
How Finland's Basic Income Experiment Will Work - nkurz
http://www.fastcoexist.com/3052595/how-finlands-exciting-basic-income-experiment-will-work-and-what-we-can-learn-from-it
======
dang
This story already had a major discussion
([https://news.ycombinator.com/item?id=10688207](https://news.ycombinator.com/item?id=10688207)),
but the current article contains more information about what is actually
planned.

Instead of treating this as a dupe like we normally would, let's try leaving
it up with the request that people discuss the specifics of this experiment,
and perhaps what other sorts of experiments could be run and how one might
evaluate them—and leave the more generic for-and-against basic income stuff to
the other thread.

------
_rpd
I think it's hard for these experiments to yield answers to important
questions about basic income because of the fact that participants know it is
an experiment.

With a 2 year length, people aren't going to adjust their long term plans
regarding the expectation of how much they will have to work. The extra cash
is just a windfall. Reaction to a long term political commitment will be
different - once people trust that the basic income will "always be there."

Similarly, some local landlords and businesses may raise prices to soak up the
extra disposable income, but they know that their actions will be scrutinized
and publicized. Is 2 years of marginal extra profit worth the loss of good
will? Again, I think the answer is different once there is a long term
political commitment.

The answer to this last question is important, because it likely leads to the
basic income being adjusted for price inflation, and then an inflationary
spiral or price controls. To me, this is the central problem with basic income
(I think the "motivation to work" issue is a red herring), and I don't see how
basic income experiments can shed light on it.

~~~
Retric
A huge benefit to BI in the long term is it allows people to move to cheaper
areas. Subsidized housing on the other hand creates lot's of perverse
incentives. So, ideally you don't want to adjust for regional cost of living.

Remember, if a store in NYC can't find anyone willing to work at X$/hour they
must raise wages and prices. This sends really important signals up and down
the economy.

~~~
ci5er
> A huge benefit to BI in the long term is it allows people to move to cheaper
> areas.

And do what? Abide?

One thing that people want to test is whether this would disincentivize work.
People choosing to move to where there may well be no jobs sounds as if it
_is_ disincentivizing work.

~~~
gozur88
>And do what? Abide?

Why not? Not everyone is ambitious. Heck, I doubt more than about 25% of any
generation would work if they didn't have to. It's one thing to be pulling
down $100+/hr in a rewarding job building the digital future, but if you're
working a fry vat you're gonna quit the first time the boss pisses you off.

~~~
mbrock
Unless you want any money beyond a basic standard of living to save up for
travel, furniture, drinks, or whatever you want. If there's a job with a
better boss, the basic income will help you transition, though.

~~~
gozur88
Sure. I just think there are a whole lot of people who will be perfectly happy
spending all day smoking pot and playing CoD. Assuming they eventually get
tired of that lifestyle, it's still hard to imagine a 30 year old guy who's
done his own thing for fifteen years actually getting up and going to work
every day.

------
distances
There's nothing concrete decided yet for this, only a preliminary study has
been started [0]. According to this press release, the next steps in the plan
are

1\. The preliminary study was launched at the end of October 2015.

2\. A review of existing information and experiences [...] will be presented
[...] in spring 2016.

3\. Following on from this, an analysis [...] will be produced in the second
half of 2016.

4\. The universal basic income experiment is planned to be launched in 2017.

[0] [http://www.kela.fi/web/en/news-
archive/-/asset_publisher/lN0...](http://www.kela.fi/web/en/news-
archive/-/asset_publisher/lN08GY2nIrZo/content/contrary-to-reports-basic-
income-study-still-at-preliminary-stage)

------
BBopUndRawkS
All three of the photos in the article are taken within a block of each other,
and I know the woman in the pea-coat walking away from the train.

Finland is a _really_ small place.

~~~
soperj
That's kind of funny, but it's not really that small. I haven't been all over
finland (but a bit of it, helsinki & area, turku, lahti, tampere, and up to
oulu.) Still haven't seen the Northern Half of the country. New Zealand is
definitely smaller, but it feels easier to visit both islands than the
northern half of finland.

------
PlzSnow
This story is so vague, it is basically meaningless. The limited experiment
may or may not happen in x years.

I understand that people here WANT it to happen and therefore discuss it as if
it WILL happen. Unfortunately reality is going to get in the way.

------
xrange
Yes, speaking of experiments, I don't see why the U.S. doesn't run a large
scale experiment to see what the effects of a basic income are. Select a small
but not insignificant demographic. Pay them a not-means-tested monthly
stipend. Since this is only a test, you should be able to pay for it with a
modest tax on paychecks for the rest of the citizens. Then wait a while, and
see what happens. We would want to make sure it cuts across a broad swath of
society, so that special interests don't wreck havoc when interpreting the
results. So we'd want rich and poor, of all races, etc.. We should then be
able to look at the recipients, and tell if they were more likely or less
likely to be employed. And we should be able to see if they spending their
time creating cutting-edge art, and new innovative music, while writing
inspiring novels, and discovering new scientific facts and mathematical
theorems. To be doubly sure that we aren't merely papering over any medical
insurance issues (what with medical inflation and all), we might also create a
separate medical payment system to cover their medical expenses. Of course,
this should be a long running experiment, so that any short term economic and
societal effects will have time to average out. Let's propose to run this
experiment, for, I don't know, maybe 80 years.

~~~
adventured
In a country as rich as the US, with wealth so heavily stacked to the top 1/3,
I'd have to argue in favor of dropping the rich out of any basic income
testing or implementation. For the same reason that they shouldn't be
participating in any other traditional welfare programs currently. The only
way a full implementation of a basic income can work - and be enough to matter
- in a country with as large of a population as the US, is by dropping the top
economic tiers out of it; make over $X, you don't qualify.

The US could afford to give the poorest 50 million adults a $2,000 per month
basic income. Federal + State + Local welfare spending total, is a bit over $1
trillion annually (including Medicaid). You could parse that $2k down to $1k
across 100 million adults, but at that level it won't be enough to replace all
the benefits people are deriving from welfare today (the health coverage alone
would severely drain that $1k level).

The downside is, giving the bottom 50 million adults a $2,000 check every
month, would enrage the middle class. One of the benefits of current welfare
programs, is you don't see it the way you do cash being spent, and I believe
most people think of cash payments entirely differently than they do eg free
healthcare.

Want to give all adults enough money? You can't do it. There is no math that
will ever get you there, unless you plan to abolish the US military, part of
Social Security and Medicare, and raise taxes simultaneously. 230 million
adults * $1,000 per month = $2.76 trillion per year (almost the whole federal
budget), it's obviously laughable.

~~~
delecti
The problem with a hard cutoff is that people just below the limit end up
better off than those just above it. One problem with a soft cutoff is how
often/when you adjust for changes.

Basic Income is only a simple solution if it's universal.

Additionally, part of the benefit of a universal basic income is that it
covers the ground of programs like Social Security, so at least in theory you
_can_ get rid of it. (though I sure wouldn't want to be responsible for
orchestrating the transition)

~~~
adventured
Getting rid of Social Security is certainly a lot more viable today, now that
politicians can't steal from its inbound surplus.

The basic income concept also collapses when you consider Social Security -
that system is designed specifically to only give people at a certain age
those benefits. As has been pointed out in the case of Finland, plenty of
people will find they are worse off. In the US case, if you spread that Social
Security money out across 230 million adults, it would become tiny per person
(~$300x per month), which is exactly what you don't want to do (unless the
plan is to shift back to a system in which people are expected more so to take
care of their own retirement needs, but I don't see how that is going to work
out with the median paying vastly higher taxes).

~~~
delecti
> if you spread that Social Security money out across 230 million adults

Clearly that isn't the idea though. The idea would be more like multiplying SS
such that all of those 230 million adults get the same payout as what the
current recipients get now.

And obviously it isn't as simple as that, not least because that's about 4
times as many people as SS covers currently, and it's already about 1/4 of the
total US budget. In addition, the idea is that we shouldn't be required to
work, and thus there should be basic income such that you can live
comfortably, and arguably SS is already not enough for that. (the total SS
budget/# of recipients = ~14k)

------
s_q_b
The studies in this area are very clear. The most efficient way to help the
poor is direct cash grants.

However anathema to our national ethic, this is what works, and form must
follow functionality.

~~~
paulddraper
References?

~~~
akvadrako
[https://en.wikipedia.org/wiki/Mincome](https://en.wikipedia.org/wiki/Mincome)

Mincome was an experimental Canadian basic income project that was held in
Dauphin, Manitoba, during the 1970s. It was only half "unconditional", the
rest income-dependant, but it did seem to have good effects.

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cpursley
I'm all for this experiment, but please, can we get rid of the Basic 'Income'
_doublespeak_? Income is _earned_. Call it Basic ['benifits', 'welfare',
'necessities', 'coverage'].sample. Anything but the _Income_ misnomer.

~~~
paulddraper
You're think of _earned_ income.

Income is anything that...well...comes in.

------
DIVx0
I really like the simplicity and efficiency of Guaranteed Income. Social
welfare is one of the 'costs of doing business' in a modern civilization. Cut
the crap and just give everyone basic resources without reservations.

The way I see it if someone really does not want to work, they'll go to great
lengths to cheat the system and the government will spend a great deal
combating these people. Just giving the bum money will be cheaper for
everyone.

More importantly a basic income will free up people who will take jobs just
because they have to. This will actually open up jobs for people who want to
work hard to rise above the basic level. It will give people freedom to
explore things that would not be feasible otherwise. This will generate more
art, more music, new science and philosophies.

Perhaps my thoughts are too idealistic but I think its more reasonable than
trying to police welfare or telling everyone to just be more bootstrappy.

~~~
notahacker
There are many people here who spend their day job writing algorithms to
monitor people's responses to certain stimuli -even down to the individual
level - in order profile users and tailor services to ensure that a few
advertising cents per person are spent efficiently.

I'm genuinely unable to fathom why when it comes to solving the diverse,
expensive and very real problems a social safety net is designed to capture,
that "give everyone a fixed large chunk of cash each year" is so widely
perceived as the "most efficient" solution on here.

The separate ideal world argument that BI would ensure that people don't "have
to" work (unless they're foreign, obviously) obviously flies a little in the
face of the efficiency argument too.

~~~
cheald
> I'm genuinely unable to fathom why when it comes to solving the diverse,
> expensive and very real problems a social safety net is designed to capture,
> that "give everyone a fixed large chunk of cash each year" is so widely
> perceived as the "most efficient" solution on here.

Economists _widely_ agree that cash transfers are more efficient at improving
welfare for the poor than transfers-in-kind. It's one of the less
controversial statements in the field. "Give everyone a chunk of cash once a
year" is probably not the most efficient manifestation of the concept just
because peoples' behaviors tend to be different if they receive regular
reliable income vs irregular income (see the permanent income hypothesis), but
when it comes to the choice of giving the poor cash or services, just giving
them cash is widely preferred.

~~~
gozur88
>Economists widely agree that cash transfers are more efficient at improving
welfare for the poor than transfers-in-kind. It's one of the less
controversial statements in the field.

I find that baffling based on San Francisco's experience. When the city
replaced its "in kind" services with cash, for the most part the homeless
people went out and spent the cash on booze and drugs.

The cash system was such an obvious failure Gavin Newsom was able to build his
political career on converting the system back to the "in kind" type.

~~~
Already__Taken
The US is in the bottom half[1] of the education rankings which might impair
good decisions. The rest of the world* has a much better functioning health
care structure for lower income people as well, medical conditions that may
impair their ability to make good decisions.

[1] rank 36/65:
[http://www.telegraph.co.uk/education/leaguetables/10488555/O...](http://www.telegraph.co.uk/education/leaguetables/10488555/OECD-
education-report-subject-results-in-full.html)

* developed world, obviously.

------
murbard2
There are two big issues with basic income:

1) Even if you spent the entire $2T annual federal budget on a basic income,
it would come to about $500 per person per month. The cost is simply
gargantuan.

2) It would not replace welfare, it would come on top of it. This is because
welfare isn't about helping the poor, it's about giving political power to the
lawmakers. This power comes in the form of large administrative bodies, where
political allies can be given cushy jobs, and in the form of an electoral
clientele. Basic income doesn't have these two features, so from a public
choice theory, it will not replace the welfare state. Case in point, when the
Reagan administration tried to apply Milton Friedman's negative income tax, he
distanced himself from it as they wanted to do it on top of other welfare
programs. This is exactly what public choice theory dictates.

------
osmala
Lets start with simple facts, current government is formed by rightwing
parties. [Not so rightwing by american standards].

~1000€ is what ultra leftwing party's youth group proposes. ~600€ is what the
Green leftist party proposes

The right wing parties talks about creating motivation for people to get to
work with the basic income. A newspaper supporting prime minister party's talk
about either partial basic income of 550€ with it replacing most benefits or
full basic income of 800€ with absolute cutting of other benefits.

What I'd like to see most is basic income combined with true flat tax. No tax
deductions, minimal bureaucracy. If we are going to pay certain minimal
support to everyone to keep them from going too desperate, we could as well
pay it to everyone and then start taxing from first euro earned with the flat
percentage.

Instead of current system in which people send lots of separate applications
for different benefits and then people paid by government has to work. And
when you get raise you probably need to get new tax form from tax office to
give your employer.

What well made basic income should give is instead of having long plateau
after the minimum everyone is guaranteed to get one way or other, is a way for
everyone to get that minimal guaranteed all the time and any marginal
employment would increase income over that. And most of the cost would be got
from reducing number of government employees required to handle it. Everyone
doing the math should consider that only real cost of basic income is when
someone earns less than (1/taxrate)*basic income and more than what government
currently gives to poor. And it eliminates cost of MANY government jobs
handling papers for benefits, and makes easier to take a job for a day or two
or week or two because you cannot loose benefits for it. Or loose benefits for
starting your own business.

------
ahallock
There is another social factor to basic income, and State-based welfare, that
I'm not sure is being mentioned: it allows people to become more isolated
because they can be less dependent on friends, family, and neighbors. I'm not
sure if that's a positive for society in the long run.

------
pegas1
The minimal income shall be given in exchange for voting rights. Pick one or
the other.

~~~
guard-of-terra
I'm not sure you're right but also not sure that you're wrong.

We don't know how many people are going to rely on basic income as main mode
of income and why.

~~~
mrec
I'm sure he's wrong with that particular phrasing.

If a real problem does arise with a non-working majority perpetually voting to
increase their BI, a more flexible answer would be to make the vote
conditional on having paid a certain amount of tax, either in that year or
over their lifetime to date or some combination of the two. But let's not roll
back the clock a few decades on universal suffrage until we're _absolutely_
sure we need to.

EDIT TO ADD: a core principle behind BI is that paid employment is not the
only socially valuable form of activity. I believe that. Taking away the vote
from people who aren't making a contribution in $$$ form would fly in the face
of it.

