The Case Against the Universal Basic Income
intergalacticproletarian.blogspot.com
intergalacticproletarian.blogspot.com
With the introduction of a UBI, employers would have a powerful weapon to force wages down, as they good argue that they needn’t pay as much any more, because they already had enough to maintain their standard of living.
If this was true, the employers would already be forcing the minimum wage down on everyone.
The UBI would give the lowest paid workers a powerful leverage they currently lack: the ability to choose not to work instead of accepting whatever wage the market offers. For other workers, the minimum wage or any viable UBI is small compared to their earnings, so it is hard to see how it could be used by the employer in salary negotiations.
If not, then all it would likely do would be to let employers lower wages.
IIRC there was actually a town in Canada that did this and this happened. Then it was taken away entirely and the poorest citizens ended up even worse off (wages did not go back up again).
Some people are simply greedy and they will pay less at the expense of having less capable employees. These people will "poison the well", so to speak, for other market participants who actually wouldn't actually mind to pay higher wages. And as was eloquently put by Keynes - "Markets can remain irrational longer than you can remain solvent". In short, asymmetric information is the key problem of free markets.
So capitalists to pay less means breaking that contract (with consequences, that's why you cannot easily do it). However synchronized breaches of the contract may take some time before this settles into another steady state, because of information asymmetry - the information about contract breach takes time to propagate to all interested parties.
""" The scale of the consensus on the idea is a far cry from a long-buried experiment in the rural Manitoba town of Dauphin in the 1970s, a comprehensive, five-year trial that is now regularly cited by advocates as the strongest proof yet that it works as a poverty reduction strategy. The experiment, known as ‘Mincome’, was jointly bankrolled by the then provincial New Democratic government and Pierre Trudeau’s Liberals, and offered an unconditional annual income to every family. Those that worked had their Mincome cut by 50 cents for every dollar earned. The idea was to offer a cushion for shifting crop prices or crop failures. The governments were interested to see whether such a support would produce a disincentive to work, a town full of lay-abouts. If successful, the long game was to roll out a similar plan nationwide. But the scheme ended up costing $17 million, much more than had been envisaged. It was scrapped as recession hit Canada at end of the decade. Almost 2000 boxes’ worth of data on the trial were packed away, not to be heard from again until University of Manitoba health sciences researcher Evelyn Forget tracked them down in 2009.
She found that there was essentially no reduction in working hours with two notable exceptions: women who were mothers of young children, or had elderly or disabled relatives and who were now choosing to stay home, and teenagers, who now felt free to continue in school and not help out their parents on the farm. Meanwhile, there were fewer work-place injuries, fewer car accidents, less domestic abuse and hospital visits declined by 8.5 percent. """
Despite companies like Walmart and Home Depot having to pay more into the system, this would be a windfall for them as the availability of people with money to spend in places like this will drastically increase. The Laffer Curve is correct when the supply side and the demand side on the graph are switched to where they belong. Walmart would then have to hire more employees to meet the demand and put more tax money into the system. lol
The point is that there would be fewer people in precarious situations where they cannot afford food and shelter. With basic food and shelter not being the primary motivator to work, more people may do innovative things that could help the economy ... and humanity overall.
Any employers of professionals, i.e. medium/high income would probably have to pay the same amount of money, because the higher taxes would cancel out the benefit of the minimum income - the net effect of UBI on medium/high incomes is relatively small.
Do we force people to move?
What will happen with dirt-cheap home when UBI will be denied to it owner?
Do _you_ want to pay someone $500 just because?
A good leader can't just tell people what they want to hear. Gentrification is OK. We don't have a right to live in an area we are priced out of and that is OK. However, I have a little gnawing voice in my head that a basic income might not be able to keep up with housing cost increases... We will still be throwing some vulnerable people under the bus. I can't see how ubi can fully eliminate need for social workers or programs with administrative oversight (high costs).
I personally think a universal basic income should not be universal. It should only apply to people who have the right and opportunity to spend their money as they see fit. Exclude the children, the prisoners, and the infirm, for example. If the goal is automation, we don't need as many people. If the economy can survive a contraction in labor supply, we could nudge people to not have children. That would be awesome.
My unverified, unscientific thoughts: My ideal is we move beyond this ideal of 2.4 children per couple. I want us to go even beyond one child policy. I want it to be socially acceptable for couples to choose to not have children. More than that, I want it to be sustainable for people to have -- on average -- fewer than one child. Now, it seems we are already moving in that direction. It seems as of 2012, we are already at 1.88 in the US, 1.66 in China PR, and 1.41 in Japan. https://www.google.com/search?q=total+fertility+rate+usa I'd say we can do better and drive it further down all over the world but we cannot promote this until we have some kind of assurance that doing so will not cause the global economy to stagnate, or worse, contract. If people live longer and are productive for longer, we can safely transition into a more automated future with fewer humans than we have today.
What goals would be served by having babies (or not having them)? And whose goals are these?
For any finite human life span, you need two babies on average per woman to keep population stable. Transitioning into a lower population number via below replacement fertility works great for a while (children are expensive), but causes problems once you have more pensioners than working people. Japan and various European are about to experience that soon, China a bit later.
> I'd say we can do better and drive it further down all over the world but we cannot promote this until we have some kind of assurance that doing so will not cause the global economy to stagnate, or worse, contract.
Per capita, or absolute? And why care about the global economy so much? (If you do, there are some easy policies to drive up global GDP like crazy: full free trade, free movement of people, simplify urban real estate development (http://www.economist.com/blogs/freeexchange/2015/03/wealth-i...), and transition to a less distorting tax system (http://www.economist.com/blogs/freeexchange/2015/04/land-val... and perhaps carbon tax).
Do you advocate for eugenics so that smarter genes get further? For that you might first want an equal beginning for every semen-sack and ovary. Currently nobody has good idea who has the "smart genes" and who has just good upbringing.
I think that if we actually get to the situation of relative equality and there is some coherent "smart genes" at play, then human specie would naturally split into homo engineers and homo welfares.
Anyhow, genuine UBI would be what you should want too.
No, I cannot earnestly support eugenics. I just think society doesn't need any given couple to have more than x number of children and if people want x + n children, they should be able to fully fund for the rearing of the n children themselves. Personally, I believe that the ceiling for x should be no greater than 2.
BI increases market freedom, allowing society to utilise all available resources (such as land), without the positive feedbacks inherent in a system where a significant fraction of market participants cannot make free choices.
This author should ask himself, if he earned $1k/money for breathing, would he accept a shitty job for $7/hr? If not, how much would it need to pay before he would accept?
Then the next question is what the effective wage of automation would be. If because people have basic income, no one will work that job for less than $15/hr and a machine can do it for $10/hr, then it now makes more sense to automate that job out of existence.
And that is the direction we should aim for as a civilization - full unemployment, not full employment. Humans should hand as many jobs to machines as we can, to free us up to do the work we each feel is most valuable, paid or unpaid.
Enough with this pro-toil mentality that sees value in everyone being employed, even if for only 4 hrs a week in order to employ 100% of the population. As if that is even possible anyway. Like what, we're going to have 10 doctors share the work load of one doctor so that everyone can be employed? And what of all the work that goes unpaid? We should just keep not recognizing that? And what of all the jobs that don't need to exist? We should keep those around so that people can fill them to prove their right to live?
Full employment in the 21st century is a bullshit goal. We as a species are better than that. Our goal should be to free ourselves to pursue what we each wish to pursue.
And anyone who thinks people's ability to organize will be in any way diminished instead of monumentally expanded with basic income, isn't giving their fellow man enough credit.
People will use basic income to give themselves greater voice. I guarantee it.
Full employment is a threat, not a promise.
I think it's better to compare inclusively here, because as much as people would be much more likely to reject shitty working conditions, they'd also be more likely to accept lower wages when their total income is still pretty good.
And that's a good thing.
Imagine you have a 100 person company right now. Everyone is averaging $50k (some are higher, some are lower, but that's the average), plus benefits.
Now, imagine everyone's job is automated away, except for the owner, and someone kept around to fix the robots.
Has the work being produced lowered any? No. Has the profit being generated lowered any? No.
So you have exactly the same financials you had before, now with 98 fewer people.
You also probably have some additional material costs for parts, but it's likely cheaper repairing/replacing robots than costs you had to cover for a human work force even aside from salary and benefits (workman's comp and various insurances, equipment, training costs as people left, hiring costs, etc), but let's just say it's comparable (even if you want to say it's not, we can reduce the payout to those people to take into effect the reduced rate of sickness and thus doc payments they'd have since they're not sharing office space, the less driving they're doing and thus reduced gas and wear and tear costs, etc. And that in turn means less payout to the government as less infrastructure investment to get people to their jobs at rush hour, etc, so taxes could also be lowered. Etc etc).
What about that ($50k times 98 = $4900k) that you were paying people before? It's still being earned. Just now by robots. Who don't need to be paid.
You lost 98 people, you still have all the money to pay 98 people, without dipping into the profits you'd have pre-robots, and without dipping into your and your employee's salaries. So let's assume that $4900k is split evenly amongst all involved. That means in this situation, everyone could be making $49k. The 98 you let go are being paid that. The one staying on is being paid that, even before his ~real~ salary kicks in. Same as you, the owner.
So everyone is being paid $49k as a basic living income, except for the worker and you, who are being paid that UBI of $49k plus whatever you were making before automation happened. You're living high on the hog, but you're also working; you have made the decision to trade your time for the extra money. The people let go, now, can choose to spend their time however they want, including -creating new businesses-, improving GDP, and their own ability to spend, while doing what they enjoy. There is incentive still to hold jobs, because while those making $49k can certainly live reasonably, those making more (let's say $99k, since the average before was $50k) have a lot more discretionary spending.
And that was managed by taxing -only- what would have been paid to those workers who were replaced; no 'new' expenses to the business (though with some assumptions, that the cost savings of using robots fully benefited the business). And that holds true regardless of whatever the market does; you only need to be paying the cost of what employing those people would have been. Getting from where we are, to there, is not as simple, because obviously we couldn't replace one person at a time and pay out a UBI from that to everyone (since the first person let go in the above scenario would mean everyone was making $500, which is not enough for the let go person to live on), but how it could actually work is quite easy to see.
I already do that.
Low wage entry level work today seems like arbitrary roles that communities come up with because they seem like activities people should be doing to earn money. A "business opportunity" is just a way to encourage people to be lazy so that money flows around more and we consume more natural resources. If you like the service industry, fine, create a great business that provides an awesome service. Otherwise, let people flip their own burgers and wash their own dishes.
If I felt a low wage entry level job would be a good use of my time, I would gladly "get a job" as most people say.
I don't want to pursue a traditional career bcuz I find 99% of that to be even more B.S. than the low wage work available.
If the only way to secure a decent sized income cuz is through status within some bureaucratic corporate structure, or through a longshot entrepreneurial crapshoot, what does that say about our society?
I don't really care about career, income, status or any of that. If I can eat and clean myself everyday and have a space where I am not persecuted I am happy.
So much of what we do seems to not even connect with those 3 things I care about. They are the only 3 reasons why I would even consider doing activities for the sole purpose of securing income.
Income should've been irrelevant to the work people decide to do for a long time now, like since the first great depression. I don't get why people don't get it.
* basic income was unconditional, and thus, additional to your wage
* basic income wasn't enough to live comfortably, but just enough to survive
then most people would still be compelled to find a job, because most people don't want to just survive. In that situation, the assumption that employers could get away offering very low wages to the least skilled workers look quite credible to me.
Thus, their overall wage will be much higher (though it may be subsidized by basic income and not fully paid by the employer).
In making this case, the author raises a bunch of bogeyman images of everything else being sacrificed on the altar of UBI. This is a paranoia tactic. The real exchanges made are done at the level of individual politicians horse-trading against rivals and various interest groups. It's possible for something to be popular enough that capital is told to go get dunked, despite all its other advantages, because the alternative is political suicide. It doesn't happen often, but this is one of those issues that captures people's imagination in a big way.
It feels like a student essay where the author has a word quota but no actual point so instead they just aimlessly wander along tangents until they pass the "finish line."
Correct.
US distribution of wealth
If we are going to be dismantling the welfare system at the same time we implement UBI, we will have absolutely no margin for error; if UBI turns out to be the wrong policy, then rebuilding the welfare system will be very difficult after having fired all the people who make it function.
Living in Oakland, I also think his point about housing is particularly salient. The ideal of basic income is that employers should hold less power over employees, but that won't be the case if you need the wage to afford rent.
If my family got enough in UBI to support us in Indiana, then we could move there and I could take my time finding a job. UBI doesn't eliminate inequality, but it can open up more options.
My bigger concern with UBI is that we may eliminate the parts of the welfare system that treats addicts, and a lot of sick people will get sicker under it.
In theory, UBI can pay for cheap treatments, and insurance (private or public) would pay for the rest.
There's no minimum to get started. Something like $100 a month might be hardly noticeable to most people, but it will make a difference to anyone living on the edge.
Also consider that having a guaranteed income makes it that much more feasible to either move somewhere with a low cost of living (since it doesn't depend on a job), or alternatively, afford to move somewhere a bit more expensive. Hard to say how it would shake out.
319m x 1200 = 382b
So it was still wrong, but ~380b is still roughly the right number.
On the other hand, the average person breaks even by design.
The income distribution is not normal, thus even if the tax is completely proportional, more than half the people would get more than they pay.
On the other hand maybe Google could buy their own school in the Cayman Islands...
This argument presumes that all money made worldwide should be taxed in the USA.
No country does that.
http://www.reuters.com/article/2013/05/31/us-usa-tax-checkth...
And then it gets parked there while they demand a tax holiday so that they can distribute these profits to their shareholders.
If I live in Missouri [1], have a manufacturer make a computer in China, sell it China, and run everything through my Chinese company ... the IRS would still tax me as if the profits came through the USA because the foreign company is deemed "controlled" through the USA. So Apple, due to their size and structure (many more shareholders) can create subsidiaries and shelter revenue to avoid tax in a way that I cannot.
[1] I'm not 100% au fait with US Tax Law in this regard. Being an Australian and UK Citizen I know those jurisdictions more intimately, but understand the US is similar. This is separate to the USA's "citizen-based" (rather than residency or territory based) tax system, which chases income/tax for citizens around the world. The FEIE alleviates some of this, but Eritrea is the only other country that "does that".
They won't ever stop complaining about that.
More talent > more competition in the labor market > lower wages > a lower wage bill > higher profits
Since the biggest cost for all tech companies is their wage bill, they'll lobby for anything that puts downward pressure on salaries.
Its a plant, it will fix itself by promoting self-obsoletian.
If we had a $10k/year UBI then a person make $100k/year would pay less than $5k taxes net if the tax code didn't change. I think if we a a 25-30% flat tax the numbers would make more sense.
Your market analysis is incomplete. For example, http://www.theguardian.com/business/2014/feb/01/rich-oversea... says "only 27% of new homes in central London went to UK buyers, while more than half were sold to residents of Singapore, Hong Kong, China, Malaysia and Russia." These are not people who live there, but want to invest in the London real estate market. By taking housing out of the market, they also increase the market rates through artificial scarcity.
> if not price then what
Different taxation for residents vs. non-residents. Rich people tend to have large places, so taxation based on square footage per resident. Set up building requirements that give preference to low-cost housing. There are many ways to tweak the economic landscape.
> If you set up your lifestyle ..
You make it sound so easy. Why not just set up your life to earn another $100K/year?
> you must be doing something fantastically productive
Why does that follow? If I inherited my $1 billion, I'm certainly able to afford a quaint $10 million penthouse in San Francisco even if just leave the money in an index fund. If I am a dictator who funneled money out of the country into my personal foreign bank account, leaving the country in poverty, would you say I was productive? Or if someone discovers oil on my land, and I exchange the drilling rights in exchange for 1% of the extracted revenue, making me rich enough to, say, move to Beverley Hills, was I really doing something fantastically productive?
I agree that allowing low cost, high density housing would be great in many cities. But the people living there don't generally agree, and they have more power. If we're stuck with a finite supply of property, then market prices are a reasonable way of allocating that to people.
As I mentioned, without high rents, how else would houses be allocated to residents? More people will want them than can get them. Would you prefer a waiting list? Or only allow ownership transfer by inheritance - excluding newcomers entirely?
I am personally not a fan of paying 40% of my income as taxes to Russian oligarchs.
When property taxes are lower than the value of the land (and in London they are virtually nil), you effectively have a privatized land tax.
The proceeds of those taxes tend to fund kleptocratic billionaires.
To be fair, Jed did discover the oil himself, so he could be said to have contributed productively to the economy. We'd have to subtract the contribution the missed rabbit would have made though.
So your theory is that people have gotten more and more desperate over the last 35 years to live near each other?
What?
>Property that people want is a scarce resource
Is exactly why the ultra wealthy have been buying it all with their tax free profits and using it as a savings account. Guess what happens to prices when that 'demand' increases?
This 'demand' for property raises the price of it.
Since rents track property prices, rents go up too.
As soon as the ultra wealthy have a fat tax bill due all that property comes on the market again. Together. Crash time. Sane prices once again.
People buy houses as an investment which can very quickly raise the price while rents depend on housing demand which depends on different factors.
I did this analysis for where I live (Pune, India) where the house prices are ridiculous and, after adjusting for inflation, found that house prices have doubled in 10 years while rents have stayed flat.
$385bn is a big scary number. Transferring $100/person/mo from the top 10% to the bottom 10% of earners via taxation is perfectly straightforward.
Starting it at a 'modest' level would end up subsidizing employers who could use it to ratchet down wages. Only if you could leave your job entirely would it have the effect of raising wages.
This outcome is even implicit in the common observation that UBI could obviate the minimum wage, making it legal to employ low-skilled workers and improving their dignity by erasing the difference between those on the dole and those who work for a living.
It's not like those robots who supposedly stole our jobs are actually fixing creaking US infrastructure. It's just falling apart.
They don't pay interest and don't have an overdraft but are available to everyone.
One system to assess people's income, not two (tax + welfare).
In the new system they would be: f'(income) - basic income
No need to wait until the end of the year. That's just when people customarily compare actuals to projections. Before that you get your withholding of tax, and eg monthly payout of the basic income.
I get the arguments he makes from the perspective of the revolutionary Left. They are, however, not interesting or really acknowledging the role that robotics/computer vision/etc will play in the future. It's not really his fault though. Rather, I think many people are just ignorant of the profound impact that this kind of technology is going to have, simply because their direct exposure to it is so minimal.
As someone that has had experience in the rev. Left for some years and saw developments with robotics in research at a well-regarded school as a grad student, I feel like I have some perspective on this article. What I saw in school really made me change my mind and re-evaluate how the future will play out. Things are going to change and the genie, so to speak is out of the bottle and there's no putting it back in. But as pretty much all most socio-enviro-economic problems, the impediments we collectively face generally aren't technological as much as they are political, and that's where the activist focus needs to be. But I digress.
Mr. Phillips, doesn't seem to get that the technology isn't ready to displace humans from all work. The real threat (which is a threat until further notice) is that robotic technology is now "good enough" to do the kind of work that was just out of reach of automation in the past. It is not inconceivable to think robots will be able to perform the tasks of human garment workers soon. The gap between robots and semi-skilled labor are disappearing every year.
The idea for calling for a stronger labor movement as a solution is frankly laughable. It isn't going to happen any time soon and the economic conditions (what Marxists would colloquially refer to as "super-profitability") that created things like a labor aristocracy (another term) and social democracy no longer exist. How does one recreate a strong labor movement when the industries that were unionized are structurally hollowed out by no-pay robotic "labor" (which isn't labor in the Marxist sense either)? I'd love to hear a non hand wavy answer (seriously!).
UBI is actually a strong step on the road to the Marxist idea of communism (ironically enough) in that it does something special: it decouples the idea of compensation from labor, which is one of the long term goals of a society transforming from capitalism to a stateless, classless society. Lenin had a term for this too, which was "bourgeois right".
Anyway, my 2 cents.
Seems like a labour movement is a means, not an end. So I wouldn't be too sad, if you need other means.
Perhaps the left should pick up Georgism (again)? See http://www.economist.com/blogs/freeexchange/2015/04/land-val... for an introduction.
That is the economic definition of inflation.
Redefining inflation is a common acting of politicians et. al who want to obscure what they are doing to the economy.
No it isn't. From Wikipedia:
"In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy."
No, inflation is defined as the rate of increase of general prices in a particular market, however that market is bounded.
> It is caused by an increase in the money supply relative to the value it represents.
Because the markets for different goods and services are to a certain extent distinct, and because populations of different levels of wealth demand different goods and services, redistribution always causes increase in the supply of money chasing goods and services demanded by the group benefiting from the redistribution (and a decrease on the other side), at least in the short run (in the longer run, its effects on overall productivity, which depend on other details, will determine the effects.) As a result, you'd expect redistribution to cause some inflation in the market for goods and services demanded by the beneficiaries of the redistribution.
Currently, they expanded the money supply past demand to accommodate the 2008 crisis and now we are caught in a liquidity trap. If the Fed now wants to stimulate the economy by lowering the interest rate though expanding the money supply they can't, because the interest rate is at the lower bound of 0%. They need to now use less effective and unconventional methods to affect the economy.
The more powerful tool for dealing with economic issues is fiscal policy, which is the domain of Congress, not the Fed. But Congress has largely failed to act, or acted counterproductively, for many years, and left the Fed and monetary policy to handle things that need Congress and fiscal policy to address. So, yes, the Fed's pretty much exhausted its tools, because its been forced to deal with a problem exclusively through monetary policy that should have been addressed through fiscal policy.
Milton Friedman's idea that it's only ever caused by an increase in the money supply needs to die already. It's always been wrong.
History is full of examples. When Spain extracted gold and silver from the Americas in vast quantities, there was inflation in the Old World. Gold rushes corresponded with inflation. The American revolutionary Continental was printed in great quantities, and became worthless. Inflation results every time there's an increase in the money supply relative to the value in the economy.
Higher prices are the result, not the cause.
On the other hand, people will still need places to live, to store food/goods and spaces for recreation. Land and personal space will also become more scarce with larger future populations.
> let's try it somewhere that is game
Any change in welfare should lessen the pressure of immigration or make immigrants more productive.
Instead we would be better off actually trying things on a small scale to see how it works rather than everyone bickering on their thoughts about how humans make decisions.
Real adjusted income per capita is skyrocketing. The only reason it looks like it is going down is because Liberals always quote the household income. Of course household income is going down, households are getting smaller and smaller.
A mere 5 percent of those in the bottom quintile in '75 were still there by '91.
http://3.bp.blogspot.com/-ZTj_GfalJo8/UCGLgI8nDII/AAAAAAAAFt...
And I don't mean that in a Keynesian sense. I mean that in a 'the rest of the first world was bombed to a pulp so we had no global manufacturing competition' sense.
http://4.bp.blogspot.com/-aTB7SNmJgkY/UCPmRNHaUxI/AAAAAAAAFw...
There's so much stuff like that going on it's hard to know where to begin with these people.
For example, demographics. If you have a large young population and a large elderly population you will have a median income pushed lower than when your demographics skew middle aged.
Also, when you have large immigration influx, that forces down your median income as a percentage for the whole population, even if the people who were there before the influx are doing considerably better in real dollar terms.
Or if retirees are doing part-time "fun" work for small amounts of pay, when they wouldn't have been 50 years ago, that'll force down median income since they're not competing for higher wages.
It goes on and on.
Second, employees are working less hours now than before, so if you think that line of argumentation flies, it actually supports my position -- adding an additional 12.5% to per capita median income per hour. https://research.stlouisfed.org/fred2/series/AVHWPEUSA065NRU...
And inflation adjusted home prices have only gone up a few % nationally. Sure, there are areas people want to live and pay a premium for, but that has always been true. Those places have just moved from rural areas to the cities.
As for education, we're in a bubble, it's to be expected. Stop the government from giving easy access loans to kids who don't know any better, stop forcing kids into college, stop college-focused hiring practices, and that will go away overnight.
Why are we even discussing this if you can't see that it's been essentially unchanged since the '70s? Similarly rents has gone up as percentage of income and housing prices just went through a boom and bust cycle and has been far higher on average the last decade than before.
Sure, there are other factors to look at, but you are very much skewing the numbers to you liking as you accused others of having done in you first post in this thread.
And it's not exactly like we're really pushing the Republican economic vision. We have the highest corporate tax rates in the entire OECD.
http://mercatus.org/sites/default/files/corporate-tax-rates-...
Second, employees are working less hours now than before, so if you think that line of argumentation flies, it actually supports my position -- adding an additional 12.5% to per capita median income per hour. https://research.stlouisfed.org/fred2/series/AVHWPEUSA065NRU...
References (trying to enumerate his arguments against UBI):
- “the supposed looming robot apocalypse...It’s just not going to happen”
- "Taking even modest initial steps toward a guaranteed income is likely to further starve critically needed targeted cash transfers and diverse in-kind benefits"
- "libertarian right ... has basically the motivation that this will undermine existing social welfare institutions"
- "the money goes into one pocket and out the other—a taxpayer transfer to landlords." (???)
- "The UBI is not only a subsidy to employers; it is a union-buster." (???)
- "With the introduction of a UBI, employers would have a powerful weapon to force wages down" (???)
I was hoping he'd propose an alternative to UBI, but he didn't. I did enjoy his extensive history of UBI.
This is true. This is also the main reason why I support UBI in Finland.
Here unions are based on negotiating minimum wages for different jobs and paying unemployment money to laid of workers. (something like 9 months after lay off, then it's government responsibility.) The membership payments are tax exempt. Both of these things would be unnecessary with UBI.
Why I don't like the unions? Because cleaning lady at paper factory gets 1,6 times the wage of cleaning lady at a hospital. They are practically fueling outsourcing more than anything else, because they penalize success.
Also because whatever I vote in the general election, is not going to affect the job market in any way. Unions hold the power. They have cartel on labor and it's not illegal like other cartels.
They have that cartel because they lobby shit more than anything else. It makes economic sense to belong to union. Your payments cost you nothing because government is basically paying them through tax exemption. If you have slightest possibility to be ever laid off, unions guarantee relatively high standard of living for that "in between jobs".
Finnish social democrats are most against UBI in Finland. They have been accused of being the political wing of Unions.
Unions would surely still exist. But they should not be able to hold as much power as currently. Which is exactly what I want. I'm not against unions, I'm against unions having a choke hold of my country.
UBI only plays with the ratios of capitalism; a UBI implementation would result in a different distribution of equality, so surely there would be historic social consequences. Those consequences are clearly up for endless debate by concerned reformists (a.k.a. fortune tellers; see the article's citations).
So, the details are all up in the air.
What a brief Marxian analysis would tell you regarding UBI and any other reform programs: since the control of the means of production and the subsequent control of the surplus labor remains in the hands of the capitalists, the capitalists will maintain their power and quickly destroy any of the proletarian benefits that the program seemed to promise.
The best example in recent US history of this happening: the New Deal.
That seems to me to be an argument against a planned economy, not against socialism. There's no requirement for socialism to remove markets as mechanism to determine value.
There is a requirement to reject a market based on private ownership of the means of production as the means to determine the individuals return for work rendered, not to reject market mechanisms in general.
In a sense you are right that Marxists and "Austrians" could agree that "intermediate" socialist policies that hamper the functioning of the market are doomed to fail. But some Marxists will believe that this is because an actual Marxist implementation could have freed the market from the limitations of the halfway house of social democrats.
E.g. a problem with the social democratic model of Norway for example is exactly that the market is stymied by all kinds of regulations that are intended to cushion society from the effects of unrestrained capitalism. These clearly affect the ability of the markets to accurately price e.g. the actual cost of a product, because it ends up pricing in societal costs of dealing with labour issues unrelated to what this company actually does.
But these are necessary to achieve a socialist programme under the constraints of capitalist modes of ownership, not because of the market.
As a specific example, in Norway it is incredibly hard to make people redundant, and even normal notice periods are typicall 3 months. These protections were hard won successes of the labour movements. But they are there to safeguard employees in a system where long term unemployment is a risk leading to reduced earning ability - possibly for the rest of your life if you end up losing career progression.
Consider a socialist system where the cost of employment are effectively borne by society whether or not there is currently work for you, and where you're not losing out on salary progression. In such a system you might want to strip most redundancy protections back to the bone, because they obscure the real costs of production and they obscure real unemployment.
By stripping such protections, society would be able to see what the free labour pool actually is, and take measures on that basis - whether it would be to lower working hours, or offer more vacations, or encourage more education, or offer up resources to people wanting to start new projects.
It is thus not the market that is a problem for Marxists, but a capitalist market under capitalist modes of ownership.
That does not mean all socialists, or all Marxists, want market economies, but there certainly are Marxists who see the market as by far the best means to calculate relative value exactly in order to direct activity fit for an industrial society. At least some Marxists and Austrians will in fact agree to levels of regulation in many areas that would cause "intermediate" socialists like social democrats to have strokes.
I see this objection raised from time to time. But I don't think it's accurate. If there is a UBI I can live off, I'll immediately quit my job at EvilCo doing stuff that I don't believe in or that I find actively harmful. The more evil a corporation is, the more it will have to pay in wages to find someone to do the dirty work. At the same time, the UBI allows people to found startups with much lower risk than today because, if the company does something people believe in, they will be willing to do it for much less money or maybe even for free. (Of course you'll still need startup capital for capital-intensive industries.)
Essentially, the UBI is a subsidy for small business doing socially desired stuff at the expense of big, evil capitalists. I really don't understand why Marxists don't see this and even fear the exact opposite.
I don't think that you argued my point, though. Virtually every reform program in the history of capitalism has eroded over time, even the ones that probably sounded as impressive as UBI at the time (near 100% tax rates, social security, etc.).
http://public.econ.duke.edu/~erw/197/forget-cea%20(2).pdf
We'd like to pretend everyone is a self-motivated software engineer who will create value for the world for personal fulfillment. The data shows this belief is false.
There is a growing fear amongst some that automation will finally overtake job creation, and that the resulting unemployment will be sufficient to throw masses of people back into poverty.
If that actually happens, then a 13% reduction in work effort might very well be less than desirable if one wishes to prevent social unrest.
There are two key benefits of basic income in that respect: Firstly, to ensure that if people are unable to find a job, they can still live a decent life. Secondly, to reduce the amount of people forced into unemployment by making more people choose to not work or work less, whether because they choose education or choose to stay home with their young children, or choose to retire earlier, or simply choose to make do with less.
Of course, the pre-requisite for that to be viable is that society can make do with 13% less work effort (or whatever it ends up being, whether more or less).
That's not a case against it, that's one of the benefits of it. The notion that everyone must work is antiquated in this continually automating world and will soon no longer be possible. The people who are losing jobs don't have the skills to be in demand and demand for human workers will only continually decrease as time passes. When you automate people, the rules change; it's not going to be like the past where people just did different jobs. There won't be enough jobs that require human skills enough to keep more than a small part of humanity working.
We are not yet in the era when humans are useless. We still need Uber drivers, house cleaners, and day care workers. Once we reach the era where robots have made everyone obsolete, BI will be so cheap to provide that no one will bother to oppose it.
I didn't say we were, I said it's coming, and we need to adapt before then or it'll be terribly hard on society.
As best I can tell reducing work effort is good, but neither the banking crises nor a BI hold much of ceteris anything like paribus. The banking crisis saw work effort fall, but also saw productivity fall and saw incomes fall for a great many individuals. It's not hard to imagine that that nets out negative.
I think you need to look into the assumption that humans require so much work; it's not historically true, hunter gatherers spent much less time working and much more time in leisure, even tribes today.
> Everyone earning their keep is not an antiquated concept.
Earning your keep doesn't require 40 hours work a week in a world full of automation, what is antiquated is the notion that there's enough work to keep everyone working all time; look around, that's changing.
> It humbles people. Fills their time with purpose. Improves their intelligence and resiliency.
So do other things, like art and culture; there's more to life than work. Seems you've been brainwashed into thinking only work fulfills people.
> Supporting someone because they exists is a horrible idea!
No, it's called being human and it's what has to come whether you like it or not; there simply isn't going to be enough work to go around to rely on a labor based means of distribution anymore and automation is going to further distribute what's left into the hands of a very few. Those trends can't end well without a radical change in how society is organized.
So far in human history the only people that were able not to work, but instead have an effortless lives devoted to "art and culture" were members of aristocracy. This happened few times, since the ancient civilizations till 19th century and always resulted in that "noble" class degenerating into bunch of perverts. Basic income would result in pretty much the same, just on larger scale.
Considered strictly (literally "everyone", specifically "software engineer"), it may actually be the case that literally no one believes that.
Let's consider a weaker interpretation, more precisely phrased "enough people are sufficiently self-motivated to create value for the world that the perceived decrease in productivity due to workers opting out of traditional employment will be substantially made up for by the other things these people choose to be productive at."
And contrary to your claims, the data you provided not only fails to show that this is false, but lends some support to the notion. From the same paragraph whence you draw the 13% figure:
"Because the primary earner typically worked many more hours than the secondary and tertiary earners, this implied a relatively small reduction in work effort by primary earners."*
"The general result that secondary earners tend to take some part of the increased family income in the form of more time for household production, particularly staying home with newborns, was found in all the experiments"
To a large extent, "Mincome reduced work effort" in the same sense that a man marrying his housekeeper reduces GDP. It does not mean people are being correspondingly less productive!
It is also not clear to me how volunteering would have been counted towards work effort, and non-commercial art almost certainly would not.
Regarding "software engineer" in particular, the study took place in the 1970s. For many well-paid jobs, the initial capital requirements look qualitatively different.
Actually Marx himself thought that capitalism was a natural historic necessity proceeding communism. This issue was widely debated at the founding of USSR --whether they could skip this phase. Obviously they choose wrong.
- Source unclear, attributed to Alexis de Tocqueville and Elmer T. Peterson
Sorry, this was never suggested? "Scaling" existing labour is the same as investing in new labor, is it not? Or do you mean new "types" of labour?
Either way, most new productivity boosters allow you to do more with the same labour force. Ideally. So you let the labour force collectively bargain higher wages so the company is forced to invest in new technology (exp(n) boost) to scale their operations instead of increasing the size of the workforce (n boost).
His argument seems to boil down to the following:
1) Labour being replaced by automation isn't going to happen because it is going to create more jobs than it displaces..... Not sure if I agree with this point.
2) That a basic income necessarily needs be IN PLACE OF existing welfare and labour protections... While some other forms of welfare may evaporate and some labour protections loosened, it doesn't have to. It provides flexibility for labourers and employers to negotiate without the looming threat of not having a basic living wage. It increases the labourers negotiating position more than the employers IMO.
3) Technology makes us more productivity, which means we can work less hours which means we can have more leisure time. The problem with this argument is that it assumes those "less hours" are equally distributed across the entire pool of laborers. What it just means is there are less hours for a limited pool of skilled labourers to fight over. Which means more unemployment. It does not mean that the taxi driver who has his 12 hour days eliminated by driverless ubers now gets to work 3 hours a day driving an uber or gets to work 3 hours a day programming those cars.
4) Instead of having a UBI, we should have a militant (violent) revolution against the rich where we demand increased welfare and labour protections. Increased welfare like a UBI? I'm not sure why the author feels like positive social institutions can't be a voluntary concession of the rich to satisfy discontent of the masses. Why do we have to get out our pitchforks to get bread if they are offering to hand out a livelihood to every citizen?
This sounds like the sort of leftist rhetoric that comes from someone in a very comfortable position. Try telling someone in real need that they shouldn't accept a basic income because "it's just a bribe from the rich so we don't start some vague revolution!".
UBI can be an answer to this, but given the political climate, I don't particularly think it's a viable solution in the short to medium term.
It seems to be a just an Economists (albeit a lefty one) looking for solutions in previous data.
1) That is the only conclusion that can be gleaned from the past century of data. Projections as to the effect of an "exponential explosion in AI/ML" have no data to support it.
2) I don't think he advocates for either. Though as a lefty he definitely doesn't advocate for busting of social programs (esp Healthcare)
3) Very True.
4) Labour doesn't necessarily ask for increased welfare, they ask for perfect employment. Which the author implies is a larger force for productivity boosts than something like UBI. It also gives the masses some control (therefore keeping the pitchforks away).
Historically, weakening labour has led to slumps in productivity for a myriad of reasons (that he could've done a better job at laying out). And we have no evidence that a UBI would increase productivity, but we do know it will destroy labour unions. Without productivity increases (towards zero marginal cost), UBI may not be able to deliver on its lofty promisies.
On the flip side: Increasing power to labour would mean another concentration of power that can (and has) be corrupted easily.
4) I think that perfect employment is a good goal, but how we get there is something else entirely. We can create more jobs, we can "re-educate" workers, we can decrease hours to create more shifts, but all of this still leaves a lot of people in the cracks. I think that one of the main benefits of a UBI is that it guarantees that nobody falls through the cracks.
I don't see how UBIs would entirely destroy labour unions either, since labour unions are often about more than setting minimum hours and negotiating standard compensations. Unions provide a lot more utility than that so I don't see workers abandoning their unions just because they get a check in the mail from the government every month. If that was the case, the union probably had very little utility to begin with IMO.
I don't know if a UBI is the right solution for solving poverty or worker inequality. But I don't think the author makes a convincing argument for an alternative, and I don't think doing nothing is a solution either.
I think a more useful way to think about the problem of automation isn't that it replaces jobs directly, it's that it devalues human capital. New jobs will involve more skill, which means each person will need more education and training. It might get to the point where training everyone so they can work for a living is less efficient than just taxing and paying for some people's sustenance directly.
I've linked https://www.youtube.com/watch?v=7Pq-S557XQU many times and I'll do it again.
Recently I've been coming to the conclusion that whilst free market capitalism deals very well with a fairish distribution of scarce resources, it doesn't deal very well with abundance (or rather, it deals ruthlessly with it - the price drops to near zero). We're facing an abundance of labour, and I don't think things are going to end well if the market rate for that ends up so low that labourers can't eat.
And then a couple sentences later...
> At the end of the 18th Century, 90 percent of the US workforce was employed in agriculture. As of 2009 (the latest year for which there are figures), less than 0.7 percent are farmers. It’s not the case that now 90 percent of Americans are out of work; they’re now engaged in other, often less back-breaking labour. The percentage of people engaged in hard, dangerous and boring jobs has tumbled.
That is a clear contradiction even if we had the same level of employment we did back then (which we don't when you account for child farm labor and low rates of retirement), "less back-breaking labour" is less labor.
The question becomes, does that just exist for Western societies or for the entire world?
I didn't read the entire article but it struck me to point out that "The Captive Mind" by Czeslaw Milosz is extremely relevant here.
While the USSR was no wonderful place to be, artists tended to be happy there, because even if they were forced to "art" in a particular sense, the USSR recognized art as a fundamental human right and dignity. Compared to capitalism where people were starving just to make it.
I've had a few drinks, but I absolutely recommend "The Captive Mind" to anyone interested in this sort of sociatal interaction. The part where society collapses (the USSR) and all of the "secret" papers are spilling on to the street will open your mind.
At least it did mine. When it comes to gold, silver, or secrets, if they can't feed you, clothe you, or shelther you, when things break down, they're not worth shit.
This is my spurious comment of the night. Check that novel out. "A Captive Mind".
I'm for a universal basic income. I'm a socialist for essentials, a libertarian for personal liberties, and a capitalist for the rest. I couldn't make it through that entire article. All downvotes are deserved.
Cheers.
I'm sure some startup can handle the issue of providing work at home jobs for the poor, disabled, and people on welfare and the software for them to work the job where it has a GUI interface and they fill out forms and push buttons. Stuff like data entry, video captions, video transcripts, or even running something like a Bitcoin miner that attaches to a USB device that earns money and pays them some of it.
There should be a way to create jobs using technology that don't require a lot of skill and training and that basically anyone can do.
Even an app where they fill out surveys and get paid, or do small things like write a 500 word essay for money. Stuff that people can do that an AI can't do yet.
The author's basic premise that improvements in technology always bring an increase of employment will, I believe, not be true at all in the next few decades.
I think the rich will look at something like universal basic income as something to keep society civil, avoiding large scale civil unrest.
One point that he doesn't mention, though, is where would the UBI money come from: taxes of course, but taxes on what? I think that is a very important point.
Our welfare systems will never solve the kind of poverty that pushes people to sleep under bridges. Our unions will never give the work force 100% occupation. It's easy to dream about revolutions and class warfare when you don't have to worry about next month's rent, but we're not talking about left vs. right here. We're talking about a paradigm shift in the human society: no longer having to worry about food and shelter on the sole basis of being human. That's the kind of society I want to experience in my life time and I don't care who wins ideological points over it.
You'd think so, but no. There are a limited number of places at those tables and always less than the number of people in need of food in an Italy where the biggest problem in agriculture is overproduction.
Then there's the little detail of catholic organizations like Caritas being used by the state to distribute food from EU sources. You don't want to deal with those that fucked you when you were a wee lad? Guess you're dining in a dumpster. Again.
> the majority of people have shelter security by proxy of family or friends
We're talking about the less fortunate minority here. Does the state need to guarantee their survival or not?
$30 000 * 230 000 000 adults = $6 900 000 000 000 a year
Now obviously, 100% of the adult workforce will not be on UBI, but even with 10% of adults on UBI, you're still looking at close to $700 billion a year. Even currently, I'd bet that way more than 10% of people would quit their bullshit jobs if they could get UBI (also causing a shortage of employees in certain industries and wages to go up) and that percentage will rise much higher in the future.
I'm no economy expert, but somehow, I just don't think we're there yet with the numbers, though I think we possibly will get there at some point. Or maybe it's just wishful thinking because I'd like this to work, even in theory only. Maybe someone has better math than mine ... :)
Isn't the whole point of "Universal" Basic Income that everyone gets it without exception? A system for the poorest 10% is just another pricey welfare system similar to those in many countries.
But this slightly different system I'm describing isn't the same as what we currently have. What I'm thinking is UBI (or whatever it might be called in this system) vs. wages. Pick one. This would automatically make the minimum wage > $30k, probably at least around $40-50k and wouldn't require paying every adult in the US, including ones who already have jobs. The key difference is that people would have a choice of going to this new Semi-UBI system anytime they wanted, no questions asked, with guaranteed income. I think that's one differentiator. Another differentiator would be removing the countless barriers that exist in today's systems. The many idiotic rules around welfare and Medicaid for example are so complicated and require so much time and paperwork, it's ridiculous. It would keep the state from trying to force people to look for jobs they don't want and waste time doing it. It would allow people to go to school full time while still receiving aid (not possible in many cases today). It'd be a real, living wage, albeit low, that could remove the stress and uncertainty of today's welfare systems. And finally, it would hopefully not carry the stigma it has today as artists and thinkers and all types of people might choose not to work at all, rather than have this be only a program for the poor.
So yeah, it's not really UBI, but it could still be a lot better than current systems.
The problems with such a system would be:
* even higher threshold for actually seeking a job because you lose BI (yes, the other side of higher minimum wages)
* either the BI is sufficient for a decent life or it isn't: if it is, it's probably too expensive because a large part of the population will receive it. If it isn't, it will be a program for the poor/disabled only and enough people will be seeking jobs to drive the effective minimum wages down to the current level.
How is it possible that the proposal of a couple of
Marxian professors from the Benelux—riffing off some of
the more utopian musings of Enlightenment dreamers in a
brief outline of an idea that they themselves concluded
was only “sketchy and tentative”—has been able to
capture the imagination of politicos of every hue in
recent years?
to get productivity growing again, labour has to become
more expensive. And the only way for labour to become
more expensive is for there to be a genuinely global and
militant labour movement
But if that's all it's offering, don't bother. The first summary is "appeal to he's-a-baddy", and the second is reasoning from a price change.
Any good argument takes the form, "here is how an improvement in your worldmodel results in regarding conclusion X as correct/false". This isn't that.
> I don't even know what that means. Want to know a surefire way to make labour more expensive? Minimum income for everyone.
It means when labor is cheap, there is little thought investing in labor-saving capital equipment, but when labor is expensive, labor-saving capital equipment is developed and invested in.
Some companies pay dividends. This is money not being used to resupply the company, nor reinvest in the company, nor to pay wages. Workers creating that wealth fighting for it to go to wages as opposed to dividends will have some side effects, one being a desire to automate the industry jobs more. Basic income for all has an effect on all of this, but not as direct. Particularly for say, programmers in San Francisco, where the small amount of money they get from basic income won't have much effect on work, automation and such at all.
Also, dividends aren't just burned. People can consume them or re-invest.
So does the author actually want a revolt? Because that's insane. It is not rational to want a war when you can get the essentials, enough to stop a revolt, through peaceful means. And, during and after the war, who will be hurt hardest? The working class! The very people the author claims to support!
This is why nobody takes people like the author seriously. They demand everything and are satisfied with nothing, and then threaten to burn the whole thing down instead of investing the effort to fix it.
Revolution isn't a solution. It's a threat which, if it is carried out, causes even more problems. If it is continuously threatened, it is a cop-out, a way to avoid thinking about how to actually solve anything.
Sometimes revolution is needed. Never think it solves more problems than it creates.
I love that. I feel the same way about most forms of government regulation; in the small and short term they can be necessary to solve a problem, but in aggregate and the long term they harm competitiveness in an industry. I always thought "clean your shit up, or we'll regulate you" to be better at improving an industry than actual regulation.
Naturally, if you don't ever follow through, the threat has no power, so it is necessary sometimes.
If you abolish the welfare system and institute welfare at 1k/yr, you've probably fucked a lot of poor people over.
Some jobs might pay more because they're unattractive and workers are less desperate to take jobs that are barely worth it.
Some might pay the same or less, because they're attractive from a lifestyle point of view (good location or prestigious). This would be similar to how someone on a trust fund can afford to take an unpaid internship, but regular students can't afford it.
Other jobs will be mostly unaffected since they already pay a lot more than minimum income.
I don't see any way that having more money is bad for workers. It might not be great for unions because it's about individual workers having more power on their own. On the other hand, it pays for some part of the strike fund.
Productivity is the saleable value of the work, not the cost of the work. The latter is only a floor for the former (since work that cannot be sold at least at its cost will simply not be done - witness the rise of fast food robots).
The paid housing would be better idea, BTW.
Start an organisation which takes from each member according to his means and shares it out equally, and see who wants to join. I wish you well.
My money stays in my pocket.
Further, taxes are regulated through voting, which determines both how much is collected and how it is used. If the majority disagrees, well, most of the money is theirs, not yours, and you're free to go somewhere else.
So yes, we the mob have decided you will contribute - we simply cannot watch the less fortunate suffer when we have the capacity to stop it!
... as though that was what the bulk of taxes were about. (If you define "less fortunate" and "suffer" to cover everyone and everything who happens to have a smaller income than you, it is weak sauce.)