
YCs Basic Income Experiment - swuecho
http://jacquesmattheij.com/ycs-basic-income-experiment
======
argonaut
As a side note, the reality is that even if basic income were instituted
nationwide, politics means that it is never _actually_ guaranteed - it could
be repealed at any time, even if unlikely. So there will always be that twinge
of uncertainty, barring some sort of constitutional amendment. This isn't
meant to be a rebuttal to the author's perfectly valid point, though.

~~~
russelluresti
I agree. Even with an act of congress, it would never be guaranteed with
certainty. Even with an amendment to the constitution, another amendment could
come along to nullify it (like how the 21st amendment repealed the 18th
amendment).

The author does have a valid point, however, in that knowing the income won't
last forever will change how the beneficiaries behave.

~~~
argonaut
If it they managed to make a constitutional amendment for basic income, I do
think it would be virtually impossible to repeal, which is why I mentioned
that would be an exception.

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reedlaw
What is the desired outcome of the experiment? Why is YC doing it and where
does the money come from? These and other basic questions make me suspicious
of the whole thing. It doesn't seen sustainable for YC to be giving away money
without expecting anything in return. I don't want to read too much into it
but my suspicion is that this is part of an effort to lobby governments. If
that's so, won't the researchers be motivated to make it appear successful?

~~~
ncallaway
> I don't want to read too much into it but my suspicion is that this is part
> of an effort to lobby governments.

I assume it _is_ part of a long-term effort to move governments towards a
Basic Income. But a more useful campaign to make BI a reality is not to juice
the early experiments to make them look more appealing. A much better strategy
is to do _good research_ and find which aspects of BI would really work and
which aspects don't actually hold up.

The main problem around BI is there's a _massive_ lack of data available for
how people actually behave. All of the conversations around BI end up as
circles of speculation around how people would react and others saying: "boy,
it sure would be nice to have some real data around the topic".

So, to answer the first question: the desired outcome is a better
understanding of how people in the real world react to a BI, and a better
understanding of which BI mechanisms work well and which BI mechanisms fall
apart under real-world conditions.

------
morgante
This is one objection I really don't agree with.

It's basically impossible to imagine a perfect (ie. time-unlimited) basic
income experiment. For one thing, we kind of need results sooner rather than
later. I don't think waiting a generation to get crucial results for the
future of political economics is tenable.

Moreover, financing for such an experiment would have to be truly massive.

~~~
simula67
Experiments are designed to seek the truth of a theory.

For example, if the participants who receive this money are poor and they know
that the money will stop coming 5 years from now, they may save every penny
they can. This may lead us to conclude that basic income does not lead to
irresponsible spending. But if any government institutes basic income
indefinitely based on the results of this study, it may produce a very
different outcome.

~~~
ncallaway
Right, but we have no data on this theory right now.

Wouldn't it make more sense to start at a small-scale and validate that it's
even _possible_ that it works? What if they spend the money to do a 5-year
study and find that all participants are _massively_ irresponsible with the
money and that BI would be a disaster of a social policy?

Why commit to a 45-year experiment when we have _no data_ right now? The
scientists working on nuclear fission aren't saying: "Let's give up because we
can't build a commercial scale energy positive reactor". They're saying:
"Let's make progress one small-step at a time on a path that gets us there
eventually".

------
avs733
So, serious question that I have not seen addressed anywhere...will there be
some form of IRB or IRB like level of this study where external, un-
conflicted, qualified individuals will monitor and review the study progress
at certain points to ensure no harm comes to participants? This is not just
common practice but often legally required in human subjects research funded
by the US government.

[to explicitly note, I am curious about this element only and my question is
not a critique or comment on the experiment]

~~~
morgante
I believe that YC is working with an external IRB. [0]

[0]
[https://news.ycombinator.com/item?id=11808958](https://news.ycombinator.com/item?id=11808958)

~~~
avs733
Thanks! agree with the other comment...that is good to hear.

------
andrewfromx
someone said something like "the one question I have about BI, is, is there an
ADDITIONAL safety net if a person burns through their cash and can't pay rent
and eat? Beecause if yes, then it's just like the system we have now with
welfare. And if not, then it's even crueler cuz some people won't eat." After
reading this "provide money for the rest of their lives" from jacques mattheij
I think I have an answer to that question. We give people BI in the form of
litterally $100,000 a year job. You come on payroll, 100k, and you get to
learn how to live on that. If your car breaks down, and there's a big payment
you need to make, you gotta learn how rain in your spending. If you still
can't eat after 100k goto a soup kitchen, someone will take pitty on you I'm
sure, but, no there is no more safety net. The key to BI is you have to make
the amount not just 30k a year or 50k. People really need to know what it's
like to have all the expenses paid AND have stuff left over for fun. You just
can't have fun on 50k cuz after rent and food and other basic stuff, there is
zero left. Not true with 100k.

~~~
ncallaway
While I'm a huge proponent of BI, I think it's hugely challenging to make the
numbers work at 20k of income. I think 12k or 9,600 is a much more likely
place for a BI program to start.

Where are you going to get the capital to make 40k, 50k, or 100k happen?

Edit: I originally wrote 12k or 9,600k are a likely place to start. To be
clear, I do _not_ think 9,600,000 USD is a reasonable place to start the BI
salary.

~~~
venomsnake
Print the money. That way you will also have a healthy dose of inflation in
the economy.

------
szermer
I read the Oakland trial as a quick, local platform to determine what the best
cadence for delivery and data gather would be.

Identifying the little bugs early (Visa gift cards versus Amex gift cards
prove to be a better option for folks that don't have bank accounts...etc)
while streamlining the reporting structure will allow the larger, long term
experiment to run smoother.

~~~
BinaryIdiot
You're correct but that isn't the issue the author is bringing up.

The author is concerned with the 5 year "long term" study. Consider the
following:

\- You know you're going to get, say, $2,500 a month for the next 5 years.

\- You know you're going to get, say, $2,500 a month for the next 15 years

\- You know you're going to get, say, $2,500 a month for the rest of your
life.

Do you plan each of those the same? Differently? You'll likely plan those
_completely_ differently because two of them have a maximum amount of payout
whereas the last one, for the rest of your life and what _real_ basic income
would be, would not have a maximum.

Unfortunately this means the experiment is flawed from the start. You won't be
able to apply effective controls so that people who know the maximum payout
want act differently than someone who expects it forever.

Basic income is almost impossible to test with proper controls unless you want
a valid but very, very long term study of probably several decades.

~~~
Spoom
I know if I was given $30,000 a year for free with the understanding that it
would entirely stop after five years, I would try my damnedest to not let it
affect my lifestyle, essentially treat it as an early retirement fund source,
and invest it. Perhaps most people wouldn't plan as I would, but I would
imagine that the cut off would have a significant effect on at least some of
the participants.

I don't necessarily agree that the study is unethical; the participants, one
assumes, are told of the cut-off before the start. I do think that the
outcomes might be less valid.

------
kovek
I wonder if Jacques saw tomp's comment in YC's last Basic Income Experiment
thread:

[https://news.ycombinator.com/item?id=11807646](https://news.ycombinator.com/item?id=11807646)

------
kavabean
I would rather look at 500 people for one year than 50 people for 10 years. It
is really important to understand how people's lives are affected and whether
the positive outcomes that have been seen in the third world are replicated in
modern economies. And here by "people" I mean a wide variety of personality
types. Hmmm maybe it would be better to have a pool of people for 1 year of
support and another for 2 years of support. Then you could also get an idea of
how perceived duration of the support changes their reaction to it.

~~~
myhf
But don't tell people which pool they are in.

------
prawn
I think BI in some form is definitely a path worth exploring (if not
inevitable), but how will it gain political support short of some level of
revolution?

In Australia, and I imagine the US too, there is always a lot of noise and
strong support for movement of power and money out of government and into
increasingly consolidated corporations. Privatisation of state assets and
services, etc. I know that the idea of "small government" is very popular in
the US.

How might BI come to pass into popular use? The jobless masses taking up their
garden tools? Or private enclaves of some sort?

On the surface you might think that successful experiments could encourage
government support, but many point to the successes of the Nordic model and it
rarely motivates the right to widen the safety net.

------
youngButEager
Bill Clinton, a politically left-leaning president, "ended Welfare as we know
it."

Why?

The old Welfare rolls created _generational poverty and dependence and low or
zero productivity_ in the multi-generational groups who received it.

Also, the German government decided Basic Income was not feasible for the
following reasons:

\- it will cause a significant decrease in the motivation to work among
citizens, with unforeseen consequences for the national economy

\- it requires a complete restructuring of the taxation, social insurance and
pension systems, which will cost a significant amount of money

\- the current system of social help in Germany is more effective because it's
more personalized: the amount of help provided is not fixed and depends on the
financial situation of the person; for some socially vulnerable groups the
basic income could be not sufficient

\- it will cause a vast increase in immigration (leading to unbudgetable costs
to cover everyone)

\- it will cause a rise of the shadow economy

\- the corresponding rise of taxes will cause more inequality: higher taxes
will translate themselves into higher prices of everyday products, harming the
finances of poor people

See
[https://en.wikipedia.org/wiki/Basic_income](https://en.wikipedia.org/wiki/Basic_income).

It's troubling that so many of our educated young people fail to correctly
predict that giving people money will de-motivate them.

California, Illinois and New Jersey -- and Venezuela -- tax the bejeezus out
of their citizens. And the problem is, the tax base _can_ leave. The taxpaying
citizens can look at their taxes going up with no tangible benefit to them
personally (no roads, bridges, schools etc. improvements, just transferring
their money to others to provide 'basic income').

All three states are losing taxpayers and job creators and in some cases
gaining non-taxpaying, benefits-seeking citizens in greater numbers than those
who leave.

------
cpt1138
Wouldn't basic income necessarily have to be a government institution like
reverse taxes. You can't support the ideal of basic income on a whim.

~~~
eru
I have a fabulous idea for how to provide a basic income on a private basis
(and potentially turn a profit). Can write it up, if you are interested.

~~~
morgante
I'd definitely be interested in reading your plan for growing money on trees.

(Sorry for the snark, but I am actually interested.)

~~~
hiou
I imagine it involves people doing some sort of task we don't normally
consider work but kind of is. Watching ads or maybe being part of a reality TV
show.

But I could certainly be wrong and would very curious as well

~~~
eru
Please see
[https://news.ycombinator.com/item?id=11828706](https://news.ycombinator.com/item?id=11828706)

------
steven2012
Basic income can succeed on a small level definitely but it can never succeed
on a national or even city or state level. The reason is simple economics:
inflation.

When money comes so easily it will drive up prices. If it's done on a spot
level it won't make an impact but once you increase the size of the population
that received this free money, it will just drive up prices.

For example look at there mortgage interest deduction. It's purpose was to
make home ownership cheaper but what it ends up doing is causing house prices
inflation, at least in areas like the bay area. The deduction gets factored
into the financial engineering required to figure out how much you can afford
to pay for a house, which causes there prices top rise.

The same thing will happen when people get free money every month. Just like
how rent prices increased around face book when they offered a subsidy if they
lived within 3 miles of HQ, the same type of increase will happen if a larger
enough population gets this free money.

~~~
ncallaway
As a question:

* How much more food will be consumed if we add a Basic Income? Most people are already eating enough food to keep them alive. It might go up at the margins as people who are currently food-insecure would be able to consume more, so let's say the overall consumption of food rises by 1-2%.

* How much more housing will be consumed if we add a Basic Income? Most people are again already consuming enough housing to keep themselves sheltered. It, again, might up up at the margins as more homeless participate in housing programs and people move up a little bit. But, again, the overall consumption of housing will only increase by a couple of percentage points.

Will Basic Income increase inflation on bare necessities? Yes, a little bit.
But significantly _less_ inflation than the income provides. The real increase
in inflation will be in _discretionary_ spending (movie theatre tickets, video
games, investment portfolios, etc). But, bare necessities won't see a massive
increase in inflation simply because, by definition, people are already mostly
getting these.

However, ever-larger scale studies are the only ways to get _real_ data on
these effects.

------
hiou
This is clearly unethical and I hope illegal so that it is prevented from
happening. Experiments on people like this will absolutely have dramatic
changes that will last their entire lives.

It's bad enough we have television shows ruining people's metabolism, likely
for life, just for some ratings. But then to come from someone claiming to be
doing academic research, especially in light of the history of research like
this, is repugnant.

~~~
BinaryIdiot
...what? So you're saying consenting adults who are agreeing to be given money
for X amount of years is "clearly unethical"?

I'm not convinced this is a good study but unethical seems to be a reach.

> Experiments on people like this will absolutely have dramatic changes that
> will last their entire lives.

What about all those focus groups and clinical trials that people partake in
every single day? Are those somehow better than this case where we're giving
people money and asking them some questions every so often?

