
Finland is scrapping plans to extend its basic income project - SirLJ
http://www.businessinsider.com/finland-to-end-basic-income-experiment-2018-4
======
alkonaut
I can't see how it's theoretically possible to do a small scale experiment
with UBI. If not everyone gets it, you can't see the big impact on the economy
(what happens with supply/demand/inflation). And if it's with a short horizon,
then people still have to _plan_ for life after the UBI experiment.

You can't give up the career you are going to need to make a living in 2 years
time, just because you get paid a small sum per month for 2 years.

So I can't see how experiments are worthwhile unless you actually go in head
first. UBI should be announced as universal and forever, or it isn't "proper"
UBI, and doesn't show the effects of UBI.

This is also the reason why no one tries it.

~~~
hawkice
I am very skeptical of claims that outcomes are discontinuous in policy space.
Going one step in direction A should give you information about going further
in that same direction, at least on some scale of change. Clearly the people
running the experiment agreed, because they designed it with the intent to get
that information.

~~~
brianwawok
> Going one step in direction A should give you information about going
> further in that same direction

So eating healthy for 1 day/week will change your blood results and tell you
that a year of it will make you lose 50 pounds?

So going to 1 day of college will make you measure differently on a test that
checks critical thinking?

Different things take different amount of time to see results. I could see
behaving very differently between

* This is a very temporary 1 year test of UBI *

vs

* You have a social safety net of UBI for your entire life, and can count on the income no matter what happens _

~~~
Nomentatus
It's more that shorter experiments might tell you whether there are deep
downsides even in the short-term. Not great information, not full information,
but information; even if it's just a one-way test.

~~~
dogma1138
It’s not that they are completely useless it’s that they cannot test the
actual affects on the economy.

If you have a small scale UBI even if it’s on say a scale of a whole town it’s
still not enough to evaluate the economic impact because the supply/demand
economy isn’t that localized.

We have other experiments that have shown to have a negative effect for
example rent allowance in the UK which essentially set the lower limit for
rent as no one rents below what the council would pay, this has increased rent
prices even in places where there was no negative change in the supply and
demand.

------
jackvalentine
「The initial plan was for the experiment to be expanded in early 2018 to
include workers as well as non-workers early in 2018, but that did not happen
– to the disappointment of researchers at Kela. Without workers in the
project, researchers are unable to study whether basic income would allow
people to make new career moves, or enter training or education.」

And this is the paragraph I went looking for.

~~~
snarf21
Yeah, the other thing that is weird when you read the article is that it _wasn
't UBI_ at all. It only went to people from a set that was unemployed. This
"trial" just removed all bureaucracy and removed restrictions on side jobs,
etc.

I'm not sure what you could learn from this experiment. The things a lot of
people want to know is can UBI provide a safety net for the poor and allow
people to quit a toxic job without fear. It will be interesting to see if any
of the 2K participants used this income/time to retrain or receive education.

~~~
jackvalentine
Yup that's my point exactly - it's just less restrictive unemployment
benefits. As you said the really interesting stuff from UBI is people quitting
shitty jobs (or, working part time at shitty jobs instead of 60 hours a week)
and doing something else with their lives.

------
simonsarris
Studying a UBI pilot with an end date is not studying UBI at all: It is
instead studying a misnamed temporary cash payment. By the nature of pilots,
the cohort’s behavior cannot reliably change to depend on UBI’s long term
existence. No study yet has guaranteed a cohort money forever, and even if it
did it would be difficult for a pilot to study the long term effects, some of
which may be generations out. What pilot can tell us answers to questions
like: "What is it like for kids to grow up with parents who have _never_
worked?"[1]

Universal Basic Income projects also tend to fail hard at the Universal part.
It’s hard to study how _society_ would change if you are not piloting
something that is intended to affect all of society.

For the Finland study, the cohort doesn’t even scratch the "U", and somewhat
contradicts itself:

> During the experiment, a total of 2,000 _unemployed persons_ between 25 and
> 58 years of age will receive a monthly payment of €560, _unconditionally and
> without means testing._ The experiment will run for two years.

(quoting from: [http://www.kela.fi/web/en/experimental-study-on-a-
universal-...](http://www.kela.fi/web/en/experimental-study-on-a-universal-
basic-income))

I've written my own long list of objections to UBI, here:
[https://medium.com/@simon.sarris/after-universal-basic-
incom...](https://medium.com/@simon.sarris/after-universal-basic-income-the-
flood-217db9889c07)

I think it's an important problem, but I'm totally flabbergasted at how much
simplistic thinking the proponents are willing to gloss over.

~~~

[1] There answer is SSDI but don't look at it if you want to sleep at night.
[https://web.archive.org/web/20130420171159/http://thelastpsy...](https://web.archive.org/web/20130420171159/http://thelastpsychiatrist.com/2013/04/the_terrible_awful_truth_about_5.html)

~~~
howard941
Your footnoted link was good reading. Disturbing but good. Thanks for posting
it.

------
JoeAltmaier
These experiments confuse me. Haven't we already seen the result of UBI?
Pensions, states that issue money (from state oil income etc), allowances,
annuities?

The world doesn't come to an end; the people don't all become listless and
stop contributing. The currency doesn't inflate uncontrollably; prices don't
change at all. The cost of living is unchanged (because economics doesn't work
that way).

All the FUD produced over this is astonishing. I admit, I had questions to
begin with as well. But it takes only a little reading and thinking to get
over it.

~~~
prostoalex
> the people don't all become listless and stop contributing

Well, in the US two groups that do get state distributions - residents of
Alaska and those on Native American reservations - do have disproportionate
rates of substance abuse (mainly alcohol).

As far as seniors who get pensions, what is your definition of "contributing"?
In many cases they are eligible for those pensions only once they declare
themselves retired.

~~~
wgerard
> residents of Alaska

Probably a bad example to bring up.

The Alaska fund distributions amount to roughly ~$1.5k a year. Not quite the
same as a pension or UBI. I'll probably get egg on my face for saying this,
but I highly doubt anyone in Alaska lives solely on fund distributions.

Further, as noted [1], the "dividend had no effect on employment, and
increased part-time work by 1.8 percentage points (17 percent)... our results
suggest that a universal and permanent cash transfer does not significantly
decrease aggregate employment."

1:
[http://www.nber.org/papers/w24312.pdf](http://www.nber.org/papers/w24312.pdf)

~~~
mrep
One of my intern friends a few years ago was from Alaska. He said all that
money practically goes towards heating because it gets so freaking cold in the
winter.

------
dandare
There are two problems with universal basic income:

1/ Many people think UBI is a great idea but everybody imagines something
else. This makes discussing UBI very difficult.

2/ Regardless of what version of UBI you personally support, it is probably
not a good idea to give money to those who don't need it. Sooner or later
people will realize that what they really want is tax/benefit reform, not
universal basic income.

REAL NUMBERS HERE -> Check out this process flow diagram:
[https://www.lucidchart.com/documents/view/87d3102c-5b89-4001...](https://www.lucidchart.com/documents/view/87d3102c-5b89-4001-9929-346873d19571#)

~~~
magduf
>2/ Regardless of what version of UBI you personally support, it is probably
not a good idea to give money to those who don't need it.

Wrong. The system doesn't work if you don't give people to money who don't
need it: the administrative requirements of assessing who and who doesn't need
it, and then policing all this, is just too high. This is the reason UBI was
invented in the first place!

It's very simple: you give the same money to everyone, even if they're a
billionaire. To make up for this, you raise the taxes a commensurate amount on
the people who don't need it (and more for the really rich people, because the
idea is wealth redistribution). So someone making $100k, for instance,
obviously doesn't need a handout, so you raise their taxes that same amount so
they're paying back in taxes what they're getting from the UBI, and netting
zero. It's much easier to do this than to have thousands of government workers
auditing everyone to make sure they aren't "cheating" by receiving money
they're not qualified for, which is what we do with current welfare schemes.

>Sooner or later people will realize that what they really want is tax/benefit
reform

No, tax reform doesn't do anything to reduce the administrative burden of
current welfare systems. UBI does. Less money you pay out for unnecessary
government office workers is more money you can end up giving to people in
need, and society will be better off with those government workers finding
more productive professions which might actually generate more wealth and
taxable income, instead of just being a drain on taxpayers.

~~~
dandare
Thank you for proving my point. And now look at the numbers in my diagram, the
administrative costs are negligible compared to the cost of giving money to
those who don't need it.

~~~
bryanlarsen
You're missing a section on the bottom of your chart.

Who will pay for UBI? -- income tax. Raise the per capita income rate an
average of £12,000, (£15,000 pounds minus the ~3,000 in savings you calculated
earlier).

No net impact on the average taxpayer, little impact on the rich and massive
impact on the poor.

~~~
dandare
I did the calculation for UK 2015-2016:

There are about 31 million taxpayers in the UK. The basic income tax rate of
20% for income up to £42k/year generates 33% of the income tax revenue. Let's
agree that these are not the rich people we want to tax. (88,7% of Britons
earn less than £50k/year.)

The higher (40%) and additional (45%) tax rates generate the rest 67% or £117
billion of the £174 billion income tax revenue.

In order to raise additional £472 billion, we would have to increase the
higher and additional tax rates to approximately 211%.

As you can see, taxing the "rich" cannot raise enough money to give everyone
unconditional poverty line minimum income.

Source: [https://www.gov.uk/government/statistics/income-tax-
liabilit...](https://www.gov.uk/government/statistics/income-tax-liabilities-
by-income-range), [https://www.gov.uk/income-tax-
rates](https://www.gov.uk/income-tax-rates)

~~~
bryanlarsen
"Let's agree that these are not the rich people we want to tax."

I definitely do not agree. BI is only viable if the average taxpayer sees no
or very little net benefit from BI. So the average taxpayer would pay £15k
extra in taxes if they receive £15k in BI. And £42k is above average (but not
a lot, the medium income is £21k, but only a little more than half of adults
are taxpayers)

~~~
dandare
The average taxpayer with income between £20k and £30k pays on average £2630
tax, some 10.7%. If you hand him over £15k and them tax him on average
additional £15k then his tax rate must be around 44%. This will be extremely
demotivational. A hard-working person will have barely more than absolute
freeloader and if he tries to work extra hard you will take half of his
reward.

~~~
bryanlarsen
No, he will have almost twice as much money as the freeloader.

More importantly, if both him & the freeloader are spending £15k on rent &
food, then the freeloader has £0k of disposable income and the worker has
infinitely more disposable income.

Another way of looking at it is that average taxpayer with UBI has an income
of between £35k and £45k and has a marginal rate not much different from what
people making £45k are paying right now. People making £45k aren't currently
significantly demotivated by taxes, are they?

~~~
dandare
You are contradicting yourself.

"the average taxpayer would pay £15k extra in taxes if they receive £15k in
BI"

vs

"Another way of looking at it is that average taxpayer with UBI has an income
of between £35k and £45k".

Today a taxpayer with median income £21k takes home £19k net. After your
reform, he will take home the same £19k net (remember: pay £15k extra in taxes
if they receive £15k in BI). Except hew will now be way below the median and
making only £4k more than the now ubiquitous dude Lebowski type.

~~~
bryanlarsen
The average taxpayer is well above £21k -- that's the median income, which
includes the 40% not paying taxes and of course median is well below average
due to tail effects.

------
upofadown
A more accurate title might be: Finland declines to extend its experiment with
basic income.

------
AnimalMuppet
Reading the comments, I'm getting the feeling of "No True UBI". Every UBI-ish
attempt that has been mentioned so far, someone says, "But that's not _real_
UBI, because..."

We may need some more precise definitions. UBI-1 is some precisely-defined
thing, UBI-2 is some other precisely-defined thing, and so on. Then we can
say, well, Saudi Arabia did and still does UBI-4, and it has had these
effects. Then we can look at various experiments and start learning something
about whether UBI is workable, and if so, _what kind_ of UBI it needs to be.

------
matte_black
Instead of giving out money, why not give out the basic necessities directly?
A free home, free utilities, free food, a basic vehicle, free clothes, free
healthcare? If you’re happy with these things you’re set, if you want more you
work for it and acquire money.

Seems like this would accomplish the same goals of UBI, but with less risks
and impact on the economy, and at some point you can benefit from economies of
scale to provide these things at even lower cost. People would not need the
financial discipline and restraint that comes with managing a basic income.

~~~
tachudda
Often times when I've seen this discussed, the reasoning behind straight cash
vs just necessities, it often has to do with overhead. If you just give people
money, its easier to administer, everyone in the program gets the same cash,
theres no inventory to administer, theres nothing to check. The other thing
often discussed in the same manner is help that has certain "morality"
clauses, such as welfare or help, but only if the poor person makes certain
decisions. As far as total impact, you can do more by just giving money, and
not spending any of it policing behavior.

~~~
matte_black
To me this is just throwing money at a poverty problem and hoping it will fix
itself.

It will never work, UBI will inevitably raise prices of things so people will
need more basic income to get what they want. That means having to either give
out more UBI or have the program become irrelevant because it doesn’t keep up
with standards of living.

A free house though is a free house. It does not become any less of a houses
just because more people have houses. And you don’t have to give out more
house to each person over time.

It seems to me that we need better systems for administration of free goods.
These are problems we can solve, permanently.

~~~
aeorgnoieang
> A free house though is a free house. It does not become any less of a houses
> just because more people have houses.

What about houses that are damaged or destroyed? Will your "trivial" system
repair or replace them? What if the occupant is responsible for the damage or
destruction? What if this is the second or third such free home they've
destroyed?

And how will people move? Can they move? Can people trade homes? Can they
still buy and sell them? If a person sells their home will your system give
them another one for free?

~~~
matte_black
Why do you think a free home must come with some restrictions? It’s very
simple. It’s yours, _free and clear_.

Do whatever you want with it, even destroy it. But you’re not getting another
one. And if it’s damaged you need to repair it. Buy insurance if you can. If
you can’t deal with it get a free condo or apartment instead not a SFH. If
theres a big natural disaster and your home is affected apply for aid or
perhaps a new home for these special cases.

------
Siecje
With UBI people say you are not discouraged from working because everyone gets
the money no matter how much money they make. But where does that money come
from?

Once you earn enough surely they will be taxing you more than you receive per
month, otherwise the system would not work.

~~~
Klathmon
I have really only read comments on UBI so I might be extremely wrong, but I
believe the idea is that as we move toward a more "automated" life, the "1%"
can make enough to pay for the 99% to have UBI. And since everyone gets the
same baseline, even monumentally high tax rates would be tolerable.

This is basically a way of redistributing wealth with the added side benefit
that you can quit your job without fear of losing everything in your life.

~~~
nabc45
>you can quit your job without fear of losing everything in your life

That sounds like an American problem more than anything else

~~~
Klathmon
It's a problem everywhere, but many places have some kind of safety-net
working to prevent it.

The idea of UBI (at least in theory) is to make that safety-net universal,
remove the barriers to use it, lower the overhead cost of administering a
system like it.

Remove the need for applications to benefit from it, remove the wasteful
"taxing unemployment income" that happens currently (at least in the US),
remove the stigma attached to having it.

------
SirLJ
This is the inconvenient truth: UBI is a horrible idea, it will turn the
majority of the population into drunks and drug addicts, watching TV and doing
nothing all day...

If you want to be free in life and not to worry about money, you have to work
hard first to get your FY money, this is the only way you will appreciate them
and the freedom they provide...

------
Shivetya
Well it will be interesting to see if they do publish any findings. I do agree
it would have been beneficial to see what would happen if workers were added
to the mix. The question some like myself would like to see is, did any of the
initial participants gain employment and leave the program? What did they do
differently while provided with UBI they did not do before. I would also like
to see if they will be followed to determine the negative and positive effects
on them after it being discontinued.

my issue with the UBI fascination is that too many automatically assume there
won't be work in a highly automated world or that costs of living won't
decrease sufficiently as well. where it ends up is still unknown

~~~
JibJabLab
My issue with it is that we aren't even at a point where UBI is viable. Yes,
we have lots of automation but we still have many times more jobs still not
automated. The experiment isn't going to show accurate results.

But I agree with you - there will still be work available in an automated
society.

~~~
akvadrako
UBI doesn't need automation at all; the big question is if society is more
productive with it or with traditional welfare. That's why experiments are
needed.

------
automoton1
Doesn't UBI have the potential to cause inflation (demand and cost-push)? Is
this a valid enough concern to search for an alternate solution to UBI?

------
Nomentatus
So now, Finland has told every citizen "If we ever seriously start UBI, or any
further experiment make sure you behave like you don't have UBI, 'cause soon
enough, you probably won't."

------
Uninen
The article is a bit misleading since AFAIC there are no agreed plans yet on
the next steps. The title implies that the project is totally cancelled, but
all of the major political parties in Finland are proposing their own
solutions for replacing it. Because of upcoming elections, this is a fairly
hot topic.

------
JBReefer
I don't see a top level comment mentioning this, but what if UBI just doesn't
work? That's certainly possible - that it works seems to be taken as a given,
and evidence _against_ that seems to be dismissed frequently in this thread.

A lot of things that work seem like they shouldn't (flight, capitalism) even
after a lot of consideration - similarly, a lot of things that don't work seem
like they should (Mendelian genetics). Maybe this unfortunately just doesn't
work?

------
jkingsbery
I wish the article said something about why it's declining to extend the
experiment.

~~~
jusssi
The article does say this:

> But in December last year, the Finnish parliament passed a bill that is
> taking the country's welfare system in quite the opposite direction. The new
> 'activation model' law requires jobseekers to work a minimum of 18 hours for
> three months - if you don't manage to find such a job, you lose some of your
> benefits. And Finance Minister Petteri Orpo already has plans for a new
> project once the basic income pilot concludes in December 2018.

In short, the current political climate doesn't support it.

IIRC there's also been some discussion whether the experiment has been in
violation of equality guarantees of our constitution, as it treats a randomly
selected group different from others.

------
peterwwillis
Things you need to live: food, dwelling, energy, transportation, healthcare.
(And necessary for a thriving economy/government: trade skills, education,
military)

Self-sustaining would be very plausible on extremely modest amounts of income
if the government subsidized the dwelling, energy, transportation, and
healthcare. It may be unnecessary for large portions of a nation to work if
people produced their own goods and services (most of which could be done by
individuals, not even necessitating cooperative work except for a few
difficult tasks).

What occurred to me, though, is that this would never work in a traditional
society because the government would be responsible for too much of people's
lives. So as an alternative, a split model may work, where people can choose
between a competitive libertarian model and a cooperative socialist model. You
either work hard to earn a living that you fully control, or you sit back and
let someone provide you with your requirements, and the model you choose
determines what things like your taxes or labor go towards.

This may be an incredibly stupid and shortsighted idea, but I would love the
opportunity to live in a commune subsidized by the government - with the
choice to leave for a different model if it sucked.

~~~
fxj
I would call food, dwelling, healthcare, communication(internet) the four
basic necessities. So why not providing these for free and for the rest, just
tax other sources of income by a fixed rate depending on how much is needed to
provide the free ones?

~~~
peterwwillis
For the first two, humans are pretty capable of providing for these
themselves. Having the government provide it alone is a single point of
failure, and simply adds cost and complexity where it isn't necessary.

Healthcare is definitely something which could benefit from subsidy,
considering how advancements in it often require large coordination of R&D,
manufacturing, schools/practice, etc. Communication is just not necessary at
all to live.

Transportation, energy, and education are also necessary to enable a means of
production, trade, and basic self-sufficiency of living. Paying for these
individually is not only less efficient, it hampers the ability of the economy
to grow by limiting who has the means to contribute to it. If you can't get to
work, you can't do work, and you're basically a burden on society. And having
to pay for the energy needed to do things like cook your food and heat your
home is just another thing which is inefficient, especially considering
different parts of a country may have different access to energy resources.

I'm not well read on tax policy so I don't know the best way to fund these
ventures, but it would be obvious that one group would need to be taxed
heavily while the other was taxed lightly, due to the difference in the use of
or contribution to subsidized resources.

------
praha14
I understand the argument that, once free from work, a number of people will
voluntarily choose to work as physicists or playwrights or mathematicians.

What I haven’t understood, though, is why someone would choose to work as a
bricklayer or spend their 20s sitting in a fluorescent office designing an
industrial process to make ball-bearing lubricant 0.4% more efficient. It’s
that sort of menial, unglamorous labor that our society and quality of life is
built on.

~~~
magduf
That's because, for some strange reason, you're confusing UBI with some
idealized form of communism.

UBI is Universal Basic Income. The keyword here is "basic". If you sit on your
ass and collect UBI, you should receive enough money to let you live in a
crappy apartment with roommates, and get some crappy food to eat at the local
crappy grocery store. Do you want to live in a crappy apartment with
roommates, and not be able to afford to eat at a nice restaurant? Me neither.
If you want extra luxuries, you have to work more, to make more money. That's
UBI in a nutshell.

~~~
smokeyj
Do UBI supporters intentionally not understand supply and demand?

Who wants to work at a restaurant if they don’t have to? Who will lay bricks
and take out the trash if they don’t have to? The idea that UBi can help
people find fulfilling work leads to the question of who does the unfulfilling
work.

~~~
magduf
Do UBI haters intentionally not understand wanting to have a better life?

People will work at a restaurant if they don't have to so they can afford a
place without crappy roommates, or in a better part of town. It's really that
simple. You work, even at a crappy job, and now you have more money than you
get with the UBI alone. Is this really such a hard concept for you?

~~~
smokeyj
> and now you have more money than you get with the UBI alone.

And so does everyone else. Prices will reflect that.

> Is this really such a hard concept for you?

Yes, what's so hard about supply and demand? Housing costs too much? Increase
supply. Healthcare costs too much? Increase supply. Education costs too much?
Increase supply.

I feel like I'm taking crazy pills here. It's all really simple. If you want
the price to go down increase supply. I'm not saying it's easy - but nothing
else will work. Redistributing costs more energy than is gained. If you want
to help those in need, increase supply.

~~~
magduf
Ok, and WTF do you do for people who can't work, or aren't in a position to
get a job, or simply cannot afford things at the prices they're at? You're
never going to have free housing and food. That's why we have welfare systems,
and that's what UBI aims to improve.

I feel like I'm taking crazy pills here. It's all really simple. Welfare
exists for a reason, even if people like you refuse to believe this.

~~~
smokeyj
> Ok, and WTF do you do for people who can't work, or aren't in a position to
> get a job

Make jobs that increase supply, and give some of that supply to those who
can't work. China is building new cities from scratch, why not do that given
the scope of UBI as an initiative?

