Universal Basic Income Explained – Free Money for Everybody? [video]
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I'm deeply skeptical of the idea that we're going to get some sort of new deal where the rich are suddenly happy with increased subsidy of the poor, in return for increased social cohesion or whatever. The rich generally resent paying taxes and avoid it where possible. Why are they suddenly going to be happy to pay more tax, to subsidize people who have no specific need for the subsidy? Supposing the US replaces its welfare system with basic income, surely the next thing that happens is that the rich buy a government that guts or kills basic income (which is, by definition, not needed). I suspect if you want the rich to pay for this you're going to have to be prepared to go full French revolution.
I'm glad the video briefly touches on this question, but I find it frustrating how much of this debate focuses on the silly question of whether receiving free money morally taints people or whatever.
Edit: I mean, one of BI's highest profile advocates is Mark Zuckerberg. Does Mark Zuckerberg seem enthusiastic about paying tax?
When birthrates stabilize at or below the replacement rate it becomes difficult to grow an economy. Typically countries turn to immigration to make up the difference, but there are other ways (see below).
Furthermore for economies such as the US economy, it needs consumers more than it needs producers. We are a consumer driven economy.
So what does this have to do with UBI?
Another way to grow the economy is to print money, and ultimately I think this is where UBI is headed. Instead of importing bodies to consume more, you simply create money so your existing individuals can consume more.
Supply side economics seems to win when populations are growing, but good old aggregate demand style economics may win out the day once populations stabilize.
In the near term I agree with you, I don't see giving up a giant military, or high enough tax rates to pay for a basic income scheme.
The real challenge is decoupling capital from political power. Otherwise, yeah, why would the rich just sit and watch it float away? If "more money" continues to translate so literally into "more influence," it's pretty hard to blame the rich for using their money to influence the government in ways that will help them continue to keep their money—at that point, it's just an investment.
Of course, this kind of supposes that the working class wouldn't vote to do that on their own. Given the recent trends in American politics, I've stopped making too many assumptions about the weird decisions we make as a group.
It is possible that the rich would not oppose trading the depressed economy where the only thing growing is bubbles to healthy economy in which they get to keep relative wealth compared to their peers (albeit with smaller gap versus median person).
How do UBI proponents solve that problem?
Then again, multifamily housing has less access to the mortgage interest deduction, which cuts the other way.
Basically, this is the deal we've already decided on in our society, and AFAICS it hasn't caused problems.
How many people are held captive in marriages because their spouse is the breadwinner? How many people stay for health insurance, or because they've spent so long raising children that their profession, if they had one to begin with, has passed them by? I shudder to think of how many abusive spouses have yelled, "Where would you even go?"
I think we agree that it's distasteful for financial concerns to put people in danger in unhealthy relationships, but I have a hard time seeing how "Making sure everyone has enough money to live" would make people MORE trapped.
The pressure might be small, but it's still there. The €1 still has to come from somewhere.
> Also, you presume that people only work for money. I think with UBI, you'd see a revitalization of community oriented, but low profit pursuits.
How are low-profit pursuits going to pay for everybody's UBI? You can't heavily tax low-profit pursuits.
We'll see if it works in practice, but that's the theory.
> The taxes will come from the same places they are expected to: automation increasingly taking over the creation of most of the wealth in society.
I think this is the "lets tax automation!" argument? That's another one I haven't seen convincing arguments for. Why do you think companies would stand for such a thing and not oursource their automation to a country that doesn't do UBI?
> that's the theory.
I think there's a lot lacking in the theory, and I'm not hearing any convincing solutions for the problems UBI presents from anyone. It all seems to be built on hopes and dreams and best wishes, with little accounting for actual real-world considerations.
It's one of the most common I've seen cited by both left- and right-leaning UBI proponents.
> I fail to see how giving everybody free money is going to get unemployed people to work. For them, nothing changes.
For the unemployed, two critical things change compared to existing policy in a typical UBI scheme funded primarily by additional taxes on capital income and very high non-citizenship income, with little change in the taxation of income at most lower levels:
(1) Additional income from work is not offset by benefit reductions as in current unemployment/welfare programs.
(2) Minimum wage is eliminated or reduced due to the reliance on UBI to provide all or part of a livable income, increasing potential (re-)entry opportunities to the labor market.
> Why do you think companies would stand for such a thing and not oursource their automation to a country that doesn't do UBI?
The "U" is why. Where would a company outsource their automation if every country in the world taxed their automation?
I'm not a politician or economist, so I can't give you a breakdown of every last detail of how UBI might work. That said, the fact that you haven't seen anyone trying to account for the real-world considerations seems to be more of an echo chamber effect than a sign that those conversations aren't happening.
They aren't. Any functional Basic Income is going to be funded by taxes that effectively fall on capital, whether directly or via taxes on business income, and be self-limited based on productivity.
This isn't even a bad thing from an economic standpoint. Capitalism has the problem where wealth tends to accumulate upward naturally (rich get richer just because they're rich and have a bit of financial sense) and eventually starves itself of demand. Re-injecting cash in the low end keeps the economy moving despite this natural tendency. UBI has the advantage of low administrative overhead too, so more of the money gets used on goods and services. Also, unlike Welfare there is no perceived disincentive to work.
That said, UBI has its problems. Prices at the low end are likely to go up simply due to lack of workers. If you have UBI why would you do backbreaking manual labor all day for minimum wage? To really work well it has to be paired with increasing automation of low end jobs to offset the labor imbalance, otherwise you end up with inflation as people are forced to pay higher wages to fruit pickers, fry cooks, etc... in a competitive job market. Or more likely, those jobs will move overseas at an increased rate to countries where the labor market is skewed towards employers and they can pay people well below the value they generate.
If UBI does indeed raise wages at the low end, it's because people have more options in life and made their own choices. Seems like a good thing, no?
More generally, inflation is usually a bad thing, except in the labor market where it's a good thing. If wages go up and the overall price level doesn't go up as much, that means people are earning more without their expenses going up as much.
Certainly there will be price adjustments: the prices of some things will go up while others will go down. But that definitely wont "offset any benefit".
Is it? The US monetary base has more than tripled since 2008 but inflation since then is only 14.6%.
For comparison between 1999 and 2008, the us monetary base increased by about a third and inflation between those years was around 29%.
Otherwise the rich are investing less and the poor are spending more on consumption. asset prices go down cpi goes up.
I can see a situation where necessities increase in price, leaving low income household in the same position they have now.
You try to increase prices, you are out of business which is eaten by competitors.
If wages go up due to people having more and better choices in life, isn't that a win?
https://medium.com/@simon.sarris/after-universal-basic-incom...
I'm pessimistic about the same legislative issues you are, but what on earth does this mean? "Transportation and warehousing" accounts for 3.2 percent of all jobs in the U.S. and is actually projected to hold steady between now and 2026.[1] What does net neutrality have to do with anything? Is this... a real comment? Do you really think they're going to send all the boys to concentration camps because their jobs got taken by self-driving cars?
I believe that McDonald's and similar establishments could have automated away the vast majority of their work force years, maybe even decades ago. And yet there are still people working there. In fact, McDonald's is often viewed as many people's first entrance into the work force, and as a safety blanket if anything goes south (well worst case at least I can go work at McDonald's or something).
In other words, I believe McDonald's and its kin are a form of social welfare.
We see this elsewhere, in less subtle ways. Tons of jobs that shouldn't exist, but which are kept afloat by regulation designed specifically to preserve those jobs.
We pay either higher taxes or higher pries to achieve both of these forms of social welfare.
And yet, support for these jobs and social actions is generally quite strong. Hence why restaurants haven't fully automated themselves; the market would vomit at the idea of those thousands of jobs being replaced by machines. Regardless of whether that would save people an incredible amount of money, they are willing to accept those sacrifices in exchange for those jobs being available.
In that light, what's the difference between what we have today versus UBI? Either you're paying someone to do functionally meaningless work, or you're paying them to do "nothing". Under the former, their work is _truly_ meaningless. Under the latter they at least have the chance to do something beneficial for either themselves or others.
Personally I haven't formed a real opinion of UBI. Even in light of the above arguments, the complexities make it a problem not so easily reasoned through. But I suppose my point is that UBI isn't as drastic a step as many imagine it to be. It would be more of an evolution of our existing, de-facto social welfare programs.
EDIT: Addendum: When I use the term meaningless here I'm really just using it for the sake of argument. Obviously no one's work is meaningless. Just because a machine could do the exact same job that a human can do, doesn't mean that the task, as performed by a human, is meaningless. The true thrust of my argument is that a human performing the task subtracts value from the economy relative to a machine doing the job. It's sub-optimal.
In theory, you could replace a McDonalds with a vending machine, but it's not the same thing.
It's not like we don't already have automated cooking lines. All the precooked foods at stores are from automated cooking lines. Just replicate that in the back of a McDonald's. I don't find that hard to fathom.
Some will say that "Well if McD's could have automated away those jobs already they would have." Market optimization and whatnot. But the market is always optimal from a _human_ perspective. Case-in-point: McD's switching away from their "pink goo" because of the backlash against it. Using pink goo was cheaper, but the uproar threatened demand, so they have to use more expensive alternatives. In the same way that I believe many, many jobs have not been automated away simply because the public backlash would destroy any business that tried.
There was a great article about the sandwich industry in the UK that goes into this [1]. And yet, even for sandwiches, Subway does well making them on demand; selling prepackaged sandwiches is an enormous and growing market but it's not the entire market.
[1] https://www.theguardian.com/news/2017/nov/24/how-the-sandwic...
If anything, I'd argue the current state of affairs is a form of corporate welfare. McDonald's profits by paying its workers as little as possible; because McDonald's employees typically don't have a ton of negotiating power, that amount is usually very little. Paying someone the minimum wage is a company basically saying "I want to pay you less but it's literally illegal."
When McDonald's refuses to pay their employees a living wage, the rest of us pick up the slack in the form of ACTUAL social welfare programs—food stamps, subsidized housing, tax credits, etc. The reason McDonald's workers can be so poor but McDonald's the company can be so successful is because the taxpayer is funding their payroll. They are not our friends.
Your argument about McD's fails because they are automating away their workforce with their self checkout systems.
That is fine, but we should have a talk about how the program is funded. This is one of the reasons I prefer talking about negative income tax. Yes, the concept is more complex, and has a worse acronym, but it is largely self-funded.
A gradual buildup using the funds available (say half, about 288 Billion) could be done, infusing more money into the system and growing opportunities for people to improve their economic standing. At the same time you'd need to gradually pressure corporations and wealthy individuals to shift investment back into US-based work instead of imports and shifting jobs overseas.
Basically, redistribute wealth very very slowly, and work trade deals to subsidize the production of our own goods until their price becomes competitive again (because we're not going to build electronics cheaper than the Chinese any time soon). But you'd have to base all this around trade deals, because globalization will just eventually crush our poor, which will keep increasing in number.
I actually laughed when I heard them say this, given their videos on things like the Fermi Paradox.
They're quite reserved in the statements that they make, as well. They won't say life is meaningless, only that we haven't found something we truly agree upon as meaningful, and given that the universe is headed towards big crunch / heat death, what does it all matter?
Given those two points, I found it amusing that they'd go so far to say that simply giving someone $1000 a month COULD resolve misery, suffering, and existential angst. It seems to fly in the face of their ethos.
Thoughts?
This does not come from principles. It sounds like a stickup.
Is it the really the case that anyone is being robbed?
Who is paying for the income? It's not "The state". It's everyone else, by taxation. You're telling people you have a right to seize their earnings for their labor. You're literally taking someone else's money, and giving it to someone else. UBI is nothing but people ignoring the moral problems of seizing assets and saying "The end justifies the means."
If a billionaire philanthropist wants to sponsor UBI voluntarily, that's a different matter. Or if you want to donate to a charity that funds UBI, please do. It'll be an interesting economic experiment. But taking assets from people and giving them to another person is wrong, no matter how good the outcome is.
We've long ago decided that we as a society are OK with taxes. If you don't want to pay them, go somewhere that doesn't make you pay them.
For example, the government can, in some situations, seize land. The government is not generally allowed to then give that land to other citizens. There have been a couple of cases that came close to that, and if you read the majority opinions on them you'll see the logical foundations.
Don't get me wrong, I'm not convinced UBI is the way we should go, but I genuinely don't see the difference between that and any other service.
Your argument is comparable to saying we've as a society accepted we pay for food. What we get in return for whatever we pay is not part of the equation. I won't pay $40 for a fast food burger.
I fail to see how I said anything like that. Can you expand?
In fact, in the US there is nothing in the constitution that supports the taxation of the people for these programs.
I'm all for UBI actually but this opinion is still valid.
In capitalism money naturally accumulates at the top, but the whole system depends on money changing hands regularly. It's the essence of the economy. With no taxation all money ends up at the top with people who have nothing to buy, the system grinds to a halt and you have total economic collapse. In order to keep the system working the rich needs to keep feeding money back into the bottom so it can trickle back up to them. Human nature being what it is, you can't expect people to do this on their own. A few (Bill Gates for example) will, but in the majority of cases they would rather sit on the money so it can make even more money for them. Giving to the poor is not "fiscally responsible". Plus it would be very inefficient to make every multi-millionaire/billionaire/multi-billionaire manage their own welfare system.
That's why it is the government's job to redistribute wealth downward to keep the economy healthy. We have endless examples of governments that failed to do this and ended up with stagnant economies and endless economic depression. Look at feudal European economies for example, where the lords hoarded the cash and left charity to the church.
If you want to see this in person, crack open a game of Monopoly. The winning state in Monopoly is total economic collapse where one person has all of the money and nothing to spend it on. If you want to make it more realistic start the game with one player having $20,000, two with $200, and everybody else with $1. That's how real life economies are. If those $1 players lose tell them they didn't work hard enough and that they should pull themselves up by the bootstraps.
For example, while government expenditure can and usually does help drive income, massive taxation isn't necessary for economic development or to avoid the system grinding to a halt and total economic collapse. I'd point you to the latter half of the 19th century in the US for good examples of this. Lack of taxation wasn't the problem.
Feudal economies functioned in an entirely different manner than modern economies, and even then you can't really describe them as a whole with the term 'endless economic depression.'
https://bradfordtaxinstitute.com/Free_Resources/Federal-Inco...
If you choose to believe that the US was somehow in a hole for 80 years despite growing massively economically and becoming the banking and investment capital of the world over that time, and if you also choose to believe that people actually paid those tax rates, then I'm not sure what we have to talk about.
There were so many write-offs and loopholes then that it was more a sop to the working class to let them believe the rich were paying for things.
Yes, it is possible to have strong growth with high nominal income tax rates - it's also possible to have strong growth WITHOUT high income taxes. The point you made that I objected to most strongly was the idea that income taxes were absolutely necessary to prevent recessions and were the main cause of growth. That hasn't been proven by history and I would say has been soundly disproven.
As for why the down votes it's probably because it's the really tired 'taxes are theft' argument that a lot of people are really tired of hearing and arguing against.
You don't think this is happening now?
A hypothetical, though not a very abstract one: A wealthy investor uses some of their money to buy a corporation. Thousands of people drive to work every day and sit at a desk for more than half of their conscious hours, making money for that company. The investor stays at home, doing whatever he wants. At the end of the day, the investor is many thousands of dollars richer, while the employees have all make $70 in wages.
Capitalism is explicitly about seizing earnings generated from labor. You're not defining "taxation," you're defining "corporation."
This describes "profit" equally well as "taxes."
You just decribed taxation in general. Should people be taxed at all? If so, should they have a say in how the money is spent?