
Big Tech’s View of Universal Basic Income Is Deeply Flawed - zdw
https://mondaynote.com/big-techs-view-of-universal-basic-income-is-deeply-flawed-acd7c2f2a02a
======
bandrami
This will be unpopular, but: what if an uncomfortably large part of the
population just _really doesn 't have anything economically worthwhile to
offer_ in the modern context? Nobody wants to say that, but if it's true, then
something like a UBI or dole (even granting the author's problems with it) is
all we can do short of mounting a massive Plato's Cave-like conspiracy to
convince people they are doing something useful.

~~~
mlthoughts2018
We also have the problem that people are forced to evaluate what activities
would be productive for them in terms of the money paid to them, but it's
debatable whether the aggregated signals of demand in a given economy truly
reflect what people would believe are "important" or "needed" or "valuable"
activities (using scare quotes specifically because _obviously_ the whole
debate revolves around how to determine the meaning of these types of terms).

My mom is an example. She works a highly menial and thankless job at a rural
county courthouse in the Midwest, where she is paid an extremely small salary,
given very few benefits, very little vacation time, and has no prospect for
retirement, regular raises, career growth, etc. The courthouse could operate
with probably 25% of the current staff, but they keep headcount artificially
high because state funding and other programs depend on how many employees
they have.

Largely, my mom is paid money to endure slight sexual harassment from small
town attorneys and judges, and to do a tiny workload of clerical work. And the
amount of money is barely enough for basic living in her area, even after
accounting for the lower cost of living there.

It seems bang obvious that her employment is inefficient. The same exact thing
happens for thousands of people in her area, whether in government, school
jobs, private companies. There's just a ton of excessively meaningless work
that companies or employers have ulterior reasons to sponsor with a paycheck
even fully knowing that the labor itself is not productive or necessary at
all.

I think if my mom knew she had a reasonable guaranteed basic income, she would
volunteer her time at the local hospital, deliver meals to sick people, do
more productive labor around her own home or through child care provided to my
siblings and their children, perhaps create craft works to sell online, etc.

The net result could easily be that her overall labor productivity in the big
picture sense would go way, way up after she is free to quit the essentially
pure loss menial job and focus on things where she knows she can add actual,
obvious value for people.

Unfortunately, I think most developed nations suffer this problem. Lots of
jobs exist because of weird misaligned incentives on the part of the employer,
who could truly not care less about the actual labor productivity of a bunch
of employees and has them on the payroll for totally separate reasons.

~~~
repolfx
Maybe your mom would, I'm sure she's a lovely woman.

But I know from hard experience that a lot of people wouldn't. My ex lost her
job at some point and was looking for a year for a new one. She became
terribly depressed, just staying in bed and crying all day. I'd talk her out
of it, she'd be OK for a while, and then get depressed again because she felt
"useless" and "like a loser".

I encouraged her, again and again, to go out and get a basic job even if it
was menial, like waiting tables, or to volunteer for something, or to learn
new skills, so at least she'd have something to do. But she refused to even
look for jobs that weren't fancy middle class office jobs, volunteering was
out of the question and her attempts at learning new skills were half-hearted
at best.

Jobs aren't just a source of money. They're a source of validation, every day.
Take away the job and people don't magically become perfect citizens who spend
all their time doing generic good. They can become lethargic and depressed.
As, in fact, the article articulates w.r.t. the French system.

~~~
mlthoughts2018
I've had long-term unemployment as well (over 18 months) and I think that is
an entirely different phenomenon that's not connected to what people would do
if they had some financial security of a basic income.

Long term unemployment creates a type of inaction/depression for some people
(this happened to me, and it sounds exactly like what happened to your ex
partner). Because so much of my identity was bound up in what job I had, what
career goals, how much money, etc., it made the feeling of being unemployed
severely distressing. I really _wanted_ to do things like volunteering, or
even basic self-care like exercising, but I _could not_ due to the distress of
unemployment and the feeling like I absolutely _had_ to find an "acceptably
good" job (for social status) and neurotically do nothing but dedicate all my
efforts towards that.

If the status of having a basic income is a positive thing, like framing it as
an opportunity to pitch in with civic duty and give back, I think it would
satisfy the status and "sense of accomplishment" requirements for a lot of
people.

But either way, the extremely distressing feeling of long-term unemployment is
really not comparable. I would say, for example, that what you observed from
your ex partner does not give you any capability of predicting what your ex
partner would have done with basic income during that unemployment period. The
situations are just too drastically different.

------
shafte
The author makes a false equivalence between the RSA in France and the typical
UBI proposal. An individual's RSA benefit decreases as their work income
increases. This has the effect of making an individual weakly indifferent to
working, since it will provide no marginal increase in income. Most UBI
proposals involve a benefit that doesn't phase out with income (or phases out
at an income level so high that it doesn't matter). The RSA, in both design
and implementation, is a lot like the already-existing EITC in the US.

The whole point of guaranteeing income is to try to avoid the distortion of
incentives that comes from means-testing benefits. When the author claims that
a UBI (like the RSA) would create a permanent class of non-workers, he is
basing his argument on an elementary misunderstanding of policies involved.

~~~
repolfx
No, I think it's a reasonable comparison. Yes, phasing out benefits creates an
incentive not to work.

But even many UBI proposals have _some_ phase out, if only because the
taxpayer paying money to a millionaire feels fundamentally wrong on so many
levels.

And the bigger problem is more basic. The idea of UBI is that freed from the
need to work, people will form utopian societies full of volunteering and self
improvement and art projects etc. But France and realistically most welfare
systems show that isn't true. People don't engage in self-improvement en-
masse. They sit around watching TV or scrolling through Instagram all day,
feeling useless and depressed.

~~~
marcosdumay
> But even many UBI proposals have some phase out, if only because the
> taxpayer paying money to a millionaire feels fundamentally wrong on so many
> levels.

UBI has no phase out, by definition. Something with a phase out can not be
called "universal".

You can decide it's reasonable or not as you wish (but those millionaires pay
more taxes than they receive). Just try to criticize the correct program.

------
aeleos
What I don’t get about articles like this is how they just go on and on about
how bad of an idea UBI is but don’t propose any kind of a solution.

It’s not like UBI was created just to have fun, there are legitimate problems
facing our society and our current trajectory is that the problems are getting
worse.

Maybe I am just missing some part of the article but what’s the point of
saying something is bad without even talk about ways it could be implemented
better or alternatives.

~~~
bena
> What I don’t get about articles like this is how they just go on and on
> about how bad of an idea UBI is but don’t propose any kind of a solution.

You're falling for the politician's fallacy. You see a problem, you see a
proposed solution, and not hearing any other solutions, you've determined that
this solution will fix the problem.

Recognizing that a solution is bad is worthwhile in and of itself. If he's
right and we accept that UBI is the wrong solution to the problem then we can
stop funneling time and effort into trying to implement that solution and
instead look for a solution that may work. Just because he doesn't have that
solution doesn't mean we shouldn't listen to his reasons why UBI won't work.

It's like if two non-mechanics were trying to fix an engine and one proposes
to slap the engine with his dick until it works again. Just because the other
guy doesn't know how to fix the problem doesn't mean he's wrong when he says
that slapping the engine with a dick isn't going to fix the problem.

~~~
repolfx
The fallacy runs even deeper than that. There might be no solution at all, by
the construction of the problem.

The correct response to "this will not solve the problem you want to solve" is
not "ok so you give me a better solution then", unless the problem is so
existential that even doing something horribly wrong is still better than
doing nothing.

The correct response may well be, "this will not work, therefore we should do
nothing".

~~~
slededit
I've noticed over time that "doing nothing" is scary to most people on a
subconcious level. It breaks the illusion that we have total control over our
world.

~~~
invalidOrTaken
I am one of those people. My productivity has improved _greatly_ by gritting
my teeth and forcing myself to do it(nothing), though. For instance, rather
than commenting here right now, I should be doing nothing and figuring out
which of my many tasks I _should_ be doing.

------
bumholio
For the working class, tech is disrupting faster than it's creating value, the
results are more distributional then they are enriching. The self driving car
removes the human behind the wheel but does nothing to reduce the cost of the
average car. Transportation does not become too cheap to meter - it costs
about the same, minus the human salaries, and also minus the cab city tax that
was typically redistributed into infrastructure for all.

There is almost no venture investment into say nuclear, too cheap to meter
electricity. There is no investment into radically new and automated ways to
build cheap, quality housing from locally available materials, or refine more,
cheaper ore with less impact on the environment, or manufacture more durable,
upgradable goods.

The supply of stuff is not disrupted by massive abundance, just the social
rules about who gets what. It used to be the guys building the stuff in every
community who were rewarded; now, all their paychecks go to a single dude in
San Francisco that wrote a marginally better algorithm for doing stuff and the
next day it spread around the world over the Internet. It turns out, there's
nothing unique or special about a human body, just a soon-to-be-outdated type
of 3D printer - with a software update latency measured in years and limited
write cycles.

A basic income capable of lifting people from survival and into knowledge
building is on the order of $5000 at current purchasing parity - impossible to
finance by any tax or industry unless we radically alter the actual supply of
goods.

------
sharemywin
"That’s why I remain fascinated by smart people in the United States being so
misguided about the implications of the UBI in a country that has no decent
healthcare system, a poor primary education complemented by a horrendously
expensive higher education system. A state in which having more than two
children is a mark of social status and in which any life crisis can lead to a
social precipice."

from the article

~~~
pretendscholar
>A state in which having more than two children is a mark of social status?

Really? I never knew that was a thing.

~~~
shafte
It's not. I honestly can't even imagine where the author would get this idea.

If anything, having fewer/no children is a mark of status, both globally
(higher income countries tend to have lower birth rates) and in the US
(vaguely implies both parents are working and have access to contraceptives,
etc).

To be clear, I don't think that there's much of a status signal either way.

~~~
bryanlarsen
It is very much a thing in the US. The middle class almost exclusively has 0,
1 or 2 children; only the poor and the rich have more.

21 percent of families earning > $200K had at least 3 kids in 2011, an
increase from 15% in 2000. Every other demographic saw their numbers go down.

[https://www.nytimes.com/2014/04/10/fashion/The-Growing-
Three...](https://www.nytimes.com/2014/04/10/fashion/The-Growing-Three-Child-
Household-in-Manhattan.html)

Anecdotally I see that too. Almost all of my children's classmates come from 2
child families with the occasional single; almost all of my wife's surgeon
friends have 0 or >2 children.

~~~
shafte
You may be right. Although I'd claim that a trend piece + a modest change in
demography aren't quite the same as a "mark of social status".

I'm applying the following standard: if someone told me that their friend had
3 kids, would I infer something about their social status? At least for me,
not really? Like you said, the poor and rich both have >3 children. ymmv of
course

------
throwawayjava
_> Education is ripe for disruption. There’s a commonly believed fallacy right
now that technology companies, specifically VC-backed technology education
companies, are going to disrupt education. That’s bullshit. Instead, Harvard,
Yale, MIT, and Stanford are the favorites to disrupt education when they fall
under heavy and sustained government pressure over the irrational and immoral
hoarding of their mammoth endowments. Harvard claims it could have doubled the
size of its freshman class last year with no sacrifice to its educational
quality. Good. Do it. More students, paying no tuition, at the best schools
will disrupt the system._

Harvard matriculates a teeny, tiny fraction of all university students.
Doubling that number is not a solution. Even doubling that number at all ivies
and elite universities is not even remotely close to a solution.

UBI may not be the correct solution, but even UBI isn't _this_ out of touch.

~~~
commandlinefan
Maybe I'm just cynical, but I have a tough time believing that the preference
for graduates from "top" colleges is entirely because they produce the best
results rather than just a way to (necessarily) artificially limit access to a
scarce resource. Just for the sake of round numbers, let's say there are
enough quarter-million-dollar-a-year jobs for 1% of the population, but 10% of
the population, with a bit of training, could step in and do those jobs. What
do you do? You set up some semi-artificial, but still realistic, hurdles to
limit the applicant pool. Doubling the applicant pool isn't going to solve the
"problem" (if you even see it as a problem); it'll just necessitate an extra
hurdle.

~~~
throwawayjava
_> Maybe I'm just cynical, but I have a tough time believing that the
preference for graduates from "top" colleges is entirely because they produce
the best results rather than just a way to (necessarily) artificially limit
access to a scarce resource._

This is not really relevant. The author of this piece suggests that the path
to affordable higher ed in the US is elite institutions doubling their full-
rides. But that's a drop in the bucket; "everyone go to an ivy on a full ride"
is not a sustainable or realistic way of decreasing the cost of college.

 _> Just for the sake of round numbers, let's say there are enough quarter-
million-dollar-a-year jobs for 1% of the population, but 10% of the
population, with a bit of training, could step in and do those jobs._

This is also not a problem. Most people who go to college would be perfectly
happy with a stable 80k. Or even 60k. The problem is not that folks can't get
250k. The problem is the massive amount of money they have to spend to get
certain jobs that pay those wages, even at lower-tier universities. And more
Harvard scholarships aren't going to solve that problem.

------
TomMckenny
Perhaps UBI does require thinks like universal health coverage but that would
not make it "deeply flawed" that would mean tweaking is needed.

And that UBI requires low unemployment is directly contradicted by the head of
the article where UBI is described as a potential solution for loss of jobs
due to automation.

But either way theorizing beforehand why it will or won't fail is
comparatively unproductive; we can actually experiment and see if it works.

And interestingly two conditions of the article; a sort of universal heath
care and low unemployment, currently apply in the US. So the article should be
predicting success there.

~~~
tatersolid
> we can actually experiment and see if it works.

Actually, we can’t test UBI without enormous risk.

If the number of people involved isn’t close to 100%, it isn’t _universal_.
Any societal effects for good or ill cannot be reasonably extrapolated to the
full population. What might “work” for 5% of the population getting UBI might
cause the next Great Depression at 100%.

~~~
dragonwriter
> Actually, we can’t test UBI without enormous risk.

Yes we can.

> If the number of people involved isn’t close to 100%, it isn’t universal.

Right, so your test has 100% coverage but not at a level that completely
displaces all other means tested benefit programs. Maybe it initially just
displaces, say, General Assistance type programs. Then you can gradually scale
it up and continuously evaluate.

~~~
AnimalMuppet
I'm not sure that's a valid test. UBI at $10/month is absolutely worthless.
UBI at $500/month is probably worthless. UBI at $1000/month is barely
adequate. If you start the test at small amounts, you're going to
experimentally decide that it doesn't work. But that only means that it
doesn't work _at those amounts_. It could still work at larger amounts.

Of course, it could bankrupt the country at larger amounts, too...

------
Analemma_
There's a fellow I follow on Tumblr who got tired of all the talk about UBI
without any concrete specifics, and so took it upon himself to look at actual,
real UBI proposals with serious analysis. There are fewer than you'd think,
considering how much talk there has been about it:

[https://squareallworthy.tumblr.com/tagged/ubi](https://squareallworthy.tumblr.com/tagged/ubi)

To be honest, the results are sobering. There are depressingly few proposals
to begin with, and they all seem to be fundamentally flawed: they either have
a lot of fuzzy math to handwave away problems, or they are politically
impossible. Each of his posts ends with "If this is the most serious UBI
proposal, there are no serious UBI proposals" and it's a hard point to argue
with. I was a strong UBI supporter even six months ago, but between this
analysis and questions like "With a $2,000/month UBI payment, won't landlords
just simultaneously raise rent by $2,000/month?" with no obvious answers, I'm
really pulling back.

------
cortesoft
I am really having trouble sussing out the author's thesis. What are they
arguing, exactly?

~~~
throwawayjava
IMO the central thesis is that society should have a negative view of tech
companies and tech workers. That's the only thesis that each argument made in
the post actually justifies. So if that's not the true thesis, then I guess
the article is just a sequence of incoherent and poorly constructed arguments
about UBI, education, corporate taxation, etc.

A counter-argument to the "you should hate tech people" thesis might be the
pronounced support among tech workers for fixing the problems their industry
helps create. The author argues that this is actually yet another reason why
we should have a negative view of tech companies and tech workers, because UBI
won't work and because we could fix college affordability by forcing Harvard
to fund a few more full rides.

------
olefoo
Any UBI program that doesn't take basic living expenses ( housing, healthcare,
bandwidth, food ) into account is just a fancy detour for the money to go back
into the pockets of the ownership class rather than creating lasting wealth
for society at large.

At best UBI is one element of a comprehensive restructuring of society towards
one that actually tries to be a knowledge economy where unique individual
talents are cultivated and useful knowledge is discovered and disseminated as
widely as possible for the maximum benefit of society as a whole.

------
paulsutter
The author seems to believe that UBI proponents are opposed to single payer
healthcare, and this could be his central beef. He never criticizes UBI
itself, he's yammering on about big tech's "view". But it's hard to tell, I
had to dig for a while to find an identifiable point.

> Yep, but not with five hundred bucks a month, Marc. At least not in your
> country, where 44% of the population can’t afford a $400 medical emergency.

------
torstenvl
Everything about this post is based on supposition, speculation, and a
fundamental misunderstanding of UBI. No, Mr. Filloux, nobody is advocating for
a $500/mo dole in which recipients have to pay out of pocket for emergency
room visits.

Nor, dear Sir, is the _Revenue de Solidarité Active_ anything even remotely
close to Universal Basic Income, because it _is not universal._

The straw men are piled so high it constitutes a fire hazard.

------
bcoates
Sneering about $500-$1000/month and talking about being able to afford a
medical emergency[1] tips the author's hand: He's not worried about the actual
poor, he's worried about the losers, mid-income aspirational types that will
never be able to afford the lifestyle they're intensely integrated into and
aware of.

UBI would make their misery even worse, asserting their status over people who
"flip burgers for a living" is all they've got.

[1] If you're in the US and poor enough that UBI would be life-changing,
you're almost certainly either on Medicaid or in a place where the first-line
medical treatment is going to an emergency room and skipping out on the bill.

------
woliveirajr
> Universal Income yields some results in two types of countries: ultra-poor
> nations when it lifts entire families from the street, or in affluent ones
> like Finland who already have a generous social safety net, free healthcare,
> a good education system and a low unemployment rate.

So, the author says that it works when the country has almost nothing (and
then any money will make a huge difference) and in countries where the
population already has a good return for their taxes, and then receiving that
money can provide some incentive to do other things.

------
jtmcmc
This seems like a strawman screed. It seems like this guy literally created an
argument out of what he thinks the general "big tech" consensus on UBI is and
then attacks it.

His argument seems to be the amount suggested (which he suggests) isn't enough
and that tech companies need to pour lots of money into helping people.

------
DoofusOfDeath
I have a working theory that the _fundamental_ differences between
conservatives and liberals include the following:

(1) While both groups would like an _accurate_ understanding of human nature,
conservatives tend to be pessimistic and liberals tend to be optimistic.

(2) While both groups would like to be compassionate and charitable, they're
riled by different problems: Conservatives especially hate the idea of
freeloading / abuse of charity, but liberals especially hate the idea of
anyone not receiving the charity.

It sounds like Filloux would consider himself a conservative, and the VCs
liberals, according to my theory.

------
pitaj
I'm a libertarian, and don't support a welfare state in general. I view UBI as
a great replacement for current welfare programs including food stamps. It
largely eliminate the "welfare gap", where when people earn more money, their
benefits start dropping off, resulting in a reversed incentive structure
leading to trapping people in poverty.

UBI implemented as a negative income tax would result in much less waste and
more freedom to the beneficiaries. It's also politically viable as it could be
seen as more "fair" since technically everyone receives it.

Edit: I think the "automation displacing human jobs" argument is easily the
weakest in favor of implementing a UBI, especially since it's not necessarily
economically realistic.

~~~
mmirate
I keep forgetting that UBI, implemented properly as you describe, in a nation
with pre-existing Robin-Hooding ... is a net-gain for liberty.

Yet, given history, I doubt that the median-minus-one politician could have
the courage to end the current welfare programs if and when a UBI system is
enacted. So I'm ... ambivalent ... about what to think of UBI.

~~~
dragonwriter
Since you probably can't implement a sufficient UBI to provide an income floor
that removes the need for other programs initially (at least, anytime soon),
but instead need to start low and ramp up with productivity gains, you need a
phase-in mechanism.

You can do this in a way that avoids forcing politicians to have the will to
eliminate existing means tested programs but achieve that in effect by simply,
add party of the phase in, specifying that UBI income counts as income in
applying benefit formulas for existing programs.

It'll be much easier to kill each of the programs when no one has a low enough
income to qualify for it.

