
Results: Finland’s Basic Income Experiment Help Us Build the Post-Pandemic World - rikumattila
https://www.demoshelsinki.fi/en/2020/05/08/letter-results-of-finlands-basic-income-experiment-will-help-us-build-the-post-pandemic-society/
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diekdnk
The experiment was terribly flawed in that it only addressed the unemployed,
and it didn't affect the existing unemployment system for them, making
incentives perverse for all taking part. The UBI was offered tax-free on top.

It represents nothing like real life UBI and needs to be redesigned as a test.

~~~
ornornor
Why can’t we ever design one such experiment right? It’s as if we were giving
ammunition to those opposed to it by conducting trials that have flaws! Would
it really be so hard to run a proper test that follows all the best practices
and isn’t biased/flawed so that we could once and for all point at it and say
“we can conclusively say UBI is/isn’t viable based on this experiment”?

I mean if a country goes all the way to overcoming political and opinion
opposition along with securing funding to actually run such a trial, why not
go all the way and do it right?

~~~
diekdnk
The test was conducted by a popular right wing party "Kokoomus", which is
heavily opposed to the system. This might affect the design of the test

~~~
swebs
>According to its 2006-adopted platform, the National Coalition Party's policy
is based on "freedom, responsibility and democracy, equality of opportunity,
education, supportiveness, tolerance and caring".[9] The party is described by
literature as a liberal[2] and conservative[3] as well as a liberal-
conservative[4] party in the centre-right[8] with catch-all party
characteristics.[29] The non-profit Democratic Society described it as "the
heir to both liberal and conservative strains of right-of-centre thought" that
is becoming increasingly liberal compared to its official stance of
conservatism.[6]

>Specifically, it contains elements of cultural and economic liberalism and
social reformism.[30] For example, it supports multiculturalism, work-based
immigration, gay rights and same sex marriage.[6][31][32][33] Although
formerly considered to have been critical of the Nordic welfare model and
campaigning for strict doctrines of economic liberalism, in the 1970s the
party shifted to supporting more social liberalism, such as increased social
security and a welfare state, justified by increased individual liberty.[34]

They've really pivoted on that issue in the past few decades.

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eeZah7Ux
Meta: countless fiscal policy changes are made in weeks.

But for UBI, decades of experiments and data-driven validation seem to be
required.

Why is it acceptable that UBI requires such huge burden of proof?

Don't tell me that it's more radical than other reforms: when used as a
replacement for welfare and other subsidies at comparable cost, it is pretty
mild.

~~~
peteretep
> But for UBI, decades of experiments and data-driven validation seem to be
> required.

Because it costs so much, and is so radically different.

> when used as a replacement for welfare and other subsidies at comparable
> cost, it is pretty mild

Buzzocks. UK over 18 population is ~52m. Give them each £1,000 a month, and
you get a cost of £624,000,000,000, which is 3 times what the UK currently
spends on "welfare"[0], and is about 3/4 of the overall UK budget. And you're
cutting the payments of a sizeable number of current welfare receipients.

Sure you can find more recent figures, or play around with how much you claim
you're going to give, but let's not entertain the fantasy that this is a "mild
comparative cost".

[0] [https://fullfact.org/economy/welfare-
budget/](https://fullfact.org/economy/welfare-budget/)

------
hkai
Seeing both sides of my family doing everything they can to scam the
government and NGOs for benefits just so they can avoid going to work, I
always think the UBI might only work as intended for perhaps 10% of the most
highly motivated individuals among us.

If I had UBI, I'd quit my skilled and productive developer job and probably
drive a taxi, because it's more satisfying, even though my contribution to the
society will be much smaller and in a certain sense, my skills would be
wasted. And I'd probably take half a year off on a beach every year.

Because of that, my tax contribution would be much smaller (probably zero),
and the country would have less money to treat sick people, buy hospital
equipment and build housing for the poor. That would worsen life outcomes for
many people and will likely cause additional deaths.

------
specialist
Medicare for All (or equiv) is enabler for widespread UBI.

The combo of M4A, UBI, and affordable childcare will lead to an explosion of
entrepreneurial spirit, small businesses, and startups.

If I had had health insurance, I would have taken a lot more risks. But I
average a major health crisis every two years, so whenever I ran out of
savings and COBRA, I had to take jobs just to get insured. (ACA helped by
prohibiting exclusion based on preexisting conditions.)

I did manage to work solo twice, with modest success. But the uncertainty
freaked my partner out and we needed guaranteed insurance for our family.

~~~
koonsolo
> The combo of M4A, UBI, and affordable childcare will lead to an explosion of
> entrepreneurial spirit, small businesses, and startups.

Funnily enough, the western country with the least amount of safety net has
the most successfull startup community and entrepreneurial spirit. Must be an
anomaly in your theory.

~~~
luckylion
Coincidentally, the western countries with the strongest safety nets, m4a and
affordable / free child care have weak startup communities and little
entrepreneurial spirit. Another anomaly!

~~~
specialist
Rankings from 2005. USA is #32.

[https://www.nationmaster.com/country-
info/stats/Economy/New-...](https://www.nationmaster.com/country-
info/stats/Economy/New-businesses-registered/Number/Per-capita)

To your point, it'd be interesting to compare more recent data. Please share
if you find such datasets.

\--

Of course there are multiple factors. Inhibitors and accelerators, advantages
and disadvantages. Even between states. Access to capital, quality of schools,
real estate prices, labor laws, ad nauseum.

Some are non-obvious. One possible crucial factor between Boston and Silicon
Valley was California's lack of non-compete employment arrangements. If true,
shouldn't others consider adapting? Why haven't they?

Imagine young professionals have children. Imagine access to reasonable and
trustworthy child care is important to those parents. So important it
influences their job choices. Imagine innovative companies providing that
service to better recruit and retain talent.

You don't have to imagine. Because it's already happening.

Ditto healthcare.

So why shouldn't similarly minded jurisdictions do the same?

~~~
luckylion
We have pretty much all that in Germany. Healthcare is mostly public and
affordable, strong social safety net, free childcare in lots of cities, free
schools & higher education (and if you/your family meet some criteria, you'll
actually get "student loans" that are generally interest-free _and_ you only
need to pay back half of it). Want to start a company while unemployed? You'll
get subsidies you don't need to pay back to get you started etc etc etc.

Germany's top startups are mostly copy cats, and that's pretty much all VCs
will invest in (granted, they're not VC by SV standards, but mostly just
investors). We're #51 on that list you posted.

I don't believe that entrepreneurship is significantly encouraged or
discouraged by what happens if you fail or whether child care is free or
expensive. Imho even regulation and red tape isn't the primary issue, but the
local culture's general relationship with risk vs safety. Germans save more
than e.g. US citizens, and they don't move to other states within Germany
nearly as much (even though it's really not that far, Germany is smaller than
California).

> Imagine innovative companies providing that service to better recruit and
> retain talent.

What you do to get & keep _talent_ (aka "the elite") doesn't necessarily scale
to the population at large. If you pay someone $200k, adding $10k for perks
doesn't matter as much. It's very different if you're paying them $50k.

~~~
specialist
Hmmm.

I'd love to know if you're right (less wrong) about culture.

How does Finland punch above their weight? Can't we steal some of their fire?

While I advocate for a democratic socialist utopia (Denmark), I'd support
anything that moves the needle to the left. When Reagan-era policies are now
regarded as marxism, methinks we've gone too far in the other direction.

~~~
luckylion
> How does Finland punch above their weight? Can't we steal some of their
> fire?

I mean, Finland fought off the Soviet Union's invasion, punching above their
weight seems to be their national pasttime. Maybe size matters, just like
small companies will be more agile than large ones, smaller states will be
able to pivot easier.

> When Reagan-era policies are now regarded as marxism, methinks we've gone
> too far in the other direction.

We have essentially the opposite trend in Germany. Social democrat policies of
the 70ies and 80ies are considered conservative/reactionary today.

I still believe we should establish some international citizenship trading
system. Apparently plenty of Americans would love to get into Europe and I
know quite a few Europeans who'd like to emigrate to the US. That'd really
allow voting with your feet.

------
101404
Open borders and UBI are mutually exclusive. There, I said it.

~~~
Drakar1903
You're right. We gotta push for Global Universal Basic Income. Someone surely
has "X% of people live on less than 5 dollars a day" stats available on hand.
If it makes their lives better over there, they have less incentive to uproot
their life to go over here.

~~~
hkai
What's the cost and how much I'd need to pay?

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sfg
If UBI allowed me to live my life, which is not extragent, then I would not do
'nothing', but I doubt I would do anything that raised tax revenue. I pay more
tax than the median tax payer in the country I live in. I would be a net loss
to the tax income of the country.

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sylvain_kerkour
> Build the Post-Pandemic World

Unfortunately how the insane amount of money was injected in other countries
since some months seems to indicate that the rest of the world have absolutely
no ambition to build a new world nor share the same vision.

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angmarsbane
Why not just pay people more for the work they're doing? Why not value work
again? It seems to me that the decrease in stress / increase in well-being
from basic income is the ability to afford shelter, food, some leisure etc.
without intense stress.

------
hkai
An alternative would be to make no changes to the world due to COVID-19, just
like we shouldn't have created TSA after 9/11.

------
rikumattila
true it was not a test of "universal basic income" as such as it targeted only
part of the population.

Some results are, however, relevant when assessing them from the world of
(post-pandemic) 2020: the participants of the experiment reported 1) less
economic troubles and financial stress; 2) Higher confidence in future
possibilities; 3) More self-determination and autonomy.

~~~
chii
but did UBI encourage more productivity from those participants? Is it more
than the cost of such a program? I want to know if UBI is a net benefit or
not.

~~~
diekdnk
Since the target audience was rhe unemployed, changing up their type of income
isn't going to give them a job, so prpductivity is difficult to measure.

The entire point of UBI is to secure everyones basic human needs, not get them
a job (unlike unemployment benefits).

If we were to test UBI also on employed people, and observed their behavior,
we might avtually gain useful insight into mechanica with UBI. Perhaps we will
see more 6-hour workdays with more people employed?

~~~
jacquesm
If you already have your basic human needs met then it is just a shortcut to
provide the money only to those that don't have that one checked off yet.
Otherwise you'd just end up pumping money around from those that don't need it
to those that don't need it.

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shse
It only works for a relatively small group of people. Scaling it up to 100% of
the population would result in inflation.

~~~
tonyedgecombe
It depends, if you have some essential resource where supply is constrained
then you might expect inflation. On the other hand goods that are readily
available like food or oil shouldn't see any significant difference.

~~~
syockit
I can't argue for oil, but for food, unless everyone agrees to eat only
processed food or cook by themselves, it's still going to see some inflation.

~~~
tonyedgecombe
Why? What mechanism would drive that? In the West we already have more food
available than we can reasonably eat. Margins in agriculture are wafer thin
driven down by competition.

Compare that to property where there is a limited supply and people are
constrained in what they can buy by their salary and ability to get a
mortgage.

------
machinehermit
We should just give everyone $100k a month so we can all be rich.

If you think that is a stupid idea then what is the threshold with a lower
amount that this becomes a smart idea?

What evidence is there that whatever threshold you come up with is less stupid
than my $100k a month?

~~~
spugody
We (Europe) already do give people a certain amount per month. We give them
healthcare, pensions and various other tax breaks depending on needs.

It is all very complicated.

The idea is to replace the complication with a simpler UBI in as close to a
cost neutral manner as possible.

~~~
koonsolo
UBI is _basic_ income. What you describe will not bring working people basic
housing and basic food. Pensions and unemployment incomes are only a small
part of population, you will need to pay _everyone_.

Taking money from healthcare and putting it in my pocket so I have to pay for
it myself doesn't bring me much income you know.

~~~
spugody
Yes, it is clear that universal basic income means everyone gets it. If my
post wasn't clear, it should be now. Thanks.

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tgafpc2
TL/DR: If failed, but that was totally expected.

------
squnch
Nothing in Scandinavia or Japan is a viable concept for elsewhere unless
explicitly tested elsewhere.

~~~
diekdnk
No country's alike, and no system can be copied naively.

(also Finland isn't part of Scandinavia)

~~~
Farrenor
> (also Finland isn't part of Scandinavia)

The Scandinavian countries are easy to recognize based on their flags, as we
all share the same pattern on our flags, a cross with the center slightly to
the left.
[https://en.wikipedia.org/wiki/Scandinavia](https://en.wikipedia.org/wiki/Scandinavia)

------
moralsupply
Where's the money for the UBI experiment coming from?

There's no free lunch, folks...

~~~
phaemon
Where do _you_ think money comes from? Seriously, how do you think it's
created?

~~~
vixen99
It comes from taxes, borrowing and printing. Only one of those relates to the
added value otherwise known as wealth creation. The other two ultimately make
everyone poorer.

The question is: for a given country, what proportion of the population can
theoretically be supported by the efforts of those who pay those taxes. This
isn't a moral judgement on the basic income idea; it's just required prior
basic arithmetic for those planning to introduce BI. Will BI actually work in
the long run? I don't know.

~~~
lm28469
> The question is: for a given country, what proportion of the population can
> theoretically be supported by the efforts of those who pay those taxes.

idk, you tell me: [https://www.theguardian.com/business/2017/nov/08/bill-
gates-...](https://www.theguardian.com/business/2017/nov/08/bill-gates-jeff-
bezos-warren-buffett-wealthier-than-poorest-half-of-us)

~~~
NovemberWhiskey
Wealth != income.

Gates, Buffett and Bezos are worth a combined $250bn. There are about 210mm
Americans over 18. So you can wipe out the entire accumulated wealth of those
three and give everyone ... $1,200, one time only.

Not life changing, is it?

------
the-dude
In The Netherlands there has been a form of UBI for decades, for anyone who
wants it or needs it.

It is called 'bijstand', is about € 1k a month and you are eligible for all
kinds of other discounts and support.

Just request it at your municipality and make sure not to find work.

~~~
swebs
>and make sure not to find work

That's just welfare, not UBI. The U stands for Universal, which means it goes
to everyone. Not just the poor or unemployed.

~~~
ajsnigrutin
The problem with "universal" is, that someone with an average paycheck doesn't
get anything, because he pays back the same amount he gets in taxes.

And the 'average' paycheck is not an 'average' in the term we use now (where
we just look at the workers, add up their paychecks and divide by their
number), but we also have to add up all the non workers (kids, pensioners,
unemployed, studens,...) with "0 EUR" paychecks, and divide by the number of
them too, because they'd get UBI too.

~~~
koonsolo
> The problem with "universal" is, that someone with an average paycheck
> doesn't get anything, because he pays back the same amount he gets in taxes.

If it stays the same for this person, that means he has to pay an extra UBI to
receive the UBI. If this person is making _basic income_ right now, he might
as wel stop working and still get the basic income, or at least lose less
percentage wise when stop working.

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qwe098cube
I get the appeal of UBI, more self determination, personal fulfilment etc.

Whenever I hear the arguments for UBI, the arguments for personal fulfilment
are usually predominant and financial aspects are usually left out. I'm always
interested in "how to pay for all this?", which proponents of UBI often
classify as a conservative talking point, but that is clearly not the case.

Another point I usually bring up is "how much is necessary to achieve that?
and why?" is $1000 each month enough and how should this be adapted over time.

My biggest concern with UBI and I haven't heard a convincing answer to it yet,
how to prevent the baseline from being moved permanently and eating up all the
additional income. If you make low income jobs less attractive, employers must
pay more to keep their employees so they have to raise prices accordingly or
go bust. So how to avoid that UBI is not just massive inflation in the long
run.

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koonsolo
You think UBI can work? Show me the numbers for some western country. Can be a
small country like Luxembourg.

First show me the numbers if all people that are working now keep their job.
Show me the extra cost and how you will get that money.

After that, give me a prediction of how many people will stop working. I can't
imagine moms (or dads), that now have only 3 months of parental leave, will
keep on working when they can have a nice income every month without doing
anything, and not paying for daycare. Your unemployment rate will not go down,
I hope we all agree on this.

And then finally, show me that this has 0 effect on all prices. Show me for
example how rent will not go up, when all of us have 1-5k extra to spend on a
bigger appartement or house.

~~~
koonsolo
Downvotes but no numbers...

