax system rides on the "General Welfare"
clause, so really taxes provide for the general welfare (food, shelter, etc),
and a basic income covers all of the general welfare bases without all of the
overhead of separate agencies and regulations.

~~~
gnaritas
> The whole basis of the US tax system rides on the "General Welfare" clause

No, it rides on the 16th amendment which explicitly authorized income taxes.

"The Congress shall have power to lay and collect taxes on incomes, from
whatever source derived, without apportionment among the several States, and
without regard to any census or enumeration."

~~~
ones_and_zeros
No, the US gov't was able to set taxes well well before the 16th Amendment,
which as you point out, is only for income taxes. The US gov't had all sorts
of taxes before the 16th Amendment and the justification for that as outlined
in the US Constitution is for the general welfare.[0]

[0]
[https://en.wikipedia.org/wiki/Taxing_and_Spending_Clause](https://en.wikipedia.org/wiki/Taxing_and_Spending_Clause)

~~~
gnaritas
We were discussing income taxes; and income taxes existed before the 16th as
well, based on other tax clauses until the courts ruled the direct taxes and
thus unconstitutional. You're correct about the general welfare clause as the
basis for most taxes, but it's not the basis for income taxes which is what
"taxes" mean generally when people are discussing taxes.

------
known
[https://en.wikipedia.org/wiki/List_of_countries_by_sovereign...](https://en.wikipedia.org/wiki/List_of_countries_by_sovereign_wealth_funds)
can/will provide impetus to
[https://en.wikipedia.org/wiki/Social_mobility](https://en.wikipedia.org/wiki/Social_mobility)

------
andrewclunn
The conflation of arguments against wealth redistribution and arguments
against over regulation or publicly managed entitlement services is
everywhere. If successful then socialists and union leaders might find
themselves at odds with one another. There would then be a real practical
distinction between left libertarians and right libertarians. Issues of
unemployment and minimum wage will become quaint as outdated means of dealing
with poverty and inequality...

Or it will fail miserably.

------
Animats
The US had this from the 1935 to 1996 - a broad welfare program. During the
first Great Depression, the US was the employer of last resort, with the WPA
hiring millions of people to do public works. During WWII, there was a labor
shortage, and that ended. After the war, large public housing projects were
built. There were people who spent much of their lives on welfare.

Until the Reagan years, there were very few homeless people. But there were a
lot of people who were just warehoused in public housing for their whole
lives. Most of them black. That didn't work.[1] The UK did something similar,
"the dole", until the 1980s under Thatcher. That, too, produced a large non-
working population.

We have a productive enough society to pay for welfare. But it generates a
huge, useless, and troublesome underclass.

[1] [http://ced.berkeley.edu/bpj/2013/06/the-robert-taylor-
homes-...](http://ced.berkeley.edu/bpj/2013/06/the-robert-taylor-homes-
failure-of-public-housing/)

~~~
manyoso
No, we did not. Again, that welfare program is very different from the basic
income described here in many ways. Those differences are crucial to
understanding the benefits of a basic income in comparison to the broad
welfare program you reference.

One such difference being that _everyone_ in a society gets the basic income
with no strings attached meaning that there is no perverse incentive _not_ to
work. With a basic income people are free to work and gain additional income
on top of the basic income and to do so for whatever motivations best inspire
them free from the fear of starving.

~~~
stcredzero
What is the evidence with regards to the benefit or detriment of the fear of
starving?

~~~
manyoso
I can't cite any studies, but I do remember having heard of many studies
indicating well motivated employees are more productive and happy employees
are more productive. As for whether the fear of starving is 'good motivation'
I would say that personally speaking it is definitely not what inspires _my_
best work. Mileage probably varies quite a bit.

~~~
stcredzero
I can say that unemployment combined with life changes and other stressors can
result in debilitating depression. However, it was falling in love and having
something to lose that motivated me to land my current job.

Now that she's left me, it's only fear of starvation that motivates me to keep
my job.

------
TazeTSchnitzel
Fun to see an article here from Business for Scotland, a pro-Scottish
independence group.

------
jfaucett
Could an economist weigh in on this?

Naively, this seems ridiculously expensive to me. If you wanted to eradicate
poverty with this policy, say pay everyone 60% of the mean income, that means
the gov't will need to raise taxes by some amount X, in order to provide a
corresponding 10% of mean earnings to every member of the population. If you
do the quick math for a 5% value of X that would mean an increase in taxes of
30% (on top of the already existing education, national security, health care
taxes), so taxes could easily approach 60% or more, unless it is feasible to
have a very small value for X mapping onto 10% mean income increase...

Anyway, I'm not an economist and would very much like to hear what one has to
say about this idea, because it does seem to good to be true.

~~~
istjohn
Read this: [http://www.theatlantic.com/politics/archive/2014/08/why-
aren...](http://www.theatlantic.com/politics/archive/2014/08/why-arent-
reformicons-pushing-a-guaranteed-basic-income/375600/)

The economists Milton Friedman and Friederich Hayek both argued for a basic
income.

------
known
I appreciate Finland for NOT pretending to fix social welfare

------
venomsnake
It will fail. Big time. Not on ideology, but on one simple term - basic income
can be used only with strong import tariffs - otherwise it becomes a huge
capital outflow out of the country.

~~~
Joof
Makes sense, but I simply don't have the background to agree with you.

------
nsxwolf
I suspect once people's basic needs are satisfied with the basic income, they
will spend whatever discretionary income they have on VR porn and legal
marijuana, and just do that for the rest of their lives.

