
Why we should give free money to everyone - epsylon
https://decorrespondent.nl/541/why-we-should-give-free-money-to-everyone/31639050894-e44e2c00
======
kijin
The most important lesson that we should draw from experiments like Mincome is
that _we need more experiments of this type_.

Dauphin, Canada was one town in one country in an era that is now forever
gone. Since 1973, the politics has changed, the economy has changed, and
culture, religion, ideology, and (of course) technology have also undergone
tremendous changes. The Internet alone should be a total game changer. Mincome
serves as a good anecdote and inspiration, but it is largely meaningless to
argue (for|against) basic income based on that data alone. We need more data
points, and we need them to be more up to date.

Because right now, all we have are a precious few data points from 40 years
ago and/or from the other side of the globe, and a bunch of hopeful statements
that haven't really weathered any test of evidence (e.g. economic efficiency
will increase, or not; people will be happier, or not). Without solid
evidence, statements like that are little more than expressions of ideological
preference, both on the left and on the right. </edit>

The experiment should be repeated, as many times as possible, in various times
and places, and for longer durations (5 years, 10 years, 20 years, long enough
to study a generation of children who grow up under the scheme). Accumulate
enough data to support arguments (whether pro or con) that are based more on
actual evidence than on anecdotes and ideological assumptions.

Will it be possible to implement a basic income of $20,000+ per year in the
United States in 2014? Absolutely not, the political environment is not ready
for it. But will it be possible to run basic income experiments on a smaller
scale (Vermont, are you listening?) throughout the next two, three, four, five
decades? Of course it's possible, and at the end of it we'll be a lot more
capable of 1) making informed decisions and 2) squashing the opposition. It
doesn't matter whether you support or oppose basic income today. Show me data
or GTFO.

~~~
notdrunkatall
I'm generally against the notion of a basic income, as I believe that if you
remove the incentive to work to survive, vast swaths of people will simply
choose not to do anything, but I am certainly not against the idea of trying
it in small experiments and seeing what happens.

And as for these experiments, I wonder how many of the test subjects were low-
income prior to the introduction of basic income?

The fear isn't that people with a so-called 'Protestant' work ethic will stop
working, is it? The fear is that if we implement a basic income in the USA,
that, well, to put it bluntly, blacks and latinos, and, to a lesser extent,
whites will simply stop working.

If you want to get better data, and more specifically, if you want to
alleviate the concerns that most people have with a basic income, give a poor
black or latino community a basic income and monitor what happens. If the
experiment turns out to be a success, do it a couple more times, each time in
different locales across the country. That's the data you need if you really
want to make a basic income a political possibility. Everything else is just
half-measures.

~~~
smirksirlot
> The fear is that if we implement a basic income in the USA, that, well, to
> put it bluntly, blacks and latinos, and, to a lesser extent, whites will
> simply stop working.

That's ridiculously racist. Poverty being tied to race doesn't necessarily
have to do with innate work ethic.

~~~
notdrunkatall
You're right about the second statement, and quite wrong about the first.

Poverty is tied to race because race is tied to subculture. Work ethic is no
more a racial quality than is the propensity to dance like a fool (edit: by
this, I mean white people dancing like fools) or to enjoy eating burritos. But
it is well known that the so-called 'Protestant work ethic' is a strong
component of white American subculture, whereas it exists less strongly in the
black subculture. Other races (such as Asians and Jews) have similar cultural
values which encourage a strong work ethic. The American black subculture, on
the other hand, does not seem to instill nearly as high a value on hard work
in its children as do the others. On the contrary, the system is perceived as
being a white construct, and black children who are perceived as trying to
join that system are often shunned for 'acting white.' That is not a racial
issue, it's a cultural issue, but its genesis has no bearing on the final
result where basic income is concerned, at least not in the short run. I do
think that the black subculture is beginning to appreciate the value of hard
work more, but according to the data, it still has a ways to go.

Latino subculture as it exists in the USA is similar, but perhaps to a lesser
extent.

If you think that's a racist statement, I suggest you look up the definition
of racist, remove your emotions and preconceived biases from the issue, google
some things ('acting white', 'black work ethic', etc) focus on what I actually
said rather than reading between the lines, so to speak, and reevaluate
accordingly.

~~~
smirksirlot
You're saying a black person who grows up in a white subculture then is less
at risk of poverty? I call bullshit on that.

It doesn't matter what subculture you grew up in or are exposed to. It is what
other people perceive of you that influences the likelihood of you falling
into poverty. Skin color has a lot to do with that. Maybe the reason black
people don't appreciate the idea of hard work is because no matter how hard
they work, they don't come up ahead?

By subscribing to the idea of these subcultures being responsible for work
ethic, you're still placing work ethic innate to the race - and that's flat
out racist.

And for the matter of preconceived biases, I'm not the person coming into this
suggesting that certain cultures have work ethic issues.

~~~
notdrunkatall
>You're saying a black person who grows up in a white subculture then is less
at risk of poverty? I call bullshit on that.

Do you mean they're less at risk of poverty than a black person who grows up
in typical black subculture? Of course they are.

[http://www.eastbayexpress.com/oakland/rich-black-
flunking/Co...](http://www.eastbayexpress.com/oakland/rich-black-
flunking/Content?oid=1070459)

Allow me to give you a little insight into my insight. I live in the ghetto,
in a place that is 75% black, in the deep South. I grew up here, I still live
here, and I know the people. They're typically good people, but as a whole,
they don't have the same mindset about work, about frugality, about financial
success that your _typical_ middle class white guy does. And the reason isn't
that they're black per se - it has nothing to do with their skin color, with
their race. It does, however, have everything do with their culture, and it's
not racist in the slightest to acknowledge that! If you don't acknowledge a
problem, how can you ever hope to fix it?

Allow me to enlighten you a little bit. A people are brought to a foreign land
and forced to work. Their culture that they knew is destroyed, so they build
another one, but as any people who've been subjugated will do, they develop a
strong resentment towards those who subjugate them and they integrate that
sentiment into their new culture. They see the entire establishment as the
creation of their oppressors, of their _enemy_ , and for a long time, they
were right! Post-slavery, racism was rampant, and it was damn hard to be a
black person in America. I don't blame them one bit for initially thumbing
their noses at the system that 'whitey' built, for telling us to fuck off, for
generally believing deep down in their soul that white people were their arch
enemies.

But times have changed. Yes, racism still exists (it exists everywhere, and is
arguably the mildest in the USA, believe it or not), but post the civil rights
movement and affirmative action, there is really no excuse for anyone - man,
woman, white, black, whatever - to decide to be a leech on society. Well,
outside of permanent disability, of course. Opportunity exists for everyone,
and if you're a black person, it exists even more so for you. There are a
plethora of excellent black-only schools which take low-income black kids who
show a willingness to work hard to succeed. MIT absolutely loves to give free
rides to the underprivileged minorities, as it improves their diversity
figures, and the same goes for just about every college. We have a black guy
as our President, for pete's sake. The difference was that his parents raised
him to embrace the establishment, not to rebel against it. They taught him to
follow the rules, to work hard, to join 'our' system and to change it from the
inside, if he so pleased. And he did. A black guy.

Finally, acknowledging that a subculture is different from your own isn't
racist. You're just a dumbass.

------
yummyfajitas
I don't get it. According to the article, Basic Income causes working hours to
drop 9% in the American controlled experiment. They try to explain it away by
acting as if 9% is small, and providing anecdotes suggesting in some cases it
might be a good thing.

For comparison, the great recession resulted in a 3.4% drop in GDP. Now, a 9%
drop in work will result in less than a 9% drop in GDP (wealth is increasingly
produced by machines, not people, resulting in a lower labor share of income),
but even so, 9% is big.

By the way, as I always ask when this topic comes up, can someone link to
actual studies? I.e., hard data rather than an innumerate reporter
breathlessly advocating a proposal because it sounds cool?

Incidentally, a back of the envelope calculation
([http://www.chrisstucchio.com/blog/2013/basic_income_vs_basic...](http://www.chrisstucchio.com/blog/2013/basic_income_vs_basic_job.html))
suggests that it would be vastly cheaper to adopt FDR's employer of last
resort policy. If we are going to adopt a radical overhaul, lets consider the
full search space.

[edit: some sources about the third world are cited on the right, not the
bottom, and I missed them on first reading. Thanks davidx.]

~~~
bandushrew
that is a very narrow way to look at it.

the 9% 'drop in work' will be offset by the increase in consumption caused by
a large range of people suddenly having more purchasing power,

businesses will have to increase production, and hire more workers to do so.

they will have to pay the workers more to entice them in, and provide better
working conditions.

this will generate more work, and higher consumption.

~~~
yummyfajitas
We'll have less wealth created, but more people will be willing to spend money
consuming it. All that means is prices will go up.

Your Keynesian story may eventually play out - the real value of the BI might
be inflated away, resulting in people going back to work. Perhaps that will
completely mitigate the problem, or perhaps it will merely result in a new
equilibrium which only hax 0 < X% < 9% fewer people working. But why create
the problem in the first place?

If 100 people produce 10 apples each, you have 1000 apples. If 9 of them quit,
you have only 910 apples.

~~~
davedx
I think a more apt analogy is:

If 100 people produce 10 apples each, and 99 robots take over the job of
producing apples, there will be 99 unemployed people with no money to buy your
1000 apples.

~~~
damon_c
... unless the owner of the robots who profits by selling all the apples to
wealthy people in other countries is forced to redistribute the wealth in the
form of a basic income.

~~~
PavlovsCat
In reality however, OWS and other activists are under surveillance to avoid
exactly that outcome.

------
hcarvalhoalves
Here's an idea: why don't we stop giving free money to the government instead?

If I didn't had to work half of the year and give ~40% of my income to a
corrupt government I could have more money/time to invest and improve other
people's lives directly, and a party wouldn't be able to manipulate the poor
with welfare programs and stay in power indefinitely. The elite largely
manages to avoid taxes anyway... the current system just slaves the workers in
the name of good intentions, and is incompetent/corrupt at spending the money.

EDIT: For those who don't know, Brazil already runs a program like that since
2003. The government spends in that program about half of the budget estimated
for public hospitals, roads, water and sanitation. It didn't changed the
situation of the poor, public services are still crap (the only the poor have
access to), there's no infrastructure to generate jobs where these poor people
live. The end result is that we now have a portion of the population dependent
on the federal government, and that's used to manipulate elections.

------
Shivetya
We are already giving tens of millions of people free money.

Basic income is institutionalized poverty. It is a world where we purposefully
place people in permanent poverty. Give them enough to survive but not climb
out of their situation. Essentially paying them just enough so they hopefully
don't try to take other people's stuff.

The danger is that far too many people will accept this standard of living. It
removes a great burden from government when it realizes it can buy off people
for a fractional amount of what it would take to raise them up. It also makes
the "feel good" crowd happy as they don't have to do anything themselves but
feel that because they paid taxes that they in turn somehow helped.

Sorry, seen too many on on SSI/SSID, section 8, and such, to believe that just
handing money out helps. It simply stagnates far more than it will ever
elevate. It might work in countries where your choice is a dirt hut, being
dragged into some regional conflict, places where survival is questionable at
best.

~~~
allanb
I'm not sure what the actual consequences of basic income would be, but at
least this article references attempts at figuring out how such systems affect
people. You're not bringing up any objections that aren't mentioned in the
article.

And pointing to existing forms of welfare/social security misses the point
entirely. Many who speak for basic income (including this article's author)
argue that it's the heavy bureaucracy and stigma associated with such
sollutions that cause people to be caught up in it.

~~~
dragonwriter
> Many who speak for basic income (including this article's author) argue that
> it's the heavy bureaucracy and stigma associated with such sollutions that
> cause people to be caught up in it.

"Heavy bureaucracy" is a source of social cost, but neither it nor stigma are,
as I see it, the real problem with means tested programs.

The real problem with means-tested programs is the perverse incentives of
means-testing, which directly serve to inhibit people from progressing up the
economic ladder by creating penalties for outside income (when, as is often
the case, the programs have inadequate benefits to start with, this often
_forces_ people into under-the-table work just to survive, which has negative
cultural effects as it erodes cultural acceptance of the rule of law.)

------
mietek
"Modern methods of production have given us the possibility of ease and
security for all; we have chosen, instead, to have overwork for some and
starvation for others. Hitherto we have continued to be as energetic as we
were before there were machines; in this we have been foolish, but there is no
reason to go on being foolish forever."

— Bertrand Russell, "In Praise of Idleness"﻿

If you agree, sign the EU unconditional basic income petition:

[http://basicincome2013.eu](http://basicincome2013.eu)

[http://www.avaaz.org/en/petition/our_chance_to_end_poverty](http://www.avaaz.org/en/petition/our_chance_to_end_poverty)

------
gaius
No-one will oppose this more fervently than those employed on very good wages
in the present system.

~~~
smartial_arts
Why would they?

Personally, being taxed close to 37% (in Australia) already, I don't have any
issues with my tax money being spent on that cause.

~~~
gaius
Because
[http://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem](http://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem)

The status quo - a large, expensive bureaucracy, employing many civil
servants, social workers, etc - suits the interests of too many people.

Here in the UK we could sweep away the "welfare system", that spends nearly
all of its effort making sure people get the "right" amount and replace it
with some sort of basic income, for which we need 2 employees to maintain an
automated system that pays everyone the same, a man to feed the dog, and a dog
to bite the man if he tries to change anything.

~~~
benmmurphy
Developed countries will probably eventually get some kind of basic income
system but it won't be simple :) I'm sure it will be very complicated and
there will be still lots of mean tested programs to accompany it to make sure
a large bureaucracy is still required.

~~~
erichocean
Then that system will be, by definition, not "basic".

One of the features of basic income is that it removes politics from poverty.
If you have a system that is political, you have welfare in another form, with
yet another name.

Basic income applies to the rich and poor alike, is identical for everyone,
and carries no social stigma as a result, and offers no opportunity for
political graft.

IMO that is why adoption is incredibly unlikely—politicians would need to
approve it, and by doing so, they'd be putting themselves (mostly) out of a
job. It seems extremely unlikely to me that will happen.

------
brokenparser

      "The problem with socialism is that eventually
       you run out of other people's money"
    
                                -- Margaret Thatcher

~~~
jhaglund
Can't tell if sarcasm, considering that Thatcher's move was to privatise,
until she ran out of public assets.

This pithy quote is also wrong because it assumes the economy is a zero sum
game and misses the point that this article is trying to make -- that giving
away money would be cheaper and have better results than the current system of
welfare.

~~~
vixen99
Blair and Brown in the UK demonstrated the truth of this quote and we and our
descendants here will continue to pay the price for generations to come.

Clearly I'm a very bad person because if I were to suddenly receive a
significant cash injection I'd lay down tools and disport myself with books,
music and a spot of travel. Everyone to his or her own. However it's good to
know that the rest of humanity are mostly above this kind of thing.

------
dschiptsov
Giving money to 13 people proves nothing, it cannot even be considered as an
experiment, while giving money to a substantial percentage of population will
result in a commodities price hikes or inflation.

~~~
thedufer
It isn't, and doesn't claim to be, an experiment on the economic consequences.
But it absolutely is an experiment on human psychology, which as far as I can
tell is all it claims to be.

------
11thEarlOfMar
In general, it is basic human nature to be active and productive, and interact
with and contribute to a society. The poor have that nature as well, and in
most cases they are poor due to a lifetime of adverse family circumstances or
perhaps one bad decision ( [http://priceonomics.com/what-its-like-to-
fail/](http://priceonomics.com/what-its-like-to-fail/) ). They can then be
trapped as poor simply from having no time to plan an exit and no runway to
execute it.

My observation is that the 13 homeless persons in London found that having the
cash gave them time away from the full-time activity of surviving so they
could think, reflect and plan, and, it gave them the runway to execute their
plan.

This concept of basic income has been occupying my thoughts quite a bit
lately, particularly when I venture in to San Francisco. Each time I think
about it, as a thought experiment before reading this article, I can see far
more good coming from it than harm.

What I think, and seems to be supported by the article, is that giving (for
example) $1,000/month to every adult in America would play out like this: A
family of 4 would have $24,000 per year guaranteed income. If both parents
worked minimum wage jobs earning another $16k each, and I do believe they
would, they'd have a household income of $56k on minimum wage jobs. They could
situate in a reasonable school district, afford to pay more rent for a safe
neighborhood, afford reasonable health care and focus on raising their kids.
The kids will do better in school, the family can feed themselves less
unhealthy food, there will be less anxiety about the basics and less domestic
conflict.

The studies in the article -seem- to support that outcome.

$12,000/year per adult not already on welfare or social security would cost
about $2 Trillion per year. To put that into perspective, Social Security
costs $1.3 Trillion in 2013. Cost of all social welfare programs was $529
Billion. The GDP came in at around 17 Trillion.

The US could afford it if we really wanted to. So what I'd like to hear are
the counter-arguments. Is it inflationary? I'd say it has to be. Is it fair?
If every American receives it, regardless of their wealth, then I don't see
how it would be unfair. Is it realistic? It seems that the US was pretty close
to something along these lines in the 60's and Obama finally got universal
health care through. Perhaps it is realistic enough to at least put a true,
modern pilot program in place and convince ourselves one way or the other. It
really seems better than the alternative: Status quo for the homeless and the
poor.

~~~
codex
Most of the poor are renters. If you gave everyone $12k more a year, why
wouldn't everyone's rent (and other expenses) simply rise by $12K?

~~~
11thEarlOfMar
I think the poor who felt trapped would be more likely to move than stay put.
The incumbent landlords in poor neighborhoods would see a % of their renters
move out, and a % of new renters move in, perhaps off the streets. We'd want
to study the net effect of that.

Those who moved out would then be moving into areas with higher rents and
mixing with those renters. So a dollar-for-dollar rent increase seems
unlikely.

Some renters would find they now have enough income to buy a home and some
would, vacating apartments for renters from poorer areaa.

Some home owners would find they have enough to afford a larger home and would
move up.

But others would invest the new income, or pay for the kids college, or take
more vacations, or buy new cars more often.

The economic impact is complex and unknown and needs to be studied. I happen
to believe it is a worth an in-depth study and worth spending some of my paid-
in taxes on.

------
the_watcher
Do we not already do this to some extent with welfare? I know it's not
optimal, and honestly, I tend to fall closer to the belief that if we are
going to have welfare systems, they are more effective if you just give cash
rather than the convoluted and easily gamed system we have now, so I see where
this is coming from. To address worries about drug/alcohol abuse and the like,
maybe some kind of system where you qualify for a bit more if you submit to
testing or something like that? Not sure if it's workable or what
externalities that introduces, but in general, giving more freedom to spend
your safety net aid seems like a win to me.

------
krupan
If we do implement a basic income and do away with other forms of welfare, how
far will we go with the "doing away?" I assume we'd get rid of programs like
food stamps and WIC. What about other forms of government welfare, like Pell
grants? Student loans? Farm subsidies? Obamacare? There's a lot you could cut
that would make this an easy sell for conservatives and/or libertarians.
There's a lot that you could argue needs to be kept even though we've added
basic income that would make this a very hard thing to sell.

------
teekert
I imagine a problem would be to determine exactly what the level of this
salary would be... Enough for an apartment? single room? Food and Clothing? Or
would the economy evolve to make the values of money such that you can just
live from the basic income?

What stops people from wanting more and more making just sitting at home
gaming more and more attractive?

What would I do? Start working the absolute minimum to keep my house, feed my
kids and start something or my self? How many people would do that?

------
ishener
if i was given free upvotes, i would not just sit around and do nothing, i
would upvote this article so much more!

~~~
ishener
my favourite line:

‘Poverty is fundamentally about a lack of cash. It's not about stupidity,’
author Joseph Hanlon remarks. ‘You can't pull yourself up by your bootstraps
if you have no boots.’

~~~
dualogy
> Poverty is fundamentally about a lack of cash.

The more you know!

------
elwell
The thirteen people seem to have been periodically checked-up on; they surely
felt a bit of accountability as the subjects of an experiment. Give out "free
money" on a large scale, and the accountable disappears; with it, likely the
positive outcome.

------
OhHeyItsE
Yeah, but it's not about helping people - _it 's about sending a message_

(at least, in the US)

------
marknutter
The thing about basic income that doesn't make sense to me is how to set it.
Basic income for someone living in rural South Dakota is going to be
drastically different for someone living in San Francisco.

------
jbb555
This is just insane. For a start exactly can you give free money to everyone,
where exactly does it come from? The only source of money is other people. So
you'd be taking away money from one group of people and giving it to others.
You are discouraging the ones who get money from working because they get free
money instead. You are discouraging those from whom you took the money because
what's the point in working if someone is going to take away your money and
give it to those who don't.

I don't just consider this unworkable, I consider it basically evil.

~~~
nathell
The question of where the money comes from is a valid one, and, perhaps
surprisingly, your statement "The only source of money is other people" is
wrong. To start with, read up on "money creation" and "fractional reserve
banking."

~~~
ctdonath
Money is not wealth, money is the _representation_ of wealth. Creating more
currency does not increase the value available within an economy. Creating
more money without creating more value for it to represent just results in
inflation.

A gallon of gas is (all else equal) worth about 20 minutes of mundane labor.
Printing more money and legislating the gas station attendant's pay to
$60/hour will just result in gas costing $20/gallon.

------
dsugarman
we should definitely find a way to get cash to the poor, but I think there may
be private market solutions like a taskrabbit for social projects that
employee the underprivileged to do social good financed by the wealthy.

~~~
14113
But that's entirely against the point of the article! If you're employing
people, they're not getting a chance to improve - just scrape by.

------
harryh
There are 314 Million People in the US. We can't afford to give everyone
enough money to have a meaningful impact on poverty. Seriously people, do the
math! It's basic arithmetic.

In order for the welfare state to be effective, it needs to be targeted
towards the people that need it.

------
swah
Read Von Mises!

~~~
Robin_Message
Why?

What did he say that relates to a basic income and where can I read more?

(All I, and I suspect many people, know about him is that he is supposedly the
correct answer to economics, promulgated all over the internet by
crackpot^H^H^H^H^H^H^H idealistic libertarians.)

------
whatevsbro
People get carried away with the idea of handing "free money" out to poor
people, without realizing that there is _no such thing_. All money has to come
from _somewhere_.

If a government is handing out money, there are three options:

    
    
      1) Money has been confiscated from other people.
      2) Money has been printed.
      3) Money has been borrowed.
    

That's it. Money always has to come from somewhere, and governments simply
don't acquire any without _some_ consequences.

~~~
twic
I fear you are labouring under a misapprehension. The "free" in "free money"
refers to the fact that it doesn't directly cost the recipient anything. Like
"free healthcare". Nobody is claiming that the government can obtain the money
for free.

~~~
mcv
Actually, the article points out that the government might actually save money
by giving it away for free, rather than implementing all sorts of complicated
restrictions and checks and hiring people to enforce those.

------
professorTuring
Ok, great. Since I belong to everyone, I will accept any "natural" amount of
money from anyone. Thank you.

Find my paypal account in my profile.

~~~
ctdonath
There's the core problem: those pushing the "just give 'em money" idea always
focus on forcing _others_ to give money ... they won't proactively act on
their own opinions by giving away large sums of their _own_ money.

~~~
tekalon
I support this, and I already give a good amount to charity and would
definitely give to a government or private program that did this.

