The experiment was terribly flawed in that it only addressed the unemployed, and it didn't affect the existing unemployment system for them, making incentives perverse for all taking part. The UBI was offered tax-free on top.
It represents nothing like real life UBI and needs to be redesigned as a test.
The biggest problems with such UBI experiments is the limited time of the experiment.
If I had a shitty, dead-end job, and someone offered me (eg.) 80% of an average paycheck in my country, FOR 2 YEARS, i'd be happier than before, and use that money to pay off loans, buy a new car, go for a vacation, etc., and keep my curent job.
If I had a shitty, dead-end job, and someone offered me (eg.) 80% of an average paycheck in my country, FOREVER(!), i'd probably quit, and live off UBI, and do other stuff (fun for me, but litle of value to to wider society, and with probably zero tax money to feed the UBI system). ...or, probably move somewhere, where I can get more for that amount of money.
Most countries have lottery systems made up in a way, that you can opt for a bulk sum or get monthly payouts from the lottery... i'm sure, that we could find people, who get monthly sums somewhere in the interesting rage, to check how they're doing now.... but usually, looking at loterry winners does not show results in favour of giving people "free money".
> If I had a shitty, dead-end job, and someone offered me (eg.) 80% of an average paycheck in my country, FOREVER(!), i'd probably quit, and live off UBI, and do other stuff (fun for me, but litle of value to to wider society, and with probably zero tax money to feed the UBI system). ...or, probably move somewhere, where I can get more for that amount of money.
While I do think this might be what some people will do, I think that over time, as we get used to such a thing, this is not at all what most people will do.
I've had periods of years in my life where I didn't have to think about money. After a short period of faffing off, I started doing all sorts of stuff. Some of it of direct value to society (volunteering) and some of it perhaps indirectly so (teaching myself new skills, working on 'products' that could be useful). I mean, even just spending time with others who themselves had it in short supply and valued my company could be considered 'useful to society'.
What I do know is that all of this time spent was generally more useful than a number of years of inane bullshit I worked on for various companies (getting paid well, but not really feeling satisfied with the result). So many projects that just stopped because of some decision higher up. So much work poured into websites that offer no value to society either. And the stress and depressions that goes with it leading to me being a 'burden' on society by using my health care bux on mental health care. I'm not a rare case.
Of course, this is anecdotal. But the assumption that people will just be lazy and offer nothing to society if they can is equally anecdotal, and honestly goes against everything I see in about 99% of the people around me.
People want to be useful. People want to be valued and needed. People want to be creative.
I consider it quite possible, or at least worth properly exploring, a society that provides in the basic needs regardless of whether you do pointless work for pointless company to allow you to spend your downtime on pointless consumption and entertainment (because no energy for anything else).
> I've had periods of years in my life where I didn't have to think about money. After a short period of faffing off, I started doing all sorts of stuff. Some of it of direct value to society (volunteering) and some of it perhaps indirectly so (teaching myself new skills, working on 'products' that could be useful). I mean, even just spending time with others who themselves had it in short supply and valued my company could be considered 'useful to society'.
Do those activities generate enough money, so that government collects enough taxes from you, to cover your UBI + all the other costs (roads, schools,...)? If not, you're still a net burden on society.
> People want to be useful. People want to be valued and needed. People want to be creative.
Of course people want to be useful and creative. But peoples usefullness and creativeness has to create atlest 2xUBI of taxes (one that goes back to the worker and one that goes to someone who get UBI but doesnt work) + all the other costs.
If you're capable of doing stuff you like, being creative, liking that work, and creating that much income, why are you not doing it now?
> I consider it quite possible, or at least worth properly exploring, a society that provides in the basic needs regardless of whether you do pointless work for pointless company to allow you to spend your downtime on pointless consumption and entertainment (because no energy for anything else).
Problem with this society is, that it also requires people who are working, to cover the cost of the poeple who are not working. Curretnly most countries do that for a very small percentage of unemployed (welfare), and most people in those countries are already complaining about the high taxes. If you raise the taxes on the people left working, and let others live relatively normal lives without working, you'll get less and less of the former and more of the later. Yes, non-workers will create music, art, will travel, write blogs, etc., but none of that generates enough income to cover even their own cost.
> If you're capable of doing stuff you like, being creative, liking that work, and creating that much income, why are you not doing it now?
Because it’s a huge risk with no safety net - even if I’m 95% confident that I could support myself as a freelancer, that’s 5% odds of ending up without health insurance / homeless / unable to support my family / dead / etc; so I stick with my FacelessMegaCorp(tm) job for now, and maybe I’ll freelance for entertainment after I retire :P
> Do those activities generate enough money, so that government collects enough taxes from you, to cover your UBI + all the other costs (roads, schools,...)? If not, you're still a net burden on society.
The median person on UBI would probably be a net burden on society.
The mean? Probably not. Albert Einstein's Theory of Relativity was a side project. It'd only take a couple of similar projects to make all of UBI worth it.
Framing people as possibly being "net burden" on society presumes that "the market", and economics, perfectly encodes the value of an activity to society, and that taxes are omnipotently levied against the activity. Conmen (Enron; Bernie Madoff) and people who squander inherited wealth (trust-fund babies; Paris Hilton) arguably have a negative contribution to society, but pay plenty in taxes. Does their existence as high-value tax base truly outweigh a kind, loving person who had the misfortune to born poor, and not get the same opportunities in life as someone who's family donated a building to Harvard?
Capitalism is unable to recognize the value of lots of kinds of work (that is often done by women), especially when those performing the work aren't the kind to charge for it. Just because work is being given away for free doesn't mean it's worthless. Capitalism has some shortcomings and one of them is that it's unable to support certain business models that provide value to the world.
Wikipedia manages to exist on the largess of wealthy benefactors, and a ton of volunteer labor. Are those volunteers a "net burden" on society?
> Framing people as possibly being "net burden" on society presumes that "the market", and economics, perfectly encodes the value of an activity to society,
If not the market, then what? Why do you think resource allocation scheme X would be better than the market overall? Without prices, we're left with the people best at being loud demagogues deciding the application of society's limited resources. Is that really better? Has it ever worked to produce prosperity or happiness?
Yes, economic value reflects social value, and chasing profit produces social good. Every time somebody's rejected this principle, he's produced poverty and death.
UBI would be cheaper than the current system (in the UK at least, but likely other countries as well).
First off, those that are currently entitled to most benefits would be getting UBI instead, and those that are not currently entitled to (most) benefits would be getting UBI and paying it back in tax.. so in theory its the same cost, less the administration and means testing.
Its also high return as its mostly spent on the basics when it isn't directly taxed back, so the money changes hands (taxed) several times within weeks. But also savings from the health service (10 billion spent each year in UK on preventable poverty related disease) and on courts and police (another 5 billion spent on petty crime directly related to poverty -likely not the full figure). Or as mentioned; the massive possibility for profit as you free up millions from demeaning repetitive low tax jobs to chase their dreams and entrepreneurial ambitions or higher education, as well as a permanent stimulus to the economy replacing much of the bailouts currently needed.
IMO we also really need an automation tax, as more and more jobs are automated the extra profit can't/shouldn't be focused on the few, though this wouldn't be necessary for UBI.
edit; I also want to add that back in the 80s early 90s, the UK welfare system was basically a guaranteed lifelong income. People were still falling over themselves to get work, i remember 10K applicants for 50 ICI jobs (low wage long hours).
> First off, those that are currently entitled to most benefits would be getting UBI instead, and those that are not currently entitled to (most) benefits would be getting UBI and paying it back in tax.. so in theory its the same cost, less the administration and means testing.
How many workers does britain have (percentage)?
In slovenia, a bit less than half of people work (we have a huge amount of pensioners, kids, students, and also some unemployed) + a huge public sector.
With UBI, an average worker would have to pay for two UBIs in taxes, to get one UBI back. And that's not counting the people quittin their jobs due to UBI (and moving to cheaper countries, where that money is worth more).
>an average worker would have to pay for two UBIs in taxes
An average worker would be paying less tax (in real terms) if we moved to UBI than they are paying for the current system.
Its also true that this isn't just going to be payed for in income tax. VAT and corporate tax will contribute as well, meaning people on UBI will be paying for it in part as they spend it(VAT), and as they don't claim some of their other allowances in benefits, healthcare and law enforcement we will save even more.
Try to stop thinking about this as 'the average worker' the country is a good deal more complex than that. systems will pay for themselves in a host of ways if they are needed and efficient; UBI is a more efficient income support system than the one we have.
> Problem with this society is, that it also requires people who are working, to cover the cost of the poeple who are not working. Curretnly most countries do that for a very small percentage of unemployed (welfare), and most people in those countries are already complaining about the high taxes.
You seem hung up on the idea that "working" is equivalent to "producing value".
We live in a society where the system is frequently optimized to employ as many people as possible. This creates incentives to encourage a lot of work being done to win zero-sum games rather than producing value for the economy as a whole. I would argue that we are already in a situation where the majority of the population can be supported by a minority of the workers. We have long been living in a world where the limits on economic growth is consumption, not production.
If we instead have the need to encourage people to find what motivates them and provide tools to the motivated to maximize that productivity I think you will see very different social structures arise.
Beyond that, I think the removal of the lazy from the work force is actually a net positive. Employers can spend less time filtering the mostly useless to find good workers. The 10x producers among us don't have to spend as much working around the lazy coworkers and managers. Even the "lazy" among us have the freedom to discover their passions and find ways to contribute more to society than they would as a low end wage slave.
> Yes, non-workers will create music, art, will travel, write blogs, etc., but none of that generates enough income to cover even their own cost.
I think you are selling people short here, or perhaps projecting your dreams on others. There is also a great deal of work that people want to do but the value of which is not easily captureable by an employer.
> If you raise the taxes on the people left working, and let others live relatively normal lives without working, you'll get less and less of the former and more of the later.
This is actually a good thing as long as you maintain sufficient production. As production declines, the standard of living provided by basic income declines which increases the incentives of the semi-lazy to work, which then leads to increased production. As long as UBI is carefully phased in, the system should equilibrilize.
Most of these dynamics aren't possible to explore in limited studies like this one. All these types of studies can do is dispell common myths about individual bevaior and the only way to really find out what will happen is to gradually phase in a UBI.
> Of course people want to be useful and creative. But peoples usefullness and creativeness has to create atlest 2xUBI of taxes (one that goes back to the worker and one that goes to someone who get UBI but doesnt work) + all the other costs.
> If you're capable of doing stuff you like, being creative, liking that work, and creating that much income, why are you not doing it now?
I dunno, it's all speculation of course, but I'd say my 'usefulness' has gone up once I didn't have to bow to my bosses' whims. It's hard to quantify that, of course, but even if I go for a quantifiable measure, I'm probably more of a benefit to society than otherwise: I've been working on various business ideas that could improve the efficiency of other businesses, my volunteering reduced the burden I put on my country's health care system (on account of needing less therapy), and possibly reduced the effect on others around me. The money I make doing 'extra' work, that I wouldn't have to do, has benefitted my younger siblings who in turn might benefit society.
Personally I don't like this kind of thinking though. I'm convinced that a decent chunk of the population is just driven to do and create in a way that is valuable to other parts of the population. Trying to reduce this to 2xUBI is somewhat futile, and honestly not a society I want to actively encourage. In fact, engaging with this thought strikes me as already a bit of a needless capitulation. How much money could we save by reducing the pointless corporate work, military spending, etc, and how does UBI relate to that? At least for a significant experiment I suspect it's not much.
> I consider it quite possible, or at least worth properly exploring, a society that provides in the basic needs regardless of whether you do pointless work for pointless company to allow you to spend your downtime on pointless consumption and entertainment (because no energy for anything else).
>> Problem with this society is, that it also requires people who are working, to cover the cost of the poeple who are not working. Curretnly most countries do that for a very small percentage of unemployed (welfare), and most people in those countries are already complaining about the high taxes. If you raise the taxes on the people left working, and let others live relatively normal lives without working, you'll get less and less of the former and more of the later. Yes, non-workers will create music, art, will travel, write blogs, etc., but none of that generates enough income to cover even their own cost.
I think what I'm driving at is that this 'working' and 'not working' would be redefined. So much work is busiwork. So much 'work' is very tenuously measurably good for society. And, conversely, so much 'work' is not really considered work, but crucial to a functioning society.
In the same way that we (many Western nations) already got rid of having to worry (generally) about some of the most basic needs, UBI is one option to reduce that even further. I think, with the recent decades of insane progress when it comes to automation, that this is possible. And I'd rather see what happens and roll back the changes than just not do it because we can't fully predict the outcome.
> I dunno, it's all speculation of course, but I'd say my 'usefulness' has gone up once I didn't have to bow to my bosses' whims. It's hard to quantify that, of course, but even if I go for a quantifiable measure, I'm probably more of a benefit to society than otherwise: I've been working on various business ideas that could improve the efficiency of other businesses, my volunteering reduced the burden I put on my country's health care system (on account of needing less therapy), and possibly reduced the effect on others around me. The money I make doing 'extra' work, that I wouldn't have to do, has benefitted my younger siblings who in turn might benefit society.
Why can't you do that now, by starting your own business and being your own boss?
> Personally I don't like this kind of thinking though. I'm convinced that a decent chunk of the population is just driven to do and create in a way that is valuable to other parts of the population. Trying to reduce this to 2xUBI is somewhat futile, and honestly not a society I want to actively encourage. In fact, engaging with this thought strikes me as already a bit of a needless capitulation. How much money could we save by reducing the pointless corporate work, military spending, etc, and how does UBI relate to that? At least for a significant experiment I suspect it's not much.
We can verify this by observing people who are currently not working and are getting welfare. Somehow, very few of them do so. Some even avoid doing real work (you have to actively look for a job here if you want to receive welfare), by literally coming to interviews and saying that they're there just for the 'stamp' (proof they were there).
> I think what I'm driving at is that this 'working' and 'not working' would be redefined. So much work is busiwork. So much 'work' is very tenuously measurably good for society. And, conversely, so much 'work' is not really considered work, but crucial to a functioning society.
But stuff we deem "crucial" (by our own, individual standards), we're also willing to pay for. Water, food, entertainment, cars, gadget, clothes, vacations, travel, books, music, perfumes, etc. Is something really crucial, if noone wants to pay for that? If someone is willing to pay 100euros for a stinky alcohol-water mix (perfume), and they're not willing to pay for your work, is your work crucial?
> How much money could we save by reducing the pointless corporate work, military spending, etc, and how does UBI relate to that?
Corporations are paying their own money for that work... they'd be the one saving, not you. Military spending can still be lowered, and workers would get to keep more of their own money, why does it have to be given to non-workers? (i'm not talking bout disabled people, etc, i'm talking about able-bodied people, who are able to work, but would choose not to).
>> I dunno, it's all speculation of course, but I'd say my 'usefulness' has gone up once I didn't have to bow to my bosses' whims. It's hard to quantify that, of course, but even if I go for a quantifiable measure, I'm probably more of a benefit to society than otherwise: I've been working on various business ideas that could improve the efficiency of other businesses, my volunteering reduced the burden I put on my country's health care system (on account of needing less therapy), and possibly reduced the effect on others around me. The money I make doing 'extra' work, that I wouldn't have to do, has benefitted my younger siblings who in turn might benefit society.
> Why can't you do that now, by starting your own business and being your own boss?
I can, because I ended up in a situation where I basically have the equivalent of UBI. My point is that it is indeed what I'm doing, and I believe others would too, given the opportunity.
>> Personally I don't like this kind of thinking though. I'm convinced that a decent chunk of the population is just driven to do and create in a way that is valuable to other parts of the population. Trying to reduce this to 2xUBI is somewhat futile, and honestly not a society I want to actively encourage. In fact, engaging with this thought strikes me as already a bit of a needless capitulation. How much money could we save by reducing the pointless corporate work, military spending, etc, and how does UBI relate to that? At least for a significant experiment I suspect it's not much.
> We can verify this by observing people who are currently not working and are getting welfare. Somehow, very few of them do so. Some even avoid doing real work (you have to actively look for a job here if you want to receive welfare), by literally coming to interviews and saying that they're there just for the 'stamp' (proof they were there).
As I said before/elsewhere, I think this is transitional effect. Not only is welfare avoided by those who would be productive anyways, the very stigma and context of welfare can encourage 'doing nothing'. It's a bit like your employer allowing you to work from home: at first, it's quite likely you'll abuse this freedom to not wear pants all day and pretend to work. I truly believe that changing this to a 'default', over time, makes it less common for the majority of people to actively do nothing. People hate doing nothing by nature.
>> I think what I'm driving at is that this 'working' and 'not working' would be redefined. So much work is busiwork. So much 'work' is very tenuously measurably good for society. And, conversely, so much 'work' is not really considered work, but crucial to a functioning society.
> But stuff we deem "crucial" (by our own, individual standards), we're also willing to pay for. Water, food, entertainment, cars, gadget, clothes, vacations, travel, books, music, perfumes, etc. Is something really crucial, if noone wants to pay for that? If someone is willing to pay 100euros for a stinky alcohol-water mix (perfume), and they're not willing to pay for your work, is your work crucial?
Most people don't want to pay for love, and yet here we are. Most people don't want to pay for a (good) family, and here we are.
Reducing crucial to 'what people are willing to pay for' is, even on a cursory inspection, complete bullshit that nobody who isn't extremely dysfunctional actually lives by.
>> How much money could we save by reducing the pointless corporate work, military spending, etc, and how does UBI relate to that?
> Corporations are paying their own money for that work... they'd be the one saving, not you. Military spending can still be lowered, and workers would get to keep more of their own money, why does it have to be given to non-workers? (i'm not talking bout disabled people, etc, i'm talking about able-bodied people, who are able to work, but would choose not to).
I'm saying the difference between workers and non-workers is something we need to re-assess. You're sort of getting there by making a distinction between 'disabled' and 'able-bodied'. Those are not clear distinctions. Is someone with mental health issues that prevent them from being able to deal with workplace stress 'able-bodied'? Or 'disabled'? What if we experimentally try to do away with that distinction and provide UBI and see how things go?
>Do those activities generate enough money, so that government collects enough taxes from you, to cover your UBI + all the other costs (roads, schools,...)? If not, you're still a net burden on society.
I challenge your assumption that someone's worth to society can be accounted for by tax revenue.
If you provide something that the society wants, they're willing to pay for it. If you make good beer, people will buy it, if you make good music, people will pay for tickets to listen to your shows, if you make great art, people will buy it,...
Tax revenue is just a percentage of the income you make.
Is your work/activity/service really worth anything, if noone is willing to pay for it?
Nobody paid my mother to raise me well. Nobody pays me to call her, or visit her. Nobody pays me to coach my younger siblings. Nobody paid that one great teacher to cultivate a love for programming in me, when just doing okay was enough. Nobody paid that one guitar player/singer who left a lasting impression on me with his song.
Nobody pays for my girlfriend to show affection to me, or spend time with me. Nobody pays... you get the point.
So many of the best things in my experience have not been quantifiable, or in fact even actively hostile to commerce. That guitar player was not getting paid, but he wanted to play because he liked the vibe of the bar. For all I know he was good enough that he usually gets played. I know that some of the top performers in my country (stadium-level audiences) would do so at no cost at this bar, randomly, and if you were lucky it was when you went there for a beer.
I do hope you don't really see the world as a matter of finances and payment. It's depressingly reductive.
But how much food can you buy with all the things you've listed as something you didn't get paid for? How much rent can you pay? How many plumbers, electricians can you call with your mothers love? You can strike a deal with an electrician, to call them or visit them, if they want, but if they don't, you have to offer them something they want - usually that's money.
You can still do all that, but you're expecting other people to do paid work, the government to take away a huge chunk of that money, and then give it to you, so you don't have to do paid work, and call your mom.
You can still play your guitar (or do whatever) for free, just for the love of doing that. But if you didn't get people to give you money (food, services,...) for your music then, or for you calling your mom, etc., you cannot expect the government to force them to do it on regular basis, if you play/call, or even if you don't.
Fair enough, but I’m more concerned if UBI turned out to be a bad policy, would it be repealed? Practically speaking, the government has a poor track record of back pedaling on bad policies once they are in place.
I'd say no, though. My experience so far has been that my government has had no problems repealing (to various degrees) things like health care, education/student loans, or public ownership of various things. From my limited knowledge this has been similar in much of the Western world, at least.
To a degree I feel discussing this is a distraction of my basic point (we have become productive enough even in just a few decades to indulge in these experiments).
But honestly I think it's a great point. Our taxes did not go down, as far as I know. I'll check in one of the coming days, but I'd be shocked to find out it did...
I'm skeptical about this too.... especialy if the UBI was the 'thing' that got them elected in the first place. And people would be protesting because they'd be losing 'free money'.
This program has to work for the least common denominator. I think a common pitfall is intelligent people designing systems in a bubble of intelligent friends then wondering why it fails spectacularly in public.
You will probably want to spend your time doing fun things, but the moment you need to upgrade your car, your tv or buy that sweet new tool for your hobby you will need to take a job.
But the biggest benefit of ubi imo is that if you want to spend your time, say, building a new product or clearing your mind in order to be more productive in the future, you will have that option. Tho I do see a lot of people just sitting around doing nothing, and ubi leading to inflation.
Imo the best way to implement ubi is by automating as much as possible, to increase productivity, and to use the extra time and money to reduce the amount of work people need to put in for a living. Thus far automation disproportionately benefited employers and not the society and the workers, money wise. If a robot makes 10 times more shoes, then taxing that bot the equivalent of 5 full time workers is fair.
I imagine for most people, and I’m talking about the ones that would continue keep at their their existing job, if there was an extra $2000/month spare cash coming in or $4000 for a couple, it wouldn’t be a difficult stretch of imagination to say they would spend the money on the two most immediately obvious things: 1) upgrade their car 2) upgrade their shelter. If everyone is now affording a new $1000/month car payment and a $2000/month in extra rent budget, how would this ultimately not lead to people trying to outbid each other and cause inflation, especially rent? Wouldn’t rent or mortgage payments essentially rise to absorb this new quantity of money? Would this be essentially a transfer of wealth to landlords?
First of all, if ~50% of people work in a country (from age 0 to pensioners), they continued to work, and got 2k extra 'free money', they'd have to pay more than those 2k back in taxes, to cover the 2k for people who don't work at all.
If we somehow took 2k/person/month from some nonexisting trillionaire, who has the money to finance it for everyone, then probably yes, prices would go up, because everybody has now 2k/month more to spend.
If the average worker had to pay for those that didn’t via increased taxes of $1000 a month (to balance that budget), I cannot see that happening without a revolt. Would you even agree to pay an extra $500 per month in taxes to pay for someone else’s living expenses? Most workers are living almost paycheck to paycheck as is.
Not if the extra “free” money are covered by increased productivity due to automation, as it happened over the past decades. Typically the main beneficiaries from increased productivity are shareholders or company founders, and that is why money gets clogged in a few hands. Workers should also benefit more from from it as it is also their productivity that grew 10x along with that of the company. So we are not really talking about free money, we are talking about money you are entitled to anyway. Sure it is your company that invested in new tech to grow productivity, but it is the society as a whole that enabled it - try making robots or new tech in a society ridden by unemployment, inequality, civil unrest and so on. Furthermore, UBI would reduce corporate socialism and get us back to a free flow of capital, as the wealth would be fairly spread across society.
The issue is that we all already benefit from increased automation and new technologies. We all carry computers with us with powerful batteries and access to the internet.
It's the (much rarer) high-skill workers whose productivity has shot through the roof by using technology as leverage. The individual low-skill worker's productivity hasn't really increased by a lot, unless you say "we've built a robot that does 95% of the work, but let's attribute all of the output to the remaining 3 humans".
> Furthermore, UBI would reduce corporate socialism and get us back to a free flow of capital, as the wealth would be fairly spread across society.
The issue with "fair" is that it's very subjective. Some may say "it's fair when everyone has the same", others may argue that it's unfair when somebody who works hard gets the same as someone who chooses not to work at all.
UBI doesn't mean we all get the same - it just means none of us starve, and can live with dignity no matter what we do ...or don't do.
We can explore a different mindset where a slice of tech improvements and automation also benefit us as a society in that sense. Is it really that bad a thought that the goal of tech is to finance a society where no one is left without food and basic, decent, shelter? In the sense that we take a radical turn where we don't motivate people through fear but rather through need? The need of having more than just food or shelter as oppose to the the fear of starving or homelessness? Why does it have to be a struggle for so many when we can just build tech that covers basic needs.
> UBI doesn't mean we all get the same - it just means none of us starve, and can live with dignity no matter what we do ...or don't do.
By that definition, most of Europe has UBI and then some ;)
> Is it really that bad a thought that the goal of tech is to finance a society where no one is left without food and basic, decent, shelter?
That's a very US-centric view. Food insecurity is a solved problem in Europe and has been for decades. Basic, decent shelter? How about 450sqft, utilities included and we'll buy you a TV, throw in free health care, free higher education and 400€ a month in cash? Yet still, people will claim that this does not allow for genuine self-actualization because somebody else will have 900sqft and two TVs or a car.
> Why does it have to be a struggle for so many when we can just build tech that covers basic needs.
Because people don't want to be limited to basic needs, they want what they see others having. They want smartphones, microwaves, computers, internet, entertainment, transportation etc. And as society, we still need somebody to actually create all of that and keep it running. Incentivizing opting out of contribution is, from society's perspective, counter-productive, and the more you redistribute, the more you encourage the contributing members to leave.
Consider this: Germany is at or near the top for total taxation of working individuals. At the same time, top salaries for high-skilled workers are significantly lower than in the US.
Say we add some more taxes to redistribute more towards the unemployed and remove the rest of incentive to work for low-skilled workers. We'll increase the number of people opting to not work, further increasing the required taxes on those that do. And we'll increase the earning-gap for high-skilled workers compared to e.g. the US, increasing the reward of emigration for that group. That's a vicious circle and it's going to be hard to stop once it reinforces itself.
These all are very interesting points, but I think most are centred around unemployment benefits, rather than UBI.
This pandemic made me realise how fortunate we are for living in Europe - literally any part of the eu, has done a better job at helping people and making sure they dont starve, compared to the US. Thats a great observation! Europe is indeed very close to UBI. The only issue is it finances it through more taxes on an individual’s output and is not universal.
People who want more than basics can demand it as much as they want. Thats not UBI, thats lazy and scrounging. Go get a job. Period.
The point you are making re even more taxation is also spot on - that is why my view is that instead of taxing current workers even more we instead invest in tech that leads to even more productivity growth and we tax the difference in that new productivity gain.
I dread more taxation, as it usually means more taxes for us, less for those who disproportionately benefit from increases in tech and automation, due to the current economic system.
For example if BMW automates 10x more of their assembly lines, then tax the gain in productivity but NOT at a level where it punishes said growth, rather at a level where both BMW and the taxman are happy. Money go into a UBI pot much like norway’s sovereign investment fund.
Tech can be treated like a natural resource that we all own, but none of us have exclusive rights over it, while those who successfully exploit it will get more of the pie.
Apply the same to all sorts of manufacturing, agriculture and anything else that can be automated.
The money in that pot go to everyone in the country, and this is where UBI is radically different from unemployment benefits. Everyone gets a share, meaning those already in employment will get a tax cut and those not in employment don't get the stigma associated with benefits.
Dont worry about people immigrating to the us - the very workers we automate out of jobs dread us highly skilled immigrants, as they dint see the benefits from our work - more than taking pictures with shiny new iphones - and they want us to stay out, by voting for Trump.
TL;DR I guess I have a few random ideas about an ideal world where we use tech for building a star trek like society, where basics are no longer an issue and all we do is advance our society.
> Apply the same to all sorts of manufacturing, agriculture and anything else that can be automated.
I see where you're coming from, but that only works with stable prices. Prices aren't stable. Technology, automation lowers prices (or increases quality). Your 2020 BMW is nothing like the 1970ies BMW, and had you wanted a 2020 BMW in 1970, you would've had to pay outrageous sums of money.
> TL;DR I guess I have a few random ideas about an ideal world where we use tech for building a star trek like society, where basics are no longer an issue and all we do is advance our society.
I believe the general issue is that it wouldn't be an issue at all if everyone was like you. The harsh reality is that most people are not. It's like anyone that read Kant and who felt the categorical imperative resonate with them, and they go "why do we need laws? I wouldn't act in a malicious way". We don't have laws to regulate their behavior, we have laws for the vast majority who didn't read Kant or don't care about what would happen to society if everybody acted like they do.
You likely live in somewhat of a bubble, your friends are usually similar to yourself etc. I have no doubt that a lot of your well-meaning ideas would work great with them. I also have little doubt that they won't with the population at large, because they are very different. It's like a bunch of people who read books talking about information dispersal, not keeping in mind that a large chunk of the target audience is functionally illiterate.
> Dont worry about people immigrating to the us - the very workers we automate out of jobs dread us highly skilled immigrants, as they dint see the benefits from our work - more than taking pictures with shiny new iphones - and they want us to stay out, by voting for Trump.
It's the high-skilled workers in the US who compete with high-skilled immigration, it's a benefit for the low-skill workers, as we'd usually bring know-how and taxes, create jobs and generally improve society. The low-skill workers vote for Trump to stop low-skill immigration, they don't mind high-tech billionaires like Elon Musk or Peter Thiel.
A transfer of wealth would indeed be an issue. But I am wondering, would UBI give more people the option to live outside large cities, given that the scarcity of income is no longer an issue? And as such the demand for rent would go down? Will try and comment less, because debate on HN gets heavily penalised unless it conforms to certain patterns. But yeah UBI and inflation / transfers of wealth are an interesting topic.
Germany might be an example to look at this. We have welfare that's paid out wherever you live. It's conditional in so far that it's expected that you look for a job and aren't rich, but that's about it. It has a fixed money component (~400€/month) and covers rent (up to some amount that's set locally, depending on the local rent prices), utilities, health insurance etc directly.
Therefore, if you're okay with the amount of money you'd get, you'd probably be better off if you're not living in a large city, because, rent aside, city living is a bit more expensive. Also, considering that you're supposed to look for work, living in a city (where the jobs are, if they are anywhere) would increase the chances of you being expected to take a job, which you wouldn't have to in more rural areas.
People still move to the cities, even though the job market isn't promising for low-skill workers there either.
There are certainly many reasons, but some I believe to be involved: it's harder to get an apartment when you're on social benefits (even more so if not in the community you're currently living in), it's harder to live in a rural area if you don't have a car (which you'll likely not be able to buy while on benefits), few people have the means to move when money is tight.
I have to read more on how this works in Germany, but the idea of UBI would be that everyone would get 400 eur. I know that is not possible right now without taxing individual income even more, and as such my view is we should come up with tech we can tax. I dont have the specific silver bullet for how it could work, but would it be possible to tax every robot that replaces a human worker? Or tax anything that 10x’s productivity in any field, but at a level where it still is very motivating for an investor to make that 10x investment by letting them keep 8x of the output?
> Or tax anything that 10x’s productivity in any field, but at a level where it still is very motivating for an investor to make that 10x investment by letting them keep 8x of the output?
That'd only work on monopolies where the company would actually have a 1000% margin. For most things, you'll invest in some great new automation, but so will your competition. Now you've both increased productivity and if you try to cash in your 10x profits, your competitor will simply take 5x profits, massively undercut your prices and you'll be gone very soon. Productivity gains will typically lead to lower prices, that's why meat, milk etc is dirt cheap these days, if we still had food prices like in the 50ies but with today's productivity, any secret illuminati meetings of the 1% would see a lot more people arriving on tractors ;)
With 80% of an average finnish paycheck, you can live a really great life in one of the southern or eastern european countries, with a car and tools too.
> But the biggest benefit of ubi imo is that if you want to spend your time, say, building a new product or clearing your mind in order to be more productive in the future, you will have that option. Tho I do see a lot of people just sitting around doing nothing, and ubi leading to inflation.
How many "normal" people, above 40, with minimal education, currently packing meat, cleaning the streets, or picking up produce will spend that time to build a new product? You and your 'startup buddies'.. maybe. Most, not.
> Imo the best way to implement ubi is by automating as much as possible, to increase productivity
> If a robot makes 10 times more shoes, then taxing that bot the equivalent of 5 full time workers is fair.
But we're already doing this.... a washing machine cost a couple of paychecks here (former yugoslavia), and now i can buy one for less than 20% of an average paycheck (not yugoslavia anymore, but i haven't moved). If we tax the automation "difference", then we have to go back to old, pre-automation prices.
How much profit does VOX make on this: https://www.mimovrste.com/pralni-stroji/vox-wm-1051-pralni-s... 221.90EUR washing machine? 22% of that is VAT, a part of the price pays for "free" transport to the home, then the seller has to earn something, import duties, transport from china(?) to slovenia, manufacturing, raw materials, testing, development + 5 year guarantee (anything happens, a technician comes to your home to fix it... just the cost of that is probably more than the whole washing machine profit). + all other cost (loss, items destroyed in transport, returns, etc. I don't see a lot of profit for the manufacturer here... and and tax would just be moved onto the consumer who'd have to pay a higher price (so they'd need higher UBI, higher tax, higher price,...).
Why can’t we ever design one such experiment right? It’s as if we were giving ammunition to those opposed to it by conducting trials that have flaws! Would it really be so hard to run a proper test that follows all the best practices and isn’t biased/flawed so that we could once and for all point at it and say “we can conclusively say UBI is/isn’t viable based on this experiment”?
I mean if a country goes all the way to overcoming political and opinion opposition along with securing funding to actually run such a trial, why not go all the way and do it right?
A "real" test would be much harder, and to be actually useful, it would also have to contain a way to finance itself, i.e. by testing it not on a selected group of people, but on a region and adding additional taxes for everyone in the region large enough to offset the payments.
If you're only testing the outcome, but not the income, you're essentially allowing "free energy" people to plug their magic machines into a wall socket while you test the energy output of their machines.
Much fewer people will agree to run that test (as it'll negatively affect their bottom line), and I do believe that proponents of UBI will also be more hesitant to run it, as it might prove that adding e.g. 20% to income tax will motivate tax payers to migrate away from UBI zones.
AFAIK one component of UBI is that you throw out (most of?) the other welfare benefits you might get. By saving money on that, you could potentially offset or even compensate for the required added income tax.
This sort of thing gets mentioned a lot, but in practice doesn't work. The amount of money spent on welfare benefits[0], plus the cost of the administration, ends up several orders of magnitude less money than UBI wage x Population size. This is the key problem with UBI: making it actually universal costs an unsustainably huge sum of money, and making it not universal just means you've re-invented welfare benefits, but worse.
0: Doesn't really matter which country you choose the results will be the same
It’s also important to note that the direct and indirect benefits of traditional welfare are also considerably higher than even the highest suggested UBI allowances.
For example in the UK housing benefits would be greatly dependent on where you live in some London councils housing benefits can be as high as £400 per week, this alone is more than the highest proposed UBI allowances that aim to match the tax free allowance (currently at £12.5K).
UBI with removal of all other benefits could easily mean that the people that need it the most would be getting less and sometimes much less.
In science, evidence determines your viewpoints. In politics, its the other way around.
If the results of an experiment support your views, then it was a great experiment and proof that you were right all along.
If the results of an experiment contradict your views, then you can fully scrutinize every aspect of the test to come up with reasons why it got such a wrong result.
There are certainly plenty of fields that have a these problems and are vulnerable to be politically driven. I'd say the further toward the "soft" sciences you go, the more you're able to manipulate results to fit certain viewpoints. 538 has a nice little demo showing off the problem.
Yes, some branches definitely. Especially human-computer interaction. Other branches like discrete math or algorithm analysis are impossible to fudge. Machine learning is somewhere in the middle.
Awesome site! Sadly p hacking is also a problem in many fields not just the soft sciences. It’s a bit of a dig at science but is it a fundamental flaw of the scientific method?
Doing the test properly means that the subsidy has to be paid for by much higher taxes on the study group only [as opposed to general government revenue raised mainly from taxes on the control group] and that the subsidy has to be credibly promised for life, not just for a year or two.
For obvious reasons, this is politically different to achieve.
A real world would have to include everybody in the economy or you will not disprove the objection that it will just create inflation on necessities. It's the problem with economic experimentation. There is only one actual economy and there is no real way to A-B.
- pick participants at random (regardless of employment status)
- give money to all the participants
- make all participants pay higher taxes to finance
For this to be realistic, the participants would not have a choice whether or not to participate. So yeah, I can't for the life of me think why we "can't ever design such experiment right".
>According to its 2006-adopted platform, the National Coalition Party's policy is based on "freedom, responsibility and democracy, equality of opportunity, education, supportiveness, tolerance and caring".[9] The party is described by literature as a liberal[2] and conservative[3] as well as a liberal-conservative[4] party in the centre-right[8] with catch-all party characteristics.[29] The non-profit Democratic Society described it as "the heir to both liberal and conservative strains of right-of-centre thought" that is becoming increasingly liberal compared to its official stance of conservatism.[6]
>Specifically, it contains elements of cultural and economic liberalism and social reformism.[30] For example, it supports multiculturalism, work-based immigration, gay rights and same sex marriage.[6][31][32][33] Although formerly considered to have been critical of the Nordic welfare model and campaigning for strict doctrines of economic liberalism, in the 1970s the party shifted to supporting more social liberalism, such as increased social security and a welfare state, justified by increased individual liberty.[34]
They've really pivoted on that issue in the past few decades.
There is no "system". There is an endless number of possible implementations of UBI on a spectrum that ranges from communist to libertarian.
One of the main UBI stalwarts in Finland is the pinnacle capitalist ideolog and banker Björn Whalroos, who wants UBI to replace ALL other welfare-state programs, including universal health care.
On the other end of the spectrum are proposals for UBI with a purpose to solve issues caused by globalization, patch-work employment, etc.
Kokoomus has strong proponents of UBI and if I recall correctly, the party approved a resolution for studying UBI 13 years ago in their 2007 national convention.
Agreed, this kind of experiment is flawed in many ways.
For me the argument for UBI is very simple: it's a simpler version of the status quo in most countries in terms of administrative overhead that offers more freedom to individuals. Those are two good things IMHO.
It's precisely for this reason that it's controversial because conservatives on both side of the political spectrum consider the notion that people should do work (no matter how meaningless) part of their core values.
Communism was all about workers and probably the closest we ever got to having UBI in some countries. Work ethos is very much a core value. So the notion of rewarding people for not working is controversial in communist circles. Most would consider communism a failed experiment from an economic point of view because it also included notions of central planning, equally (low) wages for everyone, and little differentiation in terms of skills & value of those skills. I.e. equating the two would be a mistake.
Fiscal conservatives on the other hand argue for a small state and are perpetually worried about "who is paying for this".
The argument for UBI and against both points of view is that we already have it in the sense that most countries provide healthcare, housing, foodstamps, and other benefits for basically everyone, including the homeless people, the elderly, children, and many others that in any case are not part of the working population. Also, in many countries, the working population is shrinking in the sense that unemployment statistics exclude whole parts of the population that are effectively not considered to be working and are therefore not actually unemployed (children, students, married women looking after children, medically disabled people, retired people, long term out of job people, the homeless, etc.). We take care of all these people already and that costs money. It actually is a rather large part of the current budget of whatever country you are in. Where these programs fall short, inevitably it causes a lot of problems and misery. Also the collective programs we have for doing this are a combination of very expensive and inefficient. E.g. some countries spent more on unemployment bureaucracy and programs than on the actual benefits.
UBI is about acknowledging & formalizing the status quo that no matter what, you will have the means to take care of yourself at some minimum definable level. IMHO, it has the potential to vastly simplify things in the sense that it would remove the need for minimum wage, state pensions, etc. and the associated bureaucracy. So there's an upside in terms of less administrative overhead and vastly less complexity & risk for employers & citizens.
The existing system of benefits could be redefined on top of a UBI and would likely get a more optional character. To the point where you could privatize this; which I imagine might be a popular topic in the US and other places with a strong libertarian minded population.
Meta: countless fiscal policy changes are made in weeks.
But for UBI, decades of experiments and data-driven validation seem to be required.
Why is it acceptable that UBI requires such huge burden of proof?
Don't tell me that it's more radical than other reforms: when used as a replacement for welfare and other subsidies at comparable cost, it is pretty mild.
> But for UBI, decades of experiments and data-driven validation seem to be required.
Because it costs so much, and is so radically different.
> when used as a replacement for welfare and other subsidies at comparable cost, it is pretty mild
Buzzocks. UK over 18 population is ~52m. Give them each £1,000 a month, and you get a cost of £624,000,000,000, which is 3 times what the UK currently spends on "welfare"[0], and is about 3/4 of the overall UK budget. And you're cutting the payments of a sizeable number of current welfare receipients.
Sure you can find more recent figures, or play around with how much you claim you're going to give, but let's not entertain the fantasy that this is a "mild comparative cost".
Because it would be bigger than any other program and likely bigger than every other program combined and like every other program will be impossible to remove once it is in place. This is Russian Roulette with a 64-chamber revolver with only one round removed.
Seeing both sides of my family doing everything they can to scam the government and NGOs for benefits just so they can avoid going to work, I always think the UBI might only work as intended for perhaps 10% of the most highly motivated individuals among us.
If I had UBI, I'd quit my skilled and productive developer job and probably drive a taxi, because it's more satisfying, even though my contribution to the society will be much smaller and in a certain sense, my skills would be wasted. And I'd probably take half a year off on a beach every year.
Because of that, my tax contribution would be much smaller (probably zero), and the country would have less money to treat sick people, buy hospital equipment and build housing for the poor. That would worsen life outcomes for many people and will likely cause additional deaths.
Medicare for All (or equiv) is enabler for widespread UBI.
The combo of M4A, UBI, and affordable childcare will lead to an explosion of entrepreneurial spirit, small businesses, and startups.
If I had had health insurance, I would have taken a lot more risks. But I average a major health crisis every two years, so whenever I ran out of savings and COBRA, I had to take jobs just to get insured. (ACA helped by prohibiting exclusion based on preexisting conditions.)
I did manage to work solo twice, with modest success. But the uncertainty freaked my partner out and we needed guaranteed insurance for our family.
I empathetically agree that Citizen's United, along with all the other winner-takes-all rulesets, should be reversed. Over concentration of power, in any domain, should be counterbalanced.
I just don't think we should wait.
One silver lining of the federal power vacuum is cities, states, regions are no longer waiting for permission to take action.
Given the tilt of the entire judiciary stack, effectively locking in the vetocracy, I don't anticipate these circumstances changing for decades.
Of course, the pandemic may hit the reset button for a lot of our power sharing arrangements. But again, I wouldn't wait for permission.
> The combo of M4A, UBI, and affordable childcare will lead to an explosion of entrepreneurial spirit, small businesses, and startups.
Funnily enough, the western country with the least amount of safety net has the most successfull startup community and entrepreneurial spirit. Must be an anomaly in your theory.
Coincidentally, the western countries with the strongest safety nets, m4a and affordable / free child care have weak startup communities and little entrepreneurial spirit. Another anomaly!
To your point, it'd be interesting to compare more recent data. Please share if you find such datasets.
--
Of course there are multiple factors. Inhibitors and accelerators, advantages and disadvantages. Even between states. Access to capital, quality of schools, real estate prices, labor laws, ad nauseum.
Some are non-obvious. One possible crucial factor between Boston and Silicon Valley was California's lack of non-compete employment arrangements. If true, shouldn't others consider adapting? Why haven't they?
Imagine young professionals have children. Imagine access to reasonable and trustworthy child care is important to those parents. So important it influences their job choices. Imagine innovative companies providing that service to better recruit and retain talent.
You don't have to imagine. Because it's already happening.
Ditto healthcare.
So why shouldn't similarly minded jurisdictions do the same?
We have pretty much all that in Germany. Healthcare is mostly public and affordable, strong social safety net, free childcare in lots of cities, free schools & higher education (and if you/your family meet some criteria, you'll actually get "student loans" that are generally interest-free and you only need to pay back half of it). Want to start a company while unemployed? You'll get subsidies you don't need to pay back to get you started etc etc etc.
Germany's top startups are mostly copy cats, and that's pretty much all VCs will invest in (granted, they're not VC by SV standards, but mostly just investors). We're #51 on that list you posted.
I don't believe that entrepreneurship is significantly encouraged or discouraged by what happens if you fail or whether child care is free or expensive. Imho even regulation and red tape isn't the primary issue, but the local culture's general relationship with risk vs safety. Germans save more than e.g. US citizens, and they don't move to other states within Germany nearly as much (even though it's really not that far, Germany is smaller than California).
> Imagine innovative companies providing that service to better recruit and retain talent.
What you do to get & keep talent (aka "the elite") doesn't necessarily scale to the population at large. If you pay someone $200k, adding $10k for perks doesn't matter as much. It's very different if you're paying them $50k.
I'd love to know if you're right (less wrong) about culture.
How does Finland punch above their weight? Can't we steal some of their fire?
While I advocate for a democratic socialist utopia (Denmark), I'd support anything that moves the needle to the left. When Reagan-era policies are now regarded as marxism, methinks we've gone too far in the other direction.
> How does Finland punch above their weight? Can't we steal some of their fire?
I mean, Finland fought off the Soviet Union's invasion, punching above their weight seems to be their national pasttime. Maybe size matters, just like small companies will be more agile than large ones, smaller states will be able to pivot easier.
> When Reagan-era policies are now regarded as marxism, methinks we've gone too far in the other direction.
We have essentially the opposite trend in Germany. Social democrat policies of the 70ies and 80ies are considered conservative/reactionary today.
I still believe we should establish some international citizenship trading system. Apparently plenty of Americans would love to get into Europe and I know quite a few Europeans who'd like to emigrate to the US. That'd really allow voting with your feet.
You're right. We gotta push for Global Universal Basic Income. Someone surely has "X% of people live on less than 5 dollars a day" stats available on hand. If it makes their lives better over there, they have less incentive to uproot their life to go over here.
No - rich Nordic countries have an obligation to open borders due to their wealth, relative privilege and the climate emergency that will push everyone up northward into these countries
If UBI allowed me to live my life, which is not extragent, then I would not do 'nothing', but I doubt I would do anything that raised tax revenue. I pay more tax than the median tax payer in the country I live in. I would be a net loss to the tax income of the country.
Unfortunately how the insane amount of money was injected in other countries since some months seems to indicate that the rest of the world have absolutely no ambition to build a new world nor share the same vision.
Why not just pay people more for the work they're doing? Why not value work again? It seems to me that the decrease in stress / increase in well-being from basic income is the ability to afford shelter, food, some leisure etc. without intense stress.
true it was not a test of "universal basic income" as such as it targeted only part of the population.
Some results are, however, relevant when assessing them from the world of (post-pandemic) 2020: the participants of the experiment reported 1) less economic troubles and financial stress; 2) Higher confidence in future possibilities; 3) More self-determination and autonomy.
but did UBI encourage more productivity from those participants? Is it more than the cost of such a program? I want to know if UBI is a net benefit or not.
It was not a huge difference. They were not less productive, but the measured increase in worked hours was something like 6% if I don't remember wrong. They could take short gigs without losing unemployment benefits for the time and have to deal with the hassle with going off and on the benefits for just a few days of workt. But too small and limited study to really say anything about it.
The important gain would be to give people breathingroom to actually find a job most relevant to their education and skills instead of just jumping on the first available opening to be able to pay the rent. Or even spending some time improving your skills.
In the US I think just introducing universal healthcare would accomplish part of the same thing.
Since the target audience was rhe unemployed, changing up their type of income isn't going to give them a job, so prpductivity is difficult to measure.
The entire point of UBI is to secure everyones basic human needs, not get them a job (unlike unemployment benefits).
If we were to test UBI also on employed people, and observed their behavior, we might avtually gain useful insight into mechanica with UBI. Perhaps we will see more 6-hour workdays with more people employed?
If you already have your basic human needs met then it is just a shortcut to provide the money only to those that don't have that one checked off yet. Otherwise you'd just end up pumping money around from those that don't need it to those that don't need it.
Employment, the only measure of productivity that is considered in this context, was (maybe) modestly increased or otherwise not affected.
Given that it significantly improved mental health, it seems reasonable to expect that this UBI model would lead to some savings in public health expenditure. Arguably there should also be some savings compared to the administration of the current unemployment benefits that require the person to provide evidence of activity and other such things.
How well it compares in practice to the cash cost nobody knows as the experiments are all too short to really tell.
> 1) less economic troubles and financial stress; 2) Higher confidence in future possibilities; 3) More self-determination and autonomy.
Do we really need to test that though? It seems obvious that giving someone money without affecting their taxes, the price of goods etc would do this.
The issue is that once you roll it out on the society level, it's not the same any more. It will affect their taxes and inflation. Will they still report less economic troubles and financial stress when they receive $500 a month but their rent has gone up by $500?
Why do you say it seems obvious? The most persistent objections to UBI (or welfare or unemployment for that matter) is that they cause dependency and lazyiness; that they destroy the self-confidence and ambition of the receivers. Many still claim that it will make them financially worse off.
Checkout the auto complete in DDG or Google for "welfare causes ...". Look at the arguments in the results.
We can't even have the discussion that you say is "the issue" because society is still stuck at the part you claim is obvious.
The claim is that UBI could create a permanent dependent underclass, and evidence that a cohort of unemployed people receiving lots of money from the government self-reports greater happiness than a cohort of unemployed people receiving relatively little money from the government over the space of the year does absolutely nothing to address that.
It's rather secondary to the real objection to UBI: paying for it.
Quite consistently, at least in Canada and the US, welfare is claimed to cause dependency, lazyiness, and reduce the ambition of the receivers WHILE we are paying for it.
I'm saying BOTH that it's good for people AND that it's affordable are still in dispute and that the claims are clearly not obvious.
Sure, and my argument is that proving that welfare recipients who temporarily received a greater subsidy than other welfare recipients self-reported greater levels of happiness than welfare recipients on less money does absolutely nothing to undermine arguments about welfare dependency.
The arguments - with varying degreees of plausibility - are all of the form 'long term welfare dependency is unhealthy for society' not, 'welfare recipients would be happier if their welfare income was lower'.
You disagreed with someone up the chain that the experiment's conclusions were "obvious". Since all the experiment appears to have found is that recipients of temporarily more generous benefit entitlements self report less stress and greater confidence than those who receive less generous entitlement, even most hardened opponents of the welfare state would agree that such conclusions were obvious.
> The most persistent objections to UBI (or welfare or unemployment for that matter) is that they cause dependency and lazyiness; that they destroy the self-confidence and ambition of the receivers.
And that's not conflicting with reporting less financial stress during an intervention. The self-reported consequences from eating some candy are very different from the consequences of using candy as a primary diet for long periods of time.
There are three claims that the comment I replied to said are obvious; two claims are constantly disputed and one is regularly disputed. None are, therefore, obvious.
My point is that there are differences between a) what people self-report and what the outside world thinks about their situation and b) an isolated short-term experiment and a long-term domestic/global thing.
If you won $1bn in the lottery, you'd be quite rich and, in so far that money can make you happy, probably also quite happy. If literally everybody won the lottery at the same time and got $1bn, you'd be back where you were before winning the lottery, as your $1bn wouldn't have the same relative value. Sure, you have a billion, but bread now costs $100k and your rent is $100m.
Ok. But I never said any of those things were true. My only point is that the claims in the study are not obvious, I'm not claiming they are true.
I happen to believe they are but this study doesn't establish that; and we are missing a golden opportunity to do some real UBI studies with the billions in aid that are suddenly sloshing around.
It depends, if you have some essential resource where supply is constrained then you might expect inflation. On the other hand goods that are readily available like food or oil shouldn't see any significant difference.
All resources are constrained. Food production requires land which is constrained. No one dies from hunger this days. People receiving UBI will just start buying organic food which is going to increase its price. Rent prices will soar as well because of constrained supply. So do salaries. So do other goods. And boom - there goes inflation.
Why? What mechanism would drive that? In the West we already have more food available than we can reasonably eat. Margins in agriculture are wafer thin driven down by competition.
Compare that to property where there is a limited supply and people are constrained in what they can buy by their salary and ability to get a mortgage.
I'm working and I don't get any basic income. I actually lose income because of taxes. So when you give me 1k a month extra, where exactly will this money come from you say?
If UBI is just a redistribution scheme and aggregate income stays the same, how is UBI than different from the various 'social' countries in Europe such as e.g. Sweden and Finland?
Those countries have progressive income taxes and social benefits for those without work. Isn't this the same as what UBI would look like if aggregate income would stay the same?
I don't understand your assumption about a current high marginal tax rate for poor households. I would say that in a progressive tax system, the marginal tax rate decreases when one's income is lower.
In your other post you state that Finnish effective marginal tax rate for poor persons is more than 80%. Do you have a source for that?
Effective marginal tax rate, not marginal tax rate. EMTR is what how much you actually get when taxes and reduction of welfare with increasing income is taken into account.
It's in Finnish, but if you go to page 13 there is a nice graph. x-axis is wage, EUR/month, y-axis is effective marginal income tax in year 2015 for single person household who pays rent 440 EUR/month. Effective marginal tax rate is the red dotted line.
In page 20 you can see even what single adult with a child can have.
I was actually wrong, the effective marginal tax rate can spike above 11% in some cases.
> UBI removes high marginal tax rate from poor households.
How so? I understand the "it's the same, just with less bureaucracy" camp wants everybody to get UBI, but everyone that's not below a certain threshold will essentially pay all of the UBI back via increased taxation.
So if you get $1000 in welfare now and you earn money, this changes the amount of welfare you receive. I understand that. How does that change if you get $1000 in UBI and for every buck you make, you'll pay essentiall $1 in taxes? You'll still only actually have more money when you're > $1000 on income.
When basic survival needs can be met by the lower amount, but any discretionary spending requires participating in the economy.
We already meet people's basic survival needs because it's cheaper to feed your neighbor than make it impossible for him to raid your fridge. Not taking that basic gift away if your neighbor becomes self-reliant is just removing a disincentive to becoming self-reliant.
UBI is basic income. What you describe will not bring working people basic housing and basic food. Pensions and unemployment incomes are only a small part of population, you will need to pay everyone.
Taking money from healthcare and putting it in my pocket so I have to pay for it myself doesn't bring me much income you know.
The Scandinavian countries are easy to recognize based on their flags, as we all share the same pattern on our flags, a cross with the center slightly to the left.
https://en.wikipedia.org/wiki/Scandinavia
It wasn't even really tested in Finland, just some aspects. A pilot scheme which is understood by the participants to be temporary does not induce anything like the same incentives as a real UBI implementation.
It's not free lunch, it's wealth distribution system.
Everyone gets UBI, then it's gradually taxed away as income increases.
If some part of UBI is taken from corporate taxation, it can be thought as subsidy from companies that employ few people to companies that employ more people.
> If some part of UBI is taken from corporate taxation, it can be thought as subsidy from companies that employ few people to companies that employ more people.
Or a subsidy from companies which pay people properly to companies who pay people below subsistence levels, or a subsidy from companies that produce stuff to people who choose not to even look for opportunities to produce anything...
1. Governments operate in debt-spending mode. So governments issue bonds (glorified IOUs) to banks, which give governments money. Banks then "sell" their bonds to the FED, at which point money is created. Banks use that money to buy more bonds, and the cycle repeats. BTW, to pay for the interest on the bonds, the government uses your taxes -- that's right, your taxes are not used to pay for pretty much anything the government does, it only pays for the debt the previous governments accumulated while debt-spending.
2. Banks receive money deposits, and lend money using those deposits, but not in a 1:1 rate. The rate varies, but, for instance, for every dollar a bank gets in deposits it can lend 10, which means that effectively banks create money. Also consider that this money created out of nowhere is redeposited, repeating the cycle, so in the end a dollar ends up making a thousand. For the record, currently the rate is 1:infinity in the US
It comes from taxes, borrowing and printing. Only one of those relates to the added value otherwise known as wealth creation. The other two ultimately make everyone poorer.
The question is: for a given country, what proportion of the population can theoretically be supported by the efforts of those who pay those taxes. This isn't a moral judgement on the basic income idea; it's just required prior basic arithmetic for those planning to introduce BI. Will BI actually work in the long run? I don't know.
No, taxes don't create money. Taxpayers don't print up their own notes and send them in to the government.
> borrowing
That's a bit vague. What kind of borrowing do you mean?
> printing.
Well, at least that one is right :)
> Only one of those relates to the added value otherwise known as wealth creation. The other two ultimately make everyone poorer.
I don't know what you mean by that. None of those relates directly to wealth creation, and they all relate to it indirectly. What did you mean by that specifically?
Gates, Buffett and Bezos are worth a combined $250bn. There are about 210mm Americans over 18. So you can wipe out the entire accumulated wealth of those three and give everyone ... $1,200, one time only.
My summary is that if we somehow captured the entire wealth of the wealthiest three individuals, we could double the wealth of everyone in the bottom 50%.
I don't think it's clear that this is anywhere near enough.
Say you want to pay $1,200 per month to all Americans over 18. There're about 210mm of them. That's just over $3tn per year.
In 2017, the latest year with detailed data, Americans paid about $1.6tn in Federal income taxes.
So the scale of the spending we're talking about is "imagine income taxes increased to about 300% of the current amount". Of course, it's more nuanced than that, because the theory is you make some savings on other programs and fund from sources other than just income tax - but it still gives a sense of the scale.
This answer fundamentally doesn't work; let me see if I can concisely explain why.
When someone spends money to buy a good or service, the money recirculates but the actual thing they've bought is consumed. If you pump up the supply of money by taking the same amount of money and recirculating it through the economy more, but without increasing the supply of goods and services, this means that the price of those things has to increase correspondingly just like if you outright printed a load of money and handed it out to everyone. Economically speaking, these two methods of increasing the money supply have very similar effects. (In practice, strong UBI is probably even worse than this if the idea is to make it feasible for people to not work, since the supply of goods and services will actually shrink and employers' labour costs will increase.)
As I said go read the book and learn something. Pro-tip. You completely forgot about consumption and income taxes. And that there is unemployed labour capacity available - anywhere across the world.
There isn't a finite amount of stuff, there is always capacity to expand in a business, but it may take a while, and hardly anything is subject to price auctions (see PPE for details).
What happens when we hit capacity is that there is forced savings. You end up with spending capacity but nothing to buy or nothing you want to buy. In the vernacular your spending becomes ineffective. Excess savings have the same economic effect as taxation.
It's the excess savings that income schemes are trying to offset. But that just moves the problem from the financial sphere into the real sphere - why should I grow you any carrots if you're not contributing your effort to the common good?
Not in financial terms. The money comes from the circulation. It's all just a money illusion. It passes tax points as it is spent and re-earned.
The real goods and services comes from outside the experiment. Scratch any UBI scheme and you'll find
(i) a tax credit system in disguise because the amount isn't enough to live on
(ii) a currency lock with an area that doesn't receive the payment and who fill the goods and services deficit, or
(iii) a set of people who don't receive the payment (usually due to a qualifying period), and who fill the goods and services deficit.
I'd have thought the point as pertains to UBI - an expensive permanent universal subsidy rather than a payout to the unemployed or job guarantee which fluctuates cyclically according to unemployment levels - was pretty obvious. In conventional economics the government funds its spending by borrowing or taxation. In Randall/Wray economics a unified govt/central bank spends the money into existence and has huge scope for fiscal stimulus in economic downturns with bond issue being unnecessary, but money still derives its value from the taxes the government levies. Under either economic model, the extra cost of funding voluntary economic inactivity under UBI implies net tax rises.
The problem with "universal" is, that someone with an average paycheck doesn't get anything, because he pays back the same amount he gets in taxes.
And the 'average' paycheck is not an 'average' in the term we use now (where we just look at the workers, add up their paychecks and divide by their number), but we also have to add up all the non workers (kids, pensioners, unemployed, studens,...) with "0 EUR" paychecks, and divide by the number of them too, because they'd get UBI too.
> The problem with "universal" is, that someone with an average paycheck doesn't get anything, because he pays back the same amount he gets in taxes.
If it stays the same for this person, that means he has to pay an extra UBI to receive the UBI. If this person is making basic income right now, he might as wel stop working and still get the basic income, or at least lose less percentage wise when stop working.
It has to, because one of the selling point of it is the minimal administrative overhead. In the U.K. we have armies of civil servants to administer our hideously complex welfare system. All of them and the costs of employing them have to go to make it affordable. The good news is that they too will get UBI...
Administering the welfare system costs orders of magnitude less than paying unconditional living wage to the UK's 8 million economically inactive working age people.
Living wage is shifting the goalposts, anyway it’s a simple calculation, total welfare budget including benefits of all kinds divided by number of adult citizens.
Whilst there might be disagreements over the actual calculation, both the idea of a living wage and a UBI revolve around the idea of providing an adequate subsistence income for an adult.
But if we're determining welfare budget by dividing non-pension benefit spend by number of working age adults, the problem becomes that you're dividing around 130 billion by ~36 million, and whilst that's a welcome top up for some people, there are a lot of people who have just lost their housing benefit and disability benefit that won't be able to live on £4k a year...
The ability to collect UBI while working - while, for example, starting a small business that isn't profitable yet - is one of its major positive features.
That's welfare. It's effects are not the same as UBI. Finland has welfare too.
The special feature of schemes like UBI and NIT (Negative Income Tax) is that they remove the high effective marginal tax rate from poor people who work.
The problem with conditional welfare payments is that they increase effective marginal tax rate for poor household. The rates are really high 70-100% depending on country and situation.
For example, in Finland effective marginal tax rate for poor person is somewhere between 80-101%. (That 101% is for single parent for low income job). According to Greg Mankiv and others the effective marginal tax rate for the poor can be 70-90 percent in the US.
It is entirely possible to design welfare schemes with tapers which reduce marginal tax rate. The unique feature of UBI is that it is additionally designed to subsidise economic inactivity.
You can insert the word 'effective' into my sentence above, and it remains true. It is entirely possible to design tapered benefit withdrawals without resorting to unconditional basic incomes.
(It's also theoretically possible to design tax brackets for a UBI/NIT system which imply effective marginal rates at 80%+, though I'm not sure why anyone would actually want to do that)
Tapered benefit withdrawals are the exact reason for high effective marginal tax rate. You can't use them.
You can design welfare system effective marginal tax rate decreases smoothly, but you can't make it linear. (unless you make the taxation incredibly complex and effectively same as UBI/NTI)
The question then becomes whether a perfectly linear marginal tax rate is actually optimal in real world conditions [and if so, whether it's sufficiently optimal to warrant subsidising 8 million economically inactive people in order to encourage some of the 250k Jobseekers Allowance claimants out of their welfare trap]
In the real world [i] the effective marginal tax rate in for a UBI imposed in contemporary society is still going to be very steep (UK subsistence UBI ~£10k per year, median UK taxpayer under current system has a taxable income of ~£22k per year and many people on sub-median incomes are net taxpayers) and [ii] the conditionality of a benefit is a pretty strong reason to take a job, high effective marginal tax rate or not
I get the appeal of UBI, more self determination, personal fulfilment etc.
Whenever I hear the arguments for UBI, the arguments for personal fulfilment are usually predominant and financial aspects are usually left out. I'm always interested in "how to pay for all this?", which proponents of UBI often classify as a conservative talking point, but that is clearly not the case.
Another point I usually bring up is "how much is necessary to achieve that? and why?" is $1000 each month enough and how should this be adapted over time.
My biggest concern with UBI and I haven't heard a convincing answer to it yet, how to prevent the baseline from being moved permanently and eating up all the additional income. If you make low income jobs less attractive, employers must pay more to keep their employees so they have to raise prices accordingly or go bust. So how to avoid that UBI is not just massive inflation in the long run.
You think UBI can work? Show me the numbers for some western country. Can be a small country like Luxembourg.
First show me the numbers if all people that are working now keep their job. Show me the extra cost and how you will get that money.
After that, give me a prediction of how many people will stop working. I can't imagine moms (or dads), that now have only 3 months of parental leave, will keep on working when they can have a nice income every month without doing anything, and not paying for daycare. Your unemployment rate will not go down, I hope we all agree on this.
And then finally, show me that this has 0 effect on all prices. Show me for example how rent will not go up, when all of us have 1-5k extra to spend on a bigger appartement or house.
It represents nothing like real life UBI and needs to be redesigned as a test.