
Finland’s Basic Income Experiment Shows Recipients Are Happier and More Secure - pseudolus
https://www.bloomberg.com/news/articles/2019-04-04/finland-says-basic-income-recipients-less-financially-insecure
======
shireboy
I’m sorry, but “getting free money makes people happy” isn’t exactly a
shocking result is it? The result that the employment level was consistent is
mildly interesting, though I’d expect the numbers could be different with a
longer or larger test. But the real question imo is “does this scale without
destroying the country’s finances?”

~~~
throw0101a
> But the real question imo is “does this scale without destroying the
> country’s finances?”

It depends on how it is implemented and the numbers involved.

One proposal [1] would be to give everyone $US 10K per year starting at age
21, and not having income taxes start until you have an income over US$ 40K.

This allows one to get get enough for the bare necessities (shelter, food)
"for free", but if you want to have a life that's more than just subsistence
living, you would have to work--but you get to keep a lot of that upfront.

If you want a 'fancy' life, then you'll have to work more, and there would be
personal income taxes. Presumably there would be corporate and sales taxes as
well.

I don't know enough about the math to know if it is practical.

[1] [https://www.theatlantic.com/politics/archive/2014/08/why-
are...](https://www.theatlantic.com/politics/archive/2014/08/why-arent-
reformicons-pushing-a-guaranteed-basic-income/375600/)

~~~
ams6110
Giving everyone $10K/year would just inflate prices until $10K was the zero
baseline for income.

~~~
dragonwriter
> Giving everyone $10K/year would just inflate prices until $10K was the zero
> baseline for income.

That doesn't make sense. A downward redistribution (which UBI is) is going to
inflate prices of goods with disproportionate low-end demand and deflate those
with disproportionate high-end demand somewhat, but in any plausible scenario
it will still (before considering any effects of reactive production shifts)
increase the buying power on the low end and decrease it on the high end, even
after the effects of price level changes.

------
PhDuck
As a member of the Nordic societies I find it important to point out some
important information. In these countries we already have rather sizable
unemployment benefits. If you read the (better) article by NYT[0] on the same
subject, you will be given an example showing her income under basic income
only increased with 50$ out of 635$.

[0]: [https://www.nytimes.com/2019/02/09/world/europe/finland-
basi...](https://www.nytimes.com/2019/02/09/world/europe/finland-basic-
income.html)

~~~
erikig
Thank you, I like the concrete numbers. Is this per week or per month and how
old does one have to be to receive it?

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throw0101a
It would also been useful to see results of the one in Ontario, Canada, but
the Conservative government that was elected last year cancelled it before it
had run its course (after promising to let it finish during the campaign).

* [https://www.cbc.ca/news/canada/toronto/basic-income-ontario-...](https://www.cbc.ca/news/canada/toronto/basic-income-ontario-admits-breaking-promise-1.4770772) * [https://www.cbc.ca/news/canada/ottawa/hugh-segal-basic-incom...](https://www.cbc.ca/news/canada/ottawa/hugh-segal-basic-income-scrapped-1.4770050)

------
spaceribs
Is it a legitimate argument that smart hardworking people who are considered
economically valuable will be swayed to non-economically valuable interests
within this system?

As a former fine arts student that became a UI developer mostly for the
monetary stability, I do feel like if I had the ability to fully invest myself
creating art without constantly struggling with relevancy and rent, I would
have been far more qualitatively useful to society at large.

~~~
Talyen42
As an employed person making 100k, if given UBI I would quit and not do
anything productive-to-society for most of the rest of my life. So yes, that
is a legitimate argument. The counter-argument is that the benefit coming from
more people pursuing entrepreneurial/risk-taking/passion-driven endeavors will
OUTWEIGH the lazy fucks like me.

~~~
kingkawn
The gift of ubi is society saying, “we are here to help you without compelling
you to contribute in any specific way. But if you don’t contribute in some
way, we may lose the ability to help people. here and now is your chance to
choose for yourself how to keep the world afloat and vibrant. You have our
support. We are looking forward to seeing how you choose to support the world
in turn.”

~~~
ams6110
Honestly I think about 5% of people will be motivated by that sentiment.

~~~
kingkawn
Probably more than the number of people who feel deeply motivated under the
current setup.

------
fxj
A big problem about the basic income is that it is perceived as money that you
get for nothing and so people don't have to work and therefore they are lazy.

Let me give you an analogy: Imagine that breathing air would cost money and
you would have to work in order to breathe. Unless you don't work you would
die. Would then a basic income be something that makes you lazy or would it be
something that gives you confidence in surviving the next day?

The same is true for the "basic income" that is used by its recipients for
food, medical care, clothing and shelter. So how in the world can we deny the
basic needs to most of the population in our civilization and call these
people lazy?

~~~
b_tterc_p
You’re basically saying that because it has ethical value it can’t make people
lazy. That’s irrelevant. UBI might make people lazy. In fact, it would be
pretty shocking if it didn’t make some % of the population choose to do
nothing for their entire lives but stay at home and play video games.

People like to point out that techies would feel more comfortable building
start ups, and that’s probably true. But for people with low skills and low
opportunity costs to doing nothing (of which there are many more people), I
don’t see a reason why they would work relatively shitty jobs for low income.
Who is going to work minimum wage to be a janitor to get basically no
substantial benefit. Maybe you think people deserve better wages then- but
then uh oh, it’s even harder to justify not doing things in China wherever
possible.

UBI benefits society when it’s given to a person with a high ability to to
positively impact society (let’s say skilled workers and parents). And that’s
before considering any effect on prices or whatever.

~~~
SiempreViernes
While it is certainly possible to give people enough money to become
uninterested of working, one of the conclusions of the experiment is that the
UBI version tested _did not_ make people less efficient at seeking employment.
UBI just made them happier.

In other words, not implementing their UBI version is simply a way to punish
unemployed people for not having a job. You can still argue that unemployed
people _should_ be unhappy, but you no longer have any basis for saying that
unhappines will make them more likely to get a job.

~~~
b_tterc_p
They didn’t get UBI forever, they got it for a fixed amount of time. If they
quit working, they would be shit out of luck when they money stopped flowing.
It’s not a very useful experiment.

Really this is just basic economics though. Money has decreasing marginal
utility. The first stack of cash you get pays rent, then food, then later on
luxuries. For low income workers, the opportunity cost of not working is not
being able to afford basic things. If that’s covered, there’s no reason to do
a crappy job for low pay. You don’t even need to assume laziness. If cashiers
now have their basic needs covered and want to go invest their time into
improving their education, then the cost of cashiers goes up. If the cost of
cashiers goes up, the cost of food goes up. If the cost of food goes up, the
original UBI is now too low, so the cashiers need to stop pursuing education
and get some money again. If an equilibrium exists, it’s going to be at the
point where poor people need to work, because somebody needs to clean the
toilets.

------
return0
The fact that the proponents of UBI pretend to be content with "free money
made people happier" is probably a sign that the experiment did not go as
expected. Regardless, i think the bigger question here is how would UBI
prevented the negative effects of the allegedly impeding large-scale
unemployment. How did recipients use their time apart from seeking work. How
were their relationships to the rest of society and vice versa? Does UBI
result in 2 classes of people instead of a spectrum? What were their spending
habits and are they conductive to a functioning economy?

------
mfra
To add some anecdata to the void: I have been receiving a form of basic income
(veteran's disability compensation) for the past 8 years. It's an amazing
"privilege" that has allowed me to live fearlessly, take risks, and has kept
me afloat through rough times.

I have, in no particular order:

\- Dropped everything and moved to a different state with no job lined up
(multiple times)

\- Taken a big pay cut to spend a few years working in the non-profit sector

\- Co-founded my own non-profit (it failed)

\- Joined a friend's company to help rebuild/scale it (it was acquired)

\- Pursued different goals in different schools (currently working toward an
MS in CS)

As someone who has lived in poverty most of their life, knowing that my basic
necessities can be paid for no-matter my circumstances is a game changer. I
would not have done most of the above without knowing that I could scrape by
irregardless of it working out. My path would be far more linear and safer.

I feel free. To be clear, I threw out the American Citizen Instruction Booklet
(do well in high school -> go to college -> get a job) at age 17 for the
military anyway. But more broadly I feel that I don't have to participate in
the rat race out of necessity. I have the freedom to experiment with my life
and to try whatever I want to without (much) worry. I don't look forward to
the contraction of my free monthly deposit. It will come at some point.

That said, my economic participation has been inconsistent. Those 22 year olds
incentivized by the structure of our society to get into a safe and high-
paying job ASAP and to stay there for the next 40 years will probably
contribute quantitatively more $ into the system than I will.

------
chrisseaton
What person wouldn't be happier and more secure with more money?

~~~
tekkk
That's not what the articled alleged but yes, certainly it could be a reason.
I can't recall was the extra income on top of the already existing one but
certainly getting free extra money must feel better than without. The
conclusion that the article made, that the simplification of the process and
reduction of the extra bureaucracy makes you more content, doesn't seem highly
implausible either. I certainly would enjoy it and I think it's more humane.
If it would cost the government the same amount I think basic income would be
better than the current system. But it's never that easy to estimate.

~~~
chrisseaton
> That's not what the articled alleged

It's literally the headline of the article.

~~~
tremon
which part of the headline says "more money"?

~~~
chrisseaton
What do you think an 'income' is?

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_red
Since the economic crises of 2008, central banks have been desperate to induce
some positive inflation. "Helicopter Ben" even said he would drive around in a
helicopter and drop pallets of cash out of it, before he allowed deflation to
take hold (the only way out of their debt crises, is to inflate it away).

Its no wonder that the PTB are now pushing for helicopter money across the
debt-laden west, its the last tool they have. Sad its the poor who must
suffer.

~~~
Jedi72
This is a very good point.

------
swebs
This article just looks like a copy paste job of Kela's official press release

[https://www.kela.fi/web/en/news-
archive/-/asset_publisher/lN...](https://www.kela.fi/web/en/news-
archive/-/asset_publisher/lN08GY2nIrZo/content/basic-income-recipients-
experienced-less-financial-insecurity)

Overall, the experiment failed to prove its main hypothesis that UBI would
incentivize the unemployed to find employment. Those who received additional
benefits failed to achieve higher employment than the control group.

[http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/16...](http://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/161361/Report_The%20Basic%20Income%20Experiment%2020172018%20in%20Finland.pdf?sequence=1&isAllowed=y)

~~~
SiempreViernes
That's true. But on the other hand it seems that for the same cost people got
happier, while not affecting employment levels. So it also shows that placing
conditions on unemployment support creates wasted effort and extra suffering.

~~~
swebs
>for the same cost

It's a higher cost since you're now also paying the employed.

~~~
SiempreViernes
Not in this experiment, which is what I was talking about.

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mises
If you give people everything, they just won't work as hard. At least, I don't
think they will over the long term. It's like retirement: some may learn a
skill, volunteer, etc., but most just watch TV and wait to die. This is hard
for many of us to realize, because we spend much of our free time tinkering
with and leaning technologies.

I hear a lot of people saying that society is bound to provide all the needs
of a person. I can definitively say for America, that was not the social
contract on which she was founded.

Lastly, this is sort of conspiratorial, but isn't this commonly the way we see
dystopias arise in stories? I think democracies function differently when the
average person is a net contributor that expects a return in the form if
infrastructure and services, rather than a check.

~~~
Jedi72
A huge amount of effort in society is wasted in pointless competition simply
because people need income. Imagine 2 farmers selling melons, each with 50%
market share. One discovers if she hires a social media marketer she can get
to 70% market share. The other farmer now must respond by hiring their own
marketing people. These two marketers are both very happy to be employed, but
overall we would have been better just giving them free melons and letting
them work on something they are truly passionate about.

~~~
montenegrohugo
I very much like your analogy. Competition has its advantages, but it can
oftentimes be a destructive force. The entire marketing/advertising industry
is enormous and yet nothing of value is being produced. Instead, apps and
platforms feel the need to become ever more addictive and receive ever more of
our attention share, just because then they can place more ads in front of our
eyeballs. Ads that contribute nothing to society except distract and annoy.

------
NedIsakoff
I have some concerns about this experiment, but I may be wrong.

The whole idea of basic income is that the basic income would be enough for a
person to live. Having never been to Finland (but other northern European
countries), I can't see how you can live on 560€ a month without some other
source of income or social assistance.

The people in the study are told that the basic income will end in two years,
wouldn't that change their behavior? I mean if they know the money is
temporary they're not to change their behavior too much.

I know for myself if they gave me 700CAD an month for an basic income
experiment for two years, I would be "cool extra cash". However I won't change
my behavior job/career wise as 1) its not enough to live on; and 2) its going
to end.

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m52go
Why can't UBI be attempted on a local scale first?

We have state and local governments for a reason. Something as risky and
expensive as UBI, if it is going to be implemented, should be implemented
_gradually_ with proper testing, feedback, and adaptation.

~~~
em500
Probably not. One of the most fundamental and vexing problems of macro-
economics is that individial effects often don't aggregate to the larger
system:
[https://en.wikipedia.org/wiki/Aggregation_problem](https://en.wikipedia.org/wiki/Aggregation_problem)

Just consider the simplest thought experiment: levy a one-off extra tax of
$0.01 on every tax payer and credit some random poor person. This is almost
certainly a strict Pareto improvement, but it clearly doesn't scale.

------
arunster
India is toying with this idea with the NYAY guaranteed income scheme which
the Congress party proposed as part of its 2019 election manifesto. If
implemented, it will be the largest scheme of it's kind in the world, ensuring
that the poorest 20% of the population will be paid Rs.6000 (approx. 85 USD)
per month. But 20% of the population = 50 million people. How the scheme will
work on this grand scale is yet to be seen.

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klaudius
Why not just look at people who don't work but receive income - young people,
retirees, wealthy people etc. to see what behavior under UBI looks like?

~~~
michelledepeil
except they are not representative of an entire society - specifically they
are only representative (usually) of a subgroup of society that _cannot_ work.

~~~
fsloth
This. If you take existing pensioners then you are preselecting a population
that is wildly different than the population that the UBI scheme would target.

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dragosbulugean
no government will be able to give people basic needs except at the cost of
other people. I believe this will eventually happen, but through technology,
not through these 'Robin Hood' type politicians. if you look thoughout history
it wasn't any societal rules or enforcements that advanced us, but application
of scientifical discoveries to build products that help make human life easier

~~~
deadbunny
> I believe this will eventually happen, but through technology

People have been saying that since the industrial revolution. Yet here we are
with millions employed doing bullshit jobs that don't need to exist.

~~~
llcoolv
[https://pics.me.me/bernanke-ill-pay-you-20-000-to-eat-
that-p...](https://pics.me.me/bernanke-ill-pay-you-20-000-to-eat-that-pile-
of-4866318.png)

here you have it :D

------
raaaaraaaa122
Basic income means that people who are willing to work will pay probably
higher taxes. I believe that will be easier for some people who do not earn
much to just stay home with basic income. Then less people will be
economically active (who will do low wage jobs ?) and taxes will need to go
higher etc... It's economical spiral of death for whole nation.

~~~
lotsofpulp
The goal is to provide a sustainable and desirable quality of life for all,
and economic activity is one or part of a way to achieve it. I don’t think
people will just stop wanting to go out to restaurants, or skiing, or whatever
other activities they want to do. And if they want to do them, they will have
to work. And especially to attract a quality mate.

~~~
mises
> desirable quality of life for all

Then what is there left to work for? Also, I thought the job of a society was
to protect it's citizens' negative rights (various freedoms from, freedom from
want not being one).

I think this might turn out something like retirement, as people will have to
work less: some people make very good use of their extra resources, but many
will just sit and watch TV. This is a bit in an inherent bias in the HN crowd,
because most of us tend to be more intellectually curious and would likely
spend the time learning a new language, etc.

~~~
fuzzy2
> Then what is there left to work for?

Perhaps to pass the time? You can’t just sit around and do _nothing_.

~~~
influx
I live in Seattle. There’s a sizable portion of society here who would love to
stay home, smoke weed and play XBox. I’m not inclined to pay more taxes for
them to do so.

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StreamBright
At what point gets the society in a unmaintainable state? What percentage of
the people can live on UBI?

~~~
fsloth
People already could just be unemployed and live on state aid in Finland. Not
all of them do. In a way the nordic wellfare state itself can be held as a
prototype for a nation wide UBI since people are not forced to work out of
fear of starvation (in the general context - I know people can live still in
poverty and misery in these systems).

------
loco5niner
Sure... but that's only half of the equation.

If you are forced to give me $20, I'll be happier and more secure.

However, you will be less happy and less secure.

------
tosca
The state cannot replace God, it’s inherently corrupt. People in tech seem to
always forget this.

------
chrisco255
UBI is the biggest pie-in-the-sky proposal I've ever seen. Number one, this
study shows nothing. It's absolutely worthless to select a few hundred to a
few thousand people and give them free money for two years and measure the
result.

The far more serious question, is how sustainable UBI is at a macro level. The
proposals I've heard mention as much as $1000 a month per person.

That would cost the U.S. somewhere between $1 and $3 trillion a year, just on
paper.

U.S. is already 15 years from Social Security insolvency. We have a lot of
debt ($20+ trillion) and we're talking about creating a program that costs
more than anything like it, ever.

I see no evidence to support the claims and the program has a real possibility
of completely wrecking an economy. Beyond reckless.

