Universal basic income: A nonprofit is about to test it in a big way
slate.com
slate.com
It's great that this is going to be ran at scale, and over a long period of time - the hardest part is going to be waiting on the results!
Will the basic income be extended to a child or will children be left poor while their parents get BI?
If babies get added to the BI payroll, doesn't this incentivize baby making?
Edit: the point being that children are the ones who suffer most from poverty, and investing in them has the most long term potential. But of course we don't want people to have kids just for the money, hence the difficulty.
Sure, but only in the sense that they're the ones who will be living it. Fewer children doesn't mean society won't have a future. It just means they'll each have more resources.
The world is not at risk of underpopulation. If that were actually a serious concern, we could take measures to mitigate it but all evidence points to there being plenty of people in the world already. Some wealthy countries might have declining populations, but there are plenty of countries with overpopulation to offset that.
Many of the social benefits a working Western society wants depends upon a growing population, like social security.
To be clear, they depend on a growing labor force.
However, the whole reason to investigate UBI is that we're likely nearing a future where labor is not a dominant factor of production. It seems unlikely that we'll have full employment in the future, particularly if there's UBI.
In an economy where labor is not a necessary constraint or driver of production, it seems entirely unclear why having a growing population (without a growing labor force) would be beneficial.
Not to mention that for the forceable future there are plenty of countries desperate to export excess populations. If you need to increase the population, there's no need to subsidize it.
Whether society subsidises it or not people are going to continue procreating, many irresponsibly (don't have financial ability to support their children). However are you arguing then that these children who happen to be born into poverty should then be left in it without government/societal help?
First of all, UBI should ideally be enough to eliminate poverty. Parents might have to make some sacrifices to take care of the children (forgoing personal luxuries or taking a low wage job). Once the child is of age, they would receive their own basic income so there wouldn't necessarily be a cycle of poverty.
Moreover, we should incentivize child transfers by subsidizing adoption.
If they're so irresponsible, why would giving them more money necessarily help the children to live a better quality of life?
[1] http://www.sowetanlive.co.za/news/2012/05/25/misuse-of-socia...
[2] http://www.iol.co.za/news/south-africa/grants-used-to-suppor...
[3] http://www.parent24.com/Baby/Toddler_1-2/care_nutrition/The-...
Compare:
https://www.cia.gov/library/publications/the-world-factbook/...
A fertility rate of 2 would be necessary just to replace the current population, without any growth (assuming that all children reach adulthood and breed in turn, which is a big assumption for some of these countries).
Why does world population "need to decline"?
I suppose the alternative is to eat resources at the replacement rate - this is what sustainability is supposed to be about.
Or perhaps some new technology will fix it.
No, we aren't (running out of resources).
The price of oil today is moderately higher (in constant dollars) than it was in 1946, but only moderately so.
http://inflationdata.com/articles/charts/inflation-adjusted-...
Pretty much every jump in the intervening years is directly attributable to political turmoil (e.g., war) rather than any real decline in the amount of oil available. Note that today's moderately higher prices are in an environment with active war going on in Syria and Iraq, historically two of the largest producers. If it weren't for that, oil prices might well have dropped below 1946 prices (again, in constant dollars).
Similar graphs hold for other commodities.
According to the pundits in the 1970s, we were supposed to be at the "Soylent Green" stage long before now. We aren't.
Old Man Malthus claimed that we were on the verge of the Soylent Green world (though of course he didn't call it that) way back in 1798.
But like rainforests are going away real quick.
2) Water doesn't actually get used up.
2) Aquifers do.
(that's part of a wider problem with trying to draw any inferences about how a basic income might work in a developed country from this. It's perfectly reasonable to believe the results and the appropriate design might be precisely opposite)
>We'll choose the communities mostly for operational reasons. We're experts at delivering cash in very poor rural areas, and that's likely what we'll do with the pilot. Within the communities, we want to test a universal basic income, so we will enroll all full-time residents of a community.
- from the actual fund-raising page - https://givedirectly.org/basic-income
So, they aren't incentivizing baby making between families. But there may be between communities. That said, as people are elevated socioeconomically birthrate tends to decrease.
Edited to add: https://en.wikipedia.org/wiki/Income_and_fertility
People will act differently if they know their needs will be provided for them for life as opposed to a few years.
If you are willing to work for X money a year, and you get a basic income of Y money a year, then you will be willing to work for X - Y money per year if other conditions don't change. This is will end up as tax-payers subsidizing corporations in the long run.
(They're also listing fee-less Alternative Donation Options there, but I can't quite figure out how to use those to donate to this specific experiment.)
A more realistic test would be to take those 6,000 Kenyans, tax them in some way (e.g. take 2x from 3,000 people), then distribute the money equally. And it would have to be done in one localized area to take care of the homogeneity problem (if the money is too sparsely distributed, prices won't reflect the new money distribution).
As much as they talk about how scientifically the study must be done, and the rigorous testing, it seems that there are some holes in the experiment.
Do the Italians owe the French compensation for Julius Caesar's campaigns? This game can go on forever.
Nobody owes anybody anything for the things their great-grandparents did. Or for the things their grandparents did. Or for the things their parents did. Or for the things their siblings do. Life happens right now, not 10, 20, 50, 100, or 1000 years ago.
The problem with worldwide UBI is the same as nationwide UBI. The cash is just a token to split up complicated market-clearing trades into a collection of simple half-trades. You still need the goods and services to be produced and distributed. If you take a million US dollars and give it to a Kenyan, that Kenyan would still have to send some of it right back to New York to fill up a cargo ship and send it to Nairobi, because the local markets aren't equipped to handle that ripple in the money supply.
Rather than taking the money, and moving it, you have to take the productivity and move it. You would have to industrialize Kenya to the same extent as the US. You would have to pave it with the same roads, wire it with the same cables, police it with the same cops (or maybe better cops), do business with the same contract law. I think the reason Kenya is still Kenya after the colonial period is because it does not wan't to be the 51st state of the US, or another member state of the EU. And it does not yet have enough robots operating there to sustain a meaningful UBI.
Worldwide UBI means worldwide industrialization and uniform business laws. You can't just screw with the money and expect it to work.
Think about it like this, does Bill Gates live next to a poor person? Would Basic Income in his area tell you much about basic income in the US?
As to your claim of rampant poverty, it is true. However if we surrender our welfare to automation, humans will all be in poverty compared to the control exerted over us by the machines, and what we could have achieved if we remained free. If we continue to strive for personal independence, some of us will remain free. If we give in to subsistence dependence, we as a species will be enslaved.
On a larger scale, I expect that if half the population didn't/couldn't work, but was allowed to live comfortably anyway, there would be a considerable increase in experimental creativity and social functions. We'd all essentially go out and find things to do together and alone.
Studying the effect of large scale outside cash injections into a community is not a remotely plausible proxy for studying the economic effects of a redistribution scheme.
Alaska is doing it based on a natural resource tax. Justin Trudeau in Canada just did an experiment as well - not sure where their funda come from.
I think companies taking advantage of a public good should be taxed and the result redistributed as UBI. Personally on an unrelated note I'd try to tax non-biodegradable materials like plastic and the huge amounts of carbon being released from the ground... but that's near impossible to do politically to any great degree.
I prefer the idea of basic income taking the place of debt for the creation of money. This way the tax is in the form of inflation, and everyone gets to directly benefit from the creation of new money instead of just the banks and those blessed by the banks.
Not at all. The theory of UBI is that in the West we're wealthy enough that we produce way more than we need. Ergo, we can afford to give everybody the basics. Doing the same experiment in a much poorer context would produce a very different outcome.
As an aside, I think your theory of ownership is throwing your intuitions off. You seem to think of all resources as being owned entirely by some set of current individuals. That's certainly the default model in the US, but that's not the only way to look at it.
Much of the wealth in the US was created by previous generations or in large part derived from that inheritance. Instead of capriciously assigning that to current individuals based on blood ties and other luck, you can also look at that as being a joint inheritance. Thus, something like the UBI can be viewed not as taking from individual A to give to individual B, but to use our joint inheritance to make sure everybody has the minimum necessities of survival.
I hasten to add that I don't see either of these models as "right". Fitting the complexities of a modern economy into a primate's model of territoriality will never work all that well. But there's historical precedent in things like the Spanish ejido, the Aztec calpulli, and English commons.
It's much simpler to make money appear out of thin air (as it effectively is when you take millions of dollars from rich folks in California) and distribute it in Africa. But if you have to take money some folks' pockets in Africa to give to their neighbors, that to me is a more 1-to-1 comparison at what happens for a UBI.
Basic income is about having enough money to eat and get shelter, without ANY need to work - and see what happens to human beings in that condition. If the same human being has to fund its own basic income, what's the point?
Basic income, to me, HAS to be funded by someone other than the recipient. Otherwise, it's no experiment at all.
To make sure we have the same premise, Universal, by definition, means everyone within a certain boundary (e.g. citizen of a country, city, state, whatever) receives the money, regardless of their income, location, etc?
To be functional, the money that is doled out needs to be collected from somewhere. It isn't that each specific person needs to fund themselves, but the set of people that receive the "Universal" basic income needs to generate the income needed to pay for it. If an outside set of people pays for it, then it's not a universal basic income, it's something else -- it's taking money from one set of people to give to another. I believe the whole idea of UBI is that everyone gets that same money.
The real problem is the collection problem: if you have a set of these 3,000 people who receive, say, $100/mo (made-up number), then I think a true test of Universal Basic Income is that the income has to come from that same set of 3,000 people.
In what way is that meaningless? I think it's a valid question to ask.
We need to run an experiment to identify whether redistributing tax money to everybody equally and unconditionally results in better outcomes than various other existing or proposed systems of needs-based handouts, which is a completely different scenario, not least because for a significant proportion of people in the experiment this is going to represent a reduction in their current incomes or other benefits.
That clearly isn't how a real UBI would work. If you literally take $100/month from everyone and then give it back to them, nothing happens. It would have zero effect.
The way UBI works in practice is that everyone gets a fixed amount of money and then everyone pays a fixed percentage in taxes, so that more of the UBI is funded by the wealthier people who pay more taxes. Which is what the experiment is doing.
In theory to make it accurate they should also impose a "tax" on the participants based on how much money they make from external sources, i.e. if one of the participants has a job paying $200/month and we want to emulate a 20% tax rate then they get a $100/month UBI but the funders take back $40 (20% of $200) as "tax" to "fund" it. Obviously that wouldn't work if someone had above average income (i.e. they made $1000/month in Kenya and would have a "tax" exceeding the UBI) because nobody would volunteer for a study that cost them money. But you could at least see what a UBI would do for poorer populations, which would seem to be the interesting question, because for richer people it just looks a lot like any other "take from the rich and give to the poor" welfare program.
Your example of people volunteering for a study that costs them money is exactly the problem that I am describing, and for a system such as this to work, that's how it would end up--taxes go up for people who this doesn't benefit, and as much fun as it is to assume that "other rich people" will pay for it, it doesn't work that way. That's why I think a better test is to select a group of people to self-fund their own UBI -- some people pay $140 and receive $100. Others pay $20 and receive $100.
That's generally how all taxes work. The people with more money than average pay more than average and the people with less money than average pay less than average. But the people who make $1 more than average are only suffering a net loss of $.20, whereas the people who make $100,000 more than average are paying net $20,000.
> That's why I think a better test is to select a group of people to self-fund their own UBI -- some people pay $140 and receive $100. Others pay $20 and receive $100.
In other words what you think we should do is to actually make it a law somewhere?
Worse than the lack of civility in your response is that you've attracted people to vote for it. Thus your comment is appearing before more useful ones below, which actually show why parent's objections are counterproductive, or at best, concerns for a later time (since he wants to load too many unknowns into a single study.)
As automation replaces larger portions of previously human-held positions, it could either be taxed on behalf of or socialized for investment by the basic income receiving communities.
Granted the ideal scenario for that is a long way off, but the incentives don't have to be.
Why are you trying to test both the motor AND the battery at the same time?
Test one, then the other. Isolate the variables; change as little as possible at a time to test your hypothesis, which in this case is: Just giving people guaranteed money for a long time is the best way to help them.
Thing I'd be most worried about is protecting those communities from other violent people and/or mad influx of people trying to join those communities. Island cultures might be better - more isolated.
PS - I did think of an answer to "why not cash?" but it's something that's also addressable: Bulk purchasing advantage. AFAIK, it's more cost-efficient to feed 1000 people all at once than one at a time.
If you are willing to work for X money a year, and you get a basic income of Y money a year, then you will be willing to work for X - Y money per year if other conditions don't change. This is will end up as tax-payers subsidizing corporations in the long run.
The universal basic income would be paid for by the upper and middle classes, and taken by the working class.
At least in the UK these groups are seperated enough that there's very little socialization between them, very little overlap in voting preferences, etcetera. Different cultures, within the same country.
Looking forward to the results of this test.
That is just welfare, if done on a governmental level, or charity, if you do it individually.
For it to be a true experiment about UBI, you would have to find an area that's somewhat autonomous, provide everyone indiscriminately with the same amount of money that would suffice for maintaining their basic living needs and guarantee the income for at least a certain period of time. Otherwise, well, good for you for helping the needy but it doesn't have anything to do with universal basic income.
Without knowing the purpose of their spendings I can only assume that you morally approve one over the other (which would put a big dent in your flippant "feelings of entitlement being higher among men" theory).
The results could be useful for scientific purposes (even though the sample is somewhat biased towards people buying lottery tickets).
While lotteries in the US often advertise the lump sum winnings, many are actually paid out in installments over a few decades.
What happens is that winners demand the full lump sum. For the lotteries that offer it, the lump sum is less than the total winnings paid out over the years. (Something like 10% less.)
This has created a niche for businesses to crop up where the company will give you the lump sum total due, with a nice chunk extracted for themselves.
What prevents these businesses from approaching these Kenyian people?
Hence proving the intuition that the people who buy lottery tickets are bad at math.
The businesses I'm aware of will offer a lump sum up front for assignment of any annuity.
There are a lot of labor market benefits as well; one of the big problems with means-tested programs is that they screw up the tax structure at the low end of the income scale. If your options are being jobless receiving welfare or getting a job that forces you out of welfare, there's a large disincentive to seek work. You would be paying an effective tax rate of ~100% by losing that payment.
As Sam Altman said in a recent podcast (and I paraphrase here)..."its ok of 90% of UBI recipients sit around and smoke pot all day as long as 10% create awesome new things for society...its a net benefit."
Are these 6000 Kenyans in the technical position to create a new vision and application that benefits the world society? Can they build the next AirBnB or Uber?
I'm not saying they can't, of course...just wondering if the cultural and technical infrastructural differences between Africa and the US/Europe would create experimental distortions.
[edit] ok..AirBnb and Uber were probably poor examples and with more thought it makes sense the the effects would be much more localized in this case.
I guess what I was trying to say is that the 10% have a lot of work to do if they have to carry the weight for the other 90%.
everything is tied into the conditions under which it arises. whatever the "cultural and technical infrastructural" conditions are, there would still be people freed to be "madly productive in their passionate interests."
whatever their economy and culture demand, people with more free time will be better able to fulfill those needs, right? the people best able to assess that are the people within the local economy and culture.
[1] http://www.worldhunger.org/articles/Learn/world%20hunger%20f...
If I can produce my good for $10 and sell for $20 and my competition sells for $15, what will a consumer do? What will I do in response?
The net effect will probably still be inflation, especially in the short term, but with the poorer population having a greater share of the purchasing power.
There are a couple of directions to examine this question.
First, from the supply of money and how it is used. While everyone will have more money, that doesn't necessarily mean that each unit of currency will be worth much less. One characteristic of being in poverty is needing things that you cannot purchase. If you need $1000 worth of stuff and you are given $100 or even $900 you are paying not only the nominal price of those goods but a very real and a very felt opportunity cost of not getting some other needed good. IOW, it makes sense to be nearly as careful and frugal as it was before you got your windfall.
Once you get past the threshold of 'needed' items and into 'important' items the calculus changes a bit and when you move from that to 'nice to have' it changes even further. It is easy to imagine inflation running a bit wild if a community of middle class people were all given a million dollars, for example. Look at the gold rush or the recent oil boom towns.
From the other direction, the demand for money and time from this population. Sellers who know that a population has an influx in cash might try to demand more for it. They will have trouble because that extra cash still mean a lot as examined above and they will need to compete with others for that cash. Where things will really change are people that don't need cash from this population but time in the form of labor. People who employ the poverty stricken have a distinct advantage that other employers do not have in their negotiations -- the other party is bargaining for their life. If they don't work this week they may not eat next week. This causes those in poverty to sell their time for a loss as long as that loss is not as much as the loss they'd see if they didn't work at all...and it is hard to imagine a greater loss than the pain and risk of death of starvation, homelessness, or lack of medical care for yourself and your family.
Under basic income, however, this calculus changes dramatically. Suddenly these people have a much stronger bargaining position. They are now negotiating for gain rather than loss. Employers now have to entice them to work. They have to pay their employees more than their time is worth to them for other activities like recreation or education or spending time with their family. It is not all bad; thanks to basic income it is easier to reach the gain vs. loss threshold but it will likely be more than what they can get away with when the alternative for the employee is pain or death. These employers might eat some of this cost but some will likely be pushed onto their customers. Some jobs might be lost altogether because people are not willing to pay enough for a service to make up the difference. These tend to be low value add jobs since they were, in effect, subsidized by desperation.
These three effects will lead to some inflation but, unless basic income can push people from 'need to have' to 'nice to have', a big jump, I think it will be held in check.
http://www.economist.com/news/middle-east-and-africa/2165738...
UK's DFID and Equity bank in Kenya pay out $50/mth to 10,000+ villagers there.
It's a very capitalist solution to a post-labor world.
I'd say that a significant fraction of all libertarians don't want to admit that their fantasyland and the real world are so far apart that they will never meet in any living human's natural lifespan, and therefore resist any idea which would tend to empower government to a greater extent in the long run.
By my personal estimation, UBI is necessary to avoid the accelerating concentration of more economic power into fewer hands, until the common man again becomes a "useless eater" that must be disposed of for the sake of efficiency. I fear that without it, or something like it, class-based warfare is inevitable, and war is more damaging to liberty than the welfare state. Given the choice between backing a step away from the way I wish the world could work, and running ten steps in any direction in a blind panic, I choose the one controlled step.
The better solution is to try to decouple capital ownership from individuals, corporations, or states. I'm not sure how that can be best achieved but honestly I think automating the economy itself may be the best approach. It can be done in a piecemeal fashion, but it's a question of whether the capital owners will give up the reigns of power to machines to decide how best to fulfill demands of people. I'm not so much arguing for the nonsensical approach of Jacque Fresco because his notion requires engineering wants of people and the abolition of money. For me, money and prices are good aggregators for demand, they just need to be adjusted in their use cases (probably away from capital speculation), but even an automated economy would need something akin to a price and a unit for which the price is measured in. Otherwise, how are goods created? I don't see happy thoughts and wishing being viable means to ration in any economy.
That is subjecting ourselves from total control of the machines from the bare start.
Not saying this automation is inherently bad - it may be much better than any alternative - but simply automating away throws away all the diversity that can help us get into a good system.
Capitalism: Hey, Socialism. Remember how you worked your ass off
trying to make Communism happen? From each according to ability,
to each according to need?
Socialism: Ahhhh. Don't remind me.
Cap: Check out what I did, as a hobby, after going home from work.
Soc: You... bastard.
Cap: To each according to need, from each according to how awesome I am.
Soc: I hate you. You are literally the worst. Most of those
people aren't even *working*.
Cap: I'd love to talk more, but I need to be on Mars soon,
on a rocket built without taxes.
Soc: Yeah, you'd better run! Jerk.I doubt that very much considering that most of the western world is in some form of social democracy (Fabian-like socialism). If anything, capitalism is on it's last legs due to the fact it's unable to continue to exist without turning humans into the hover-pod marshmallow people from Wall-E. A species that has to consume everything in sight without any natural check to its growth will inevitably be constrained by the physical limitations of its environment and it's technologies.
Inserting the word "social" into "social democracy" is the greatest propaganda trick socialists have ever pulled. It lets them take credit for an existing, functional system that they want to destroy. It's classic bait and switch.
If anything, "capitalist democracy" is a far more accurate term.
http://www.theatlantic.com/politics/archive/2014/08/why-aren...
(meant to post this on parent comment, but it works just as well here as an illustration.)
That's a bold assertion. Care to back this up? Because you know, I have an entire peninsula full of people to demonstrate that this is false.
Q:Do the Poor Waste Transfers on Booze and Cigarettes?
A: No
Measurement: Survey asking how much money you spend on alchol.
Justification: For more sophisticated gaming and to deliver the mostly negative and insignificant results we observe, households would need to remember how much they reported at the last survey (often one year ago), and report a similar but slightly lower number. This seems unlikely.
JUST LOL. With shoddy logic like that, I can make everything to sound like a great idea.