Also, this is Finland a small, rich and homogenous country. Whether their model can be adapted to say Indonesia or the US or Japan is to be seen.
The main source of ideas was from Milton and the Nixon administration who with the economy going south looked for alternative means for people to "make" a living.
"...Friedman believed that it should be accompanied by an end to any minimal wage system and any other system of social protection. Friedman also believed it should be as low as possible and financed by a flat income tax"
So it'd be accompanied by a loss of minimum wage floor as well as it should be as low as possible (approx USD 1000/mo after initial trial phase in Finland.)
It's not a comfy lifestyle by any means, but could get people off the streets who otherwise would not have the means.
Given those parameters, with a few exceptions, I don't see this implementation undermining people's will and want to work and at the same time it has great upside in simplicity and affecting their poorest citizens positively.
Two important effects of this would be:
a) the labour market would become a lot more open and free. At the moment, employers wield all the power because employees need a job. It's not a free market if you can't say no to a deal. With basic income, people can say no if the offer is too bad. But if your alternative is starvation, a terrible job for too little pay is still better than nothing. Minimum wage exists to limit the employers' power to exploit people who have no option to say no.
b) It fixes the unemployment trap. For people with unemployment or disability benefits, getting a low-pay part-time job often means they end up with less money (or the same money and more costs) despite them taking the effort to work, because they lose the benefits. This discourages people from working. With Basic Income, you keep that income if you get a job, so you always get ahead by working, even if it's only a little. There's nothing fraudulent anymore about doing little jobs while unemployed.
I'd probably prefer both the basic income and the tax to be a bit higher than Friedman would like them to be, but that's part of the standard political-economic give and take. As long as the Basic Income is at least enough for decent food and rent, I'm happy.
Progressive taxation is a recognition that there is a disproportionate benefit in living in an ordered and lawful society for those with high income (and assets, though we seem to have lost the plot on taxation of assets). You depend on the efforts of a lot of people, each of whom has benefitted from the state's education and infrastructure. Your products benefit from the state's legal support, your money from the state's stability, and so on. Progressive taxation is a recognition that those benefits don't scale linearly: those at the highest incomes benefit not only from the linear support of their wealth, but the exponential support of society.
Taxation is not theft. Society enabled you to earn that money. In return, it wants a cut.
It's true that most of those who receive the money taken from you in taxes will not have 'earned' it either. Most of those that built the society that you're benefiting from are dead -- the scientists that enabled modern technology, the industrialists who built the economy, the soldiers and politicians who gave us our free society -- the most important work was done by those who came before us.
We are all their heirs.
The "cut" society received is the benefit it gained that made it pay the person enough to make them wealthy.
>Progressive taxation is also a recognition that most of anybody's income is enabled by living in a modern, safe, resourceful, co-operative and free society. Without a modern society and without the benefit of all that have come before us, we'd all be subsistence farmers.
Are the citizens of Singapore, with it's 20% top tax bracket, subsistence farmers? Are all the people in the countries listed at https://en.wikipedia.org/wiki/Flat_tax#Countries_that_have_f... subsistence farmers? There may be moral arguments for progressive taxation but they aren't economic ones; non-progressive taxation is perfectly capable of funding a modern society.
>It's true that most of those who receive the money taken from you in taxes will not have 'earned' it either. Most of those that built the society that you're benefiting from are dead -- the scientists that enabled modern technology, the industrialists who built the economy, the soldiers and politicians who gave us our free society -- the most important work was done by those who came before us.
These who came before us chose to do whatever they did. Someone being born didn't choose to be born, so it's not fair to suggest they have some kind of obligation to the previous generation. A contract to which one party did not consent is not a valid contract.
And yes, virtually all the states on that list are significantly poorer and have drastically worse social services than Western Europe.
I didn't contract with the government to accept their jurisdiction over territory (though every tax I've ever paid has been due to a free and fair decision to do business and make purchases on their terms), but then I didn't contract with wealthy people to agree to their ownership of assets they claim rights to stop me using or charge me for using either...
Contrary to propertarian mythology, both the institutions of property and government are imposed by a mixture of force and the likelihood of society being substantially worse off if they didn't exist.
There's a big gap between "significantly poorer" and subsistence farmers. As in, an order of magnitude of GDP in many cases from that list (e.g. Russia).
>Contrary to propertarian mythology, both the institutions of property and government are imposed by a mixture of force and the likelihood of society being substantially worse off if they didn't exist.
The difference is that government necessarily involves force, due to requiring involuntary taxation (an entity funded by voluntary donations isn't generally considered a government, it's considered a charity), while it's possible for a group of people to agree to trade together and respect some notion of property (be it the strong capitalist notion of property or the weak anarchist notion of "possessions") without requiring force.
You can have a perfectly harmonious society where everyone within it voluntarily respects each others' possessions, but you're still going to need force (or the implied threat of force) to prevent outsiders who aren't part of that particular social contract and don't particularly want to be from making use of that property. The possibility that someone might not voluntarily accept a social contract over the ownership of property is an existential threat to property rights which can only be resolved through [implied] force. Hence de jure and de facto the basis of all property and trade is the coercion that enforces its rules, whether that's by a government institution or a group of friends with big guns.
I hope you agree with me that society does not equal government.
I do not beliefe taxation is theft, but your argument for taxes simple is not good either.
government == society
If government exists completely separate and independent of society, something is wrong.
our government == functioning democracy
Additionally, the large majority of society's interactions happen outside of any democratic vote. The whole goal of the Constitution was to narrowly white list the functions of government so that the Civil Society could be left to operate as it saw fit thus maximizing individual liberty.
In general, not maintaining a clean separate abstractions for government and society is like having classes that try to have too many unrelated behaviors. They lead to unneeded coupling of functions and an inability to reason cleanly about the whole system.
The thing is, the moment you abandon the option of using the government as the tool by which society organizes itself, you abandon democracy. I'm not sure where else you can go from there, other than accept that you're never going to be free.
Most taxes are percentage based.
Let's assume tax level is 20%.
- one earns $1000 he will give $200 in taxes,
- one earns $10000 he will give $2000 in taxes.
Richer person already gives more to the society than the poor one, taxing the rich guy with higher taxes is just a way of making them guilty because they made it.
Progressive taxation here in Europe actually hits the middle class the most, as most of them are already in the highest tax tier (I'm not talking about the ridiculous French 75%) and as soon as you reach this level you are suddenly hit by a big tax. It makes you wonder, what you did wrong?
Richer person also received orders of magnitude more from society than the poor one.
"taxing the rich guy with higher taxes is just a way of making them guilty because they made it. "
It is not, at least to a sane person. If you're the type of person that believes that saying "Happy Holidays" is persecuting Christians, then you might think that.
"It makes you wonder, what you did wrong?"
No, it doesn't. Not at all.
Let's suppose a BI of $1000/month and a 50% flat tax.
Someone without a job gets $1000/month.
Someone with a $1000/month job pays $500, gets $1000, ends up with $1500/month.
Someone with a $2000/month job pays $1000, gets $1000, ends up with $2000/month, paying effectively no taxes.
Someone with a $4000/month job pays $2000, gets $1000, ends up with $3000/month, paying effectively 25% taxes.
Someone with a $10000/month job pays $5000, gets $1000, ends up with $6000/month, paying effectively 40% taxes.
Note that I'm not opposed to keeping progressive taxation on top of the BI. I just think it's not really necessary anymore, and it could be used to convince conservatives to give this a try.
If BI is also excluded from taxable income in an otherwise "flat" scheme, it's effectively a two-tier progressive tax system (many proposed "flat" taxes without BI also follow this model), with a zero % bracket and one other bracket; still not a smooth progressive curve. A smooth progressive curve is when marginal (not total) tax rate is a continuous, monotonically increasing function of income (probably asymptotically approaching done limit.)
It's very much worth noting, though, that there are plenty of progressive curves - including those currently in use by many jurisdictions - that have no close approximation in that set. And in particular, if what you want is an increasing marginal tax rate, it does not do that.
It's absolutely worth comparing this to some progressive tax systems without BI (though that's a lot more work because those systems are a lot more complex), but I suspect BI will do reasonable well in that comparison.
EX: The interest on student loans are only tax deductible under a specific income. So, if you pay 2.5k in student loan interest your effective marginal tax rate increases by ~16% from 65k to 80k. The top tax braket in the US is 39.6 which is less than the 25% marginal tax rate from 65k - 80k + 16% (25+16 = 41). On top of that the top marginal tax rate does not include Social Security or Medicare income taxes, but deductions don't apply to SS or Medicare taxes.
I'm not sure what the "not really" refers to. Its true that the US system is only progressive if you look at nominal income tax rates, ignore the different treatment of different sources of income, ignore the main tax on income paid by most working people (payroll tax), and ignore, well, lots of other things.
That's kind of irrelevant to the point I was making, which had nothing to do with the status quo US income tax system.
> So, if you pay 2.5k in student loan interest your effective marginal tax rate increases by ~16% from 65k to 80k.
Actually, that's wrong, because deductions are not credits. If you got a credit for 100% of student loan interest paid that phased out over the $65k to $80k range, that would be an effective ~16.7% additional tax over that range with $2.5k of interest paid. But its a deduction (which means it reduces your taxable income), so with the marginal rate in that range of 25%, it only increases tax liability by $625, which is a ~4.2% increase in effective tax rate. (Which still breaks progressivity, since the effective marginal rate of 29.2% is slightly greater than the next bracket of 28%, buts its not greater than the top bracket of 39.6%.)
Good catch, I read "You can reduce your income subject to tax by up to $2,500." as "You can reduce your income tax by up to $2,500."
Consider a BI of 100 with flat tax of 45%, and people with before-tax paychecks of 300 and 1000. First guy ends up with 265, second guy with 650. These exactly correspond to BI-less tax rates of 12% and 35% respectively. Second guy's taxes can pay for both their BI and then some. Their paid taxes total 485, just short of 5 BIs worth.
Rich people have money. Making money using money is almost not taxed here. So they escape the taxes.
If you are paying 40-50% in tax, they're probably only paying 15-20%
Yes, they are regressive. So are income taxes, the only difference is that people lie (even to themselves) about those.
Personally I'm quite a big fan of the Estonian tax system. You pay tax once you take money out of the company (i.e. when you want to spend it)
Progressive income tax is no longer a very relevant factor for financing BI, or anything, in Finland. The main purpose of progressive tax in Finland is no longer about collecting revenue; it is about punishing those who are doing too well. That is very apparent from the public discourse.
So yes, Finland is likely somewhere on the right hand side of Laffer curve, particularly for high earners. (For low earners, many countries are; that's where BI system might help).
Your location on Laffer curve is of course hard to prove because the world is such a volatile place -- you cannot experiment with different tax rates and see what happens, because all the other factors impacting revenue are changing all the time so no trial will produce consistent results.
But Finnish income tax progression is just about the tightest in the world. The highest decile (anyone earning more than €50k a year, gross) pays about 43 % of income tax revenue . However, that revenue pales beside revenue from consumption taxes (VAT, which is now 25%, and fuel taxes, and vehicle taxes).
The country's tax revenue is higher than ever, but it is not enough when government spending goes up even faster. Public deficit is about 3.3 % of GDP . Whatever we do with taxes is not going to fix that hole. Some control on the money-flow out will be needed.
Finland also does not spend as much as you would expect on health, schools, military, infrastructure, public security and just about anything you normally think of as the government's role. There is one major thing where Finland spends comparatively more than other developed nations: transfers.
The motto of government seems to be "if it moves, tax it; when it eventually stops moving, subsidize it".
And many people who are about to make a lot of money (e.g. sell the company they've grown) will run to Sweden as a tax refugee. Think about that. Run to Sweden as a tax refugee.
For wealthy people, income tax doesn't matter as much as capital gains
CGT is a mildly progressive 30-33 % here. If the government were trying to get 60 % which is my marginal tax rate for earned income, their revenue would likely plummet because there would not be much sense in showing capital gains in this country. Anyone selling a business etc would move to that great tax haven, Sweden, for the year when they sell.
For us workers, the best tax planning option is to switch earnings to non-taxable form like working for ourselves.
E.g. if I want to have a new garden shed, I don't pay someone to build it. I take unpaid leave from work and build it myself. This way, the tax office pays most of my garden shed. This country has probably the most expensive carpenters you can think of...
At the end of the day, it's simple math. Live in country X, pay 33% when sold. Live in country Y, pay 15% when sold. Live in country Z, pay nothing. When we're talking about millions in tax, Monaco/Belgium/Malta/the UK do become very attractive very fast. After all, you can always return a few years later and live like a king.
43 % is the proportion of tax revenue paid by the top decile.
(10 % of taxpayers pays 43 % of revenue.)
But of course people are running elsewhere as well. Recently there has been fuss about wealthy pensioners moving to Portugal where they pay no tax.
You are somewhat right, however - a BI will give people the ability to turn down all jobs. E.g., in the last BI experiment, work effort was reduced by 13% - more than double the effect of the great recession.
A much better solution is the Basic Job. You get a Basic Income (which pays less than any job in the market economy) but you need to work for it. You spend a lot less money (anyone working in the market economy doesn't get paid by the basic job), you have minimal disincentive for getting a job, and you get some productive output (e.g. parks have less trash).
That's simply not true. There are plenty of regions (many rural places) where the inhabitants have one option of where they can work due to a small number of employers and the individual's skill-set.
Meanwhile, outside of China...
As 'successful' people we can see many ways out of these arbitrary situations, even if you tie our hands behind our backs with something like "and no plan that involves your current professional skills like acquiring any old computer and doing software dev". We can also execute on our plans. For us, being poor is a choice, many of us started out that way to begin with and chose to do better than our parents. For a lot of others, it's really a lack of capability in not only seeing ways out but also precisely following instructions someone else gave them to get out. As the saying goes, you can lead a horse to fresh water... All the opportunities in the world are useless to you if you don't have the capacity to see them or execute on them.
This may be true in some parts of the world but here in the UK the minimum wage has become a standard wage for all kinds of jobs.
This is because we have a tax credit system designed to make up the difference. What's happened over time is employers are gaming the system by offering jobs on minimum wage and the minimum number of hours required for the tax credits to kick in.
Often the hours offered result in someone working part time but on hours, such as 10 - 3, that make it impossible to get another part time job.
Employers that used to pay overtime now employ extra workers instead. So we have a country where unemployment is relatively low but where a lot of people don't have any disposable income.
Efforts by the current Government to address this problem are , predictably, meeting a lot of resistance.
In the US most of our poor folks don't work - do you have stats showing differently in the UK? I'm very curious now.
A GOOD system is the one which helps hard workers to lift themselves from being poor in any meaningful way (less bureaucracy, more help with kids, less taxes, more subsidies etc.) rather than one that prevents an easy improvement. What OP described ain't that good, unless your primary goal is to have nice low stats for unemployment.
The current system disincentives old fashioned hard work as any extra money earned equates to a drop in benefits received.
However, the 'unemployment rate' was 5.5%
* A person is classed as unemployed if not only out of work, but also actively looking for work and available to start work within a fortnight.
* The unemployment figure is higher than the claimant count as many job seekers do not or cannot claim JSA (Job Seekers Allowance)
I thought this statement might be due to the crazy-low federal minimum wage in the USA, so I looked at statistics here in NZ where the minimum wage is closer to reasonable (although still only 75% of the living wage ). 2.4% of people in employment earn minimum wage , and 39% earn less than the living wage for their main job  (about the same if you look at total income). All statistics and values I've collected are for 2013.
We aren't close to that point yet.
Meanwhile people without jobs are suffering. Lets fix that right now, with a BI.
We can also fix the problem of people without jobs by giving people jobs.
What? Most jobs pay less that minimum wage.
> E.g., in the last BI experiment, work effort was reduced by 13% - more than double the effect of the great recession.
Because 13% didn't feel like being slaves anymore.
> A much better solution is the Basic Job.
I'm going to ignore your blatant misuse of the term "slave".
Your figure of 0.9% is for people over 25 who earn exactly minimum wage (1.6% in that line earn less than it)
Edit: Also, if you're not paid hourly (i.e. flat salary), you'll not be included in those tables. So if you're salaried at minimum wage, but work unpaid hours (which seems to be common in the US), you're earning less than the minimum wage, but not "Officially".
You can change the denominator if you like, that doesn't change the substance. Regardless, 0.94% or 3.9% is far less than "most" (which is what mrottenkolbar claimed).
The only incorrect statement anyone has made is "most".
Yeah, you've clearly not been going outside the past 5 years.
It is also a nice idea for personal freedom, but not for the benefit of the society.
Minimum wage is a way much better thing.
The EU has the property, that any citizen has the freedom to choose freely his work place and to choose freely his living place. People are using it and this is good for one and bad for others.
For example here in Germany, we have many people from Poland, Hungary, and other such countries working in jobs for cheap, at least cheaper than a German works for. Jobs are like health care system, construction work, butcher, and even in Amazon Fulfillment centers and alike. For them it is still a lot of money, because their and their families living place are their home countries. It is way cheaper to live in those countries than here in Germany. (I think the same is true for the Netherlands, Belgium and others.) So those people live here in Germany for cheap, because they consume here in Germany few to none services and goods. They bring their goods from their home countries with them. So that they can save money for the family support at home. That leads to the situation, that the money is removed from the circulation within Germany. Little to few services consumed means, no jobs for others, means also no taxes for the country.
That is not changed with BI. It is even more, local people (or people who decided to have their living place in that country) will benefit from BI and decide not to work for that low income. That is not a problem for the companies, because we have lots of those other people, who will work for that money, which will not qualified for BI. So basically, with BI you will introduce an even lower class/society.
Versus with required minimum wage the country, the society can set that to a level, which supports to live in that country. So that people are willing to work for that income. That means, that the money will no be removed from the country by people from abroad. The money will be used within the country to consume services and goods and as such will support other jobs as well. That will lead to an healthy economy.
BI is not for people with disabilities. Do you really think, that people with disabilities should have the same amount of money? People with disabilities have way higher costs of living. They need special support in terms of (medical) device, re-fitted living space, re-fitted mobility requirements, and much more. So that people with disabilities have an equal quality of living, they need more support. But all ideas, I have seen so far, consider also the budget dedicated to people with disabilities as budgets to be usable for BI. That is like a kick in the ass to the people with disabilities.
The mismatch between forced homogeneity in some areas (like currency) and not in others (fiscal policy) is what contributed to the Greek debt crisis.
For people with disabilities, you can add an additional income on top to reflect their additional costs. And as far as I'm concerned, if they do manage to get a job, even temporarily, they keep the extra income.
I used to know a buy who was seriously spastic. Easily 100% disabled. Nobody would ever expect him to work. But inside that spastic, uncontrollable body, he was actually very smart and good with computers, and he got a job as programmer with an employer willing to accommodate for him. Then the department he worked got downsized, and all his coworkers got unemployment, but he didn't, because he was disabled. So he registered for regular disability pay, but didn't get it because that was for people who got disabled during their working life, and his was a birth condition. There was a separate kind of disability pay for that, which he also didn't quality for, because that's for people who couldn't work at all, and he'd clearly worked.
With BI, that wouldn't have been a problem.
To expand on this, removing the minimum wage is meant to make it easier for people to "get their foot in the door". The economic notion is that e.g. if X's labour is not worth more than $5 per hour, and the minimum wage is $10 per hour, then X will have great difficulty finding work (because the ultimate minimum wage isn't $10, it's $0). This means they'll have more trouble obtaining the work experience that would make them more productive. Removing the minimum wage means anyone can work who wants to, and the basic income protects them from the hardships that normally accompany low-wage jobs.
If I accept a lower pay job, I'm doing my part on lowering the pay for that job in the collective bargaining between employer/employee. You might think it's not detrimental for you, but it's detrimental for everyone who competes for that job. And, as your argument is truthful, it will become a spiral: no disincentive in accepting the $2/hr job, then no disincentive in the $1.95/hr job, then ... for n iterations until there's no disincentive in doing it for free, for the experience or the kicks.
And, of course, in the end the benefit will go the usual beneficiaries.
You say this like it's a bad thing. Study after study show that people perform their best creative work when it's decoupled from extrinsic reward.
If basic income covers all of your needs and allows you to do what you enjoy for the sheer pleasure of it, what's wrong with that?
as an example - what I do to earn money, while enjoying it mildly as abstractly creative process (software development) is vastly different from what I do in my free time (mountaineering, travelling, general wilderness adventures). You cannot buy my vote on this with some basic 1000 USD income, if you tax high earners like hell on the other side.
One thing I saw consistently all around the globe - people need motivation to give their best and try hard, only few deliver without it for sheer pleasure. It doesn't have to be monetary one, but this one is universal and quite well oiled principle. BI doesn't offer me anything - I want to work, I don't have an issue finding next job, and if there is anything between, we have working social system that helps me. What does BI offer to somebody like me?
...currently. Things change, and you may one day find you do have an issue finding your next job. As someone who has been in that situation in the past, relying on a "working social system", I would much rather have guaranteed basic income to fall back on (in addition to universal health care, which is even more urgently needed where I live).
What's wrong is a potential increase in income inequality and worst wealth distribution.
A corporation or somebody from a upper class will be getting richer from the work being done while the guy(s) doing the work with the basic income will stay at the same level. I don't think we should increase our inequality metrics even further.
But I agree with you on the whole. The serfs should just be grateful I'm not beating them.
By the way, thanks for the interesting links.
you deal with it with progressive taxation
And, empirically, you can see it. In my country (Portugal), with a supposedly agressive progressive taxation, inequality measures (Gini and Palma) are increasing. And the amount of luxury cars too. :)
This means that in the overall collective environment jobs that are undesirable (garbage collecting is the normal example) will actually pay more than something like being an political intern. But people could do both of these jobs and still have money for housing/food/etc.
Only if you assume one's time is worthless.
Opponents to basic income argue, among other things, that this is too much power and some workers would become exceedingly picky, without the fear of not being able to pay for rent and food. There definitely is a moral aspect to the question, with "anti-cheater" emotions/reactions.
I think that's important, and not just for those people: that they don't have to accept a minimal (and likely dead-end) job to survive also means that those who would be inclined to are not prevented from taking steps that prepare them for a better and not-dead end job, that is more useful both to them and society.
There's a chapter on minimum wage in "Economics in One Lesson" that picks up the argument of the parent post.
The competitors of Deutsche Post are now using special structures not to pay the minimum wage to people (they are contractors) and this pushes Deutsche Post to do the same.
So, for this case, it was not good. In fact, the people in Germany pushed to get a minimum wage for all employees and the right wing government accepted. It shows you how bad the lack of minimum wage was for the people.
Basic income better aligns everyone's economic incentives, so it solves (in theory) a whole host of the problems we've got.
It's great to hear that some form of it is going to be tried.
Basic income realigns people's incentives. It might be better than a really badly designed welfare system at removing "welfare traps", but it also can be expected to have a whole host of negative aspects in comparison to other possible configurations of the payment of government subsidies.
I will accept that there are almost certainly edge cases which I can't predict that will need ironing out. probably due to the administration of updating the list appropriately. but basic income seems very much like the proverbial silver bullet that never exists, so I am curious over its negative aspects.
in discussing with friends and family, the worst thing about basic income is it means paying people for doing nothing and that _really_ _really_ angers some people. even worse, it means even millionaires get basic income!
- massive distortion of low-end wages, particularly for unpleasant, useful but not particularly revenue-generating jobs such as cleaning. Further outsourcing of manufacturing work for the same reason might be considered a negative aspect by some (especially people with moderate-to high skills related to that manufacturing)
- massive skewing of wage payments away from younger people in many competitive areas of employment, because now that the taxpayer will cover living costs and assuming removal of minimum wages there's absolutely no reason to pay trainees, apprentices (or the likes of runners desperate to make it in television) any non-trivial sum until they've spend a long time "proving their worth".
- regional cost-of-living differences and a guaranteed permanent income encourage former job-seekers to relocate to areas where their prospect of getting a job is minimal. This is further exacerbated if better-targeted housing benefit payments and social housing are removed from the equation.
- depending on the level of BI entitlement children get they're either likely to become a lucrative income source or unaffordable in many areas, especially for single parents.
- a surprising amount of BI revenue will be captured by low-end rents, and other costs that people with more cash to spend at the bottom of the pyramid can't avoid. A surprising amount of BI costs will be funded by the productive
- non-citizens are inevitably going to be heavily penalised (otherwise the country becomes an migrant magnet)
- many advocates use BI as an excuse to push for middle-class squeezing flattening of the tax system, withdrawal of education and health subsidies etc.
- the cost of paying people who would really rather not work almost certainly vastly exceeds the cost of paying wages to people whose job it is to kick people who would really rather not work off benefit programmes. Throw in the fact that people who never had any intention of claiming benefits are now entitled to them.
Like every other reform to the tax or benefit system there are a whole host of winners and losers (including people you probably don't want to be winners like "slum landlords" and the indolent, and people you probably don't want to be losers like the owners of the neighbourhood cleaning firm and hardworking immigrants). It's about as far from the proverbial silver bullet as imaginable: it's reforming existing incentives that have (for better or worse) been tested and debated for decades with a blunt instrument.
I imagine any sensible, practical proposal for basic income would start it relatively low, keeping many current benefits and gradually expand it if it is successful. That seems to be the option Finland proposal will probably take. This will give time to assess the impact and allow corrections/adaptions/cancelling it . No doubt basic income is a blunt instrument, honestly I think that's part of its appeal to me. It seems fair compared to a plethora of well-meaning but convoluted network of social welfare initiatives, that we call a social welfare system.
I will consider you points more carefully.
- obviously a lot depends on the level of basic income. and what is sacrificed for it. I had not considered the politics of people using basic income as an excuse to withdraw education or health subsidies.
- effect on wages can be mitigated in the short term by retaining a (perhaps lower?) minimum wage.
- I agree a lot of basic income will be swallowed in rent. but that will be because that is what is important to people with the money to spend.
- cost-of-living differences will encourage job-seekers to relocate to cheaper areas. this seems like a good thing. if inner city companies can not find the workers it needs, it will either relocate or provide company buses or something. that seems a much better solution than keeping job-seekers where they are.
- non-citizens is a very good point I hadn't considered. But then, non-citizens are penalized by requiring visas etc. plus EU nations will be restricted on what they can do to stop EU citizens claiming.
That really only applies in industries where people would do the work regardless of pay ("passion" based industries like film). And even then it only makes sense for capital intensive roles (e.g. it wouldn't apply to music, software, painting, comedy, etc).
For most industries, in the face of steady demand (for workers) and a drop in supply (of workers), compensation for trainees, apprentices, etc will increase.
> regional cost-of-living differences and a guaranteed permanent income encourage former job-seekers to relocate to areas where their prospect of getting a job is minimal.
Good. It stops companies from externalising their costs onto the most vulnerable in society.
For example at the moment most companies in my city are located in the middle of town. Companies are happy with this situation only because they can externalise most of the costs.
For example most of the offices in my city are ~1.5 hours travel away from the poorer areas of town. But its where the jobs are. This means a lot of low income wage workers have no choice but to spend ~3hours/day in unpaid travel time. That is hardly fair.
Introduce BI and what happens? Low income earners refuse to donate ~3hours/day unpaid labor to companies. Companies will either compensate the low income earners (great outcome!), move offices closer to the low income earners (great outcome!), decentralise (great outcome!), or be forced into more automation (great outcome!).
> massive distortion of low-end wages, particularly for unpleasant, useful but not particularly revenue-generating jobs such as cleaning.
Actually, what we have now is a distortion of the market. BI would simply cause a market correction.
> a surprising amount of BI revenue will be captured by low-end rents, and other costs that people with more cash to spend at the bottom of the pyramid can't avoid.
Probably not, because like you mentioned above, you actually significantly increase the supply of land and housing available because its no longer tied to jobs.
And if you only doubled the amount of vacant housing you would send the property market into "free-fall" - aka back to affordability.
Our world and species is not so noble as to roll over and quietly take it like the author's many many assumptions suggest. Nor would we be above being so petty as to start global wars to take what's AustraliaCorp's.
please stop with this homogenous country bullshit. Finland like any other western country has a significant amount of other ethnicities, more than 10% in the case of Finland. And it's not like people are the same if they are of the same ethnicity.
And even if it were especially homogenous, how would that matter?
Half of those are Swedish.
Now given that income taxes > (or even >>) corporation and dividend taxes even if those reduced wages translate directly into increased corporate profits the net tax take by government will fall, whilst their liability goes up from BI obligations.
All BI will do is enrich the business elite and drive further inequality.
A semi test case of BI is being inadvertently conducted in the UK with tax credits. Thanks to effectively subsidised wages by the state, wages have remained stagnant or fallen. As wages have fallen more people qualify for tax credits, further subsidizing wages in a negative feedback loop. Net result: the cost to the state has ballooned to 30bn/year from an originally projected 2bn/year with over 50% of working households now in receipt of them, coupled with ever increasing equality gap.
Far from harmonising wealth and reducing inequality, basic income will have exactly the opposite effect.
What's the evidence for this?
If B >= X then employees can walk away from any job for any reason. It inverts the labor market. Instead of employees competing for jobs, employers compete for labor. Portions of tech industry exhibit this inversion. Saleries, benefits, working conditions are off the charts compared to say Walmart line workers or Amazon pickers.
A healthy society should always motivate people to WORK and produce products/services, that's what keeps society running. If main goal of BI is to remove that motivation, I fail to see it as a step in right direction.
There are an unknown amount of reasons that would determine the success of a program like basic income, so I'm wondering why the size and homogeneity of a country are always quickly brought up.
basic income has no effect on diversity or homogeneity. perhaps it might encourage people to immigrate, but that's hardly a reason not to do it. having a country that is so desirable others would like to immigrate into it is a clear indication of doing something right. besides I think its obvious you would only qualify for basic income as a citizen.
And in those countries, experience shows that the grand-children of immigrants have far more similar values, desires, opinions and habits as their peers than they do to contemporaries in the original home of their grandparents.
The average black family in the United States has been in the United States for longer than the average white family. That blacks and whites in the United States are not essentially homogeneous even though they mostly went to the same schools, participated in the same economy, spoke the same language and experienced the same media is purely an artifact of deliberate exclusion.
Any social program is easier to sell in an homogenous country because the opponents wouldn't have the "these people would benefit" argument.
Beyond that, I still fail to see how it would matter.
At least I can't figure out a way to "screw the system" which by definition just gives everyone an equal amount of money.
Capitalism runs off of inequality of all sorts. Capitalism's entire history is filled with instances of the ruling class systematically serving up xenophobic and racially divisive propaganda (in order to justify expanding imperially, in order to justify inexpensive labor, etc.), with no sign of slowing down. As such, I can find no evidence that cultural tranquility is possible under the global capitalism. The inequality that capitalism continues to deliver breeds dangerous ideological heterogeneity between the people of the working class.
Someone hard-working with a 130 IQ versus someone depressed or maladjusted with a 90 IQ are, in fact, in entirely different classes. It isn't "dangerous" to admit that, it's simply reality. Capitalism does a decent job handling those extremes.
> Someone hard-working with a 130 IQ versus someone depressed or maladjusted with a 90 IQ
Capitalism doesn't do a "decent job handling those extremes," it does a fantastic job creating those extremes. The latter person you mentioned is either highly exploited and/or rejected from society and given a tragic, humiliating life. Our capitalism is divisive, unjust, and destructive.
Capitalism just deals with the results, in this case human capital.
You're questioning economical premises stated as obvious in a tech forum (so, where no special economical knowledge should be assumed). You're doing the right thing - why are they obvious? If he who stated them as obvious can't answer that with solid references, then it's not obvious; it's just an unfounded preconception.
Didn't downvote, but personally, I really dislike sarcasm used in this manner. It's not so much questioning as flat-out contradicting. And it does that in a way which doesn't help to bridge the inferential gap.
Some opinions there describe welfare as evil thing, removing any motivation for people to even try to get a better life. maybe not applicable for Finland, but interesting nevertheless as coming for 1st-world country (although they describe themselves as 3rd-world one).
Let's not forget that for every hard-working individual there is X slackers looking how to get as much out of system with as little effort as possible, by any means necessary. I fail to see how BI would motivate those people to get better, and contribute to our society.
Hopefully in this case, road to hell isn't paved with good intentions as usually...
Whether it's a job or welfare, everyone in our current system is scrabbling. And so everyone is stuck in a scarcity mindset.
Basic income is different. There is no scrabbling needed, not even emotional work, it just arrives. And so I expect that will flip people from a scarcity mindset to a leisure mindset. They won't be slacking, because slacking is a way of scrabbling. They'll want to do something, although without the need for a day job any more, that might be more towards the creative side. Some will "retire" on BI and write their novel or go back to university. Others will want to work to make more than the BI.
Expect a period of labour shortage, manufacturing turning to robots in reaction, a surge of cultural product such as has never been seen, and mass education with a broadening of the scope of people's interest into "blue sky" non employable fields.
I'm curious as to how you would judge whether or not automation is efficient enough to do this?
Buckminster Fuller, former president of the Mensa society, argued that we passed that invisible line back in the 1970's:
>In technology's "invisible" world, inventors continually increase the quantity and quality of performed work per each volume or pound of material, erg of energy, and unit of worker and "overhead" time invested in each given increment of attained functional performance. This complex process we call progressive ephemeralization. In 1970, the sum total of increases in overall technological know-how and their comprehensive integration took humanity across the epochal but invisible threshold into a state of technically realizable and economically feasible universal success for all humanity
-Buckminster Fuller, Grunch of Giants, 1982
It's not like there is a large problem in Finland with people living on the streets. Rent is subsidized up to 80% if you are unemployed or without income. Unemployment benefits and/or social assistance cover the remaining 20%. If you become homeless, you will be provided with temporary housing.
Any homeless problems are usually due to larger underlying personal issues. Some people, such as alcoholics and junkies, will not or cannot adhere to basic living rules and will rather choose to be, or forced to be, depending on how you look at it, homeless.
Besides, for a bit of morbid humor, homelessness is a self limiting problem in Finland due to winter.
Any homeless problems are usually due to larger underlying personal issues.
Is that claim supported by any facts?
"Long-term homelessness is a case of prolonged or repeated homelessness , which is often associated with poverty, in addition to severe psycho- social problems such as substance abuse and mental health problems , crime and violence . This group is estimated to comprise about 40-50 percent of all homeless people living alone."
It has been tried at least five times (three in USA and twice in Canada). The results have been re-analysed in recent years and show that the reduction in peoples willingness to work is very slight.
Of course if Finland does it over the whole country then this will be a much larger experiment than the US and Canadian ones.
I think that there are good reasons to believe that it will have a very positive effect. It also gives greater bargaining power to the lowest paid so that it should help to prevent the reduction in wages that is becoming a feature of the low end of the employment market.
It also gives greater bargaining power to the lowest paid so that it should help to prevent the reduction in wages that is becoming a feature of the low end of the employment market.
If supply of labor is significantly reduced then prices for labor will rise. Didn't you just claim that won't happen?
1: The 13% decrease in work effort is per family unit. This is an important distinction, because it led to the following 3 points
2: The primary wage earner in the unit reduced their effort only slightly, but this had a large result due to them making the majority of the cash
3: The secondary wage earner, who was usually the spouse reduced their work effort to stay at home longer after having a baby, and to do more work around the house.
4: The tertiary wage earner, in most cases an adolescent male, had theIr work effort reduced by the fact that it entered the workforce later. This may have been due to them continuing their education.
So I think - IMHO - the 13% reduction represent a net benefit for society - dad doesn't have to do so much overtime, mum can spend more time with her baby, and your kids stay in school longer and become qualified for better jobs...
If you want to argue that making us poorer, but having more leisure is a good thing, go ahead. But don't claim the effect is "slight" unless you also consider the great recession to be "slight".
This is not necessarily the case. "Work effort" is not fungible. In the case of tertiary workers, a highschool drop-out working now is probably giving us less productive output over time than had they finished their education.
If I follow your logic, and what the study showed, if I start working at 16, but you go to university, and get a masters degree so do not the start work until you're 25, I have put in more work effort, and you are now making us all poorer.
canadian basic income experiment statistical analysis repeated
on Google got me a lot of hits including these that refer To Dr. Evelyn Forget's analysis in 2009:
Isn't Japan also a homogenous, small, rich country? Seems like an excellent place to try this, to me.
The only explanation I can think of is that you meant "small" as in their population, not geography.
In addition Rome was weakened by that law. First of all even if budget could not afford free grain, there was no way to put end to that law (Rome was a democracy, croud wanted free grain). The other unwanted effect was migration of people from villages to the city (hey, there is free food there, so what's the point working hard).
I encourage every supporter of basic income to learn more about that Roman law and how it affected Rome.
When we start giving money we need to think about a number of issues:
1. Someone needs to earn these money, someone will have to be taxed and that someone will not be happy. Rich people tend to know how to avoid taxes. So it may turn out that in a few years it will be hard to provide money for basic income, unless a given country has sufficient natural resources to finance basic income.
2. How basic income will affect inflation (if it is going to increase it, it may happen that basic income becomes worthless shortly)
3. How basic income will affect democracy - I can imagine a party which main program point will be "increase basic income" (Gaius Gracchus was outbid by his competitors) - a croud might vote for a random wacko without thinking about further consequences.
4. And, at the and, as there is a question if basic income is ethical. We take money from X to give that to Y, this does not sound good when we think about things like ownership, justice - obviously that depends on ethical system one prefers.
If it turn out that basic income caused economical problems in a given country (higher inflation, high taxes, capital escape, budget deficit) then who will have to pay for that failed experiment?
It may happen that potential beneficiaries of free income (economically weaker, poorer people) will have to pay for it much more then they got.
The people that are supposed to pay for all of this are by definition the people who are clever enough and powerful enough to figure out how to avoid paying for it. Raise taxes enough on those juicy Silicon Valley salaries and you'll see large tech companies decreasing salaries while compensating with corporate housing, transportation, and stock that is taxed at a lower rate. The money simply won't be there, not in the amounts needed or anticipated.
And the biggest issue is that housing is also paid for spearately under this plan (as per the article).
Nowadays the situation living in helsinki center is that only rich and unemployed people can afford to live there. You know, "close to where the work is!".
They should pay you a lump sum and you would live where you wanted using only that money. Too bad if you can't afford the most expensive place to stay where "the work" (=pubs and bars) are.
In more remote places (but still cities) you can have a studio appartment for probably 200 euros per month.
If they choose this, then "rational" unemployed would move to the outskirts and rent cheaper properties till they could afford more expensive apartments (via new jobs). Hope they can keep it free of interference so it can be gauged for success or failure.
No it's not. Currently all wellfare in Finland is based permanent residence. But if you don't have permanent residence, the social services will get you one if you just are in Finland "permanently". Which happens if you can claim that you have no other safe place to go. Or if you have family here. Or if you have no other citizenship.
Russians can't come over the border right now. But if there is ever a civil war in Russia, then we are fucked. If Russia starts to move Syrian refugees through russia just to fuck with us, we are in deep shit.
Some people are really worried about immigration. While it's not a problem right now. Some people are really worried that we are not perceived as fascist. Some people are really worried about refugees who are here. Nobody gives a fuck about Syrians in Syria.
Getting citizenship means you have to do military service, but you gain nothing from it. Currently it is punishment really.
So, not sure if that would change in implementation.
With regard to perceived fascism nations typically act in self interest. This is why they go to war. Neither China nor Russia typically much care about what anyone else thinks, whether it's human rights orgs, etc. Actually, most places don't care. It's mostly Europeans who are afraid to look nationalist. You really don't experience doubt of identity in most other countries.
Now, I get it that one day we will have to transcend the idea of nations and embrace global globalization and beyond internationalism, but we're just not there yet. Maybe another couple of hundred years.
It states that everyone how can't earn enough money to live on it, has right to wellfare. This "everyone" is basis for recidence based wellfare. How it's not basis for enormous levels of development aid beats me.
I beg to differ. In Norway we are getting lots of "refugees" which has been safely in non-warring European countries, seeking asylum here, simply because its a known thing we have higher "wages" for asylum-seekers than other European countries.
It may be cold hearted, and it may not be a popular opinion, but my take on it is that these people stopped being genuine refugees 4000kilometers ago. They are now welfare-shoppers. I honestly don't see how anyone can argue anything else.
We're getting a flood of people right now, and the result is that our asylum institution can't scale to handle them all.
All historical data suggests that they will all be non-working, non-integrated people, living on government benefits for years to come, and for those who manage to become a productive part of society, they will still be less productive than regular citizens, for a multitude of reasons. Historical data also says most of them wont return, but still will have the same rights to government provided benefits, pensions, etc. Nothing personal, nothing racist, but they will be a net loss for the national economy.
All these things accounts to a massive increase in government welfare-related obligations, costs and spending. Now and in the future. Our "future budget" is already too big to handle, accounting just our regular citizens. With this flood we're facing future bankruptcy.
To avoid that means taking away future pensions. It means we stop maintaining infrastructure like roads now. It means cutting costs all over. The costs are very real.
And now Finnish people may fear that such an offer like this will land them in the same situation: That they too will become a "too sexy" target for welfare-shopping ex-refugees. It's not fearmongering. It's a very realistic scenario. I can't say I would blame them for thinking that way.
At very least the perverce incentive of wellfare to non-citizens should be acknowledged. But that's not politically correct at the moment.
I don't think it's good for the refugees themselves either in the long run. Their children could have been doctors, lawyers and engineers in Syria, Egypt of Turkey in 2050. Now they are destined to be third class citizens in cold and dark north.
I mean, I think I understand them. They are very clever, see what is wrong with this world (and there is plenty), and aim for biggest obvious culprit (be it 1% topic, evil corporations etc.) and say "if we fixed this, all will be good from now on". Well, life, economies or markets don't behave like that. People are aholes, lazy, selfish, greedy, messed up, not caring about anything but themselves.
I like solutions to problems just like the next guy, but only those who factor these basic built-in human flaws, so they can work long-term outside the paper they are written on. All other are just a hidden additional financial (and other) cost to all of us.
Scaremongering: the process of saying or doing something in order to deliberately make people feel worried or frightened
I started those two sentences with the word "if", making no judgement on how likely they are. Do you suggest that in HN it's not cool to gauge options and speculate?
"Nobody gives a fuck about Syrians in Syria" This is admittedly my personal perception. The only article in finnish so far that actually suggests political action to help Syrians in Syria, that I have read was also written by me.
I have a hunch that you are too a Finn. And that you read between lines bit too much.
Why do you have to commute? Take the bus to the interview, it's not like you have to commute every day to the city centre to find a job.
I'm reasonably well paid, and pay a lot of tax. I can save quite a bit. I could afford to live for 5 years from my savings without working. But not forever, so I still work.
But if someone was to give me 800 euro a month then I could live of my saving for maybe 20 years instead. Certainly long enough to get to retirement....
So why would I work?
I wouldn't. So not only would this cost 800 euro a month directly but also the 4000 euro a month in taxes I would have paid.
It doesn't take many people to do the obvious thing...
The fact is, there are very few people in your position, and fewer still who'd give up their considerable income in order to not work. Very few of us work just to live; we all want more than that. The number of high earners who'd quit their jobs is minimal. However... The number of low earners who'd quit is much bigger. That's the problem that society will need to deal with - the cost of things like retail and domestic services like cleaning will go up considerably because people won't do the work unless it pays relatively well.
people want to pay as little as possible to get as much as possible, that's natural to all of us.
I'm not sure about that. There are plenty of businesses that do very well selling less at a higher price - there is perceived value in buying an ethical, artisan or luxury good. Perhaps people wouldn't mind paying a bit more if it meant society was better off if they could actually afford to. The notion of doing things for the "maximum possible happiness", even if it means you're worse off yourself, isn't new. Jeremy Bentham was writing about "felicific calculus" more than 200 years ago - https://en.wikipedia.org/wiki/Felicific_calculus
Why don't you do that? They'd pay enough for you to be able to live off your savings until retirement age, by your account.
But most people would. It's not that I buy into the "people don't just work for money". I could be creative, do interesting things and meet people without a job.
What I do believe is that most people are greedy and lust for stuff. Most people want a new car, a bigger house, a bigger TV and a new phone every year.
Basic income would cover my needs and your needs. For most people it won't be enough to get the level of comfort and luxury they want.
Your personal situation is far from representative and can't be used to assess the usefulness of universal basic income.
I don't have to work but I find myself working more as I enjoy it even though I have hobbies to keep me busy.
Often your friends are working so they just don't have a lot of time to have fun on week days. TV is much worse in the middle of the day. Sure, it seems like adding 40 hours a week of free time would not change much, but it often feels like 4x as much free time due to all the unnecessary activity's around work that suck up time.
Finally, many things are fun while your tired at the end of the day / week to unwind, but get boring when your wide awake and full of energy.
If you take the proposed eventual 800 Euro and assume every single citizen will get it (roughly 5.5 million in Finland) that would be 52.8 billion Euro/year.
For comparison the net domestic product of Finland is 216.9 billion (bad indicator but one i could find with a quick search)
I think if you do this, every citizen should get the base income and only income above it and corporate income should be taxed. Currently the average income in Finland is about 3.1k/month. So on average that's 2300 Euro taxable income (once again grossly simplifying). You'd need to tax that at roughly 35% to refinance the base income.
Not sure if the corporate taxes and hiking the 35% to say 50% (+savings on all the stuff that is now covered by the 800 like unemployment, retirement) can make up for all the other costs (infrastructure, education, health care, police, military etc.)
There's also the standard questions of "why not ask for more" and "what will people do with the free time, why should they work". Which are the interesting questions that an experiment could help answer.
Also remember that, although everyone theoretically gets an equal slice of a basic-income pie, there's nothing stopping a government from making taxes more progressive to claw back the wealth transfer from anyone who was living comfortably on their own income and didn't really need the help.
That's the marketing speech, but in reality, I doubt it.
There is a very large sector of government and GONGO employees who will argue how for each of them, the particular payout they are handling is very important and the basic income should not displace that particular system, or the sky will fall on all of us.
I don't believe the basic income system will displace the housing support, for instance. Same applies to many other kinds of social assistance. The trade unions will howl about the unemployment funds that they control but are financially maintained through taxes. Etc.
And there's a lot stopping a government making taxes more progressive. For instance, the fact that revenues might actually decrease. Finland is already having a very very high tax wedge.
Minimum of 485,50€ and 705€ per month respectively. So 800€ isn't much more than any unemployed would get anyway. If you have any previous employment then your unemployment benefits will be (much) higher.
Something interesting with basic income is that it erases the traditional "income flow" that makes it make sense for parents to have one bank account that they own, and pay for all family members out of it. Under basic income, I could see each family member defaulting to having their own bank account to receive deposits.
You could go way more wild in the "enforcing spending on childen" with that setup than anything food stamps do. You could require that e.g. the government gets to audit the expenses on all "child" accounts to ensure they're for the child; and additionally require that parents only buy things "for" their children by first transferring money from their own account to the child's, and only then spend what is now the child's money on the item.
This is in fact already very common in Finland. As a rule, each family member indeed has their own bank account.
Each parent also typically manages their own money and then common costs like housing and car maintenance are agreed upon; sometimes this leads to habits that are perceived as totally weird by foreigners. E.g. parents splitting up the bill after an extended family dinner at a restaurant, and rent splitting agreements where a complex formula is used for deciding what is the fair share of each parent as their incomes are not the same.
Children's benefits are paid to accounts assigned by parents (typically they go to the mother but some families are able to save them for a nest egg which the child gets to keep when turning 18).
There is already an unconditional child benefit (approximately 95 € for one child, the per child amount increases so that for five children it is altogether 665 € per month.) However, this is under constant attack because "rich people don't need it".
There is no child deduction whatsoever in taxation.
The "enforcing spending on children" is generally implemented by having a daycare system at low cost to parents.
It's far from clear why you want to give our most vulnerable people absolutely no protection from the corrupt. We could also save money by abolishing the SEC, FINRA, and the EPA - do you also favor this?
That way they have a sizeable amount of cash to start their adult lives with (Uni, buying a house, starting a business, travelling the world, etc).
If you don't trust their parents with this amount of money, perhaps you should take away the children from them altogether...
I'm not sure if Wikipedias numbers are accurate, but they claim that social security already cost 57 billion in 2011 (of course not all of that would be replaced with the basic income).
Basic income doesn't create more money, it's just a more efficient and simpler social security net.
1) I think you can't just consider the implications of how people will behave as employees once they're earning a Basic Income. How employers will simply take advantage of the system and force people to work for less. If anything I think it will put more pressure on businesses to make sure they're paying enough, otherwise they won't have the manpower to grow their business. Then there's the argument about automation. There will be only a few companies who can do automation to compete in this new economy. If anything I think it's worth mentioning that not only will it make it easier for large corporations to attempt to take advantage of people, but I think it will make it far easier for regular citizens to become employers. For example, I think people will be far more willing to accept terms that pay only equity in a company than they would be today.
2) With regard to "what will people do with all of their spare time". I think perhaps the dystopian future many people imagine will happen for a few weeks where people celebrate, get drunk and party all day because they don't have to work. Eventually I imagine that life will catch up to most people. They'll have hobbies, they'll start businesses, they'll contribute to non-profit efforts. And one of the most important I think, they'll have the time to engage with their government to ensure it remains loyal to its citizens and not to special interests.
NOTE: And to clarify I think these points are made with regard to a "Basic Income" and not a "Minimum Guaranteed Income". Basic Income IMO is the far superior choice. Minimum Guaranteed Income seems to give all the benefit to the large corporations and little to no benefit to the average citizen besides guarantee that they'll remain out of poverty for their entire life.
The hard part with a BI is finding incentive for many to do more than the minimum required to survive. We might be creating that dystopian future simply by defining through law the minimum required to keep people from rising up. In other words, we create a permanent lower class whom we keep just happy enough they don't take out stuff.
I think BI is an interesting idea but the dangers are too high unless you find something for people to do. Don't wait for them to find it, most never will try. BI needs to come with some public service at the minimum if not employed
If I have an apartment for rent, and now I know everybody is getting, unconditionally, a $ 800 paycheck, what keeps me from raising the price by the same amount? The people who do work will still be able to pay my price, and there'll be demand for it.
For those near the poverty line who will pay less than 800€ in new taxes still need to eat, so they cannot pay 800€ more in rent.
Also, rent was just one example. In the long run it seems inflation will just go up unless there's heavy regulation of the market, at least on basic goods and services (housing, food, clothing, etc).
I'm looking forward to see what people are going to do with the spare time.
You can increase them past the point that people on lower wages/basic income can pay, driving them out of desirable or semi desirable areas to cheaper areas. See London as an example.
Like I could move to Helsinki if I wanted to on my current salary, but I see no reason to do so. I live in smaller city (or maybe it's even considered a town) and I have plenty of extra money left over after my rent.
Friedman is clearly closest to the last camp and even self-identified with it. https://en.wikipedia.org/wiki/Milton_Friedman#Libertarianism...
Obviously for an article pitched at a general audience, rather than an academic one, some people won't know Friedman so it's not unreasonable to expect them to clarify. I presume that's why they added the following lines immediately after calling him a "libertarian economist".
"Friedman believed that it should be accompanied by an end to any minimal wage system and any other system of social protection. Friedman also believed it should be as low as possible and financed by a flat income tax (which means that the tax would be universal and at the same rate for all).
So in reality, what Friedman was pushing for was a system which would provide employers with people ready to work for lower salaries at no additional cost to employers."
I can't see how any reasonable person could read that and then claim the article was putting Friedman in the wrong camp or being misleading or inaccurate regarding that point.
"people will mostly work but it's a better way to secure those who do not or cannot" Or "a lot of people become lazy and don't want to work, why would they when they get money for just sitting on their hands"
However thats the wrong perspective for this.
UBI is a potential solution IF you believe that most jobs will be gone which also means that most taxation schemes like income tax will be gone to. If you are still thinking about this as a solution to getting jobs back or there aren't enough people to pay for it then it's already a dead discussion.
So the key premise for this discussion is not whether it will solve our job problems or whether people will be lazy and not pay income tax. The key premise is that the productivity gains and price decreases by automation is used as some of the leverage for society to build a self sustained ecosystem for humans to live in. Where technology is a kind of photosynthesis that allow for the distribution of goods and wealth even though everyone mostly ended up working with producing said good.
Every person in Australia over 22 and under retirement age can get extremely generous welfare, forever. It doesn't matter if you've never had a job, etc. etc.
A single person gets $1046/mo
With children is $1200/mo
Are Australians sitting around on their hands? Some are, sure, but the vast majority don't want to live the life that ~$1k/mo buys.
We see this with the minimum wage debate -- everyone's definition of a "living wage" is different. Does basic mean house, car etc in a nice area or does it mean that if you're not working you can afford to live only where the cost of living is low? I think this needs to be really clearly laid out so down the line the intention of the money is clear.
If it's clearly laid out ahead of time, then in the US situation for example, someone complaining that they cannot afford an apartment in an expensive area without working is not evidence for a need to raise the basic income, it's evidence they need to move or find a (better) job.
Our left is more communist than U.S. left. Some of them don't give a shit what is "living wage". They think government should give them all excess money possible. And if there is no excess, then take loan to support some arbitrary standard of living for everybody. "You don't have to pay debt" "tax the rich more".
But people don't really believe them. Most Finns still think that "average Finn is somewhat sensible person". The whole multiparty system can exist, because we mostly agree on stuff. It's just the details that are different. When I go to vote, I don't think "how to save the country from the evil Kokoomus". I think what party could nudge the system to better direction.
Being cohesive small nation state is cosy. But the hivemind can be scary at times. Currently police is trying to pass internet surveilance legistlation and it's not much protested. Because "average Finn is somewhat sensible, they would not do this if they didn't really have to".
So for starters, do the BI scale per individual, and if so, how? Assuming it scales flatly, it gives an incentives to have children because of economies of scale (this is not to say people will have dozens of children, as this is a single incentive among many, many of which are incentives to not have children).
The benefit from basic income in Finland is reduced bureaucracy and welfare trap removal https://en.wikipedia.org/wiki/Welfare_trap It's beneficial to work even low wage job part time when your wage is not reducing your basic income.
"Cost of living" in basics like rent and food is what people buy anyway. How is having a basic income going to change that, unless you had like a huge homeless/starving population that can suddenly now get homes/food?
I must say that doesn't sound very "universal" to me.
The "universal" part is that this is a universal floor on living standards that applies to everyone.
People will be frugal because they'll want to spend money on other things. Imagine a poor person as a person just like you: he has wants outside of basic survival.
Problem is that one has to prove he does not have any other income. That could be problem for some people, for example illegal foreigners. Or divorced fathers who have income on paper, but everything gets confiscated for alimony.
So, are we talking about unemployment benefits? Because one of the things a guaranteed / universal basic income aims to do is eliminate the so called "welfare cliffs".
An example of a welfare cliff would be: let's say you can get 300 euro / month being unemployed, or 310 euro / month working 60 hours a week. Does it make sense to get the job? With a UBI scheme, you'd get the basic salary, and you'd go do the job as well, kind of a win-win. Of course the overall picture is much more complex than that, but that's the idea.
But other, potentially larger secondary effects is that overall productivity and efficiency of the economy should increase, driving prices lower. Essentially, what we're talking about is that people below a certain threshold are not free enough to pursue paths which would give them the most benefit in the long run. E.g. they cannot enroll in a university, or whatever, because they are living day to day. By giving financial independence to everyone, you are giving them the freedom to achieve these long term goals. It'd also give more people the freedom to get into the startup scene, and I think HN agrees that innovation is an overall net win.
Also, clearly the money has to come from somewhere in the short term, and this would likely be a form of taxation which would come from richer people and companies, and it'd redistribute this wealth to the poorer ones. It can be argued that the current (and seemingly near future) distribution of wealth is rather one sided, and things would be better if wealth was distributed more evenly. Of course, that wealth would be re-injected into the economy rather rapidly, so arguably little would be lost.
The social security tier you seem to refer to (Arbeitslosengeld II, ALG II, also known as Hartz IV) has all kinds of conditions, eg. personal wealth above a certain value needs to be used first; significant others need to chip in first (and for people younger than 25 also their parents, and if you live in a flat share agreement, overzealous officials may try to exploit that fact); there's a cooperation requirement on seeking jobs (and the officers in charge to deal with that can mess with you in plenty ways).
The "father who has income on paper" (and presumably a job) scenario is the smallest problem, by the way. Alimony is capped at a living income (which happens to be defined as "enough to not receive social security benefits").
But it seems to me that the system is not very efficient to get people back into jobs, even though that's its basic premise: Continuing to receive ALG II can be a full-time job in itself.
The "promise" of unconditional basic income is discussed somewhere else on the page: you get the money, now you're free to live with that somehow or find a job on your own terms. It gets rid of the busywork, both for the recipient and the social security sector.
Sort of, but that different from the unconditional income for all adults, which is what the article is about. For one there's what you mention yourself, but afaik there are also countries where you have to be able to prove you are actively looking for work/follwoing courses/... in order to continue to receive it. (btw one reason unconditional income might in the end be cheaper for a country lies in getting rid of the administration to deal with all these rules and execptions).
Apart from that there are the social aspects, here's one: I know enough people who tend to look down on others who are not working and receiving that income. That might fade away if both groups get the same income, as the offenders will quickly realise they would be looking down on themselves.