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The “Giving free cash to the poor will make them lazy” theory (econstuffs.wordpress.com)
55 points by joeyespo 3 months ago | hide | past | web | favorite | 115 comments



I wouldn't call it a myth, I'd call it a theory.

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.


> 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.


> We have some strong pervasive ingrained cultural beliefs that money must be worked for and not given

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 [1]. 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.

[1] 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.


> Money that has been earned through work gives the recipient a higher level of satisfaction than money that has been gifted.

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.


I would say that while plenty of people in the first generation to receive UBI may continue to work, later generations that are simply born with it have a much higher risk of simply moping around doing nothing of value. Any experiment that doesn’t explore UBI beyond a single generation isn’t rigorous enough IMO.


That's what I am thinking too. It will be interesting to see how people who have only seen UBI their whole life will behave. In a summer job as a teen I worked at a government welfare agency. Some of the clients were third generation welfare recipients and you could definitely see that they had no idea how a job works because they had never seen anybody who held a job for a long time. They would just skip work for a week without telling anybody or be insulted when the boss told them what to do.

A UBI experiment will probably need 50 years or more to determine what the long term consequences will be.


We will also need to see how the job market reacts. If people don't feel like they need to work, employers will have a harder time finding good employees and making them stay. So they might start offering much higher wages and fancy benefits, which in turn will make more people want to work so they can enjoy those perks. Positions that still can't be filled will be automated away. Sooner or later the market will reach a new equilibrium.

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.


How is it possible to be a third generation welfare recipient? Doesn't unemployment run out after 2-3 years?


That was in Germany. They won't let you starve so if you absolutely can't or don't want to work there is a level of assistance to keep you from starving. I think it's the same in the US. You will always get some level of welfare to not starve.


It's dated but if anything it's gotten worse.

https://scholars.org/brief/what-happens-poor-families-when-t...


>>simply moping around doing nothing of value

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 question is what are the percentages? Also, are they different by income level? or age? does addiction play a role?

The problem is UBI is a simple solution to a complex problem.


I think I'd call it an assumption.


> I wouldn't call it a myth, I'd call it a theory with inadequate evidence to support or refute it.

I would call any theory that lacks adequate evidence to support it a myth.


Calling it a myth implies that there is adequate evidence to refute it.

By your reasoning we could also be talking about the Giving-Free-Cash-To-The-Poor-Will-Make-Them-Productive myth.


That's called a hypothesis.


More like any theory without evidence that persistently gets presented as fact.


So dark energy is just a myth?


No problem with UBI as a theory, for all I know it might be strictly better than the status quo. Handing money out seems to have worked out for the banking system, hahaha. :[

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.


I always wondered: if UBI was reality for everybody, wouldn’t then simply all prices go up by the UBI level and nothing changes after all?


Price is (primarily) a monetary phenomenon. If you print money to pay for UBI (or anything else), prices go up. If you raise taxes to pay for UBI, prices don't go up. That's in aggregate; there will be a little bit of movement on the margin -- the price of caviar might go down. But rent & food shouldn't move much -- 99.9% of people in the US already have a place to live and enough to eat.


If you assume demand will go up for consumer products and/or output(aka supply) will go down under UBI. Then, prices would go up.

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.

http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=dema...


You're quoting a microeconomics answer to a macroeconomic question.


I've thought about this some. I think the problem with this reasoning is that prices can't go up by the UBI level, since it would be a fixed dollar amount per person. That is, the price of bread can't increase by $1200 per loaf.

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 economy doesn't produce more(or even less) then all that money would go to pay for the same(or less) amount of items.


Yes, I think that's true, although the magnitude of the effect is hard to determine, and I think is likely to be very small.

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.


Only for goods that have a constrained supply, in the UK for instance it would probably end up in the pockets of landlords because the housing market is so broken.


If you imagine that there's a fixed amount of stuff available to buy with money, and you increase the supply of money, then the price of stuff in money goes up since the total amount of stuff must remain equal to the total amount of money. But since UBI will mean that poor people have a bigger proportion of the total money than they do now (and rich people having a correspondingly smaller proportion), it will lead to poor people getting a bigger proportion of the stuff, and have a nonzero effect.


You're assuming that any additional funds would simply be spent, and spent on the same goods thus driving up demand given an inelastic supply. All those factors together seem unlikely.


Prices for what? How would anybody coordinate this?


That's what markets are for.

The joke at Google is that if we get a company-wide raise, Mountain View landlords are the ones who celebrate.


Rent is a big one. For example, you charge your tenants $1000 a month now. UBI kicks in, everyone gets an extra $500. Why wouldn't a landlord up their rent charge to $1500, or even to just $1250? Who wouldn't want to do that?


When I was in the military there were landlords who tried to raise your rent whenever you got promoted since each rank's pay is publically available, basically negating your pay raise. The only solution was to make it illegal, but I imagine it'd be even harder to detect with UBI since everyone is getting the same amount, they could just raise rates uniformally instead of singling people out.


The shortest answer, of course, is competition.

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.


> For example, you charge your tenants $1000 a month now. UBI kicks in, everyone gets an extra $500.

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.


While this is true, it is not magically funded, consider the average person. Taxes historically are taken out every pay check. 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.


> While this is true, it is not magically funded, consider the average person.

Yes, do.

> 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.


>not everyone will get equal (or any) additional income under a UBI scheme

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.


The point is to avoid any effort on deciding who really needs it, and not create perverse incentives not to work. If your tax bill exceeds your UBI, your income is a lot higher than your UBI so you don't care that much.


At the same time, a lot of people will leave crowded cities when the UBI gives them other options. That should exert downward pressure on housing costs.

(Also, laws against randomly raising rents by 50% would be useful.)


You're forgetting there is supply and demand as well. If there are more places to live than people who need them, then landlords and property owners will have to compete to offer the best price. This would drive prices downward, even if everyone has an equal constant added to their income.

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.


I'm not forgetting supply and demand. The supply increases, therefore demand would as well.

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.


> The supply increases, therefore demand would as well.

So you're misunderstanding supply and demand?


If one landlord defects and charges $1250, then they all have to do the same, as long as housing supply isn't constrained. Then if another landlord defects and charges $1100, all the landlords have to switch. In theory at least. Obviously the rental market isn't very liquid, so prices can lag and you can have distortions that persist.

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.


Because they're in competition with each other, and thus they also want to undercut each other to ensure that they get tenants for their properties.


One solution would be social entrepreneurs. But I guess the issue with that is regulation. I can imagine lobbyists and NIMBYs blocking those proposals.


With an extra $500/month, maybe I get a mortgage at $800/month and start building up some equity instead of renting.


I don't think the idea is that the poor will get more money from the state just that the money they get will not be means tested.


How do you envisage that would work?

If everyone were to receive £20k per year, the price of everything would obviously not go up by £20k a piece.


I have yet to see any studies of UBI that focus on the Universal part. It should be going to rich and poor alike across a sufficient region to see how it works when people on UBI commingle. This is important because "fairness" in the system is often just about people being treated "the same". If the rich are receiving the same checks as everyone else its hard for them to complain about it.


If someone's taxes go up $1000 and they get a $250 UBI check for it, that person could definitely complain.


I was speaking more colloquially. Yes of course they _can_ complain. But I was more suggesting that many people would not complain its unfair without making the connection to their taxes rising. Also, btw many UBI schemes do not intend to raise taxes, but to be a bureaucracy-free distribution algorithm.


They could, but hopefully they'd be interested in considering how a UBI might broadly restructure social and economic dynamics, and whether that broad restructuring has effects someone sees as a fair trade (or even a great deal) for this money.


But they might also be able to afford to stop working for a year to say raise young children. I think the solution is to encourage everyone to take advantage of this system.


Does the Alaska dividend count? As far as I know, everyone domiciled in the state gets the same check.


It's not enough to live off it, so it's not a UBI.


For the subsistence hunter-gatherers that usually barter, it is enough to soften the blow of a lean year, and a nice bonus in a fat year.

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.


That particular check amount depends on how long you've lived there.


Not since SCOTUS struck that down in 1982.

https://en.wikipedia.org/wiki/Alaska_Permanent_Fund

> 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.


There's a pernicious assumption here in equating "recreation" with "laziness". All of us deserve to have fun once in a while, regardless of socioeconomic status. Recreation can improve mental and physical health, provide great opportunities for social interaction, and exercise parts of our brain that don't otherwise get exercised.


The problem is often people who work, work hard and importantly pay taxes, don't have the time for this recreation.

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.


If you work a job that allows you no free time that is your choice. Whining that other people have leisure time is absurd, if you want leisure get a better job.

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.


Frankly if you can't see why someone working hard would be annoyed with their money going towards taxes that pay for people to enjoy a life that they are not enjoying, then you are no better than someone saying "Don't be lazy, just get a job". People do different things, some people want to make lots of money or have a 'good' career, and sometimes you have to suffer through the bad side of your choices. A bit of empathy goes a long way.

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.


People seem to have an interesting psychology around perceiving government spending, as if their tax dollars are going 1:1 into a specific thing. Looking at a welfare recipient and thinking "they're taking my tax money" vs "they're taking 0.000000x% of my tax money".

But, I agree about income taxes in general as a tax on high income labor, not the wealthy.


Even the most high power CEO in the world can take long extravagant vacations. Do you think he is crying because someone in Detroit can work part time and relax half the week? Your argument is bizarre.


But a doctor who's had an 80 hour week, saving lives, helping people, and spending time away from their family, can't feel it's unfair they have to pay for someone to stay at home and relax.

The world is more than CEO's and part time workers.


How is that any different from a CEO with long hours and high pay? No one is forcing this person to be a Heart Surgeon. They could do very well as a Suburban GP with basically 9-5 Hours and still high pay and prestige.

I actually think you are just one of those "Taxation is Theft" libertards.


Considering the top 20% of Americans will pay 87% of the income tax this year, how much more should they pay in your estimation?

https://www.wsj.com/articles/top-20-of-americans-will-pay-87...


You'd be getting the UBI too, could always take some time off...


Instead of UBI, which many critics are fearful of, why not switch to a voucher system? The government gives everyone a voucher redeemable for $x for food, $x for healthcare, etc., whatever forms of welfare we decide to provide as a society. Then private companies can register with the government as providers of these services and consumers can spend their vouchers wherever they want. This solution seems like it eliminates bureaucracy by switching to a market based system, provides a safety net for the entire population, and makes it harder to freeload.


> eliminates bureaucracy

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.


> 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?

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 can't redeem the vouchers for cash, only for the good or service the vouchers are designated for

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).


I realized that while you were replying and added an edit to my comment.

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.


One counter argument to that are the organisational costs, which run against one of the central arguments for UBI - more efficient distribution of the welfare pot, due to the simplified, no questions asked system.

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.


I think this would be a nice iteration on the concept of social welfare for all. The real advantage to money is that it is 100% fungible. By restricting what UBI can actually pay for (Class B money it could be called) this then limits abuse. Of course some will still abuse the system and trade their Class B money for less Class A money but there's a certain amount of fraud potential you simply need to accept, even while policing and enforcing the law.


Yeah, I don't think you can eliminate fraud entirely. But we already have fraud in our current welfare system.


Because we already have these and the proponents of UBI argue radically transforming them by handing people money would be better. Money is already exactly such a 'voucher'.


No, money you can spend anywhere. A voucher has to be spent on the thing it's designated for.


Right but as I said, the UBI people say 'that's overhead we can get rid of'. That's sort of the point. The thing you're proposing isn't that different from many existing forms of subsidy. In the US, for instance, you can get 'vouchers' specifically for buying food. Or specifically for buying a house.


Yes, but UBI isn't politically palatable to many people (probably most people). More incremental reforms to the welfare system, like what I proposed, have a greater chance of being politically realizable.


Even incremental reform can be difficult and your reform is not that much less radical than UBI. And has some curious aspects - for example, your vouchers are actually more bureaucratic than SNAP/EBT.


Voucher sounds like something that can be revoked.

"You weren't a good citizen, you murdered. Vouchers revoked!"

"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.


You could say this about the current welfare system too. As far as I know what you're suggesting doesn't happen.


Not everyone is on welfare. The point is everyone should have the same basic level of resources available.

Another issue is politicians already try to attack the current welfare, Examples:

https://www.usatoday.com/story/news/politics/2013/09/18/comm...

https://www.cbsnews.com/news/trump-signs-executive-order-pus...

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.


It's easy to do some research and say, "Hey, this works! Look at all the places that did it!"

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.


The real problem with UBI is the people who need help the most are least able to help themselves. I have friends who are mentally unable to advance beyond assistant usher at the movie theater (the head usher is some 16 year old kid who started two weeks ago). I have a friend who is convinced the CIA had the doctors put a bug in their knee while doing surgery.

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)


I've always looked at UBI from that angle.

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.


This is my problem with UBI. I don't believe that the US will ever meaningfully reduce the size or scope of the safety net. It's not politically feasible to do so.

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.


> what social services people already depend on will you get rid of?

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.


that would essentially privatize any existing government social services and most conservatives support the idea of smaller government


To implement basic income without raising taxes, the USA would have to trim something like 10% from our defense budget.

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


10% of the defense budget would fund a $15 a month UBI.

edit: bad math

598 billion per year * 10% / 325 million people / 12 months/year


I am quite interested in UBI and look forward to seeing more empirical data on the various experiments being conducted.

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.


No matter which version of a UBI you support, there's one key feature that I just can't imagine happening out here in the real world. A UBI should REPLACE most existing forms of social assistance. Food stamps, unemployment insurance, some kinds of pensions, some kinds of child support, etc etc etc. Each one of those is a massive public sector industry with a lot of political weight behind it.

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.


One argument the article forgot is that efforts to help the poor with goods or services rather than cash entail building a bureaucracy, and inevitably the iron law of bureaucracy asserts itself, more and more of the funds are diverted to the bureaucrats rather than the ostensible mission.


Giving away cash won't make people lazy; rather, it will motivate them to maximize their take of the action, while minimizing someone else's. Scores of people claiming to be poor will suddenly appear out of nowhere, with outstretched empty hands.


It being "Universal" means that people don't have to claim to be poor. Now, because we have progressive taxation, claiming to be poor would indeed be advantageous - but that's true even today.


Same incentive as for tax evasion.


Increased enrollment isn't the same thing as increasing work %. Some of these other studies are testing "cash transfer for specific thing" and find that "specific thing" increased, somewhat. That's not really what people are arguing when they argue broader cash transfers, like Basic Income.

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:

https://www.dropbox.com/s/r19npwc30trejb6/Basic_Income_in_a_...

https://www.dropbox.com/s/oi0kv3vcya9o0ad/The_Rural_Income_M...

https://www.dropbox.com/s/hkd489vcarcrorg/Findings_from_the_...

https://www.dropbox.com/s/5m2k5qzgv699dfe/THE_TOWN_WITH_NO_P...

https://www.dropbox.com/s/dsucn7jone74g65/New_Jersey_Graduat...

I've had these sources handy since last year when I was doing research on my own UBI-skeptic piece: https://medium.com/@simon.sarris/after-universal-basic-incom...


If you are on an island where a third of the population is struggling, e.g. bad crop yield, the whole population on the island will experience the negative effects as a whole.

Solutions? 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.


I feel like UBI in general is a bad idea. If you give me free money, I'm just going to spend it or use it like any other money. If my landlord, mechanic, etc. knows that certain people are getting extra Income, what stops them from just raising the prices? If the landlord knows that a tenet is getting $300 a month and extra income, what's stopping them from raising the rent $300, completely negating the UBI concept?


Exactly the same thing that's stopping the landlords from raising the rent by $300 right now - supply and demand.

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.


This is very culture dependent and depends on the values of the recipients. There are cultures of entitlement where none of that money would go to education or entrepreneurship, just to greater levels of indulgence.


[flagged]


Please do not post generic ideological comments to HN. It leads to generic ideological flamewars, and those are off topic here.

https://news.ycombinator.com/newsguidelines.html


Sources?


If your going to talk about Socialism you're going to have to define it better.

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.


Question for conservatives: Do you really think that if your rent was a few hundred bucks cheaper per month you’d start smoking crack?


crack? no, but i'd have more money to spend on weed ;)


> Question for conservatives

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.


> Are you sure UBI would actually be against "conservative" interests?

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.


> Are you sure UBI would actually be against "conservative" interests?

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.


We could also review prior experiments.

1970s MINCOME experiment. Dauphin, Manitoba Canada https://en.wikipedia.org/wiki/Mincome

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.


From the article:

However, some have argued these drops may be artificially low because participants knew the guaranteed income was temporary.[6] 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.


Your point?

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.




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