This is why basic income experiments like YC Research, the Ontario one, the finished Namibia one etc are all important. We need to see what happens in different cultures, in different communities, in different economies when we give un-earned income to people with no strings attached. We need to see what will happen.
You can absolutely bet if you give enough people free money, there will be ones that opt to do nothing but sit around playing their ninplaybox consuming their drug of choice. You can absolutely bet that some will use it to make positive life changes though like improving their diet or health care, seeking training, starting a side-hustle. We need to do these experiments for years and years in many areas in many populations to see though what exactly will happen.
I imagine if you took groups from the same state here in the US and gave those in a rural community money they're going to behave differently than someone living in an urban or downtown setting. Different if one group is in an economically depressed community and one is in a community full of healthy local businesses and corporate jobs.
I wouldn't call it a myth, I'd call it a theory with inadequate evidence to support or refute it.
So, “hypothesis”? The article did present some evidence to support it’s argument. I’m sure you know that when discussing evidence and science, “theory” means something has been more or less proven.
Your hypotheses that a significant number people will do nothing good with the money is the unproven “myth” or common hypothesis the article was talking about.
The problem with the belief that unearned income is unhealthy and will lead to laziness and drug use in any significant amount is that it prevents people from trying to see what happens, because if true, it’s seen as at best a waste of money, and at worst doing damage to the participants. The hypothesis that unearned income leads to laziness is a real and significant impediment to the testing of that hypothesis.
By and large, people who inherit money don’t end up wasting away high and broke. There are a few, but nobody is suggesting seriously that we need to do lots of studies to see if inherited wealth is different in other countries or rural vs urban settings. Why should money given to the poor be thought of so completely different than money given to the rich?
We have some strong pervasive ingrained cultural beliefs that money must be worked for and not given, knowledge must be gained by derivation and struggle and not just told, success and stability must be attained through risk and competition and not cooperation or social programs.
These beliefs predate most of science, so it may be worth examining our assumptions about what needs to be tested.
Money that has been earned through work gives the recipient a higher level of satisfaction than money that has been gifted.
> knowledge must be gained by derivation and struggle and not just told
Knowledge gained through personal experience stays with you longer and more effectively than second-hand knowledge. That's why the traditional, frontal lecture teaching style is falling more and more out of fashion. That's also why you can't just read a book "Learn C++ in 21 days" and expect to be a decent programmer afterwards.
> success and stability must be attained through risk and competition and not cooperation or social programs
I have no idea why you're mixing success and stability, when those are orthogonal concepts. As for success: A lack of competition leads to stagnation; monopolies lead to rising prices and hinder progress. Look to the Soviet Union and you'll see what coorporation and social programs instead of competition through free markets leads to . As for risk: Risk is what you naturally get once all the lowest hanging fruit are picked and there are still ripe fruits hanging higher up in the tree.
 Of course, in a competitive environment you'll still need cooperation. Competition on a higher level (i.e., in the market) and cooporation on a lower one (between coworkers) tends to work quite well for companies.
That is certainly widely believed and assumed to be true. Do you have evidence to back that statement up? And what does "satisfaction" mean? Is short term satisfaction about money related to long term life stability or happiness? What does higher level of satisfaction mean? How much higher? What level of satisfaction is the goal? Do we need to reach a certain level of satisfaction before it's okay to hand out money?
The problem with your statement in this context is that the author of the article offered contradictory evidence. Are you claiming the author or the evidence is wrong?
> Knowledge gained through personal experience stays with you longer and more effectively than second-hand knowledge.
That widely believed to be true, it's a super strongly held cultural belief that relates to the concept of hard work. But language is the first thing we learn, and we learn it by rote not by principles or derivations. And languages are hard to learn. So hard that educators believe you can't learn them well late in life.
Most education is by rote and example, and not by "critical thinking" or by struggle, no matter how much people like to wax philosophical about the importance of those things. Most of what we learn and teach is simply shown and remembered.
> That's why the traditional, frontal lecture teaching style is falling more and more out of fashion. That's also why you can't just read a book "Learn C++ in 21 days" and expect to be a decent programmer afterwards.
The thing missing from your examples seems to be practice, and not a distinction between derivations and second hand knowledge. Things that are used & practiced stay with you longer than concepts you are told once but don't repeat or apply to anything.
The things you're stating, you're stating as belief. What I'm saying is that if the bar needs to be scientific evidence for proving that the poor can handle cash handouts, then the bar also needs to be scientific evidence for proving that the rich can handle cash handouts.
A UBI experiment will probably need 50 years or more to determine what the long term consequences will be.
I'd call it a success if about half the adults end up working and the other half stay at home, just like people used to do 100 years ago... except this time, both men and women should be free to choose which side they want to be on.
while this may be true, I think it's somewhat of a false dichotomy. If we get to the point where UBI is implemented, I don't think the only two choices will be 'continue working or mope around'.
There are hundreds of thousands of ways to create value in society, and they don't have to be tied to the notion of working in exchange for money for survival.
I think the fear is that a small portion of society will be doing all the work to support the 'lazy ones'. It's understandable, but I think it is entirely possible to avoid that situation. Of course, it would require a fundamental shift in our worldly view (i.e. from individual success to shared success), but those discussions are hard and usually get shut down as 'commie crap'.
The problem is UBI is a simple solution to a complex problem.
I would call any theory that lacks adequate evidence to support it a myth.
By your reasoning we could also be talking about the Giving-Free-Cash-To-The-Poor-Will-Make-Them-Productive myth.
The issue is that the economy is outrageously complicated and it isn't obvious that the people who want to bring in a UBI are the same people who will be working to bear the cost of a UBI. If it turns out to be unfair and negative, as any ambitious economic policy can be, it could be politically very costly verging on impossible to unwind.
DEMAND INCREASE AND SUPPLY DECREASE:
A simultaneous increase in the willingness and ability of buyers to purchase a good at the existing price, illustrated by a rightward shift of the demand curve, and a decrease in the willingness and ability of sellers to sell a good at the existing price, illustrated by a leftward shift of the supply curve. When combined, both shifts result in an indeterminant change in equilibrium quantity and an increase in equilibrium price.
The best the market could compensate, I think, would be a percentage increase in prices corresponding to the average percentage increase in income. Since UBI is a flat amount, not tied to income, that average percentage is going to be so close to 0 as to be completely irrelevant. Even if it's not close to 0, for low-income (or UBI-only income) households especially, the marginal increase in income should be significantly higher than the marginal increase in prices.
If the average purchaser of a particular class of good (say, eggs) is making 10xUBI post-tax, then getting one unit of UBI in addition to their base salary shifts the demand curve enough that you'd expect to see a price increase proportional to that increase -- so a dozen eggs goes from costing .05xUBI to .055xUBI, purely as an economic rent.
But for a person making less than the average salary, like 2xUBI or 0xUBI, their egg-purchasing power increases dramatically. A 2xUBI person previously could afford to buy 40 units of egg, and can now afford 54 eggs, a 36% increase in their buying power.
The joke at Google is that if we get a company-wide raise, Mountain View landlords are the ones who celebrate.
One thing to note is that we're not really constrained on "places to live". We're much more constrained on "places to live that are nice enough and close enough to ways of making enough money." A UBI directly increases our supply of "places that are close enough to ways of making enough money."
Also bear in mind that landlords aren't competing just with identical units, but also with alternative living arrangements. If landlords charge more, I save more if I live with a roommate or stay with my parents.
They don't, though, because UBI isn't funded by magical outside injection of value; the maximum mean additional after-tax income in any plausible UBI scheme (ignoring gains by induced economic growth or tax policy changes not germane to UBI funding) is $0. In a sense, it's a means-tested program where the means-test is within the taxing structure rather than a separate bureaucracy.
More to the point, though, local and interregional competition on rent, the same thing that stops landlords from capturing all the gains in income from all sources, is what constrains this (or not, if it is absent); UBI presents no special features in this regard.
> Taxes historically are taken out every pay check.
And witholding formulas will be adjusted to reflect the additional taxes to pay for UBI, so people with jobs or other income subject to withholding (with income high enough that, at the level of approximation provided by withholding formulas, they would pay some additional tax for UBI) will have their non-UBI regularly-received take-home pay commensurately reduced.
> This person is now receiving $X dollars a month "for free", insofar that it doesn't require any actual input on their end to receive this money. Rationally, of course it's not magical free money, but and the end of the day they do ultimately have X more a month to spend.
No, even in the take home pay before filing taxes and settling up at the end of the year sense, not everyone will get equal (or any) additional income under a UBI scheme, and the mean will still be around $0.
Why call it universal base income if you can price yourself out of it like you can with normal welfare? I thought that was the entire point of the system.
(Also, laws against randomly raising rents by 50% would be useful.)
Then there's the possibility of some people working less or quitting one of their 2 jobs so they can enjoy their life a bit more. So their actual income could remain flat. If enough people do this then landlords wouldn't be able to increase rates either.
If there are more places to live than people who need them, then I'm curious where this place is. In populated areas where the rental market is already insane (SF, NYC, etc), then it could really only increase rent prices.
So you're misunderstanding supply and demand?
I realize that housing supply is constrained in many areas, which complicates this analysis, but in many areas that is more a regulatory failure than a necessary condition.
If everyone were to receive £20k per year, the price of everything would obviously not go up by £20k a piece.
For everyone else, it represents part of a new chainsaw, or snow machine, or set of fur traps, or some other vital tool of their trade or side-hustle that might be otherwise inaccessible without financing.
The point is that everyone gets it, and it is very possible to examine how people spend it, and why they chose to spend it that way. Extrapolation can provide some limited insights as to what might happen if everyone got more in total, at more frequent intervals.
> The first dividend plan would have paid Alaskans $50 for each year of residency up to 20 years, but the U.S. Supreme Court in Zobel v. Williams, 457 U.S. 55 (1982) disapproved the $50 per year formula as an invidious distinction burdening interstate travel. As a result, each qualified resident now receives the same annual amount, regardless of age or years of residency.
So you can say that " All of us deserve to have fun once in a while, regardless of socioeconomic status." But for someone who is working too hard to take the time to have fun, this rings kinda hollow. And I can bet it stings a bit to have your taxes going towards paying for someone to do the things you don't have time to do yourself.
I went through a stint of working in cafe's recently, and one always had a group of people who would turn up after leaving the job centre (you have to go here to qualify for benefit money) in the early afternoon, and would just basically hang out. Frankly I had to fight the jealousy, I wish I could spend every afternoon hanging out with my friends. I had to remind myself how much it sucks to be unemployed, and how nice I have it. I can imagine this could seem unfair to someone in a more stressful position.
I am disturbed by people's aversion to taxing the wealthy. After WW2 the top tax rate in the US was over 90% and until the 70s it was over 70% but since then we have been systematically fooled by the wealthy to believe the absurd "Job Creator" story and income inequality has sky rocketed as a result.
I don't think the place to aim for is income tax. Tax in the 70s was crazy (the Beatles wrote a pretty famous song about it, it was in the 90%s in the UK). Frankly I don't think income tax should ever be above 50%.
Taxing capital gains on the other hand should be higher than in the 20%s for people "making" millions a year this way. Not to mention how easily corporations dodge tax, or how people can inherit vast fortunes without doing or risking a thing. Aiming at raising income tax is just pointing badly off people against slightly better off people, all whilst the truly wealthy are ignored.
But, I agree about income taxes in general as a tax on high income labor, not the wealthy.
The world is more than CEO's and part time workers.
I actually think you are just one of those "Taxation is Theft" libertards.
Okay -- so I register with the government as a "food provider", and I take food vouchers in exchange for non-food (like gasoline or something), and redeem them with the government for cash money. Who is making sure that I can't do that? We could have it strictly be an enforcement solution -- no bureaucracy, but a huge operational burden on the justice system. Or, more reasonably, I would have to submit to being regulated as a food provider, and would have to meet certain standards in order to do so, and would have to file appropriate paperwork to establish that I am doing so. Hell, as long as we're here, we might as well make sure that I only provide healthy food, according to what is currently thought of as healthy. Oh, and the cost of the food I sell has to be regulated; can't have me charging $20 for a hamburger, even if it is a "premium" one.
Anyway, long rant, but in the end, the suggested system sounds like a mountain of bureaucracy and would probably cost way more to keep running than just giving the money directly to people.
You can't redeem the vouchers for cash, only for the good or service the vouchers are designated for. So a food voucher would let you redeem it for food. A healthcare voucher would allow you to pay a healthcare provider for whatever services you received.
Edit: oh, you're saying you pretend to be a food provider. The solution to that seems simple. Lifetime ban from voucher funded industries for anyone caught doing that and forfeiture of 3x damages. That's just an example, but if you make the punishment great enough I doubt you'll have a problem with it. It seems like it's pretty easy to catch someone doing what you described. For one thing, you'd have to be registered as a business to even engage in the practice you describe.
> I would have to submit to being regulated as a food provider, and would have to meet certain standards in order to do so, and would have to file appropriate paperwork to establish that I am doing so.
Sure, but how do you think the welfare system works currently? You'll always have bureaucracy, but you can have it in greater or lesser degrees. I contend that my proposal would have less bureaucracy than what we currently have. You already have to register with several state agencies if you want to run a grocery store (at least in my state). Whole Foods doesn't find that too onerous.
> Oh, and the cost of the food I sell has to be regulated; can't have me charging $20 for a hamburger, even if it is a "premium" one.
No, that's the whole point of switching to a voucher/market based system. You as the service provider can charge whatever you want. The population, as recipients of the vouchers, can redeem them anywhere. If you charge $20 per hamburger you'll go out of business or change your prices.
You are misunderstanding the scenario. I am a food provider. Someone buys food from me for vouchers -- what do I do with those vouchers? I assume I exchange them for cash from the government, otherwise, I can't pay my rent or my employees or for cleaning products.
The problem with not regulating the $20 hamburger is that I sell a $1 hamburger for $20 in vouchers, and slip the customer $18 in cash (that I replenish by redeeming the vouchers, as above). Yes, I'm committing fraud, and yes, if I get caught I'll get in trouble. But if fraud is widespread then it becomes impossible to detect.
Yes -- this is how food stamp and EBT programs work now, but they work with huge amounts of bureaucracy, a stated non-goal in your system. So I don't really see a differentiation here between what you're offering and what food stamps already do (poorly).
Yes, I agree that's a problem, but you can reduce fraud by making the punishments severe enough. For instance: commit fraud, lifetime ban from the industry.
I don't believe UBI is palatable to a majority of the population, but I believe a voucher based system could be if marketed appropriately.
As with current voucher systems, there would definitely arise a black market as people trade them for other goods. This leaves people vulnerable to being exploited.
Finally I would personally argue that people should try and think less rigidly about what is considered a good use of money and time.
Recreation as an end isn't an inherently bad thing - it would lead to a larger market for content creators if you want to think purely pragmatically.
There are also many cases where buying a new computer or a bike, instead of more food, would be of greater benefit to a person and society as a whole. Partly with this in mind, you could argue vouchers restrict any unintended beneficial effects of financial freedom.
"You weren't a good citizen, you murdered. Vouchers revoked!"
Some time later
"You weren't a good citizen, you were speeding. Vouchers revoked!"
Then of course you can have law enforcement at various levels, or even prosecutors, specifically seek out reasons to deny vouchers to any given person. Little bribe, little political promise, little threat and bam you've shit-listed someone.
Or you get voucher-casualties via prejudice, "driving while black" traffic stops/arrests for example.
Nope. Nope, that sounds too Soviet Russia.
Another issue is politicians already try to attack the current welfare, Examples:
Also, convicted criminals (of various varieties) are already ineligible for benefits in certain states https://www.jobsforfelonshub.com/can-felons-get-welfare/ which is basically what I suggested above.
Here in the US, we already have a complex network of safety nets to take care of the people who UBI is really targeted for. This begs the question, if you give people a basic income, what social services people already depend on will you get rid of?
There's no way you can keep all of the social services AND give people a basic income, it's just not economically feasible.
These are the people that need the most help, and UBI won't help them. Both will fall for scams, and otherwise not provide for their basic needs if just given money.
UBI can help the disabled who are mentally competent. There are many things that I do daily that required working eyes/ears/limbs. Some of them society can make "reasonable accommodation" for, but some of them are not possible given that disability.
UBI can also help those who had "bad luck". Though here we quickly get into people that it is hard to be sympathetic towards. I know of a lot of people that are poor because they continually waste their money on drugs (legal and otherwise - not medically required), gambling, trinkets... They may never be rich, but a different spending habit could change their life. (You will note here that I'm injecting my own value judgement on their lifestyle)
In order to fund it you essentially take the first $X from ALL of the other equivalent services.
IMO this would gut programs like Social Security enough that they could actually be reformed. Right now if you talk about reforming any of them, scare politics are used because it's a singular threat to a person's livelyhood. If you look at your monthly check and see $800 from UBI and $200 from Social Security, all of a sudden that gets a lot less scary.
If we could could swap state managed welfare for equivalent UBI, well, that's an interesting trade-off to consider. But I don't think we actually have that option.
Most of them, that's one of the major reasons you'd want to do it. The means-testing bureaucracy being so expensive all by itself, you might as well give everybody enough to live and get rid of the bureaucrats.
I think you mean politically feasible. And political feasibility is something that changes with the popular will.
Not to say we’d want to keep all our current welfare type benefits with UBI
edit: bad math
598 billion per year * 10% / 325 million people / 12 months/year
Having said that, the "danger" of UBI is that it's a big, fat slogan that can mean damned-near anything -- and there are a ton of people who both support and oppose it because of the way the idea makes them feel. That makes for a terrible environment for productive public discourse.
The only half-ass real world data I know about is the independently wealthy. They get money every month and don't have to work. In general, people who become that way suddenly ruin their lives. And the numbers probably aren't so good for those who earn it and then stop to enjoy it.
This example sucks, however, as the goal of UBI (as far as I know) isn't to replace all income. It's to cover the basic needs of people so they can be free to study, improve their lives, and not have to spend all of their energy in the day-to-day struggle of existence. I have no idea how it will play out in that scenario, and I suspect that the long-term effects will be much more pronounced than the short-term ones. This will be, after all, a major culture shift.
I like the idea. I just don't know enough about it -- and it doesn't have enough definition -- for me to support the idea.
I live in Germany, where every market has some form of social assistance connected to it. The task of dismantling that bureaucracy would be outrageous... And quite a lot to spend on a relatively untested scheme like any UBI.
The work disincentive of basic-income-like cash transfers, in studies so far, is actually somewhat consistent at around 10%. Some papers referencing this approx figure:
I've had these sources handy since last year when I was doing research on my own UBI-skeptic piece: https://firstname.lastname@example.org/after-universal-basic-incom...
1. Build a wall around the less fortunate and allow some of the more able ones to work for less than you would otherwise pay.
2. Share the resources of the more fortunate with the less fortunate until they are back on their feet and are able to prosper.
A persons good fortune isn't made in a vacuum.
If the people receiving UBI are universally spending that money on something other than rent, then the landlords who raise their rent by the UBI amount will become noncompetitive and fail to attract tenants.
To presume that 100% of the UBI will simply be absorbed by the landlords is absurd, not only because of the above argument, but because for many people, the UBI will be significant enough to swing them to home ownership instead of renting, putting additional pressure on the landlords not to raise prices.
You can argue that Socialism works very well in many places. Such as Scandinavia, New Zealand, Canada etc. It just depends on what you think of as Socialism.
Are you sure UBI would actually be against "conservative" interests?
With UBI, it's hard to justify salaries for much of the redistributive bureaucracy.
With UBI, it's hard to have open borders as well.
No, but the most common objection I hear to UBI is that people will just spend the money on drugs. But I have yet to actually hear anyone say that they'll start smoking crack or whatever if their rent went down a few hundred bucks a month. So either I should start hearing people admitting that they will, or else this objection should get dropped.
Yes, it's a downward redistribution without moral behavioral tests to assure that people who don't adhere to conservative values aren't getting it.
> With UBI, it's hard to justify salaries for much of the redistributive bureaucracy.
Only because it maintains anti-conservative redistribution while removing the pro-conservative limitations on that redistribution which the bureaucracy exists largely to enforce.
> With UBI, it's hard to have open borders as well.
It's hard to have the strawmanning position of “open borders” that conservatives pretend any decision from their preferred style of restriction is, but it's not actually harder to have any of the real alternative immigration policy positions that are significant contenders with those preferred by conservatives.
In fact, a basic income for citizens and LPRs whose level was tied to a dedicated funding stream that included (as well as the usual suggestions of higher taxes on capital and high-end income) additional per-entrant per-year fees for dual-intent work-allowed visas and supplemental income taxes on all non-citizen, non-LPR income would actually be a potent political lever to increase the number for a policy that, while not actually open borders, would be closer to it than many of the things they conservatives have objected to as “open borders”, with numerically unlimited work-allowed dual-intent visas, perhaps retaining H-1B style restrictions on conditions and sponsorship, but possibly also (with a higher additional fee than the H-1B style ones if those are also retained) a personal, unsponsored one that only requires the applicant not to be personally excluded from entry for criminal record, etc.
1970s MINCOME experiment. Dauphin, Manitoba Canada
Briefly: Adults continued to work, excepting mothers with newborns. Public health improved. Higher graduation rates. Welfare related stigma reduced.
TL;DR: Many benefits, positive ROI, no discernible downside.
Adopting UBI really is a no brainer.
However, some have argued these drops may be artificially low because participants knew the guaranteed income was temporary. This represents an important limitation to the knowledge of the impact of a guaranteed annual income; little is known about the long term effects on willingness to work.
We shouldn't try UBI because initial positive results may not prove durable?
I'm also struggling to understand how willingness to work, especially with our current labor glut, is more important than public health.
I forgot to add:
The sole concern I have about UBI in the USA (vs Canada) is our lack of universal healthcare. Single payer or otherwise. I can't imagine UBI working without it.