
UBI without quality public services is a neoliberal’s paradise - howard941
https://www.opendemocracy.net/en/transformation/ubi-without-quality-public-services-is-a-neoliberals-paradise/
======
gojomo
The subhead asks: "Why should governments give cash-handouts before providing
free, quality public services to all?"

That's pretty clearly because "free, quality public services to all" are
really hard & expensive to deliver. Without prices & competition, they're
prone to massive inefficiencies, over-provision or under-provision due to
various political distortions, and resource- or agenda- capture by insider
managers/public-employees/organized-lobbies.

Smaller, tightly-knit polities can often manage more-efficient public
services. The two examples given in this article – "quality public housing"
and "free public transport" – work well in some places!

But giant geographically, economically, ethnically diverse polities like the
US have a much harder time. Public housing in the US sucks. Mass public
transport here faces costs 5x as large in as other developed countries – due
to the sclerotic interplay of dysfunctional bureaucracies, mercenary
contractors, and powerful public employee unions. That is, those exact unions
in the "Public Services International" federation which employs this op-ed
writer. So of course she's arguing, "pay us first, and more, before spending
more directly on the poor".

But the point of UBI, if it were to work as hoped, is to route around such
non-poor middlemen – those who claim to be serving the poor, but rarely seem
to reduce overall poverty. Cutting checks is comparatively easy to do, and
most non-addicted adults can spend $X for their own welfare better than any
supposedly altruistic outsider could spend the same $X.

~~~
theslurmmustflo
Look at how well competition works in our broken healthcare system. Our costs
are the highest in the world yet our life expectancy and infant mortality
isn’t all that great.

Or look at education at all levels, where costs have also skyrocketed and
public options keep getting cut because bureaucrats from “competing” private
industries try to push their agenda (you could argue this is even worse in
healthcare and pharma).

Competition and profit motive hasn’t been proven to work so well for public
goods, in my opinion, but would love to hear of examples where it worked. This
is why for some things we still agree we should pay for at a government level
(local or national), such as firefighters, defense, mail, etc, etc.

Not even going to get into how inflationary ubi would be, instantly driving up
costs due to “rational” economic behavior.

~~~
bhupy
Healthcare is NOT a free market, there is no pricing mechanism like there is
in literally every other industry. It is the only good/service in America in
which the prices are known/paid only AFTER the services are rendered.

[https://fee.org/articles/imagine-if-we-paid-for-food-like-
we...](https://fee.org/articles/imagine-if-we-paid-for-food-like-we-do-
healthcare/)

~~~
leetcrew
> It is the only good/service in America in which the prices are known/paid
> only AFTER the services are rendered.

this is not really true. if you are having nontrivial repairs done on your
house or car, they will give you an estimate upfront, but there can easily be
unforseen problems that cause the work to cost a lot more. you might decide to
have your car fixed later, but it's hard to pull the plug on a kitchen remodel
halfway through. there's all kind of work that gets done without knowing how
much it will cost beforehand.

~~~
bhupy
You're right, I was being hyperbolic.

I'd qualify my statement with preventive* healthcare, the near entirety of
which can function on upfront prices.

~~~
leetcrew
to your credit, I can't think of another field where there is so much
uncertainty over how much something will cost when they already know exactly
what they are going to do, what materials they will need to do it, and how
long it will take.

------
vore
UBI often gets held up as a panacea for an "inefficient" welfare system by
allowing recipients to have "consumer choice" regarding e.g. healthcare or
housing.

In my and the author of the article's mind, UBI only makes sense as a form of
supplementary, discretionary income. If a UBI recipient is made to trade off
housing payment against health insurance payment, they're required to make a
choice between two essentials; if they're both essentials, they're not really
fungible in the first place.

The argument often goes hand-in-hand with greater privatization of public
services, which inevitably commodifies what should be for the benefit of the
public.

~~~
legitster
Trade-offs are not that binary in real life. There is a reason you do not live
in the biggest house possible, you choose to forgo a bigger house to pay for
other necessities.

And these marginal trade-offs are exactly what drive the normal economy -
small improvements for price-conscious consumers. As much as I may agree
something is essential, that doesn't mean I think it should be one size fits
all or centrally allocated.

~~~
maxsilver
Trade-offs are that binary in real life -- for everyone who would need UBI.

If you are wealthy, you can choose to "forgo a bigger house". If you are
middle-class or lower-class, the options are pretty much binary already,
today, in the real world. You eat, or you don't. You have a roof over your
head, or you don't. You get medical treatment, or you don't.

There's no way to "penny-pinch" , when you are already at the bottom, because
all possible savings an individual could make are already priced in.
Comparison-shopping isn't a choice, when you are already priced out of all but
one of the options.

\----

Unless UBI ends up being some huge amount of money (like say, $60k
USD/yr/person), there won't be any meaningful non-binary trade-offs for any of
those folks to make, regardless of whether UBI happens or not.

~~~
tathougies
> If you are middle-class or lower-class, the options are pretty much binary
> already, today, in the real world. You eat, or you don't. You have a roof
> over your head, or you don't. You get medical treatment, or you don't.

This is a lie. Most 'poor' Americans have lots and lots of expensive things;
they could choose to do with less. This is not to say all could, but the
poverty level metric is so excessive, that many have lots of discretionary
spending that many 'rich' households do not.

This has to do with how we define 'poverty.' The poverty level as set means
that many americans with lots of discretionary spending (for example,
television) are classified as poor, despite having easily fixed overspending.
For example, according to data from the department of energy (accessible here:
[https://www.eia.gov/consumption/residential/data/2005/hc/pdf...](https://www.eia.gov/consumption/residential/data/2005/hc/pdf/tablehc7.11.pdf)),
26million / 39million households eligible for federal assistance (~64%) had
cable television, meaning almost $70/month in unnecessary expenditure. For
those below the poverty line, 10.6mil/16.6 mil had cable or satellite (again
~64%). This is data from 2005, but other years are similar.That is a bit
ridiculous.

~~~
vore
Are you choosing watching TV for $70/month as an example of an "expensive
thing"? Living in poverty doesn't mean that you get should judged so harshly
for mild discretionary spending to make your life less of a hellhole.

~~~
tathougies
> mild discretionary spending

If the claim is that those living below the poverty line are going hungry
(i.e., "there's no way to penny pinch when you're at the bottom", then
claiming $70 (which can buy _a lot_ of groceries) is 'mild discretionary
spending' is incredibly disingenuous.

~~~
vore
Most members of the middle class would classify it as mild spending, so I
don't see anything disingenuous about my claim.

Groceries are not fungible for entertainment, and if you choose to spend a
reasonable by middle-class standards amount on it you shouldn't be punished
with misery and people tut-tutting at you for it.

Furthermore, I don't know what your point of revising the poverty line
downwards is, apart from to tell people that they should be satisfied that
their life isn't worse.

~~~
tathougies
> Furthermore, I don't know what your point of revising the poverty line
> downwards is, apart from to tell people that they should be satisfied that
> their life isn't worse.

My point is that there should be various levels of poverty so comparisons can
be made apples-to-apples. There is an income range where people cannot afford
food, and there is an income range where people can afford food but cannot
achieve a certain standard of living, etc. These need to be distinguished to
make intelligent policy points.

> Most members of the middle class would classify it as mild spending, so I
> don't see anything disingenuous about my claim.

And many members of the upper class would say having a personal nanny is mild
spending, but that seems ludicrous to literally everyone else. Luckily, my
statement that 'If you cannot afford <insert basic need>, then <X> is a
luxury' is a statement that could apply independent of the economic class of
the speaker.

> Groceries are not fungible for entertainment,

Yes they are. I do not have cable so that I can purchase more food which I
find more entertaining than vapid television shows. Also, consumeristic
entertainment is not a human need. I will grant that humans need some level of
entertainment. Luckily, libraries have free videos which are woefully
underused. The radio is free, as is broadcast television. Also, humans have
entertained themselves for literally as long as anyone can remember.

Look, the guy I replied to made a point about 'middle-' and 'lower-class'
people, by claiming there's no way to penny pinch when you're at the bottom. I
pointed out that, by the federal standards, those at the bottom (i.e, in
poverty) are spending about $800 a year on cable (based on cable rates in my
area, which may not be representative, but whatever). Thus, it seems clear
that there are ways to penny pinch at the bottom. I'm not sure what is
controversial about this statement. There are clearly ways to entertain
oneself reasonably without cable, as I and countless others demonstrate.

------
novok
UBI shouldn't be implemented until regulatory supply constraints on the basics
of life (healthcare, education, housing, etc) are removed. Otherwise the rent
will go up by about the same amount that UBI provides and we will be back at
square one again.

~~~
anchpop
I shopped around for a good price when looking for an apartment (in a college
town). Would competition not be sufficient for keeping prices down for
renters? I understand it would raise rent prices some, since people having
more money would increase demand, but increasing nearly the same amount as the
UBI seems surprising. I'm not very knowledgable in economics so I apologize if
this is a stupid question.

~~~
novok
Many places in the USA and elsewhere have NIMBY zoning policies that prevent
new housing and / or dense housing from being developed, slow it down, make it
significantly more expensive than it needs to be with 2:1 parking
requirements, reduce property taxes for long term holders and so on.

This reduces new housing being developed in response to demand and thus
increases the price when there is an increase in demand by an inordinate
amount.

UBI will increase demand universally across the board in the form of cash for
everyone, and inelastic supply constrained essential goods like housing will
go up as a result.

This RE investment article explains it a bit more:
[https://www.nreionline.com/finance-amp-investment/why-
supply...](https://www.nreionline.com/finance-amp-investment/why-supply-
constrained-markets-hold-so-many-advantages)

~~~
beat
That doesn't mean rent will increase to 100% of UBI, which is exactly what you
said earlier.

~~~
TeMPOraL
If something else (what? utilities?) picks up the rest, doesn't it still
nullify benefits of UBI?

People say it's a stock argument, but I haven't seen any good refutation of it
yet. And I say this as a fan/supporter of UBI.

~~~
beat
It will take some, but not all. That's the refutation.

The problem isn't the idea that some cost-of-living things will increase in
response to UBI. It's a defeatist "What's the point, the landlords will get it
all" attitude that doesn't take into account the complexity of what people
spend on and the supply/demand relationships of those things.

~~~
novok
What I am saying is before or when a national UBI program is created, a
national law making things like zoning restrictions illegal would also need to
be implemented. Kind of like japanese zoning:

[http://urbankchoze.blogspot.com/2014/04/japanese-
zoning.html](http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html)

A couple of other (bad) examples is how national health plans are implemented
in other countries, making things like being exempt from the national
healthcare system illegal. Or the insurance mandate from obamacare.

I'm not saying UBI shouldn't be implemented in a why bother manor, I'm saying
you need both if it's going to be an effective system. If you don't, you will
significantly reduce it's effectiveness.

~~~
beat
It's probably unconstitutional to eliminate zoning restrictions from the
federal level. And even if it's possible, it would be political suicide, and
even if it happened, it would have a lot of unintended consequences.

------
legitster
> Providing a single mother with a cash payment to fend for herself in an
> inflated housing market is not as effective as providing quality public
> housing. Giving people more money to fill up their cars is not as
> progressive as offering free public transport.

To me, this is actually an argument _for_ UBI. A poor single mother deserves
access to the same market of housing as everyone else! And public transit is
great, but your living and employment options are super limited if that is
your only choice.

Absolutely, we need to study how much social services would actually need to
be offset. Perhaps free housing and buses are still valuable even with UBI.
But having dual-class public and private options is not true progress.

It seems that in this author's view, a UBI is only a means to an end for
tackling inequality, and doesn't believe the actual poverty alleviation
aspects are of value. While I respect the point being made, I would argue that
this in itself is a pretty privileged position.

~~~
Mediterraneo10
> Public transit is great, but your living and employment options are super
> limited if that is your only choice.

In most countries where UBI is even remotely a realistic possibility
politically, public transit is just fine and how most people get to work.
Indeed, for a single mother a personal car may well cost far more than the
actual utility it provides. The USA is an odd one out in this respect.

~~~
legitster
True, this is a US example (although I was surprised by how many European
cities have competing private transit systems). But I stand by my point that
prescribing people's needs robs them of important choices.

~~~
Mediterraneo10
A car likely wouldn't be even a choice for a single mother without the state
subsidizing car ownership indirectly

------
jedberg
I don't know of a single supporter of UBI who doesn't first support health
care and education for all.

------
gumby
I agree they are orthogonal. Part of the purpose of a UBI (and it needs to be
U -- Universal -- not as a welfare replacement) is to correct for
inefficiencies or inequities in structure -- you don't live close to a transit
stop so you may spend some money getting to/from.

The other purpose is for signalling within the commercial system (tortilla
chips are more / less popular that potato chips) which is crucial for the
functioning of an economy.

As a welfare replacement it's terrible because it suffers from diseconomies of
scale.

~~~
dullgiulio
If it is Universal as you say, it cannot be zero-sum. If it is not zero-sum,
what is it? Fueled by debt? Highest income pay more taxes (on income or
assets)? In that case it is tecnically not Universal. You can't have money ex-
nihilo.

~~~
anticensor
Debt-based bond-backed money is already ex-nihilio. UBI-backed money might
exist and the monetary system would have been much simpler.

~~~
gumby
> Debt-based bond-backed money is already ex-nihilio

Every time you use a credit card you increase the money supply, though it is
sterilized when you pay your bill at the end of the month (or when you
default).

Arguably it's not really ex-"nihilo" as there is economically valuable
activity (extension of credit) which is paid for via interest. Increasing the
money supply to match economic activity (as best it can be measured) prevents
deflation, among other things, and debt is the tool used, surely better than
simply running the presses.

~~~
anticensor
You would replace the interest ratio by resupply ratio (feeding expenditure
taxes and income taxes for income exceeding UBI back into supply) in an UBI-
backed monetary system. You could easily target zero inflation _per capita_ in
such a system.

~~~
gumby
Yes, this is a good idea. The current approach uses banks as the interface,
hence the use of debt. Purely a mechanical artifact, not a moral issue as it
is often taken by people fixated on microeconomics.

------
cryoshon
the issues shouldn't be related.

the point of UBI is to maintain liquidity of goods and a baseline level of
demand for goods amidst a financial environment of increasingly extreme
economic inequality which would otherwise cause sharp contractions in demand
as a result of the public's lack of money.

if public services expand, each UBI dollar goes that much further. expanding
public services alongside UBI creates a virtuous cycle in which a larger
portion of each UBI dollar can be spent on non-essential goods, stimulating
demand and subsequently funneling more money into the tax fund.

if public services contract, each UBI dollar has less purchasing power because
a larger portion of its value is earmarked to purchase substitutes for
essential public services. for instance, if your municipality slashes its
water purification services, you'd need to purchase more bottled water than
before, so you'd have less spending money because you'd still be paying the
same amount of taxes yet you'd be forced to take on an additional expense as a
result of the cuts. this situation completely undermines the economy as a
whole because the cost of private sector substitutes will rise with every
additional service cut until they are unaffordable, at which point demand will
finish crashing and be incapable of recovery.

------
bluGill
UBI fails because most people who we want to help won't make good decisions.
As my childhood barber noted, in the great depression the "men" who couldn't
afford to feed their family where the ones hanging out playing pinball with
any cash they had. UBI wouldn't help them, any money they get wouldn't go for
food, shelter (or a long list of other things), but to expensive
entertainment.

------
purplezooey
_"... not as effective as providing quality public housing."_

That is so far fetched. We can't even build more than 10% of the _housing_ we
need, much less add enough public housing.

------
0x262d
This is a brilliantly concise explanation of this. I think it slightly glosses
over one thing, which is that in any case where it might actually be
implemented, UBI is basically a trojan horse to undercut and defund actually
existing and useful welfare programs. That is what happened in Finland:
[https://www.socialistalternative.org/2017/03/07/finlands-
bas...](https://www.socialistalternative.org/2017/03/07/finlands-basic-income-
experiment-step-disguised-progress/)

~~~
Mediterraneo10
The rhetoric in that linked article sounds like a fetishization of work, the
old-school Communist praise of the labourer as the ideal human being. That is,
the authors call for creating more jobs and building factories. That is a
turnoff to those socialist-minded people who feel that work sucks, it is
something our modern society ought to be avoiding by increasing automation.

~~~
0x262d
SA is completely in favor of automation and actually calls for reducing the
workweek. But under capitalism, automation is used to drive down wages and
increase the ranks of the unemployed, which is the primary concern of the
(growing amount of) people who are living paycheck to paycheck or unemployed.

