Basic Income Research Proposal
basicincome.ycr.org
basicincome.ycr.org
* Direct stock ownership depends on the company growing, not failing, not being bought out, etc. * Mutual funds depend on the fund manager not going under / properly managing assets. * Bonds depend on state institutions honoring them. * You can't really save for retirement in a bank because their rates of return are below inflation. You lose money in banks. * Hoarding fiat is obviously bad. * Any asset you would try to store long term is subject to market volatility at the least and potential obsolescence at the worst. You simply cannot guess what anything will be worth decades from now.
The current US administration knows full well that throwing tens of millions of people off insurance will probably cost them the disenfranchised working class that elected them in the first place and lose them their majorities in congress and the presidency. I fully expect them to stab themselves in the foot with this, since a lot of monied interests benefit from the absurdly inefficient default state of healthcare where many people depend on emergency rooms for all problems, but in the same vein repealing social security would destroy their voting base unless they made it a grandfathered in shutdown where the next Democratic administration could just reinstate it and nobody on benefits would lose benefits.
Err, no. This is not a risk of properly structured mutual funds. The manager does not directly hold assets - they make decisions about what to do with the assets, which the custodian executes. And the fund's management has no recourse to the assets held by the custodian. How the fund goes under is if the assets they hold go to zero value.
There's still execution risk, though, which is why passive management is ideal. I'm pretty sure VTSAX can successfully hold a market-cap weighted mix of the 3600 largest US firms pretty much indefinitely. The risk is that the largest US firms stop being generally profitable, like what happened in Japan.
"Democrats promising $30K BI? Well we're gonna do $35K!"
You keep referencing ACA, but there is currently a new bill to repeal it: https://www.lgraham.senate.gov/public/_cache/files/06822f49-...
Even if we guarantee some sort of income floor, there will still be those who, despite that guarantee, need additional assistance. Whether it's because they have more children than the average, are irresponsible with spending, are victim to a drug habit, unexpectedly lose their jobs, or succumb to medical debt, we have to come to grips with the idea that UBI won't be a cure-all.
Even if we acknowledge (and not all will) that most people who are dependent on safety-net assistance are perfectly good and responsible, depending on what the amount is, what their life circumstances are, and a myriad other factors, I don't think we can take it for granted that UBI obviates those specific-purpose programs for the remainder of those who need assistance and for whom UBI is not ideal.
Put bluntly, there are people who will take the entirety of their UBI check and spend it on stupid things, and end up without money for food, or for their childrens' health. What are we to do about them?
Why do you think it's impossible to encode the mechanics of a pension in a smart contract-based system?
1. Pensions don't currently work like this
There are many thousands of different pension systems across the world.
It stands to reason that you could create new system, and if it had significantly attractive advantages, people would use it.
2. Trusted oracles are a problem
Yup, we need more decentralized services that smart contracts can take advantage of. Wait a few years, they're coming.
3. Smart contracts are only useful for deterministic changes
Making deterministic change is precisely what you want. Do you mean statically defined? Because that's obviously not correct. And are you considering a new system specifically designed for pensions?
Virtually all innovative technology is "hype" until it isn't. I agree we have a ways to go.
> Making deterministic change is precisely what you want.
Yes, but that's a problem when you have to interact with the real world which isn't.
And you could do new things based on control of your pension, which might radically change how we think of them.
The main thing that smart contracts remove is the need for trust. And that's the main problem with pensions.
The promise that is your pension would be cryptographically enshrined in a blockchain, with full transparency.
And that hasn't really explained how the funding would be there.
If you promise basic income for only 5 years, then I'm probably not going to quit my job and become an artist because I can't be unemployed for 5 years and expect to waltz back into a job. If you promise basic income "forever", then I'm far more likely to retire at 30 and plan to never work again.
* I believe this is the case, correct me if there are any I missed
Seems great, as opposed to just trying to make it while working full time.
Would they, though? That's the key question that I believe this study (and others like it) fail to address. Depending on the basic income amount, I believe it would be possible to live a fulfilling (if somewhat minimalist) life without needing to supplement that income.
With BI I could spend more, but I would still keep on working towards a relaxing financial freedom where money is not a problem at all.
Yes, this requires employer flexibility and the move from 40h->15h per week grants much less freedom than stopping work entirely but masses of people suddenly being content with a minimum amount of money does not sound convincing to me at all.
Living off the basics is pretty dull. Most people who live ascetic lifestyles by choice usually come from a position of relative wealth and choose it more as an aesthetic or affectation than anything.
All in all, I think there are enough people that things would be fine.
Anecdotally my friend is part Native-American and gets 4k/mo from the tribe's casino money and they're bumping it up more soon. She's chosen to be a stay at home mom.
A better question would be, "how many would report their work out of an entire country was offered a basic income?" There are already data points for comparison, when that question is asked.
An interesting question is "can we reasonably automate things that people currently get paid less for than a basic income would be, or will we have to pay them more, and if we have to pay them more, what will be the economic effect of that?"
People on HN are significantly different and not even close to a representative sample. No one at any point is saying that HN readers are better or more moral, but there are huge, huge differences in technical skill, intelligence, knowledge, college attendance rates, social skills, empathy, and so forth compared to an average sampling of the population of the United States. I'll leave it up to everyone to decide which direction the arrow points in the above fields.
You are making arguments against things I never wrote, which is a strawman fallacy.
I took a couple years off a long time ago. I didn't stop working on stuff. Really, if you pay me, all that means is that I work on what you want me to work on, and maybe show up at particular times. It doesn't motivate me to work, it just motivates me to change topics.
I absolutely know people who would never work again. I know other people like me, who do it because they enjoy it. And details matter a lot, and tend to be ignored[1] by simplistic first-principle reasoning.
A big part of this is the ratio of those, and how quickly the number of jobs drop. I would fully expect this sort of thing to need tuning as it goes - I personally see the biggest change being a sudden explosion of people with lots of free time. Just as a tiny example, what does this do to the video game market? What about dry cleaners when fewer people wear business-drag?
Anyone who makes confident predictions based on econ101-style reasoning is simply dressing their politics up in an argument from authority.
[1] What does assortive mating look like under such a scheme - how much status will holding a job gain? Is the income set at an "uncomfortable" level, how will that change over time, what sort of barriers (class, academic, opportunities, etc.) will grow up around it? Are there any incentives to do something useful, even if it isn't what we think of as a 'job'?
Details really matter.
Generally speaking, this would probably be the most efficient use of UBI: you trade it all away as soon as you exit college and invest it in something. I can see whole branches of financial and life insurance services growing out of this market.
I do realize that by this point this would be hard to hide.
The whole point about Basic Income (at least the unconditionally one) is that there are not going to be any jobs (or very few and only for highly talented people). And even if there are jobs it will always be worthwhile working (as long as it's unconditional)
So if you, like me, believe that's the case, the whole discussion about whether people want to take a job or not becomes moot. It doesn't matter if they would have, they can't.
A much more important discussion then becomes how we make it work financially.
If there are no jobs, it will be because we designed it that way, not because it was inevitable. Tech giants proposing basic income as the solution to their lazy lack of desire to figure out how to better distribute work tell glowing stories of how lovely it will be for low paid workers to get this extra money. They never actually explore the scenario they are actually proposing that all you get is $10k-$20k and you have little or no hope of getting a job at all ever again.
That would be a dystopian nightmare and I think it is likely to end in bloody revolution.
Lots of hopeless people with nothing but time on their hands who are being completely fucked over by the system with no way out of this black hole but just enough money to keep eating well, even if they are living in a tent, sounds like a recipe for creating a well trained guerrilla army.
Technology isn't inevitable but to the extent that we wan't to reap the benefits of it is. In other word, we aren't designing anything other than our own replacements.
With regards to how SV tries to paint it thats a different discussion and have nothing to do with whether it will happen or not.
It doesn't have to be dystopian (ex. Post scarcity society) but until we get there it's going to be worse not better for a lot of people.
But I would challenge you to come up with an alternative that by and large at least compete with the reliance on technology.
The problem is that no specific part of the whole system is responsible and everyone in the system is more or less acting rationally.
So I fundamentally disagree it's not inevitable (with the above context considered)
Actually, I have. I was homeless for nearly six years until earlier this month. I am medically handicapped and can't work a regular job. I was a homemaker for a lot of years, I had a corporate job for a few years and I currently do freelance writing, resume editing and I blog, which gets me a little money via ads, tips and Patreon.
UBI will solve nothing as long as we do not have universal basic health care and affordable housing. If we establish universal basic health care and create sufficient affordable housing, then the last piece of the puzzle is redistributing work. We did this once before under very similar circumstances where automation was "taking our jobs."
It was called The Industrial Revolution. It gave birth to the 40 hour work week, overtime pay and unions.
If work is structured properly and you can get a cheap SRO or similar somewhere and not have to worry about medical bills, you can cover your basic living expenses working part time. If it is well structured where you work as little or as much as you want, then people who are unambitious hedonists or who have personal burdens, like chronic health issues, can just get by without it being a dystopian horrifying black hole that seems inescapable. Folks with more energy and/or more ambition can work harder and do more with their lives.
I have written a number of pieces laying out the details. Some are listed on this page of my old blog:
http://micheleincalifornia.blogspot.com/p/ir2.html
But I don't imagine you are actually interested. That "challenge" was most likely intended to mean "Shut up. It isn't like you have a solution."
You completely ignore that there is no need to structure work if I don't have to hire people to produce or develop my products. This is the whole point and why I believe you are fundamentally looking at this wrong.
The industrial revolution replaced physical work, this revolution is replacing intellectual work.
You are betting on some political/ideological/moral change in people, not actually addressing the points I was making.
I am not betting on a political, ideological or moral change. Whether we establish a UBI or go with something akin to my above proposals, these are equally political solutions. Neither will happen without a great many people working to make it happen.
The only question is what kind of future do we want? I think UBI makes no sense and will not work. Universal basic health care would be vastly easier to implement, if only because it has already be done in multiple other countries, so we have models to borrow from. Yet, people think that is a bridge too far and will not happen.
So, to me, the good news is that UBI is unlikely to happen and Gig Work is already on the rise, such as Uber, writing services and delivery services. The challenge here is just getting the word out that such services need to be a win-win scenario for both company and workers.
I am already living this reality. Gig Work has been an ideal solution in the face of a medical situation that makes a normal job not work for me. So, I know firsthand that Gig Work can be a terrific option for the worker if it isn't designed to screw over the little guy.
That can totally coexist alongside factories with very few workers. The rise of the machines does not have to be a terrible thing for humanity. The Industrial Revolution raised standards of living and quality of life across the board. There is no reason The Second Industrial Revolution cannot do the same.
But we do need to set that as a goal and work towards it. My only real concern is that, currently, some very rich and powerful people do not see the 99 percent as actual human beings. They see them as sheeple. And the solutions that grow out of such contempt tend to be self fulfilling prophesies that force powerless people into the narrative imposed on them from high.
I am intersted in hearing actual solutions not wishful thinking based on the idea that humans decide themselves when we obviously don't.
If you want to argue that then I have already asked you how that would happen given the reality we live in.
Gig-work will also be replaced by technology either through digitalization or automation.
95% of jobs created since 2010 are temp jobs i.e. part of the gig-economy, that's obviously not sustainable as there isn't any rise in salaries while as I said the cost of living is rising.
So again unless you believe that technology is not going to take the jobs
If you were genuinely interested, you could read the multiple articles I have already written and linked to. I don't think you have bothered to do that.
I see no reason to engage further.
However, I really don't think UBI is the answer. I don't understand where the money will come from/who will do the leftover work. I think we should continue to cultivate an innovative society and new types of jobs - more appealing I think - will be created.
I do a lot of "light one candle rather than curse the dark" type projects. I try to promote things that already exist (like gig work) that I think work. I do my best to get such info into the hands of people who seem hardest hit by the societal growing pains we are witnessing.
It can be hard to measure the results of such efforts and it can be outright impossible to prove to others that it makes a difference. But, I have had experiences* that convince me that it does make a difference, so I persist.
* http://micheleincalifornia.blogspot.com/2016/08/for-just-few...
What fundamentally new jobs have we really seen the last 100 years besides computer engineer and how many people does that industry actually occupy. As it turns out not a lot.
Everything else is just a more refined version of things that already existed in some form or another and rapidly being replaced by technology.
Which part of it? Not too many generations ago, many people lived entirely off the land. A large portion of people's "jobs" were displaced from agriculture and yet over time new jobs keep getting created. There are jobs that no one had even thought of that are now providing for the livelihood of many people.
Yes I believe there will also be new things that people want and new ways that other want to help them get it that will keep fueling the economy. There are things that are inaccessible to many people now that will become more everyday and "middle class".
> Unless you don't think computers will be able to do most of the things that create fundamental value in society.
No not at all. Of course I think automation can keep getting better but there are plenty of jobs that I don't see computers doing anywhere in the near term - building a house, paving a street, cooking food, being a nurse, being a garbage man, etc etc.
> What fundamentally new jobs have we really seen the last 100 years besides computer engineer...
Um seriously? I know people who literally are "social media managers". I know people who sell eBooks for a living or do Youtube. I know folks who attempt to at least live off the music they make.
These are just "new" jobs that no one could have envisioned before. But think of all the greater demand there could be existing jobs. I have a friend in Fiji and apparently there nearly everyone has a housekeeper, even "middle class" people. There is a demand for stuff like that even in America - people keep pushing toward whatever improves their standard of living as long as they can afford it.
Technology is growing fast but its far from the only thing desired by people.
New jobs keeps getting created simply because the markets have grown through population growth and globalization. If you look in the US out of all the new jobs created since 2009 95% of them are temp jobs not structural jobs. Temp jobs means that the job is being perceived as less valuable (no healthcare) than ex a structurally solid job. The actual market value of most jobs is diminishing. At the same time cost of living is going up up up.
The jobs no one have thought of are literally a drop in the ocean. They pay a few people very well while 90% don't make a dime on them. And they are only "new jobs" in the sense that they are about a new medium or technology. But fundamentally nothing new about them.
The problem with most jobs is that they don't actually require the whole human only a small part of the humans abilities. Unless you don't think technology can replace that function I have a hard time seeing where you get your view that it's not an actual problem from.
Technology allow you to be competitive which mean you need to keep investing in technology to be competitive. Yet income is actually declining and cost is going up.
Here is an interesting graph showing price change:
https://twitter.com/hnshah/status/909557796873662464/photo/1
How is that an illustration of things becoming more accessible? Unless of course you mean that TV series covers people fundamental needs.
No not at all. Of course I think automation can keep getting better but there are plenty of jobs that I don't see computers doing anywhere in the near term - building a house, paving a street, cooking food, being a nurse, being a garbage man, etc etc.
Yet there are already technologies doing that today. This will only increase over time.
Um seriously? I know people who literally are "social media managers"
Social media manager are just marketing people in another medium nothing new there. Selling ebooks is just selling books in another media. these aren't actually new types of jobs and it's a very very very small fraction of society who actually make a living from these. You can't live on likes.
The benefits of technology is desired by people and thats what matters here.
How many people and jobs are we talking about, if these are the jobs expected to support the vast majority of the populace? And on a related note, why would these people not feel resentful that (by necessity) a major chunk of their earnings is directed towards everyone else?
Assuming that humans will behave differently and be driven by different things than they have _for millenia_ is foolish, and why BI will never work.
Thats the proper perspective to understand this discussion, not pointing back to a few thousand years of human civilization, unless of course you claim that humans is the last word in evolutionary process.
If you (like me) believe technology will take over most jobs then (U)BI is so far the best model we have as it will always make it worthwhile to work.
UBI is going to be treated just the same as a tax break for the poor and likely to stay at very minimal levels.
And in that context you see various growth and cuts over time.
However, even that is misleading as richer society's have a higher percentage of discretionary income and may be willing to pay higher tax rates.
Nobody thinks it's important to add street lights in the middle of corn fields. But, cities have had various forms of lighting over time and increasing standards for lighting levels from the 1400's to now. US street lights for example could be perfectly useful for walking if they where 1/10 as bright as they currently are which would significantly reduce associated costs.
Historically, rates where vastly lower. But, people also got vastly fewer benefits from the government. https://en.wikipedia.org/wiki/Taxation_in_medieval_England So, YMMV.
PS: Anyway, if inflation adjusted medium income was say 10x as much I could see people tolerating 70% tax rates as their take home pay would still be significantly higher than we have. AKA if average person make 500,000$ in inflation adjusted dollars then they might be ok with an after tax take home pay of just 150,000$ / year on average. But say government provided self driving cars and underground tunnel networks.
If USA would pay UBI I would do my best to somehow become citizen, there is no reason for me why I shouldn't try. And there are over 7 billion people on the planet, I'm not the only one who thinks that way. That is why I raised the question of borders/immigration + UBI. It's very different situation when it is now for illegals and also people who want to become citizens.
In combination with open borders, you do risk having a class system, where the citizens have money and immigrants don't, but at the same time, it solves the issue of certain jobs not being worth the time of someone who gets UBI (and therefore being for immigrants).
It's a tough balance for sure, and one of the main arguments against UBI (accidental creation of a class system).
I remember working somewhere where I was being tested before getting into this system and I met plenty who said they were heavily advised not to go back to work by their doctors. They want to do /something/ because being at home watching TV gets boring after half a year. So they were sent to that place in the meantime. I have other friends who are in this system who end up working in charity somewhere.
But most of my friends i met in this system ended up finding a job, despite being promised permanent "universal income".
In the past if you tried to work somewhere while being in this system, and it worked but you got sick again you'd have to reapply (which is a very long process) but now it's changed so it acts more as a safety net in case working somewhere doesn't work out for your health. I've heard this is to encourage people to work and I've heard (from the people who work in the system) that it's successful so far.
Just about everyone I know would start a business, volunteer, do creative things, contribute to making the world a better place.
But, at the end of the day, I don't care how people spend their time or their money. If some fraction of the population wanted to bum around on their minimal UBI for the rest of their lives, fine by me. It's never going to lead to a life of luxury, and I quite honestly don't care if that's how they want to waste their lives.
Funding my fellow countrymen who want to squander their lives, so long as they're doing so peacefully and in the privacy of their own homes? Sign. me. up.
So this experience stands against one of the most common arguments against basic income, "nobody is going to work anymore". It validates my belief that people will still seek purpose (and monetary rewards) even when their basic needs are fulfilled.
> I've heard this is to encourage people to work and I've heard (from the people who work in the system) that it's successful so far.
Always good to hear of policy that's actually working. At times, watching the news makes it feel like all of politics is just a smoke and mirrors game without any positive outcomes.
I feel a lot of people on here want to be or are already an entrepreneur. So of course your friends are most likely gonna start a business if they had the time, opportunity and safety net. But maybe that's enough?
Another thing I hear a lot from people in this system is saying they wish they had more money and wish they could do something to earn more. (But then again I think this is always the case)
The money we get is based on some average income. It's enough to pay the rent for an apartment, save up a little to buy a TV, maybe even a trip to another country if you're careful, etc.
I don't think it's enough to own a car, buy a house, have kids, etc. To live that kind of "dream" you need to find a full time job. Which sounds fair within the UBI context but maybe unfair if you're disabled. (I personally don't know, my own life is more than good at the moment)
I should have mentioned that there's a social stigma with not working (at least in Norway). Many of my disabled friends are not very open about it because they think it's embarrassing. I have one friend who choose to work at charity-ish place just so he can say he's working. He's 40 years old though and I believe the stigma was much stronger back in the past.
Personally if people ask what I'm doing I tell them that I'm disabled but I like programming, making music and so on. I've never had anyone react negatively to this, but this is face to face, first time we meet, and maybe the non disabled people I meet have similar mindset as me. (programmers, freelancers, artists, etc) The friends I have who are disabled is another friend circle entirely.
So I don't experience the stigma but I can imagine there are some people who don't like it of course. It's just that I don't hang around those people.
But this stigma could be an important factor as to why people want to work.
I feel like I'm talking for https://www.nav.no (the system in Norway I'm talking about). Maybe they have more useful (and more accurate) data for the people who research UBI.
They can't claim to know how people will behave if it is a lifetime, but evaluating some change is better than evaluating none.
In that case, you're going to have to be content with a thought experiment, because there is no entity that can credibly make such a guarantee.
When there's a cultural shift to a UBI, that's not going to vanish overnight just because of an election cycle.
Its true that its easier to add than to remove. One solution to that would be to tie adding it to removing something else.
So with this time frame I believe initial ideas of "I'm going to put this to savings" will quickly disappear. Five years is a pretty long time, especially when considering at how bad humans are at preparing for the future.
What I think will be interesting is to see the different spending trends over time. I would imagine the first and last years are different than the middle three. But that's just a guess.
[1]
What I'm saying is that if even those above the 50% income level are bad about saving a basic emergency fund, I don't expect those receiving this kind of grant to be any better at preparing emergencies. I do think they will be able to handle them better, but I do not expect them to plan better.
The point isn't that the lower can't save, it is that people above the median income still don't save. These people should be able to save, but don't.
[1] https://www.census.gov/data/tables/2017/demo/income-poverty/...
- A small amount of free money for everyone
- Rollback the state, welfare programs, etc. to balance out step 1
It's not realistic to reason about the effectiveness of the UBI proposal without considering the effects of the second step.
I don't blame them. They just never had seen what people who have a job do. When I grew up everybody close to me was working so I could observe how a job works. And people who grow up around high-powered people like CEOs know how being a CEO works.
Your comment reads to me as an implicit argument against UBI. Is that your case?
Allow to me comment from an insider perspective.
- The welfare money didn’t cause the lack of work. They were not strongly related or if anything it’s the lack of work that drives the need to take up welfare.
- It’s likely an extremely small minority of children in welfare-assisted families who see zero closely related adults working at all.
- People who grow up without working role models do have a harder time learning the ropes on the work life, on that we agree. That doesn’t mean they’re doomed to fail completely. (Saying this as someone who had no idea how to do this right but eventually learned, went through grad school, now works in tech, outearns the median income in her city, etc). Also how do you explain the many underemployed/unemployed/deadbeat kids of successful high-status parents? The connection seems rather spurious to me.
- Taking away the welfare money would do nothing to get someone employed. Instead it might endanger the family’s life. You realize that right?
"People who grow up without working role models do have a harder time learning the ropes on the work life, on that we agree. That doesn’t mean they’re doomed to fail completely. "
People certainly can escape their upbringing but from my observation on average most people stay close to their social class. That doesn't mean that some won't do much better or much worse than their family.
That disincentive goes away with UBI, which is the main reason I think it would work better. Under that system, every dollar you earn directly translates to a better standard of living.
I also know more than a few 1st-generation 'trustfunders'. Some are artists, some scientists, a couple work as university professors. They certainly are all doing useful work, right?
Just look at HN as a case study. There are many people here (myself included) who could live off of their savings indefinitely. In fact, I've tried a few times. But, as others have pointed out, sitting around doing nothing is dreadfully boring. Once one removes the usual daily stressors (e.g. being able to pay for rent, food, kids, etc.), escapist behavior quickly grows dull. Believe me, when not required to manage stress, there is only so much Netflix one can watch and only so many video games one can play.
I wouldn't worry about the vast majority of Humans doing nothing. People just do stuff. It just means changing perspective of what is valuable work. There are many types of work that are valuable to Humanity even if the market can't support them.
Edit: just want to add that I would be concerned by younger adult males forming gangs. Their PFC's aren't completely formed, and they have raging hormones. In Christian western countries, it's a common saying that "idle hands are the devil's workshop". And, I find that true. So, young adult males, with nothing to do and risk-taking brains, tend to get into trouble.
And non-technically-inclined people with savings could help by promoting, documenting distributing, training, prettifying, and providing other support for such systems.
And yes, I've put all my spare resources into that kind of FOSS technical work myself (although at the moment I'm once again working for pay to climb out of taking on debt to finish another FOSS project done with my wife -- this one called NarraFirma).
Related by Alan Kay: https://news.ycombinator.com/item?id=15261691 "In the interview -- to say it again -- I'm not calling for the field to implement my vision -- but I am calling for the field to have a larger vision of civilization and how mass media and our tools contribute or detract from it. Thoreau had a good line. He said "We become the tools of our tools" -- meaning, be very careful when you design tools and put them out for use. (Our consumer based technology field is not being at all careful.)"
See also "The Skills of Xanadu":
Printed: https://archive.org/stream/galaxymagazine-1956-07/Galaxy_195...
Audio: https://archive.org/details/pra-BB3830.08
And yes -- a Basic Income would make that possible for everyone someday. But if you can live that way now, why not help create a more joyful and sustainable alternative right now? Isn't it plausible that our direction coming out of any Singularity may have a lot to do with our moral and technical infrastructure going into one?
(Obviously, there are some paying jobs that align more closely with such ideals, but they tend to be few and far between, and if you have savings and take one, you displace someone else who might not have your options.)
Also related by me on basic income: http://www.pdfernhout.net/basic-income-from-a-millionaires-p... http://www.pdfernhout.net/towards-a-post-scarcity-new-york-s...
Reason for this is simple: successful project it's not just the code, but also community around it. Coordinating even small team across different time zones, helping new contributors, reviewing the code and keeping it all together is exhausting daily job and not everyone can handle that. Now projects that you find valuable would require highly skilled programmer to work on them.
So the person it's require to build such software can easily find a job in one of corporations that pay very well or FOSS-related job that might have lesser pay. Why should someone prefer to live off savings or in debt just to build software that don't have business model?
This is the reason I don't think basic income would help here at all. Of course some could be okay in living just above poverty while working on project they believe in, but most would prefer job for some corporation that would have have 3-10 times better pay.
So instead of basic income there should be viable way to fund open source projects and to distribute the pay fairly according to the job done. For individuals and small teams there is already Patreon, but there no simple solution for distributed teams usual open source project have because it's extremely hard to collect and distribute the money without offending someone or contributors lose motivation to work on project when one guy is being paid while they get nothing. Unfortunately I don't even sure if ever will be solution for this.
Where we differ regarding the BI and FOSS is possibly in thinking in these areas:
* There are many small but important projects (Mithril, Vue, many others -- even Linux early on) which are initially the work of one developer, eventually supported by a community. A BI would make more such starts possible, and also make contributions more feasible. While it is not quite "if you build it, they will come", certainly there are a lot of cases where a good project, well supported by one person, makes a big difference to a lot of people. Khan Academy in its early years is another great example of this.
* There is an entire gift economy of volunteerism. In some ways, much economic activity in even the USA is voluntary (even if it is ignored in the GDP) when you consider child care, helping neighbors, volunteering at non-profits, conversing with strangers to share knowledge, and so on. So, I know it is possible.
* Regarding "most people" and "some people": If you multiple seven billion people on the planet times even 0.1% of people being civic-minded at any particular time (and the percentage is probably much higher), then you get 7 million people. That is still a lot of people who can put a lot of time into things. And even without a BI, Clay Skirky said, there is a lot of time that could be liberated for improving free software and free content: https://web.archive.org/web/20110102193349/http://www.shirky... "Two hundred billion hours [of TV watching], in the U.S. alone, every year. Put another way, now that we have a unit, that's 2,000 Wikipedia projects a year spent watching television. Or put still another way, in the U.S., we spend 100 million hours every weekend, just watching the ads. This is a pretty big surplus."
The bottom line is that the way people make a lot of money is by standing between someone and something they want and asking for a toll to access that thing. Almost all venture business models are based on some variation of that (or aspire to that such rent seeking). It's not the only way to make money, but it is the way to make a lot of money. The problem is that tolls have lots of external costs. For tolls at bridges there are delays, health costs of fumes, and increased risks of accidents. For online software, there is the externality of lost privacy (but only one-way, consumer to aggregator) needed to make possible the tolls Google and Facebook charge advertisers as they sell human eyeballs. There is also the externality of risks from central points of failure (whether loss of service or censorship).
Small-scale exchange commerce may make a lot of capitalistic sense at the scale of, say, running a local farm, bagel shop, or plumbing company. But on a large scale, like Facebook, Google, Slack, and so on, the centralization of control of information flows poses enormous risks to democracy.
If there was not so much regulatory capture, we might expect our governments to pour literally trillions of dollars a year into software (and content) for democracy right now given how important that is. Instead we have a proprietary centralized Facebook, Google, Twitter, and even Windows -- and our democracy and culture is at great risk from an imbalance of power. Governments at the behest of content publishers have continually expanded copyright and passed ever more draconian laws about sharing information. And every day we get more funding pouring into the next venture (like Slack) that can figure out how to capture and centralize more information and data mine it for the benefit of the investors.
For a latest example of how Slack continues to invest in data minining alll the secrets of coprorations: https://medium.com/@noah_weiss/starting-up-slack-s-search-le...
As we move into an age of AI, the emphasis on monopolistic business models is even more dangerous. It's bad enough to have a communications system shaped by short-term greed and competition -- it is far, far worse to have autonomous inhuman AIs shaped by short-term greed and competition let loose on the net.
I wrote an essay relate to such funding trends over a decade ago, with a section on automotive intelligence: http://pdfernhout.net/on-funding-digital-public-works.html#w...
Of course, ultimately, there are lots of moral failures all around. If people had rejected Facebook or Slack from the start, the world online might be a very different place.
But, in the words of Marc Zuckerberg: https://en.wikiquote.org/wiki/Mark_Zuckerberg
Zuck: Yeah so if you ever need info about anyone at Harvard
Zuck: Just ask
Zuck: I have over 4,000 emails, pictures, addresses, SNS
[Redacted Friend's Name]: What? How'd you manage that one?
Zuck: People just submitted it.
Zuck: I don't know why.
Zuck: They "trust me"
Zuck: Dumb fucks
But how do we impeach Facebook, Slack, Google, or Equifax? In our society, we can't. The best we can do is create alternatives.
Instead of centralized proprietary services like Facebook or Slack, we could instead have shared standards (e.g. email, IRC, or what comes next) and a variety of implementers of those standards. But if all the techies are being paid by VC to work for Facebook or Slack or the next similar service, that creates a vacuum of developers working on better email or better IRC standards (and implementations).
We may benefit from some hierarchy, but we also benefit from having that mixed with some meshwork (as Manuel De Landa suggests: http://www.t0.or.at/delanda/meshwork.htm ).
There are several options for moving forward -- a Basic Income is just one of them. Maybe there can be better business models that affirm democracy. And maybe there can be more court rulings protecting democracy. And maybe there can be more collective investment by government and foundations in FOSS. (One other place I suggest that is here, suggesting the intelligence community fund FOSS intelligence tools: http://web.archive.org/web/20160508005451/http://pcast.ideas... ) But we may not get there if we believe a conventional rent-seeking business model is the only way to fund most software and communication services.
* First of all I don't think that important projects started by single developer is right example for benefit that BI could bring because they managed without basic income in past and they don't need it today.
If project don't get enough traction during period when project originator actively work on it that's usually mean that will never happen. But if original developer leave there still chance for someone else who believe in idea to take control or just fork it and continue. Also this rotation seems like one of crucial parts that make open source successful.
So while BI would let someone to work on the same code indefinitely or at least much longer than now I don't think that will greatly increase number of popular and widely used open source projects. And who knows might be it's will even decrease that number.
* Another note about voluntarism. It's great that in developed countries there is endless number of ways for society to participate in all kind of useful activities and I wish it's was even remotely close in country of my origin. Though for the reasons stated before I simply don't believe that crowd-sourcing can be applied to build successful software projects. You might say that community can go promote software instead of helping with development, but today you can't even promote project efficiently using centralized tools we have simply because companies companies like Facebook and others want you to pay for that. Number of communities outside of centralized social networks is dwindle over last 10 years.
So I wish to think positively, but so far all I see is that distributed FOSS projects cannot successfully compete with corporate or VC funded products. With direction where Internet, hardware trends, Internet and society itself going I don't see how we going to get more people involved in open source and not less.
But hopefully someone will come up with idea how to fund truly distributed open source teams so they can at least somewhat compete with VC money burning centralized proprietary alternatives. Without that best we can hope for is that open source will keep positions it's have today.
Now, getting 100 software developers top agree to work together on the same project might not be easy ("herding cats"). But it seems doable, as we can point to quite a few projects (including big names like Linux, WordPress, Apache, and Python) where it has happened. And there are even some books out there on how to create and manage FOSS projects.
Granted, those particular big-name projects have also had commercial support eventually -- so we don't know all the details of what might be possible otherwise. But there are plenty of examples of voluntary groups of significant size dedicated to a common purpose (fire companies, sports clubs, historical societies, and so on) so it is not inconceivable the same will continue to happen for software if people have the free time to participate in them.
I know many people who would say it's would be great, but I sure that wouldn't looks so great in practice. If average salary of developer is going to be multiple times above BI the only people who going to stay out of full time job would likely be useless due to their poor skills or inability to work in team.
I saying that from my own experience: I almost left doing my boring freelance stuff to learn C++ and work on project I want to see finished. I still keep doing it because I like it, but living without money is not fun. And I'm crazy Russian guy who used to see poverty all around, but I absolutely don't see how people who used to get at least $70,000/year salary in EU / US would go change it to something like $40,000/year BI.
Also I can't say much about Apache or Python, but other two examples are wrong. Linux become actually successful after corporations backed it while WordPress have massive business behind it: Automattic has 500+ employees and way above 1B valuation.
Participating projects in free time might work for some software, but most of time there is group of lead developers who doing most of heavy lifting and projects wouldn't live without them. And there plenty of extremely boring, but very important work that is critical for security and project integrity, but can't be really crowd sourced at all.
PS: Though I should note that I'm proponent of BI and I feel it would work great as replacement for traditional ineffective welfare systems that either useless or too easy to abuse (I seen plenty of it while lived in the UK). And I sure that BI could give indirect benefit for the society in general, but I don't believe it's what's needed to push FOSS forward.
Linux and WordPress were both started with one or two people, and it was years before a lot of corporate money jumped onboard after they were starting to show success. It took thousands of people who cared about FOSS quietly lobbying for it in the companies they worked for (as I did at IBM Research) and also others to turn that interest into companies like Cygnus and RedHat.
https://en.wikipedia.org/wiki/WordPress "WordPress was released on May 27, 2003, by its founders, Matt Mullenweg[1] and Mike Little,[9] as a fork of b2/cafelog."
https://en.wikipedia.org/wiki/Automattic "Automattic, Inc. is a web development corporation founded in August 2005."
On the commercialization of Linux and how it took coordinated effort to promote it before companies adopted it: https://linux.slashdot.org/story/00/02/03/0039223/commercial... which references: https://web.archive.org/web/20020206225729/http://www.linuxw...
I understand this BI approach may not work for you right now. It may not even work for most software developers right now.
But, as a counter example, there are about eleven million graduate students in the world, many living on about a Basic Income level of funding. That is proof that millions of people are willing to live for years at poverty level wages (or even taking on debt) in order to do something they care about -- even if quite a few could get jobs paying a lot more by pursuing more immediate commercial success. Granted many may aspire to a better paying job as a tenured professor, but any look at the statistics show that is not going to happen for 90%+ of such students. Most of these people in graduate programs are generally not there because they are "useless due to their poor skills or inability to work in [a] team." http://www.richardprice.io/post/12855561694/the-number-of-ac...
See also: "The Murdering of My Years: Artists and Activists Making Ends Meet" by Micky Z. From the book blurb: "Mickey Z. considers work a 50-year fugue from which some people awaken to wonder what has become of their lives. In The Murdering of My Years, cabbies, waitresses, clerks, telemarketers, and an array of others tell how they balance activism and artistic production with the daily struggle to make ends meet. Contributors’ essays are at once absurd and poignant; captivating and strange. Collectively, their reflections challenge the myth of the American work ethic and exhort readers to advocate for themselves in the workplace."
=== A tangent on what I want to do, making public intelligence tools for civic sensemaking, and how a BI could help
Here is a different path to a similar place instead of a BI, but it is much less compatible with our current economic system: :-) https://web.archive.org/web/20090219001429/http://whywork.or... "It is now possible to abolish work and replace it, insofar as it serves useful purposes, with a multitude of new kinds of free activities. To abolish work requires going at it from two directions, quantitative and qualitative. On the one hand, on the quantitative side, we have to cut down massively on the amount of work being done. At present most work is useless or worse and we should simply get rid of it. On the other hand -- and I think this is the crux of the matter and the revolutionary new departure -- we have to take what useful work remains and transform it into a pleasing variety of game-like and craft-like pastimes, indistinguishable from other pleasurable pastimes except that they happen to yield useful end-products. Surely that wouldn't make them less enticing to do. Then all the artificial barriers of power and property could come down. Creation could become recreation. And we could all stop being afraid of each other. I don't suggest that most work is salvageable in this way. But then most work isn't worth trying to save. Only a small and diminishing fraction of work serves any useful purpose independent of the defense and reproduction of the work-system and its political and legal appendages. ..."
As I see it, 99% of commercial programming every year is not needed -- and worse, just makes work for other programmers supporting poorly implemented redundant garbage code. Really, how many accounting systems do we need? How many online shopping systems? How many medical records systems? How many email systems? How many EDI standards? How many programming languages? How many OSs? How many libraries for basic embedded control tasks?
I'm all for diversity and experiment and playfulness and for everyone who wants to learning to code and writing their own applications, languages, and OSes for fun and self-education and even some personal security in knowing for sure what the code they use does because they wrote it. But, at the same time, as I see it, almost all commercial programming done today is completely unneeded (or 100X harder than it should be) compared to if we had a few solid agreed upon standards that were well thought out and implemented in FOSS and maintained in a cooperative way which supported flexible adaptation. (See Alfie Kohn and "The Case Against Competition").
But we have the mess we do because of vast amounts of commercial competition introducing vast inefficiencies into the software development process because programmers were not allowed by their companies to cooperate and coordinate with other programmers in different organizations. For example, Microsoft sabotaged the web and JavaScript for along time via "embrace, extend, and extinguish". https://en.wikipedia.org/wiki/Embrace%2C_extend%2C_and_extin...
Are we really that much better off now as software developers than when people were, say, running Rexx under an IBM VM in the 1980? http://www.rexxla.org/rexxlang/mfc/rexxadv.html Or, better even, using Smalltalk? https://archive.org/details/byte-magazine-1981-08
For example, in my opinion, most application software has gone downhill since Smalltalk-80 and the 1990 version of "Analyst"... :-) https://groups.google.com/forum/#!topic/comp.lang.smalltalk/... "... The Analyst Spreadsheet (which was also sold as a separate package) was simply the best. Cells could contain arbitrary Smalltalk objects, and formula were arbitrary Smalltalk code. When we showed people things like image manipulation within spreadsheet cells or computing inverses of matrices containing fractions and/or complex numbers, they often could not believe what they saw :-) ..."
I'm trying to recreate that sort of thing two decades later in JavaScript as FOSS in my spare time from descriptions... And more, perhaps crossed with HyperCard, Augment, Thunderbird, a Federated Wiki, Diaspora, Matrix.org, MatterMost, SEAS, Angler, IBIS, and a Semantic Desktop. My latest version exploring some ideas (still a long way to go): https://github.com/pdfernhout/Twirlip7
I am doing it for these sorts of reasons: http://web.archive.org/web/20160508005451/http://pcast.ideas... "This suggestion is about how civilians could benefit by have access to the sorts of "sensemaking" tools the intelligence community (as well as corporations) aspire to have, in order to design more joyful, secure, and healthy civilian communities (including through creating a more sustainable and resilient open manufacturing infrastructure for such communities). It outlines (including at a linked elaboration) why the intelligence community should consider funding the creation of such free and open source software (FOSS) "dual use" intelligence applications as a way to reduce global tensions through increased local prosperity, health, and with intrinsic mutual security."
Also related: "Alan Kay is still waiting for his dream to come true)" https://news.ycombinator.com/item?id=15261691
I've worked on successful commercial and governmental intelligence systems before so it as not quite as far-fetched a stretch for me to do that as it might seem. But I still need to earn a living, so it has to be a spare time thing right now. With a BI for everyone in my family (so, BI x N), I could have been doing that full time (or at least, a lot more than now) for many years -- rather than my current pattern of earning money working for others to to buy my own free time to do such projects.
So, imagine 100 dedicated programmers willing to live on a BI to make something like that that happen. It might be an organization similar in spirit to, say, Project Vote Smart (but without as much drama or a physical site) which has 40 lowly-paid interns (again showing there are people willing to make that financial tradeoff): https://en.wikipedia.org/wiki/Project_Vote_Smart https://www.glassdoor.com/Reviews/Project-Vote-Smart-Intern-... https://www.glassdoor.com/Salary/Project-Vote-Smart-Salaries...
Sure, maybe you would not want to be part of such an effort yourself today. But with a BI, I feel there might be enough people working on it to make a real difference while having a lot of "hard fun" along the way -- people who choose to participate in civic ventures and who would finally have the time to volunteer since they have a BI. And then maybe the result will be the next Linux/WordPress/Apache/Python/etc.. Of course, odds are any specific such project would fail -- or even if it succeeds, it would be ignored. But if enough people can do the same using the free time a BI provides, eventually one such project will be a success, just like for every Linux there were probably 1000s of people playing around with starting their own OSs that never went anywhere. And if our economic system still exists in its current form then, likely companies will come along to commercialize that success and expand on it, same as with Linux.
Of course, without a BI such a project is still possible, in the way Project Vote Smart is possible (via volunteerism and interns and small grants), or Linux or Python or even the early Web got built in people's spare time until finding organizations that supported the main developer for long-term full-time work, or Mozilla exists (for at least another couple of years), or the Chandler Project existed for a time. It was unfortunate to see Mozilla waste literally hundreds of millions of US dollars that could have gone to a FOSS project like this for organizing information (including web content, search results, and email). And it was also saddening to watch the Chandler Project spend millions on an information organizer with not much to show for it and then dissolve -- but at least their heart was in the right place and with 10X to 100X more time and more funding they might have succeeded after going up some painful learning curves. But sometimes it just takes many failures before a success (part of the theory of Y Combinator, for example).
1. The money involved is voluntarily donated, not confiscated from taxpayers - an essential difference between tax-funded vs charity.
2. 3000 recipients is vanishingly small on a state or federal level. When everyone gets their monthly $UBI check, supply-and-demand dictates that "free money" will be duly devalued, with prices of low-end essential goods/services rising to match (say, basic rent rising to $1000/mo).
3. Many who currently produce wealth to make ends meet - paying income-scaled taxes included - may very well be enticed to "go Galt" by seeking a self-sufficient lifestyle where $UBI/mo covers all cash needs without one having to get a job per se. (I find this option quite attractive.)
4. Old aphorism: "tax what you want less of, subsidize what you want more of." UBI implements/enforces this by punishing the productive and rewarding the idle. Yes, some people will use the opportunity to do laudable activities - which won't necessarily contribute to the economy. Yes, some people will use this to bridge current welfare-to-work transition issues - which are better handled by narrowly fixing that bridging problem without having to involve the entire population. Yes, more people will wonder why they're pulling other people's economic weight, and consider the merits of humble low-income living.
5. I realize Y Combinator is in the business of giving money to people to encourage productivity. Methinks they're too used to working with the rare hyper-productive, and don't grok how many people are quite content with low-cost no-effort zero-productivity living.
At first glance this seems intuitively correct, but I'd encourage anyone reading this to control+f my username in this thread for arguments showing otherwise.
Take a low-income area and give everyone $1000/mo for no reason (they're not trading any local productivity for it), and rent & other basic costs will immediately rise accordingly. "Move!" you (and I) say - and the limited supply of inexpensive rural housing (matching UBIers' lack of need for jobs) will likewise rise accordingly, as the market of renters just vastly increased. Over time, low-end housing supply may increase, but now you've a market of homes which rather pointedly do not have jobs nearby - you've just created communities of people absolutely dependent on UBI.
This will be the result of the steady march of automation displacing the human workforce regardless. Furthermore, the lack of a UBI system in a high unemployment due to automation scenario would lead to complete collapse of the market economy.
...unless legislators continue prohibiting people from working if they can't produce enough value per hour. Minimum wage is "debtor's prison" redux.
There's plenty of low-skill low-value jobs I could hire people to do, regardless of technological advancement, if only regulations weren't so oppressive.
Do people care if wages are higher than they should be, according to supply and demand, and causing some underemployment? Even economists don't seem to agree on the effect of minimum wages. Generally, I'd guess people want more pay for themselves, up to the point that they genuinely fear their own unemployment. It seems that both employees and employers prefer to keep wages a bit over the equilibrium level.
It's funny how people have such ideas about who "deserves" to be paid how much. It has nothing to do with supply and demand, making the labour "market" somewhat dysfunctional when judged as a market.
Yes, everybody who works full week should earn enough to make a living. The fact that I'm wearing a t-shirt made in China is mixed up in this in complex ways, but it doesn't change my position.
It's worth noting that Barak Obama, in the primaries, campaigned on a platform of renegotiating NAFTA to not fuck over American workers so hard. Then, after the primaries, that topic vanished and once elected he tried to pass TPP which would've been just as bad for American workers as NAFTA. Then of course Trump campaigned on the same issue, but he's Trump and there's not really anything more to say about that.
I also find this theoretical aspect of UBI quite attractive - the potential for a lot of self-organization into self-sustaining communities of scale in rural, low cost of living areas.
With a large-scale UBI in practice, you'd also have the effect of higher taxes that would claw back the UBI from those who have jobs, as well as an additional amount to cover the UBI for those who don't work.
I still prefer a job guarantee scheme for dealing with under-employment. This gives anyone who is willing and capable of working the chance to earn the minimum wage, and hopefully gets some productive benefit in return.
No, that's not what “supply and demand” says. With normally-shaped supply curves, you would expect priced to increase but not so much as to prevent a net increase in what people who are net beneficiaries can afford.
If you're making six figures, you can make 20 years of UBI in 4 years and stash it in the bank. Why not quit now?
If serious, look into ChooseFI, the FIRE community, etc. It's totally possible to self-fund the transition from your current lifestyle to the one you're describing.
(i) there are others in the same currency area who don't receive the income
(ii) the amount is insufficient to live on
(iii) there are insufficient jobs overall in the economy for all that want them
(iv) it isn't permanent
then all you actually have is a tax credit system with a different withdrawal mechanism. https://medium.com/modern-money-matters/is-basic-income-basi...
The pathologies of income schemes that cause all of them to be degraded and cancelled build up over time as people adjust to the new scheme and work out who is failing to reciprocate.
Overall basic income is theft from workers and will be seen as such by those workers. https://medium.com/modern-money-matters/is-basic-income-basi... They then agitate to have the income removed from those seen as cheating the system.
What we need are guaranteed jobs at a guaranteed living wage, paid for by the state working for the public good. Then private businesses finally have to compete for labour and that maintains the wage share.
People need something to do where they can be of service to others. Not paying off and left to rot.
It would also have to be very librial about borders and illegal immigrants to simulate the US.
I would suggest the minimum size of this nation should be around 15+ million people.
MMT doesn't model fiscal policy as unconstrained in real terms, only nominal terms. And given the legal authority, of course a sovereign issuer is always able to spend. In this case spending is merely typing digits into a computer. This fact doesn't imply deficits/debt "aren't relevant", but rather deficits/debt work very differently for the currency issuer as opposed to the currency user.
At one of our dinners, Milton recalled travelling to an Asian country in the 1960s and visiting a worksite where a new canal was being built. He was shocked to see that, instead of modern tractors and earth movers, the workers had shovels. He asked why there were so few machines. The government bureaucrat explained: “You don’t understand. This is a jobs program.” To which Milton replied: “Oh, I thought you were trying to build a canal. If it’s jobs you want, then you should give these workers spoons, not shovels.”
Disagree, basic income is equitable distribution of a collective legacy of increasingly advanced tools and a necessary recognition of limited natural resources and duty to share a small portion to every human being on the basis of birth into our society, aka social contract.
"Overall basic income is theft from workers and will be seen as such by those workers."
When enough of those producing wealth decide that UBI = theft, they aren't going to just continue producing without pushing back. Personally, if UBI is implemented, I will "go Galt" and move to a self-sufficient homesteading-style life, leaving any cash-requiring activities (like paying taxes) to my $UBI/mo check. That I am a productive person does not mean my productivity will necessarily be taxable; I grew up in a live-off-the-land family, and would be happy to return to that lifestyle if you're going to just take a big chunk of my income just to give to others.
There are enough jobs (yes, there are). Wealth is not durable (you eat a hamburger, $1 of economic wealth turns to *). Encouraging idleness by funding it is an unsustainable economic strategy, because so many people find paid idleness a desirable lifestyle.
You're close, and it's an easy mistake to make since it seems intuitive. However, the reality is that people find THE IDEA of paid idleness desirable. Small N, but everyone I know who has found themselves in that position has only remained idle for a very short time. Productivity quickly returns, although not in the form of trading time for money.
Like most human traits, there is a wide degree of variance. As such there is no doubt in my mind UBI would allow a greater number of idlers because it would be more easily available. Just as it would allow more people to trade a job they don't like for a constructive activity they do.
(I'm not saying that about all poor, but the fraction thereof who are is significant.)
No, they need fulfillment in their life. Do you think flipping burgers at McDonald's provides that?
UBI allows people to not have to work long hours at shitty jobs. That is something that should be praised, not derided as "theft".
I could see this test could serving as a dataset for calculating anticipated inflation rates on a national scale. If money is sent out via a trackable card instead of raw cash, you could begin to extrapolate where this basic income spends would be going, be it consumer products, bills, etc.
Even if it was people's entire household budget being tracked, it'd be difficult to draw too many inferences from spending in the absence of price pressures driven by everyone else having UBI too.
Unlikely. UBI removes the connection between location and income. As a result you can move to somewhere incredibly cheap to live since there's no need to be in an in demand market in order to have a nice job.
Housing is really quite cheap in the US. With Real Estate you pay for the location not the actual land or building.
Of course people won't necessarily want to move away from their "hip" city, but UBI is "basic" and if you want to stay in a high demand area you will have to supplement UBI with work.
As for basic consumables, demand is unlikely to go up for these fundamental goods because people are _already_ consuming them at their basic required levels under the current system (toilet paper, eggs, milk, bread, chicken, beans, rice, birth control, etc).
It isn't that they can't afford to live where they are now, it's that BI will be absorbed by price inflation everywhere.
A big reason for the current rise in real estate prices is urbanisation (centralisation of population in big urban centers) - e.g. London, NY, SF, and plenty other cities. (The other reason is foreign investments, but I'd argue the investment comes after the initial rise in prices, simply because real estate is perceived as a good investment opportunity.) This urbanisation is to a large extent driven by the fact that the most high-paying jobs are available in these cities, which consequently also increases the availability of lower-paying jobs. I.e. people move to cities to succeed/earn money.
If you remove the last implication - if people can earn a living without moving to big, overpopulated cities - then arguably the concentration of population would drop and the "bubble" would pop/deflate.
Housing prices are a function of income elasticity - raising the income for everyone will raise housing prices for everyone. Note - this is not the only way that real estate prices can increase (as you described urbanization), but it is one that BI would cause.
This is a truism but incorrect in the context of this conversation.
UBI does not increase incomes for everyone. It is a wealth redistribution. Many will see their income fall, especially initially, in order to prop up the incomes of the poor and those who decide to live solely off UBI.
What you're thinking about is a negative income tax or some other BI that is disproportionately weighted.
Many people (the wealthy) will have their net income (income after taxes) go down considerably in a UBI system.
For example, everyone gets $12k a year in UBI income, however funding such a system will require a fairly stiff tax increase (this is how the wealth redistribution will occur), so for high earners, their $12k in UBI will be negatively offset by the increase in taxes.
As an extreme example, someone earning $1MM annually will get the $12k UBI same as everyone else, but an (example) increase in the top income bracket from 39.6% to 60% will cause them to pay $118646.4 more in taxes resulting in their net income under a UBI system to go down (-$118646.40 taxes + $12000 ubi) $106646.40.
UBI does not "create" new money and just give it to everyone (which would cause inflation). It's a wealth redistribution. That is, many people will see their income go down under UBI (probably most HN readers for example). The money supply will represent the same amount of wealth, what changes is who owns that wealth and as a result who decides how to use that wealth to consume.
Regarding price changes, price is set by the amount of a good/service demanded by consumers, and the supply of the good/service created by suppliers. High discretionary income does cause the demand for certain goods/services to go up (especially luxuries), but UBI is so basic at $1k per month it won't make much of a change in the demand curve because the type of goods/services that will be consumed by someone living on UBI are so fundamental they are already consuming these goods at the same rate under the current system.
So far as housing is concerned, UBI will pretty much "explode" the supply of acceptable housing for people living solely on UBI since they get access to housing in the entire US instead of having it constrained to locations where they could conceivably "make a living." I'm sure you realize what happens when supply increases drastically but demand stays somewhat constant (everyone has to live somewhere and you can only live in one place at once) -- the price of housing on avg will plummet considerably for UBI'ers.
UBI is Universal Basic Income, meaning that income is increased for everyone universally. Nobody is claiming that money is created out of thin air.
What you're thinking about is a negative income tax or some other disproportionately weighted welfare program.
Increasing the income for the vast majority of the population inflates the prices of income-elastic goods and services.
Again, good luck trying to raise tax revenue 30% without killing the US economy.
You're subsidizing the unproductive, and punishing the productive. I can be productive in untaxable ways.
Under UBI that would be your prerogative. Most highly productive individuals and all corporations will carry on producing.
>You're subsidizing the unproductive, and punishing the productive.
You may have moral qualms with a UBI system. You will need to come to terms with these doubts in the midterm future, as UBI will be the only system (we currently know of) capable of sustaining a market economy in a world where automation has displaced the workforce.
Instead of having to work for that first $1000/mo, it just...appears. Yes it was earned elsewhere, and whoever earned it won't miss it as much as the recipient will appreciate it, but since the recipient has done nothing for it, its local value plummets. Instead of some low-income people having $1000/mo for rent, now everyone has $1000/mo for rent - and basic prices will rise accordingly.
I won't notice much change for losing a sub-1% of my income, but those for whom UBI is really intended can go from really struggling to renting (even buying) housing. With limited housing supply, suddenly prices will rise.
While I'm a staunch advocate of "move already!" for solving economic problems, I don't see enough people moving - nor enough housing for them to move to - to cause "the price of housing on avg will plummet for UBIers".
Imagine the poor section of town. Many/most rent. Suddenly, with no additional productivity, everyone is getting checks for $1000/mo. You think rent etc prices aren't going to suddenly skyrocket? I grasp your theory that people can now move to more affordable locations, not needing to be near jobs - but will they really? before they can, rent prices just shot up, consuming their newfound income. Destination rental prices similarly increase - still relatively attractive, but higher than before since there is more demand and more money to pay for it.
Yes the supply of acceptable housing for UBIers increases, but those markets already existed and were already priced for a low-demand market; now you've "exploded" the demand - prices will rise, matching people who now have $1000/mo and few expenses.
I live near Vancouver, which is the most expensive housing market in Canada. Poor people here have access to free health care, a provincial welfare program, and a permanent disability allowance. The income amount is enough to live on in some parts of the province, but not Vancouver. Still there's a glut of unemployed poor people who prefer substandard housing or homelessness over relocating to where they could afford to live. They don’t choose to live anywhere else, even though they're not in Vancouver to “make a living”.
Programs aimed at helping the poor here focus on providing subsidized housing, not relocation.
It seems to me that if UBI doesn’t help these people afford a better standard of living where they are now, then it won’t help them at all unless they’re forced to relocate. What am I missing?
So its not that the whole housing market just moves up the value of UBI and nothing changes. UBI introduces a new market of houses that currently are unsellable and rotting.
Those are obviously not a long term solution, but the existence of UBI and the economic pressure it produces will incentivize builders to develop the cheapest possible living conditions to supply to people living on UBI. That almost certainly would be an entirely new model of building - constructing for density, but without the limitations of building in already densely populated areas.
You could say, "This is a problem with the current financial system," which it is, but it's not a problem that UBI will solve.
If UBI is enacted, then prices will still inflate and people who purchase foreclosed homes at auction will continue to do so today, because they will also have the same increase in income as everyone else.
If UBI is funded by printing money, people with assets will see them devalue through inflation (people with no assets won't have this loss).
If UBI is funded by taxes, it's likely to be progressive. So sure, the high income people get the UBI check. And a bigger tax bill to go with it.
Even so, if you hypothetically see a decrease in income for 3% of the population and an increase in income for 97%, you still have inflation. 100% of the population purchases housing, which is income-elastic, meaning housing prices will increase because 97% of the population's income will increase.
Maybe it would be funded by magic fairies, who knows. I guess funding it with inflation would be close enough to that.
The point I'm making is that the "universal" or "unconditional" just means that everyone gets it. It doesn't mean that everyone is better off after it is put in place, because there will be tax and economic effects from putting such a thing in place.
This is why traditional welfare programs tend to limit the type of spending - i.e. medicaid or food stamps.
In terms of A, some people would drop out of their current employment. In all likelihood temporarily, but a lot of people are doing things they don't want to do because they don't want to be homeless. Likewise, it would almost certainly not be 97% of people making more money - that kind of progressive tax threshold would mean you don't even start taxing for UBI until 6 figure income.
In terms of B, a lot of areas of the country are currently unlivable for a huge percentage of people because there is no way to earn money to afford to live there. Living there in absolute monetary terms would be cheap, but absolute money is pointless if you have nothing coming in.
UBI reduces demand for housing in cities because anyone that doesn't want the added income from living there would now have the option to move away. City housing prices are extraordinarily beyond the flat costs of construction and maintenance - the scarcity of work means a scarcity of high demand housing in cities surrounded by deserts of unlivable land.
Finally, for all those dropping out of the workforce, the UBI is not an elastic income - it will be a simple binary can a UBI recipient afford to live in your apartments or not. For those who want an extremely reliable tenant who has a guaranteed ability to pay rent every month, meeting the UBI threshold becomes an extremely strong price ceiling on affordable housing.
Inflation isn't magic. Inflation happens insofar as someone is willing to pay the higher prices and nobody can produce supply to drive the price back down. Introducing UBI does neither to housing (especially when as a percentage of income UBI relative to the cost of home ownership would be a relatively small gain in income for most people, and almost all current homeowners / tenants).
Wealth redistributions don't cause inflation. The money abstraction still represents the same amount of wealth, it just changes who can choose how to use that money to consume.
That said, you'll probably see some radical pricing changes in the market from the new system, but probably not as much as you would expect because UBI will be so limited at first, the money will be spent on absolute necessities that people are already consuming under the current system (ie demand won't go up for toilet paper and basic consumables, and UBI isn't enough for luxury goods).
There exist goods and services with prices that are a function of income-elasticity, meaning that they inflate with the more money that people make (e.g. housing). This is one of the reasons that many welfare programs are targeted spending, like food stamps or medicaid.
UBI does not do this. It doesn't "increase" the amount of money floating around, it simply redistributes a portion of the created wealth from one population (the rich) to the total population. UBI money isn't pulled out of thin air, it's taken from one group (via taxation) and distributed.
Of course prices for certain goods and services will change as a result of this wealth distribution, but to suggest global inflation will occur (ie the value that money represents decreasing within the complete system) is incorrect. Furthermore, while I obviously can't say for certain, I imagine prices for fundamental goods will not change drastically simply because UBI doesn't provide enough money for real discretionary spending. The goods/services you consume under a UBI program you already would be consuming at the same rate under the current system.
If you consider the velocity of money, you will almost certainly see inflation on consumer goods if the money to be redistributed would have otherwise just sat in some rich guys's savings account.
There are also inflation expectation to consider, liquidity traps, the actual demand for money, etc.
UBI alone simply won't provide enough discretionary income to cause sharp increases in demand of goods. Not to mention, the type of goods that a basic income affords are those that are already scaled out and are easily scaled out - ramping up supply would happen relatively quickly in the unlikely scenario that demand for these goods does go up drastically.
As I've repeatedly said in other comments, I believe demand for these simple goods will stay relatively flat since they are such fundamental necessities people are already consuming them and won't necessarily increase demand significantly (UBI won't cause demand for toilet paper to go up significantly).
You're right that the short-term effect of this is indeed inflation on the prices of these needs, but the long-term effect is larger portion of the economy dedicated to filling basic needs instead of superfluous luxuries.
How so? Is there are large number of consumers that are currently not able to satisfy their current basic needs? Otherwise aggregate demand will stay the same and on the supply side nothing changed, so there is no reason why prices would change.
> There are plenty of low income workers that would quit their jobs, driving their wages up
I don't think we have enough information currently to unequivocally state that. How many low income workers would quit? It's not like many people in better paying jobs reduce their working hours up to a point where they make the equivalent amount of money as a UBI. How many currently unemployed people would be picking up the slack?
> thereby either driving up the cost of goods or reducing supply.
Labor costs are a small part of the price of basic goods. I couldn't find much good information, but e.g. [1] says that for fresh fruit and vegetables a 40% increase of labor costs amounts to a 4% increase for consumers.
Because of this I think prices would soar much higher than 40%
A thought experiment: you have a business; now everyone has money; then prices rise "together"; so market distribution remains the same; you decide to reduce your price to the old price and your competitors don't. Now you get customers from your competitors that you didn't have before.
The amount that this happens depends, naturally, on how free the markets involved are (if free at all).
My proof is by example through thought experiment: I'm a grad student who has a bicycle accident. Without free gov healthcare I now must go into debt to either the hospital or a lender (medical purchases are just one example of an essentially non-negotiable expense). Perhaps I already had other debts, but somehow now my interest payment + living expenses payments are more than my basic income, otherwise known as the normal life of a grad student in todays society anyway - in my case BI didn't work. This is just one example of how easy it is to slide back into poverty with such a system, it could occur slower and over a few generations but sooner or later poverty is back. We just pushed the goal posts back a little bit.
Instead I believe we should leave our dealings with money to the marketplace, but should definitely act as a society to provide a good life for all citizens by seeing that their basic needs are met. Make free public housing that all citizens have a right to ask for. Provide basic but nutritious food to the populace, for free. Encourage free markets and capitalism, but see that the basic needs of every citizen are met - and perhaps a little power in the marketplace i.e. money is also a basic need, but its still only one of many. "If they didn't already exist, people would think public libraries were the most radically extreme socialism".
For these reasons, the growing popularity of BI is worrysome to me. It's just neoliberalism made pallitable by a once-in-every-few-generations wealth transfer.
Most UBI proposals include universal healthcare because healthcare is a problem best solved when everyone is in the "insurance pool" automatically. As long as the hippocratic oath exists and doctors have to provide life saving treatment it will always be in our macroeconomic self interest to incentivize people to seek healthcare before its life threatening.
[1] http://www.multpl.com/us-gdp-inflation-adjusted/
[2] https://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&...
That's an extraordinary assumption. The majority of nations in fact do not see routine, much less significant, overall wealth increases. Major economies as varied as Germany, Mexico, Russia, Britain, Japan, Brazil - have seen near zero economic growth for the last decade. The US appears in fact to be starting a protracted stagnation of growth, due to its extreme debt (in most every regard from public to consumer to corporate), resulting in problems similar to those experienced by Japan due to its egregious debt problems (low productivity gains, weak or negative income growth, weak or negative real wealth gains, low GDP growth, etc).
UBI can't be implemented in a nation in which population growth is falling rapidly (fewer workers to carry the tax burden), while debt is already sky high, incomes are stagnant, and existing entitlement system IOU's are already set to bankrupt (either directly via default or indirectly by currency debasement) the government (with already dire perpetual half trillion plus dollar deficits with the public debt soaring toward $30 trillion next and annual deficits set to climb toward a trillion dollars).
Median rent in the US is $934 thus this one benefit costs the US goverment as much as this proposed BI would. Unless we are talking about housing where people aren't which is likely a non-starter for a slue of reasons.
It still isn't a black hole, though. A ton of social security money is then spent on essentials. Its much less wasteful than defense spending.
On the other end of the spectrum is a lot of infrastructure spending, especially big projects like Eisenhowers national highway system that built the interstates - money goes in, but the productive gains and economic stimulant from the spending is greater than the money going in so it is a net positive for the economy. I'm hesitant to even call that government spending or debt or the cost of the state since it doesn't really cost anything - you are using money to make money. It is state investment.
Now, of course, state investments have variable success rates. You can look back at successful projects and say they were obviously worth doing in hindsight because they have produced substantial prosperity. The highway system, the national railroads, the panama canal, national electrification, the Hoover dam, etc have all proven valuable. But often a bridge built or rails laid go unused and were wasteful. And then there is the matter of how bad the government is at keeping these projects within sane budets - Boston's Big Dig took significantly longer and cost multiple times more than initially projected, and that brings the value into question after its done whereas beforehand it looked obviously beneficial.
UBI I think is in a very optimal spot on that spectrum. It is immediate wealth redistribution, going almost exclusively to the poorest who per dollar earned spend the most of directly stimulating economic demand that grows the economy most optimally. But unlike infrastructure investment the return is immediate - as checks go out money is spent often same day, and as long as money is moving from slow growth (investment) to fast growth (consumption) its a net benefit to the economy, as long as said benefit is greater than the overhead of administrating the taxes to fund it and the distribution of the money. Which comes back to the infrastructure is great scenario - its great until you are being wasteful and corrupt in spending on it. If money is actually going to building infrastructure or money is actually going to the poor it is a colossal boon. When money goes into private pockets as it does in spades with the DoD it is wasteful. It isn't the amounts you take, it is how you spend that, and how predictable your spending and taxing will be going forward - markets can handle very high taxes as long as they are predictable.
I am no fan of the military and I agree with your premise, but I would strongly, strongly disagree with the "little R&D" portion of this comment. A great deal of technology we take for granted today was first made available due to the military taking on the huge reverse asymptotic cost curves of early adoption and invention of new tech.
The military is an inefficient and potentially immoral R&D department, but it is not one that generates very little. A quick historical look at what has come out of the machinations of war and preparing for it will illustrate the point, and fast.
A lot of the problems when discussing the military budget are intentions. Nobody is proposing to grow or keep the current scale of the military on the idea its a valuable source of research. It is in the same vein as how you would not fund a basic income for research purposes - surely a lot of valuable R&D would actually come from a UBI by letting more people experiment as a hobby, but you wouldn't use it as an argument for making a UBI because the research per dollar spent ratio would be awful compared to dedicated research institutions.
Funding CERN et al is on the order of magnitudes more bang for your buck if you are spending money to advance science than spending it on a military.
Which relates back to my original point. All government spending needs to be interpreted through one of two lenses - either the government is absorbing an absolutely unavoidable expense and using its scale to lessen the burden (infrastructure maintenance, healthcare, retirement) or it is investing money with the intent for it to improve the country. There is absolutely a lot of overlap, but we are back at intents - when healthcare makes your citizenry healthier more often so they can be more productive that is a nice perk but does not come close to justifying public healthcare spending. Infrastructure can fall into both camps - building last-mile roads is absolutely not in all likelihood going to grow the economy - people would live more densely if not for state subsidies on public housing developments hooking into the public road network. But when they build highways to increase traffic throughput that is almost always with intent to grow the economy.
A UBI falls in both camps, but conservatives should focus on the later benefits. The economic growth potential. On the topic of the military budget, anyone arguing for the current scale of the US military is arguing for a "necessary expense" perspective, not an investment one. Because its investment value is atrocious. And in general people are very skeptical of anything suggested to qualify for the first camp - and we should always be skeptical of those expenses, because they are the legitimate expenses where government spending actually contracts the economy.
But that doesn't mean that X dollars won't matter. In fact that is the entire purpose of this study "If we give people $1000/month, what happens?". Sure it isn't representative of what would actually happen with BI but if the study is done well and its findings are sound through review, then it would be a great way of answering "would that amount of money matter".
You're right - it serves both conservative and liberal ideals, which is a good thing.
> but I believe this is a terrible mistake that will have the exact opposite effect to what its supporters intend - there will be more poverty and debt slavery, not less
Watch this to understand why it would not be the case: https://www.youtube.com/watch?v=xtpgkX588nM
Two arguments against this. The first is that you are comparing a steady income with an insurance. You can always spend your BI on insurance. Wether insurance would be more expensive if you had BI or not, has not been proven in this model, but it could go either way.
The second is that BI in that tought experiment, even if you eliminated insurance-type nets, would still yield lower poverty. Its just not the exact same people. That is one of the hardest problems on any social welfare program: if you need to improve everyones position absolutely and relatively, you basically cant do anything. You have to let some lose for others to gain.
The book "Inventing The Future" by Nick Srnicek and Alex Williams gives a detailed explanation of how to use UBI to move beyond neoliberalism.
Whereas the reality of people receiving free money might be somewhat different. There's the drip, drip welfare payments of just enough money to survive without being motivated to find a job. Then there's the fallout, family break-up and chaos that occur in the wake of a lottery win. Both morally questionable.
Or perhaps there might be a settling down period of people acting irresponsibly followed by a recognition that engagement with the problems of civilisation and survival doesn't end because one has food, shelter and internet. There are novels to write, structures to design, problems to solve and of course there's science to be done. Work is more fun than 'fun'. Pick something worthy of your talents or start the slide into mental disorder and addiction.
Whatever the truth it almost goes without saying that a study alone cannot sort these issues out. Perhaps it can help. But in science experiment is insufficient there has to be theory to go with. (This is a major reason why so few studies in medicine and psychology are reproducible. I assume in sociology too.) What makes it more difficult in this case is there are moral components which can't be assessed empirically, only by conjecture and criticism.
Whereas many of us spend our limited freedom chasing pleasurable (and unpleasurable) illusions that lead only to disorder and despair. That said, there are plenty of sane, wealthy people in the West who do important work for the sake of it, because they wish to. How do more of us become like them?
Also, despite apparently comfortable conditions, there are plenty of survival problems which remain. For example, meteor strikes, super-volcanoes, cancers, toxic ideologies/religions. Plus an unlimited number of as yet unidentified problems.
These problems are more abstract than working for a pay packet to buy food but they are nonetheless real. And they are not being sufficiently addressed! Universal Basic Income could turn out to be an important breakthrough in this regard, I think, if we also address the question I posed at the end of paragraph 2 above.
That's why I always clarify that an essential piece of Basic Income is that it is unconditional. Whether you're on the bottom rung of society or the top, employed or unemployed, basic income should be the same amount.
When the choice to get a job changes from "Well I'd lose my benefits" to "Well my basic income is no longer enough, I'll work part time", then state welfare no longer becomes as much of a trap. It can finally make strides towards lifting people out of poverty.
Trying to peg UBI to regional cost of living costs an incredible amount of money (the cost of living in the Bay Area has to be at least 10x the rural Rust Belt) and has practically no benefit (because all it means is people get the privilege of living wherever they want on redistributed money, rather than choosing to either live where they want and seek the means to afford it or living where its cheapest and costing society less in macrospect.
There already exist communities and retirement homes whose entire agreement with its residents is "give us your social security checks, we give you food shelter etc". If you know constant money is coming in, arranging your business around being super easy to use for that money is a very lucrative opportunity.
In addition, full, 100% automation doesn't seem likely to me. Service sectors of the economy may simply keep smaller human staffs in order to keep their hospitality atmosphere. Not enough to offset job loss in other sectors, but there are already plenty of businesses today that have a human element that don't _actually_ need them. It might even look like a luxury business model. No reason that will go away just because robots can do it better.
If it's determined that money makes lazy and that's moral hazard there should be really high tax for inheritance.
http://time.com/money/3925308/rich-families-lose-wealth/ "It takes the average recipient of an inheritance 19 days until they buy a new car."
For many people, BI would end up being a large portion of their income, such that losing it would be catastrophic. Now those people would become beholden to any government demand made on penalty of revoking BI.
If a government enacts unconditional BI in the year 2020, who's to say they won't change their minds in 2028 and make it conditional on good behavior?
Are there any mechanisms that could make basic income a true unconditional guarantee?
>Are there any mechanisms that could make basic income a true unconditional guarantee?
Maybe a government backed cryptocurrency? One that distributes the BI through some sort of immutable smart contract? Lots of problems with the approach, but maybe we can solve enough of them.
Now, whether our current governmental or political realities would ever give up control in that manner is another story :(
Social security income is indispensable for the majority of pensioners now. It used to be only for day laborers who it was understood never had an opportunity to save. Things have changed for sure.
Similarly, most old people wouldn't be able to afford their healthcare if it wasn't for Medicare, even it they never even filled out a Medicaid application.
Basic Income research will be vital in the future when it actually becomes a genuine piece of public policy. Although I have little faith it will be used effectively by politicians/decision makers.
I hope it provides some meaningful and insightful data either way, though I'm partial to a positive result from this effort.
We're basically saying here that $60M (plus the other group) is better spent to see what weights to give to models to see how UBI scales-up rather than spending it to run a full gamut of Test Cases through the models and figuring out which outputs to motivate people to do with the money.
I mean, why are we spending money to figure out what people will spend the money on when we can already envision all the possibilities. Or am i wrong, and no one has modeled this yet??
[0] https://en.wikipedia.org/wiki/Economic_calculation_problem
As well I think for established people with kids and other commitments 1000 isn't nearly enough to get by but there is a real danger that for young adults you give them this option of completely checking out of society if it's available forever. Rent a cheap house with friends, smoke weed, and play videogames sounds like a pretty decent option to a lot of 18 year olds. Or even younger maybe? When can kids legally drop out of high school?
I really think basic income is a bad idea. I don't think we are anywhere near the point of mass replacement of the entire workforce with robots/ai even in the developed world. Forcing people who are working to pay into a system that lets people contribute 0 to society while enjoying a decent life(24k for a couple/roomates is completely livable in many parts of US especially without a car) is both unfair and likely to cause significant social strife between workers/non-workers.
I really think a basic livable wage with the removal of the minimum wage is a far better solution. Set some minimum livable wage based on 40 hour work week and have the government top up wages rather than incomes. Obviously there would have to be some sort of progressive claw back system to encourage people to find better paying jobs and not just go with the easiest thing available. Maybe have the government act as an employer of last resort creating some busy work cleaning streets or repairing roads.
I really think it's important for people to have something to do when they wake up in the morning and to be contributing members of society. Not only out of a sense of fairness for the people that are working but I think it is incredibly unhealthy to not have any responsibilities in life.
I suspect a lot of people here don't appreciate this because they (and many of their friends) have a much different mindset. But I can easily see a lot of that sort of behavior and then, ten or fifteen years in, they decide they want something more out of life, start a family, whatever. But now they're 30 years-old with no skills, never having worked a real job, minimal education, etc. Pretty hard to do a reboot at that point.
They spend a couple of years doing that, get bored and get on with enhancing their lives. The biggest stoner/gamer I knew is now an extremely well paid city guy. I lived in a dead town and the extended 100 or so people from my age group that I knew in my teens and twenties, a large amount of whom spent a lot of time gaming/smoking, now occupy a huge variety of positions in society across the country (and some the world) in their 30s. I can actually only think of one person who's still a bit of a waster.
Most people actually want to have a good life and you and the parent are simply snobs who don't know the sort of people you so condescendingly talk about.
So obvious question on many minds, "Where do I sign up for the free money?"
Also, will it be randomly selected or will the selection criteria factor in cost of living, current financial situation, education, etc?
And where is the potentially $66 million dollars for this coming from?
EDIT: On their FAQ[1] I found the answer to my first question:
>> Can I be a study participant?
> Unfortunately, no. It is important that participants are randomly selected into the study.
It's not clear (to me at least...) if the randomness applies to choosing the original 3000 people selected to take part in the study, the bucketizing of them afterwards into 1000/2000 groups, or both.
This research, to me, seems to be ignoring the biggest open question of UBI. All tests to date have looked pretty good, but have only been done on a micro level. The fundamental issue one really needs to answer for UBI is the macro scale effects.
As a society, if we were to redistribute trillions of dollars without commensurate economic value being directly created, we'd expect to see large scale inflation.
Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, discover the technology, etc).
If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.
Anyway, it would be nice if UBI worked, but I've seen no evidence that it will in a large system. It would be nice to get confirmation of previous UBI studies, but this research proposal is likely to just generate the same data, without addressing any of the open fundamental issues.
~323,000,000 total US population
77.2% over the age of 18
~250,000,000 total over the age of 18
$12,000 per year per adult = $3,000,000,000,000 per year
[0] - https://www.census.gov/quickfacts/fact/table/US/PST045216
I feel it would drive a great de-urbanization, as people try to move places where they could get the most for their UBI.
UBI isn't like defense spending. It isn't a black hole you put tax dollars down and get nothing out. It means tremendous goods demand for the necessities of life that is extremely stable and reliable for businesses to profit off.
Unlike (some) defense spending, UBI doesn't intrinsically create some economic value. Increased stability would indirectly create economic value, but it needs to be more than the face value of the UBI check for it to not lead to gross inflation.
Personally, I'd love an extra 1k / month, but I rather see that go to a lot of other people before me.
The hard part is figuring out where to take the money to cover the difference.
Most people would pay $1000 more taxes per month and get it right back as $1000 in BI. The benefit would be that if their income suddenly fluctuates, that $1000 would be there as a baseline.
It answers many of the questions people are asking here.
The reason people right now love gaming so much and often to an unhealthy degree is because its an escape from a life they don't like living but have no choice in because they are chained to a job to survive.
But maybe there much smarter than I, and they secretly want to create these problems so they can capitalize on them.
Or maybe, they want to sap the proletariat of their drive so that the elite can remain the elite forever.
My tin-foil theory: The poor are no longer able to purchase consumer goods as their entire income goes to their basic needs. With the middle class being pushed to the poor class, this will have devastating consequences for our consumerist-based economy. Thus, BI is nothing more than recession prevention.
Of course, that's probably not the case.
Wouldn't any politician campaigning to increase the basic income be almost automatically elected?
That's not true at all, and in fact, the last time a large number of economists were surveyed about a proposal, the response was overwhelmingly in opposition: http://www.igmchicago.org/surveys/universal-basic-income
Many economists would agree that, ceteris paribus, cash is "better" than an equivalent amount of earmarked money in most situations, because cash is more flexible. But that's a very narrow statement that isn't applicable here, because it's assuming that the set of people receiving the money would be the exact same (it's not, by the definition of "universal"), and it's also assuming that there are no other external consequences to the proposal (another topic which is, at best, debatable). So even that point of agreement among economists isn't relevant to this proposal.
I’m referring to a general principle regarding transfer payments. They’re usually more simple ways to reach a desired outcome than alternatives.
Yes, and I'm explaining that that statement isn't true (in the sense of consensus among economists) in any way that is applicable to public policies. Certainly not this one, because that's explicitly not a dichotomy being proposed - there's no tradeoff being proposed between the $1000 stipend and all of the other forms of public assistance that the participants could be or are receiving.
It's only true (in the sense of consensus) on a micro level, looking at the value to an individual of cash vs. in-kind payments, ignoring secondary factors, ignoring externalities, and ignoring positive or negative feedback. That's not a relevant framework when discussing public policy.
The intent of basic income I have read about is to increase the personal freedom and provide a flexible safety net for the poorest individuals. And for personal freedom I'm guessing you can take or leave the basic income -- but none will because it's money right?
And about your second thought, you could use evidence for politicians elected based on their promises to raise or lower taxes -- which is essentially an income increase or reduction (for various income subsets of the population).
People aren't clamoring to increase welfare because the people whom it's perceived to benefit aren't the ones who actually have the largest voting power.
People absolutely do reward politicians for securing funding for their constituents, usually in the form of earmarks, targeted tax breaks (e.g. disaster relief, geographically targeted bailouts), and stipends. In fact, it's one of the strongest predictors of support for politicians representing smaller districts.
Only at the national level (ie, when running for president) does it become problematic to be perceived as having spent Congressional funds on your own district, because the new constituency includes people who had their money "taken away" in order to provide those earmarks.
Huh? No, the point isn't what the richest people would think - they have an incentive to oppose either welfare or cash handouts. The point is that currently, welfare only targets the people with the lowest voting power, because they're both a very small bloc and also a bloc that doesn't vote very consistently in the first place. So there isn't a huge political incentive to increasing welfare.
As soon as you make that a handout that targets everyone (or appears to target everyone), you've suddenly put the largest voting bloc - those who are neither very wealthy nor on welfare - in a position where they will start to clamor to increase it more and more, because they'll see that as money flowing towards themselves.
Also I don't think it's hard to see how this thought would come about (not saying I'm advocating it). But there are plenty of ideas that would help society in general (lower college tuition) that many Americans are against whether rationally or irrationally.
If you fail to see how the American public would have a negative reaction to some kind of redistribution of wealth I think you should think about the average American's reaction to the idea of a socialist politician.
That's not it - I'm not saying that the American public wouldn't have a negative reaction to "redistribution of wealth". I'm saying that the American public has a negative reaction to "redistribution of wealth" when they don't think it benefits them. In other words, they're generally fine with wealth being redistributed from other people to them, which is most evidenced by people of all income levels usually (though not always) being on board with federal money coming in to their district. This generally takes the form of federally-funded infrastructure projects or targeted subsidies.
I'm using that to explain why people in between welfare-level poverty and comfortable wealth would have a different reaction to a stipend that (they think) is coming out of other people's tax dollars than they would to current welfare programs (which [as they perceive] don't benefit them).
>Wouldn't any politician campaigning on this automatically get elected?
No, lay people would be quick to confuse this with communism. The irony of it is that this sort of a system was one of the few things Keynes and Friedman agreed should be part of public policy.
Milton Friedman did not say that this should be part of public policy, though his words are commonly interpreted very generously to imply that he did, by people who wish to demonstrate that this is a policy with "conservative support".
What Friedman actually said is that the cash value of all welfare and other support systems is greater than the in-kind value. That's a pretty narrow statement. In theory, that sounds like it's a statement of support, but it's really not. In practice, basically nobody is actually proposing doing away with all welfare, social security, government subsidies, etc., because it would be a political non-starter. Even if we scope this discussion to the context of the YC research experiment, that's plainly evident, because there's no stipulation that the participants abstain from all other forms of public assistance, as well as deduct the cash value of every other stipend and subsidy that they receive from the $1000 payment.
Comparing what Freidman wrote about to this proposal is like trying to discuss Adam Smith in the context of the political left, on the basis of the common term "liberal". Yes, there technically exists a frame of reference in which that's a meaningful comparison, but it's not a particularly useful or relevant frame of reference, and it does nothing but mislead and obfuscate the actual details of the underlying facts.
What does this mean? Is it going to be 5 years or not? Will different participants get it for a different amount of time? Will they know when it is going to stop?
"We propose two treatment arms, one of which will receive the basic income payments for 3 years while the other receives a 5-year guarantee."[0]
[0] - https://static1.squarespace.com/static/599c23b2e6f2e1aeb8d35...
The big question proponents of Universal Basic Income must answer is: does direct stimulus of aggregate demand result in real growth? Is risk de-incentivized when a labor market participant is not required to work for marginal increases in "happiness"?
Taking our current central bankers experiments with quantitative easing (and now, perhaps, quantitative tightening) as a proxy for injecting liquidity into the system I think there is at least one evident result: bubbles forming in even the unlikeliest of places.
In any case, full support for YC's experiment and can't wait to see the data and results. Best of Luck and thanks for your vision and efforts!
Are the results of this feasibility study publicly available?
The site guidelines are specifically written to guard against this: https://news.ycombinator.com/newsguidelines.html
Sort of like what PG describes here: http://www.paulgraham.com/pgh.html
1. People given Basic income and minimal addictions will fair best 2. People without basic income and minimal addictions will fair second best 2. People without basic income and addictions will fair third best(drugs, major alcohol, internet/game)
4. People given basic income and addictions will fair worst(drugs, major alcohol, internet/game)
I'm probably completely wrong. 3 and 4 could be switched in which case Basic income would be always better.
My general premise is giving people with a strong addiction money without some kind of life structure is a bad idea.
Please don't down vote me if you disagree. Please just comment on how you disagree.
- or devolve into BS you never know.
It's _way_ easier to be a functional addict if you have financial stability. The real problems with addiction (crime, disease, etc) start to compound when you can't afford the habit.
I do see a lot of existential crises occurring in people born under the current system who transition to a UBI lifestyle. Probably less so for those born into UBI.
We now have a guaranteed universal Citizens's "Basic" Income, albeit at a very low level, paid for by taxpayers via the normal progressive tax system and which primarily helps the working poor.
Iron out all the inevitable implementation problems.
Then raise the level to the minimum level for welfare payments and remove a swathe of bureaucracy.
Observe the results while gaining a sensible Welfare System based upon "From each according to their ability, To each equally, with neither favour nor discrimination".
Adjust as necessary.
Also, $1k/mo is pretty small. Are you just hoping to observe some behavioral changes at the margin with which to extrapolate?
*Drugs are a different issue, that should be treated as a health problem and dealt with accordingly.
Unless you are serving food directly you cannot prevent turning assistance into drugs because you can always just sell whatever you are given.
It's universal INCOME, not universal "take care of all your problems for you".
The idea is you can help pay for UBI by cutting the then-superfluous programs. But the benefit for people is in having the unconditional safety net, not in having access to only one program.
Staying below that might encourage under-reporting on taxes; staying above that gives the researchers pretty reliable addresses and SSNs from participants.
Let's assume some sort of Basic Income is enacted. A standard livable amount for all adults, that will scale with inflation, and even with number of dependents.
Some people will still work. Will still pursue hard working jobs that contribute to society, that push our capabilities as a species forward, and add value (important). But think about most of the world and people that you know...I'd imagine that on average, people would elect to not choose to - for lack of a better term - "work hard" to boost their income if their basic needs are covered. Some folks would just love to let others take the wheel, and enjoy their netflix and soylent in peace. This needs proof of course, but I believe that's an assumption we can make for sake of discussion.
Now...we all know that automation is coming. Already we see many of the tasks that humans depend on for survival and prosperity being done faster and more efficiently with artificial intelligence and robotics. Things like harvesting natural resources, agriculture, production of goods, and even building infrastructures. The responsibility of these tasks is shifting away from the people, and into the hands (clamps?) of specialized machines.
So, assuming 1) we have individuals who are having their needs provided for, but not making a measurable contribution to the survival of the species/system and 2) we are trending toward automation and hyper optimization for all the processes that we depend on for survival...when do AI and/or algorithms start to find that certain people are not worth being provided for? Who manages these systems? Someone that we elect? An artificial entity?
I'd honestly love to hear others thoughts on this. I know I would rather fight and claw for survival than pray to someone that they don't choose me to shoot off into space.
It won't be accidental, or at least come out of nowhere. We should be able to see it coming even if it will come out of evolving algorithms. There will absolutely be intent in constructing intelligent artificial life.
Will there be travel restrictions? (if someone is receiving this money, do they have to stay in the same city/country, or can they move?)
What age ranges will be included in the study? [I found the answer in the report: it's 21 to 40]
Is there a control group that won't be interviewed regularly? I'm more motivated when my boss talks to me. Requiring people to meticulously manage their time will already bring a productivity boost.
What about controlling for the end date? My contracts last for 1 year at a time. If I suddenly knew I'd have a steady income for 5 years, that would be a huge relief, and I'd change my lifestyle accordingly and settle down (e.g. be able to plan to start a family). That feeling is independent of the amount of money, it's just the stability.
My first feeling is that living with basic income will be similar to retirement. (and there's a lot more data about what retired people spend their time doing).
To my thinking it would have been interesting to study the possible inflation effects (treat the isolated community as representative for the whole country) but I'm sure there is a good reason/past research for structuring the sample this way.
How many lottery winners hold on to their winnings?
Let's be realistic. If you give the uneducated poor free money, the only thing that will change is how much money they have to spend on junk food and dated electriconics.
UBI as a policy in a place like the U.S. is hopelessly niave. Our culture of poverty if the typical culture of ignorant poverty. I speak as someone who lived among the poor-hell, in high school I dated two women from the same trailer park, poverty in the U.S. is about getting mine, and often times about getting one over the man.
These aren't temporarily downtrodden future intellectuals. These are people who haven't understood education or work for generations. But, on the other hand, who are we to claim our culture is superior?
No one is saying that.
> How many lottery winners hold on to their winnings?
Not relevant.
> Let's be realistic. If you give the uneducated poor free money, the only thing that will change is how much money they have to spend on junk food and dated electriconics.
That's the point. UBI isn't welfare, it's not meant to rehabilitate people and make them into workers. If most people who get UBI choose to live off it and not work, and remain poor, fucking great, that's the whole point of the program, to reduce the working population down to those who actually want to work as there aren't going to be enough jobs for everyone and many people would choose not to work if they could.
You just really do not understand what UBI is about, not at all.
You may also want to consider the efffect of health care. In other UBI environments free healthcare is a given. In this experiment healthcare costs can easily cripple the impact of the regular income. Control for that by providing health care insurance, or make it two experiments by doing some with and some without. If that doesn’t work maybe consider doing this experiment in another country.
I thought basic income was about a time where AI would take most of the jobs, and everything would be far cheaper thanks to automation. I cannot understand how it'll help you not work in the current world.
Because working part-time might not be an option for many, even if they are ready to forgo the money. We also have not built that automated world yet, so although $1000/m certainly helps, it is still not enough to pay for a comfortable life in the US.
Maybe someone more informed on the subject can enlighten me.
Starting this wood-carving artisanat shop that you're insanely good at looks a lot more promising when you know you'll have a bit of money to eat at the end of the month :D
A huge hope of defensors of basic income is that it may pay itself by the economy boost it gives, and won't just add $1000 to every rent bill in the area !
For the sake of argument, however, as you say, going part time is not an option for many people. For the lowest paid jobs, on the other hand, going full time is often not an option. The jobs at the bottom tend to be part time with no benefits and no guaranteed hours. These are the people who will be most benefited by a basic income. If they are additionally stuck in a hostile work environment, the basic income may give them enough cushion to quit the job rather than hanging on just so they don't starve. It may also give them enough money to take time off work and go to school in order to earn a slightly better income. And, if they are laid off through no fault of their own, it may allow them to eat until they can find another job.
Core to UBI is that since everyone gets UBI, and since I pay substantial taxes, I'd pay a minimum of $UBI in taxes and simply get it back as a UBI check for a net total of $0.
BUT... If that's taxable income, I have to pay (say) a cumulative 33% on that additional "income". Instead of a net $0, I have to pay something like $4000 in additional taxes. WTF?
The state pension.
I know many pensioners in the UK that work as the state pension does not provide 'enough'.
http://99percentinvisible.org/episode/the-finnish-experiment...
That's 66 million dollars, if you're wondering.
Also, will be interesting to see the difference in results from this study to ones done in countries where healthcare is free or subsidised.
By itself with no other income sources the individual would fall below the US federal poverty level[0] by $60 and would likely qualify for some Earned Income Credits[1] as well as subsidized health care.
Adding children or a spouse (especially a working one) will crank the tax rate up or down.
Then there is an entire universe of tax complexity having to do with credits and penalties an individual or family might face.
That would sure be cheaper.
I wonder how long it will be until USA is ready for that stuff.
I must say after reading through to the full proposal, I was a little disappointed it doesn't include much that stood out as different or "disruptive" or "new" as I would have hoped given that it has grown out of YC. YCR has definitely done some cool things and is moving very quickly and again congrats on the successes so far.
Maybe other things are going on behind the scenes that were not included in the proposal and are not on the website? I couldn't help but get the impression while reading the proposal that this sounds like a proposal that any ol' well-funded private foundation could have come up with, and unfortunately I fear the study will run into the same problems those other private foundation type studies run into while in progress and once completed. What a waste and shame if that happens.
I fully understand there are limitations to these studies, and rules to play by, and there are many working components as these studies grow bigger in scale and touch more people and must interact more with the government and press then research teams kind of need to become more risk averse and CYA a lot more. But couldn't there be a secondary smaller research studies going that actually try new and interesting UBI research and try to answer some of the harder questions UBI faces as well as look harder at some of the multi-sigma rare events (pros and cons) of UBI that could happen.
Also I want to commend YCR for what looks to be a legit "people first" research approach. I wish more policy type researchers follow your lead and think about how people might be affected or not affected as a result of policy instead of just making assumptions based on big macro numbers changing and then trying to change those numbers.
Again no offense, but this study feels like similar studies: Get some smart brand name Phd's, spend a lot of money and spend a lot of time to get data needed to calculate some "results" numbers to support a policy idea or two. Great, these "results" will end up in some random think tank type policy articles and papers that government representatives have thrown their way every day by various lobbying and advocacy groups. These results will probably make a few good buzzworthy headlines on various news and "pseudo" news sites from NYtimes down to buzzfeed. Great.
Headline: "A new large UBI study just showed xyz positives happen under UBI but there's a couple exceptions...".
This is a lot of money and time to run a study you know no matter how successful it is what UBI naysayers will still have tons of ammunition to complain why policy shouldn't be changed yet or at least not dramatically. What then? Another 5 year study?
Cool story bro. Good studies that lead to good policies do 2 things: 1. They show evidence of doing the good thing they are suppose to do. 2. They shutdown most or all of the things the other side is using to prevent the policy from passing. This study is not doing enough of either, especially #2.
Are you guys studying things like: The psychology of people once UBI is more common and less stigmatized not just the psychology of getting unconditional money? How to pay for it? Seriously here. What will the uptake rate be? Will the first years pull down tax payers into UBI before re-adjusting and they return to work. What are you really shooting for here? 20% 33% 50% feeding back into the payer loop? What tactics might groups or business use to reverse or combat the psychology on UBI, what will be used to take advantage of people who suddenly have money and no restrictions on it? Hello more MLM schemes? Look at Norway news this week and their SWF, don't make that mistake.
I realize you have aggregation problems and methodological individualism stuff and what not. But start a moonshots division in YCR please. Good luck.
> We tentatively plan to randomly select 3,000 individuals across two US states to participate in the study: 1,000 will receive $1,000 per month for up to 5 years, and 2,000 will receive $50 per month and serve as a control group for comparison.
Is this a joke? This may as well read: "We'd like to research the effects of Universal Basic Income. We tentatively plan to select 300 individuals from opposite sides of a freeway: 100 will receive a free roast beef sandwich, and 200 will receive a pack of airline peanuts and serve as a control group for comparison."
UBI costs 1- to 2-million dollars PER HEAD to simulate. You can't cut corners on this and still expect to get relevant data. Not only are you not getting the data you want on how UBI would affect human behavior on the scale of a lifetime, you're also totally ignoring the greater sociological impact and resulting economic impact.
The 5-year span is too short to impact human behavior, the 1000-person headcount is too small to observe any greater sociological or economic impact, and the source of the funding (willing voluntary participants interested in UBI) means we're getting zero data on how the public would feel about being forced to fund this.
This research addresses literally none of the strongest arguments against UBI.
Maybe this is cynical, but I think they might already know all of this. They're just doing it anyway because they know a horn offering 5 years of free money will get their blog a lot of attention, and they know the results of this "research" will be biased toward the pro-UBI result they already want.
I guess we can all look forward to decades of liberal arts majors citing the outcome of this research as if it means anything. It's really unfortunate too, because these are the issues that really matter.
People spend all their energy arguing about race and sex and abortion and gay marriage and cops and who gets to use which bathroom, but nothing impacts human prosperity (and suffering and death and peace and war) the way macroeconomics can. That's when policy gets real and impacts people on a scale with a lot of zeroes on the end, and when enough people are misinformed about something like this, it has the potential to take humanity down a very dark path.