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Comment by JonFish85 | Hacker News Reader

This is missing perhaps the most controversial part of the Universal Basic Income: that it's funded by the same population that it's helping. This isn't a fair test because it's being funded by "outside" money, from a much richer source (investors and donors from the richest country on earth). It's a charity moreso than a real investigation of Universal Basic Income.

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.

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I don't know why you're being upvoted. Your argument, to me, is meaningless.

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.

I get the "point" of UBI, but there is the problem of who pays for it. The answer of "other folks" is very difficult, and to me, the most controversial part of it, which is what I said.

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.

> 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.

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.

Right, I'm not saying that everyone pays themselves $100/mo; clearly that's not going to do a thing. I'm saying that I think the same set of people who receive the money should be taxed to pay for it. The thing of UBI is that it will be paid by your average person who isn't wealthy, it will be paid by the upper middle class.

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.

> The thing of UBI is that it will be paid by your average person who isn't wealthy, it will be paid by the upper middle class.

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?

It is an experiment. If the experiment shows a big enough benefit (increase in productivity, reduced costs on healthcare, improvements on education, etc) then, you start thinking where is that money coming from.

But we don't need to run an experiment to know that giving 6000 people regular income will make them generally better off; that's obvious, especially in the context of a developing country.

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.

You contradict yourself. You've just responded to the meaning of his post after stating its lack thereof. Please be more precise in your insults, and perhaps be less dismissive overall.

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.)

Funded by something, not necessarily someone.

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.

The problem is that basic income is not enough. Most of the people who will receive it will still need and want more. This means they will still be looking for work, and will be willing to accept lower wages, because they have the basic income. This will in turn drag down wages for everyone and end up as a tax-payer subsidy for employers - effectively, part of wages will be paid by the government/tax payers through basic income.

As an experiment to see if it's economically viable, yes it's flawed. But to explore possible benefits it still has value. What originally made me more open to the idea was reading about a similar (I think) experiment and all the indirect outcomes like kids staying in school instead of working to support their families, more families with one parent often with the children, etc.

And that's valuable, sure. My point is more a question of if it's truly a "Universal Basic Income" experiment, it should be done so that it's paid for by the taxpayers of that same system. My suspicion is that such a program would dissolve fairly quickly because the tax burden falls squarely on people who have worked the hardest to pay their own bills and to provide for their own family. If they suddenly have to lower their quality of life, or their kids' quality of life to pay for someone who they perceive as not working very hard, then the system gets difficult.

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.

Why do you think UBI would be paid for by people who need it most? My assumption is that it would be paid for with a combination of cuts to social programs (i.e. those replaced by UBI) and more progressive taxes and/or corporations. So in effect it still will be "rich folks" paying for UBI.

Depends on whether you pay for it mostly from increased taxes or cuts to benefits. It's certainly possible to design a UBI programme where comfortably middle class families are the chief beneficiaries and existing state handout recipients, (i.e. "poor folks") the chief losers. And it's certainly true that many of UBI's most prominent proponents on the right are also amongst the most prominent opponents of any attempt to raise taxes on the rich...

Yeah, I guess that assumption is an optimistic one. I tend to mostly think of UBI as a left/progressive issue. I only have a passing familiarity with what folks on the right think about UBI but mostly historically, not present day. Got any links handy to help me broaden my horizons?

That's not so different from how tax and welfare currently works in America, and the current redistributions are far more complex than UBI would be.

Except the UBI tax will be very large, and in addition to current entitlements.

Isn't the whole point of UBI to replace other entitlements? If everyone has basic income, why have food stamps? Or disability? Or social security?

See this: https://news.ycombinator.com/item?id=11424820

Thanks - those are good points...

Most of the discussion of UBI that I've seen posits it as something to replace the social safety net. The social safety net is obviously not paid for by the people it helps (except in some small way, perhaps), so why would UBI be? True, part of the social safety net is inevitably returned to the richer portions of the population through their own share, but inevitably the net flow is towards the poorer population.

The social security net isn't paid for by the people it helps at the time they're receiving the benefits. It is designed on the principle that many of the benefits are temporary subsidies which some of the recipients are going to pay back in future out of higher taxes (or have already paid far more in their taxes for years). Obviously there's some net rich to poor transfer, but the main point is that both social security and UBI have direct costs to people who are actively buying making stuff, making stuff and investing in creating jobs in the American economy, which may or may not be greater than the economic gains from poorer people continuing to spend in downturn, not defaulting on their loans and being able to afford to sort out their health problems or relocate to somewhere with jobs, depending on how efficient the redistribution is. This, on the other hand, is just giving 6000 people money that local economy wouldn't have otherwise seen. Of course the community is likely to be better off overall, and even the rich people are going to think it's a totally brilliant idea because they're net gainers too.

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.

The social safety net is eventually paid for by the people it helps through inflation of the prices of basic goods and services.

Perhaps partially. But their real income can be inferred from how many goods they consume, and I don't think anyone would dispute they get to consume more goods in the short and long run with food stamps than without them.

Eventually, they pay for it all, and the amount of goods they consume declines as well as productive capacity flees or is shuttered when taxes become punitive. The sovereign goes bankrupt because it has to spend more than it can get in revenue, leading to debt that can only be inflated away. The Soviet Union had bread lines at the end; we've seen this movie before.

Given the inevitable rise of autonomy and the move away from labour being necessary to produce goods and services, what would you have us do then? If we reach a point where we automate more jobs than can be replaced, we either face rampant poverty or we have to move to a system like UBI. It's certainly socialism adjacent, but I wouldn't consider it Soviet style communism.

If we live in a world where everything is free and no one has to work we are living in a zoo. This is one pole of the spectrum, a pole which you would have us move closer to. To avoid being mastered by someone or something else you need to be a necessary part of the world and provide for yourself. The human response to automation should be to augment ourselves with technology, not become dependent on technology. If we lose control over our own personal affairs eventually we will be enslaved.

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.

I could never subscribe to such a dystopian outlook of the future. Sure, we could augment ourselves with tech, but that will not ultimately stop things like automation in transport. Millions of jobs are set to be made redundant and there is no clear replacement for them. No amount of tech augmentation to ourselves is going to fix that. More importantly, we are still trying to understand what a majority of humans would do if their basic needs were cared for. That's the purpose of studies like this. Humanity has never truly broken free of its evolutionary bond to fighting for the resources it needs to survive, it just changed what resources it fights over. This is truly uncharted territory and UBI is currently the only viable idea on the table to deal with it.

My prediction of what most people will do if they receive a basic income and have no hope of getting a job is that they will do drugs all the time.

I expect a relatively small percentage would be interested in dangerous chemical highs if they aren't leading miserable lives they need to escape from. Myself, in that situation would likely spend my time socializing, playing games, consuming various media, and generating some amount of my own content.

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.

And yet, such studies as exist show that this does not, in fact, happen. Did you read the article?

Please elaborate on how you reached this conclusion.

So basically you think it is best (of likely options) that the majority of humans should not have basic needs met so that the remainder can reflect on how free and unenslaved they are. That is quite cynical.

> 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.

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.

Poverty is localized, so you do get outside money into poor communities.

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?

Unfortunately, it is impossible to isolate a community in modern society. One way or another the funds will leak, for example, IS funded income being used by Kenyans to buy Chinese TVs. That money will take a long way to come back to Kenya or US, but there may be a positive net effect even if it doesn't.

Wowsers wrong.

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.

That is what matters to you, it's not the only important way to use this concept. Charity has fucked up the world in many places many times. This is a chance to stop that.

This is missing perhaps the most controversial part of the Universal Basic Income: that it's funded by the same population that it's helping

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.

That's how it was handled in some of Heinlein's stories. The government calculated the value of new goods and services that had become available, then issue that amount of new money as direct payments to the people. Done correctly (yeah, right), that wouldn't be inflationary at all (although it seems like you'd also need some mechanism to claw the money back if the economy shrank).

UBI should ideally be funded by taxes on the savings by coroporations due to automation and outsourcing which reduces demand for local workers. Then it would truly scale with the times.

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 would rather have a world UBI funded by world-level income and capital taxes. The richer countries owe places like Kenya big for centuries of extractive imperial policies.

I would dearly love to see the note I signed to assume that debt.

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.

British colonization of Kenya started in the mid-19th century and ended in 1962. Before that the Arabs and Portuguese were only able to control the coasts. So "centuries of extractive imperial policies" is a bit of hyperbole.

Do the Italians owe the French compensation for Julius Caesar's campaigns? This game can go on forever.

Generally in Western countries, the groups that pay in and take out are quite disparate.

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.

A very similar idea to basic income has been tried and failed miserably because it ends up as employer subsidies.

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.

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

If Y is enough to live on, you might decide X is not enough to keep you doing that job and look for something else.

It depends what you mean my 'enough to live on', because you can live on very little or no income, but you won't live well. At our current state we cannot provide enough for everybody for free, this might be possible in the future, but not for the next 50 years. Basic income does not fit well with our current system, it would be wiser to invest that money into useful projects such as free healthcare, education, transportation in my opinion.

That's the thing about the Universal Basic Income, the "controversy" is always phrased in terms of: "Oh but will this really help people?" or "Oh, but people will just sit and do nothing and that's not good" and always carefully avoids: "Hey, who will pay for all of this?"

I have never witnessed a single discussion about basic income where "Hey, who will pay for all of this?" isn't practically the first question out of everyone's mouth. Stop framing the discussion as underhanded/deceptive.

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