
Universal basic income: A nonprofit is about to test it in a big way - MaysonL
http://www.slate.com/blogs/moneybox/2016/04/14/universal_basic_income_this_nonprofit_is_about_to_test_it_in_a_big_way.html
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GordonS
> we’re planning to provide at least 6,000 Kenyans with a basic income for 10
> to 15 years

It's great that this is going to be ran at scale, and over a long period of
time - the hardest part is going to be waiting on the results!

~~~
brador
What will they do about births and deaths?

Will the basic income be extended to a child or will children be left poor
while their parents get BI?

If babies get added to the BI payroll, doesn't this incentivize baby making?

~~~
morgante
It seems fairest to give BI to all adults. That way you don't incentivize
pregnancy but people will receive their own BI when they come of age.

~~~
joelthelion
But then the BI might not be enough to support families. It's a tricky
problem.

Edit: the point being that children are the ones who suffer most from poverty,
and investing in them has the most long term potential. But of course we don't
want people to have kids just for the money, hence the difficulty.

~~~
morgante
I don't think having children is a natural right which society has the
obligation to subsidize. Perhaps an additional subsidy should be provided for
those who have children when the study begins, but no new children should
receive that benefit.

~~~
k-mcgrady
>> "I don't think having children is a natural right which society has the
obligation to subsidize."

Whether society subsidises it or not people are going to continue procreating,
many irresponsibly (don't have financial ability to support their children).
However are you arguing then that these children who happen to be born into
poverty should then be left in it without government/societal help?

~~~
morgante
> However are you arguing then that these children who happen to be born into
> poverty should then be left in it without government/societal help?

First of all, UBI should ideally be enough to eliminate poverty. Parents might
have to make some sacrifices to take care of the children (forgoing personal
luxuries or taking a low wage job). Once the child is of age, they would
receive their own basic income so there wouldn't necessarily be a cycle of
poverty.

Moreover, we _should_ incentivize child transfers by subsidizing adoption.

~~~
k-mcgrady
I think the UBI should cover the majority of families but there are still
going to be irresponsible people out there. You're definitely right that the
children should get out of poverty once they are old enough to receive their
own UBI but I think there should still be some sort of program in place to
protect the children of irresponsible parents throughout their childhood. I'm
not sure of the best way to do that but overall their is probably a net
benefit for society as poverty will inevitably lead to crime and
physical/mental health issues.

~~~
morgante
> I think the UBI should cover the majority of families but there are still
> going to be irresponsible people out there.

If they're so irresponsible, why would giving them more money necessarily help
the children to live a better quality of life?

------
Vinnl
To participate, you can donate here: [https://givedirectly.org/give-basic-
income](https://givedirectly.org/give-basic-income)

(They're also listing fee-less Alternative Donation Options there, but I can't
quite figure out how to use those to donate to this specific experiment.)

~~~
chilicuil
This is awesome, are there any list about other similar experiments?

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JonFish85
This is missing perhaps the most controversial part of the Universal Basic
Income: that it's funded by the same population that it's helping. This isn't
a fair test because it's being funded by "outside" money, from a much richer
source (investors and donors from the richest country on earth). It's a
charity moreso than a real investigation of Universal Basic Income.

A more realistic test would be to take those 6,000 Kenyans, tax them in some
way (e.g. take 2x from 3,000 people), then distribute the money equally. And
it would have to be done in one localized area to take care of the homogeneity
problem (if the money is too sparsely distributed, prices won't reflect the
new money distribution).

As much as they talk about how scientifically the study must be done, and the
rigorous testing, it seems that there are some holes in the experiment.

~~~
simonebrunozzi
I don't know why you're being upvoted. Your argument, to me, is meaningless.

Basic income is about having enough money to eat and get shelter, without ANY
need to work - and see what happens to human beings in that condition. If the
same human being has to fund its own basic income, what's the point?

Basic income, to me, HAS to be funded by someone other than the recipient.
Otherwise, it's no experiment at all.

~~~
JonFish85
I get the "point" of UBI, but there is the problem of who pays for it. The
answer of "other folks" is very difficult, and to me, the most controversial
part of it, which is what I said.

To make sure we have the same premise, Universal, by definition, means
everyone within a certain boundary (e.g. citizen of a country, city, state,
whatever) receives the money, regardless of their income, location, etc?

To be functional, the money that is doled out needs to be collected from
somewhere. It isn't that each specific person needs to fund themselves, but
the set of people that receive the "Universal" basic income needs to generate
the income needed to pay for it. If an outside set of people pays for it, then
it's not a universal basic income, it's something else -- it's taking money
from one set of people to give to another. I believe the whole idea of UBI is
that everyone gets that same money.

The real problem is the collection problem: if you have a set of these 3,000
people who receive, say, $100/mo (made-up number), then I think a true test of
Universal Basic Income is that the income has to come from that same set of
3,000 people.

In what way is that meaningless? I think it's a valid question to ask.

~~~
AnthonyMouse
> The real problem is the collection problem: if you have a set of these 3,000
> people who receive, say, $100/mo (made-up number), then I think a true test
> of Universal Basic Income is that the income has to come from that same set
> of 3,000 people.

That clearly isn't how a real UBI would work. If you literally take $100/month
from everyone and then give it back to them, _nothing happens_. It would have
zero effect.

The way UBI works in practice is that everyone gets a fixed amount of money
and then everyone pays a fixed percentage in taxes, so that more of the UBI is
funded by the wealthier people who pay more taxes. Which is what the
experiment is doing.

In theory to make it accurate they should also impose a "tax" on the
participants based on how much money they make from external sources, i.e. if
one of the participants has a job paying $200/month and we want to emulate a
20% tax rate then they get a $100/month UBI but the funders take back $40 (20%
of $200) as "tax" to "fund" it. Obviously that wouldn't work if someone had
above average income (i.e. they made $1000/month in Kenya and would have a
"tax" exceeding the UBI) because nobody would volunteer for a study that cost
them money. But you could at least see what a UBI would do for poorer
populations, which would seem to be the interesting question, because for
richer people it just looks a lot like any other "take from the rich and give
to the poor" welfare program.

~~~
JonFish85
Right, I'm not saying that everyone pays themselves $100/mo; clearly that's
not going to do a thing. I'm saying that I think the same set of people who
receive the money should be taxed to pay for it. The thing of UBI is that it
will be paid by your average person who isn't wealthy, it will be paid by the
upper middle class.

Your example of people volunteering for a study that costs them money is
exactly the problem that I am describing, and for a system such as this to
work, that's how it would end up--taxes go up for people who this doesn't
benefit, and as much fun as it is to assume that "other rich people" will pay
for it, it doesn't work that way. That's why I think a better test is to
select a group of people to self-fund their own UBI -- some people pay $140
and receive $100. Others pay $20 and receive $100.

~~~
AnthonyMouse
> The thing of UBI is that it will be paid by your average person who isn't
> wealthy, it will be paid by the upper middle class.

That's generally how all taxes work. The people with more money than average
pay more than average and the people with less money than average pay less
than average. But the people who make $1 more than average are only suffering
a net loss of $.20, whereas the people who make $100,000 more than average are
paying net $20,000.

> That's why I think a better test is to select a group of people to self-fund
> their own UBI -- some people pay $140 and receive $100. Others pay $20 and
> receive $100.

In other words what you think we should do is to actually make it a law
somewhere?

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rdudekul
In India I have tested this in my own small way, by giving money to some known
poor people. My experience has been that typically women utilize the money far
more effectively than men. May be India is a bit peculiar in terms of feelings
of entitlement being higher among men.

Looking forward to the results of this test.

~~~
pilsetnieks
> by giving money to some known poor people

That is just welfare, if done on a governmental level, or charity, if you do
it individually.

For it to be a true experiment about UBI, you would have to find an area
that's somewhat autonomous, provide everyone indiscriminately with the same
amount of money that would suffice for maintaining their basic living needs
and guarantee the income for at least a certain period of time. Otherwise,
well, good for you for helping the needy but it doesn't have anything to do
with universal basic income.

~~~
kgwgk
That wouldn't have much to do with universal basic income either unless the
money being provided was somehow extracted from the very same group of people.
Giving away someone else's money is of course more likely to "work".

~~~
wastedhours
It's fairly close, it's just the "local rich" for whom the UBI is an additive
rather than their main income source has been abstracted for donations. Based
on the assumption that there'd be a semi-stable taxation system in place when
people are earning more through trade/working, it'd be a reasonable way to
test, no?

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JulianMorrison
Now that's an interesting idea. Starting a UBI in a poor country has to be an
awful lot cheaper than starting it in a rich one with a high cost of living; a
small charity can do a comparatively large amount of good.

~~~
morgante
The ideal would be to give it to the entire population of a small, poor island
nation. You could then get a very good idea of its impacts without worrying
too much about perverse incentives and other outcomes. It's unclear to me how
this study is going to deal with people moving into the UBI villages.

~~~
chipsa
Looks like the study participants are fixed at the beginning of the
experiment. People who move out keep their cash, people who move in don't get
anything.

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amelius
Can't we have a new style of lottery, where the prize is not $1,000,000 or
more at once, but instead just basic income for a lifetime?

The results could be useful for scientific purposes (even though the sample is
somewhat biased towards people buying lottery tickets).

~~~
judah
What you're suggesting already exists.

While lotteries in the US often advertise the lump sum winnings, many are
actually paid out in installments over a few decades.

What happens is that winners demand the full lump sum. For the lotteries that
offer it, the lump sum is less than the total winnings paid out over the
years. (Something like 10% less.)

This has created a niche for businesses to crop up where the company will give
you the lump sum total due, with a nice chunk extracted for themselves.

~~~
amelius
> This has created a niche for businesses to crop up where the company will
> give you the lump sum total due, with a nice chunk extracted for themselves.

What prevents these businesses from approaching these Kenyian people?

~~~
bryondowd
I'd wager the gross value is too low to be worth the effort of going out
there. I'm assuming a basic income for these rural Kenyans would be a very
small amount in USD.

------
irln
No sarcasm intended here: Is the highest abstracted benefit of Universal basic
income (other than the benefit to those that receive the basic income) that
you cut out the middle person in social welfare distribution?

~~~
AngrySkillzz
Partly. As an example, well-intentioned midcentury relief workers did a lot of
damage to minority communities (like you see in Malcolm X's autobiography).
Eliminating means testing and data collection saves money and is significant
for the people involved in the program.

There are a lot of labor market benefits as well; one of the big problems with
means-tested programs is that they screw up the tax structure at the low end
of the income scale. If your options are being jobless receiving welfare or
getting a job that forces you out of welfare, there's a large disincentive to
seek work. You would be paying an effective tax rate of ~100% by losing that
payment.

------
cubano
Isn't one of the more interesting benefits of a UBI supposed be that it frees
the people getting it to be madly productive in their passionate interests?

As Sam Altman said in a recent podcast (and I paraphrase here)..."its ok of
90% of UBI recipients sit around and smoke pot all day as long as 10% create
awesome new things for society...its a net benefit."

Are these 6000 Kenyans in the technical position to create a new vision and
application that benefits the world society? Can they build the next AirBnB or
Uber?

I'm not saying they can't, of course...just wondering if the cultural and
technical infrastructural differences between Africa and the US/Europe would
create experimental distortions.

[edit] ok..AirBnb and Uber were probably poor examples and with more thought
it makes sense the the effects would be much more localized in this case.

I guess what I was trying to say is that the 10% have a lot of work to do if
they have to carry the weight for the other 90%.

~~~
Vinnl
I mean... AirBnB or Uber? If some of them set up schools or other things that
benefit the local community as a whole, wouldn't that be far better than
someone developing some app or something and probably moving to the West and
earn shitloads of money?

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kelvin0
All other considerations aside, isn't this going to create some form of
inflation? At least in the beginning (first couple years), I would think that
a greater monetary mass (everyone has more money) would see an increased price
tag on goods? I am no economist, just wondering what others take is on this?

~~~
jackcosgrove
It would do exactly that. Scarcity is relative, so giving everyone in the
world a basic income will simply raise the prices of basic goods such that
many again would be unable to afford them even on a basic income. The best way
to end hunger is to grow more food, not to give everyone more money.

~~~
AngrySkillzz
That really isn't true though. You can find the data on this almost
everywhere: we produce enough food to feed the entire world's population more
than adequately, but it doesn't get to the people that need it because of
poverty. [1]

[1]
[http://www.worldhunger.org/articles/Learn/world%20hunger%20f...](http://www.worldhunger.org/articles/Learn/world%20hunger%20facts%202002.htm#Does_the_world_produce_enough_food_to_feed_everyone)

~~~
jackcosgrove
You're advocating for demand-side stimulus by giving everyone money to spend
on goods without increasing the productive capacity of the economy. This led
to stagflation in the USA in the 1970s. There are other examples such as
Venezuela today where simply giving out money does not improve welfare if the
supply of goods and services does not grow as well.

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pakled_engineer
There already is a long term UBI scheme in Kenya's poorest region around Lake
Turkana if anybody wants to see what the desperate poor do with the money.

[http://www.economist.com/news/middle-east-and-
africa/2165738...](http://www.economist.com/news/middle-east-and-
africa/21657384-wild-ancient-and-oil-rich-turkana-shows-how-fast-continent-
changing)

UK's DFID and Equity bank in Kenya pay out $50/mth to 10,000+ villagers there.

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transfire
The title of the article is COMPLETELY WRONG. UBI is _universal_. You don't
just give it to the poor. Everyone gets it. That's an important part of the
point.

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transfire
They are giving this money to poor villages. I wonder if that is going to
provide a good testing ground? Do these people even have access to "higher-
level" activities? If not then these people will just do what all the nay-
sayers say they will do. Nothing. But not b/c they won't, but b/c they can't.

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dnautics
I think the biggest unsolved question about ubi is will prices increase? There
is no meaningful test if this question unless the test is conducted truly
universally (I.e. this experiment will not resolve this). The potentially
devastating consequence of increasing prices due to ubi is that it might
relatively drag down individuals in the lowest income tiers (yes, even though
they are also getting money).

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jiiam
The point that makes universal basic income (UBI) unconvincing IMO is that it
relies on a reality that it actually subverts, i.e. money. I'm not saying that
we should eliminate money or provide UBI in a different, subsidiary, form. But
maybe it is worth thinking on what the meaning of money, economy, markets,
loans, etc will be in a world where there is a UBI.

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AdamN
Finland is experimenting with this as well (Switzerland might too):
[https://www.weforum.org/agenda/2015/12/finland-basic-
income/](https://www.weforum.org/agenda/2015/12/finland-basic-income/)

------
known
Basic income can solve many
[https://en.wikipedia.org/wiki/Social_mobility](https://en.wikipedia.org/wiki/Social_mobility)
issues

------
GodofGrunts
I'd like to point out that Libertarians do not support basic income. In this
instance, the argument is simply that basic income is a better system then the
current welfare system.

~~~
mason240
That's not true at all. Lots of libertarians support UBI (which this specific
case is not).

It's a very capitalist solution to a post-labor world.

~~~
logfromblammo
I am libertarian, and support UBI, though not _necessarily_ via state taxation
and administration. Pragmatically, though, that is how it would need to be
instituted in the real world, even if it could possibly work differently in my
personal libertarian fantasyland.

I'd say that a significant fraction of all libertarians don't want to admit
that their fantasyland and the real world are so far apart that they will
never meet in any living human's natural lifespan, and therefore resist any
idea which would tend to empower government to a greater extent in the long
run.

By my personal estimation, UBI is necessary to avoid the accelerating
concentration of more economic power into fewer hands, until the common man
again becomes a "useless eater" that must be disposed of for the sake of
efficiency. I fear that without it, or something like it, class-based warfare
is inevitable, and war is more damaging to liberty than the welfare state.
Given the choice between backing a step away from the way I wish the world
could work, and running ten steps in any direction in a blind panic, I choose
the one controlled step.

~~~
norea-armozel
I think UBI is a band-aid on a bullet wound which is the notion of capitalism
(note that I see markets as independent from the concept of private ownership
of capital/land). All it does is delay the inevitable collapse of capitalism
under its own weight.

The better solution is to try to decouple capital ownership from individuals,
corporations, or states. I'm not sure how that can be best achieved but
honestly I think automating the economy itself may be the best approach. It
can be done in a piecemeal fashion, but it's a question of whether the capital
owners will give up the reigns of power to machines to decide how best to
fulfill demands of people. I'm not so much arguing for the nonsensical
approach of Jacque Fresco because his notion requires engineering wants of
people and the abolition of money. For me, money and prices are good
aggregators for demand, they just need to be adjusted in their use cases
(probably away from capital speculation), but even an automated economy would
need something akin to a price and a unit for which the price is measured in.
Otherwise, how are goods created? I don't see happy thoughts and wishing being
viable means to ration in any economy.

~~~
mason240
Just the opposite actually. UBI will entrench capitalism as the basis for the
economy, and rightly so, into the post-labor future. It will put the final
nail in the coffin of already the already obsolete ideologies of
socialism/communism/anarchism.

~~~
norea-armozel
"It will put the final nail in the coffin of already the already obsolete
ideologies of socialism/communism/anarchism."

I doubt that very much considering that most of the western world is in some
form of social democracy (Fabian-like socialism). If anything, capitalism is
on it's last legs due to the fact it's unable to continue to exist without
turning humans into the hover-pod marshmallow people from Wall-E. A species
that has to consume everything in sight without any natural check to its
growth will inevitably be constrained by the physical limitations of its
environment and it's technologies.

~~~
mason240
Social democracy is very much based on capitalism, and it can't support it's
social programs without taxing gains of the capitalistic economies.

Inserting the word "social" into "social democracy" is the greatest propaganda
trick socialists have ever pulled. It lets them take credit for an existing,
functional system that they want to destroy. It's classic bait and switch.

If anything, "capitalist democracy" is a far more accurate term.

------
loceng
One factor that can't be measured is what competitive advantage they will have
over others and how much of an impact that will have on their quality of life.

------
sickbeard
sample size too small, and the problem is not that people will blow it on
drugs and booze.. the problem is affordability.

~~~
cuchoi
6000 people is not an small sample size at all. I work at one of the research
centers that evaluated the impact of Give Directly, and a sample size of 6000
is not small in any case.

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TheLogothete
>As it turns out, that assumption was wrong.

That's a bold assertion. Care to back this up? Because you know, I have an
entire peninsula full of people to demonstrate that this is false.

~~~
naasking
The sentences following your quote provide plenty of links to back that up.

~~~
TheLogothete
They were just bolded, not a terribly good choice to indicate a hyperlink,
IMO.

