The Great American Share – Sam Altman Interview on Basic Income

1 - These weren't the people who were going to move our economy and society forward in the first place.

2 - It's better if they sit on the couch and have their needs met than having them turn to violence or fueling the rise of the next Hitler. That's what will happen if we take away a huge number of people's jobs via automation and give them nothing to fill the gap.

It's not so cut and dry. I don't believe that incentives under UBI will lead to greater innovation. I see it as wonderful gift to the most intelligent and self motivated, while killing the incentives to achieve anything for so many others.

I grew up in a poor rural area and have seen many examples of what guaranteed monthly checks does to ambition. I believe kids growing up in the inevitable "UBI communities" will be trapped even more strongly than in disadvantaged communities now.

My objection is not about taxes or wealth distribution, but the ethics of giving millions such a choice, much less making it the "default" one.

Many of the human-made constructs in our world were defined as a stop-gap for the lowest depths of humanity. Certain people are extremely selfish, narcissistic, care only for themselves? We have some laws to combat that such as taxes, environmental protections, etc. Certain people are violent? We have some laws to combat that and gone to war against that.

So you need to ask yourself, do you have faith that UBI will "free brains enough to produce innovation, progress, and further intellectual output", or lead to massive work reduction, increased prices, and increased complacency?

This may sound cynical, but those who can actually deliver innovation, progress and intellectual output of a meaningful magnitude are already doing pretty well. To a big extent, because they can be determined and can work hard. Most people (myself included) are rather mediocre and have no capacity to advance the society beyond its current, rather advanced state.

The power of UBI is that it solves the immediate problem that many jobs will disappear, and with modern technology people shouldn't be starving. But it keeps the tried and tested incentive-based capitalism underneath.

Perhaps one day mankind will evolve to a utopian state, but in the intermediate to long term we absolutely are still capable of great selfishness, laziness, and ready to take any shortcut to advance our own goals.

The Grateful Dead were local musicians who gained more widespread popularity whether every one of them wanted it or not, especially once they signed a record deal with a capitalist outfit that could advertise and promote in ways that the musicians could not or would not do on their own.

As the purported leader of the band, Jerry Garcia for one indicated that he was soon earning more income than he really needed, and having a strong balance toward benevolence over greed, set out to give 1000 dollars each to numerous individuals who without a doubt were truly in need of the funds.

A thousand dollars really would go a lot further then compared to a short 10 years later once the devastating devaluation of the US dollar was set into motion after it was unlinked to a universally appreciated natural resource (gold).

Anyway, turns out that before too long it was determined that it was costing twelve hundred dollars to give away each thousand, and the program ended up grinding to a halt.

Exactly! UBI needs to go on top of our existing welfare system. It's a problem of freedom. Say I give you $300 and tell you that's what you live on this month. Well with $300 you can find a (crappy) shelter. You could buy food, pay your existing debt obligations, etc. But you can't do all of them. The money gives you freedom but not enough to do everything you need. Our existing welfare system is a god awful patchwork but the existence of all these separate systems makes sure that someone who is poor is still free to buy food AND pay for shelter AND pay off debt. UBI is adding another AND on to the list. We've progressed as a society, wealth is abundant but not shared so now you can buy food AND pay for shelter AND pay off debt AND ... whatever you can do with $12k a yr (or whatever the figure is.)

I don't have an authoritative source on the above claims, but here's a 538 article which talks about the issue a bit. https://fivethirtyeight.com/features/most-welfare-dollars-do...

"[reduction in cash assistance] has happened despite a burgeoning economics literature suggesting that direct cash transfers are in many cases the most efficient tool to fight poverty."

Issue (2) seems less cut-and-dry to me.

I'd argue that the culture is currently overwhelmingly biased toward saying "no," usually under the guise of "freedom" -- if we couldn't say "no" to the chronically homeless, we probably wouldn't have a half-million of them on the streets. If we couldn't say "no" to low-income mothers, we wouldn't have the highest maternal mortality rate in the developed world.

The intercoin project was started with the aim of letting communities issue and control their own smart cryto currency, and seamlessly integrate it into apps. Same as Paypal, VISA network, Venmo, FB do. UBI becomes just an app on top of that.

Then community membership becomes a question of the community members or government. Harvard university knows who its students are. Other communities might make decisions via direct democracy (polling not voting).

intercoin.org

If people who need housing have the money to buy housing, but they're not buying buying housing, then I agree that's a problem that needs to be addressed. Do we see this in practice? Is there an epidemic of people who can afford homes but are choosing to suffer in homelessness?

If so, then maybe we can add some free level of shelter to everyone in addition to the basic income.

2. If you give the basic income to immigrants too, then they'll spend that money into your economy. This is a good thing. Withholding it from immigrants would probably be harmful.

I know you brought up the "global citizen" model. An easy way for us to achieve that model is just to start paying everyone in the world a basic income. Whichever country does this first will probably become the world's final superpower.

1) Let people make their own decisions and don't try to be their caretakers.

2) UBI should be universal. Ideally the impetus would not be on the US government or any other local government to implement it. Let's not conflate their responsibilities further, they are a large enough centralized point of failure.

Besides, the existing American welfare system is ostensibly focused on providing a minimum standard of living to children, on the theory that kids shouldn't be punished for their parents' dumb decisions. A lot of the more glaringly stupid and inefficient bits are places where the relevant politicians wanted it to be for everyone in need but had to find some way to claim it was only for families without actually making it only for families. Having a UBI backing the welfare system removes a lot of the impulse to game the system and gives a lot more heft to the argument that children really should mean children and the archetypal broke 30-something bachelor actually should be on their own.

Issue (2) is likely to be a fraught issue no matter where the line is, but luckily in an American context we've already spent decades hashing out the boundaries of a well defined Social Security system. Have an SSN, get a UBI; no SSN, no UBI. That's probably not the best answer, but it's probably good enough to keep relatively small immigration issues from derailing the whole project.

The US has cut back welfare programs in both nominal and real terms many times, broad increases have been less popular. The fortitude to say no to benefits is not missing from our culture (if it were, the suggestion of UBI would have quickly led to its adoption without substantive debate.)

This would be a mistake. Self-sufficiency is very inefficient. By pooling our resources, we can live much more sustainably and prosperously.

If everybody in the world tried to live like the Amish, we'd destroy the planet in no time. That lifestyle was only sustainable when there were far fewer humans.

This is a legitimate concern, but it's at minimum partially addressed by the "as a share of the gdp" part.

We should also probably forbid Congress from increasing this share without a massively overwhelming vote.

Here is a subreddit discussing UBI + crypto combinations https://www.reddit.com/r/CryptoUBI/

Personally, I believe that collective human interests can be accurately modeled with crypto currencies. Things like UBI, health insurance, other new unrealized collaborative goals likely will be modeled in this way. For example, if I could help end homelessness by accepting a certain coin for my goods and services, I likely would.

We need to make damn sure that adequate opportunities to generate wealth ourselves remain so that UBI doesn't become the only income for large swaths of the population. That'd just put producers and UBI-only recipients at odds. Not to mention inflation pressures.

Rome did not collapse because of UBI, if that is what you are suggesting.

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

For human beings, the number where a communal understanding can work and seem like magic is about 350. The missing key to understanding this, is the network of interpersonal relationships that form in any society. These networks are like strong fibers in a composite material, giving it a cohesion and tensile strength that the aggregate wouldn't have otherwise. Those who operate small companies know this firsthand.

A lot of collectivism is akin to selling concrete by advertising using the specs of reinforced concrete. It doesn't hold together as well as it should on paper, because there is something very important missing in the theoretical description. For larger numbers, in the millions and beyond, there needs to be some kind of larger organizational structure. Historically, this has been hierarchical, but other solutions could exist enabled by technology.

The reformers (Gracchi brothers, Caesar, etc) wanted Roman citizens to have their fair share of the actual land that Rome conquered. Not regular hand outs of grain. The idea was that citizens would actually own a piece of The Roman Dream. Land is income, then and now.

Never happened. The wealthiest Romans were successful in assassinating reformers and dominating the Roman 99% for a thousand years.

As Rome ran out of new conquests, the empire collapsed.

Compare that to whether or not modern society can provide for its members sustainably with UBI. By far, the biggest expense people have is housing - which is not limited by some natural law. One of the reasons for why housing on the coasts is so expensive is because people can't make a living in the rest of the country.

> Last I checked, welfare does the opposite of this. It helps people merely subsist, not strive for greatness.

It depends what you mean by "human potential." I agree with you that "human potential" is not the right way to frame what basic income unlocks. By giving people money to spend, it unlocks the economy's potential to produce wealth for the people. We won't produce wealth that people won't buy and basic income allows more people to buy more wealth.

It also gives people the freedom to choose how they spend their time. We have a lot of pointless jobs in the economy that really only exist as an excuse to provide people incomes. A basic income can allow us to eliminate those jobs. The people who aren't working at those useless jobs anymore are now free to do something useful with their time.

So in that sense, basic income does unlock human potential. But by boosting demand and by doing it in a way that flattens out the demand curve, it unlocks resources in general, not just labor.

> If he weren't a millionaire and the current president of YC, would we keep seeing articles about his vision on the front page of HN? I don't think so. I don't believe his arguments are that cogent or compelling.

I agree with you that his arguments could certainly be more compelling. But he's not wrong that basic income would be a good thing.

> If you take Sam Altman out of this article, would we discuss it at all? If the answer to that is no, then why are we discussing it?

I would certainly be discussing it. Maybe nobody would be listening to me. But I've been involved with basic income since 2011 and I think it's hugely important.

You're not wrong, but UBI isn't exactly welfare - it's more like a blanket grant to pursue whatever it is you'd like. If that's sitting on a couch watching tv - fine, but most everyone would likely bore of that very quickly.

Whether this would be good or bad should be open to debate (preferably with evidence), but only two lines in your comment address this.

Do you have an alternative for UBI? If so please provide you theory and factual data to support that will help people "strive for greatness"?

I mean the entire United States was founded on the belief that welfare unlocks greatness, because the founding fathers all believed that citizens wouldn't contribute to having a republic unless they shared in the ownership of the means of production. It's not like this is some crazy new experiment, we've been doing this for hundreds of years with everything from cod fisheries in the 1700s, the homestead act in the 1800s, ESOPs in the 1900s, tech startups in the 2000s, etc.

Source: https://www.amazon.com/Citizens-Share-Reducing-Inequality-Ce...

Unfortunately, it has not resulted in human potential being unlocked.

Outside the mining, run by foreigners and with foreign works, economic activity in the country has gone down. Nauru now has the highest obesity rate in the world. 94.5% of the population is overweight, 71% obese, and 31% diabetic. https://en.m.wikipedia.org/wiki/Obesity_in_Nauru

I agree that some form of UBI looks to be better in many ways to what we have now, we can’t be blind that one actual historical outcome is a nation chronically ill, obese, and unemployed.

https://www.theatlantic.com/business/archive/2011/06/meet-na... (2011)

How did you check? Most research I've seen shows that welfare reduces poverty but does not drag down gdp.

Anti-welfare people tend to ignore the positive benefits of entrepreneurs being able to take more risks when they know that a bankruptcy won't be catastrophic and that they could still send their children to school and get treatment when they're sick.

Ok, so how about a counter argument then?

Citation needed.

EDIT: Provided by another comment: https://news.ycombinator.com/item?id=15918968

I disagree. Whatever you think about the quality of his arguments, the fact that the president of Y Combinator is writing about UBI makes it worth discussing for those who care about the topic, because he has significantly more leverage to affect things than most other people writing about it. Similarly, I'd be more interested in reading a poorly conceived piece on nuclear war written by Donald Trump than a brilliantly-crafted article from my nephew.

Part of that brand has to be 'benevolence'.

In tech, it's important to be seen as 'the good guys'.

'We're on a cause to help, the money is secondary' - is the basis for a SV company brand.

Understand that the materiality of the benevolence is irrelevant. Only the perception.

The soon to be Princess Merkle (or whatever) and Angelina Jolie spend a little bit of time making speeches written for them - and all of a sudden they are 'amazing, altruistic people' - irrespective of their actual commitment. And it's bizarre how intelligent people eat it up and believe it. We ignore the middle aged lady down the street who volunteers at the Salvation Army two days a week about it and doesn't say a peep about it, doesn't put it on her resume.

So the dissonance between the 'reality' of some way to help and the words of the auteur don't really matter that much.

I don't entirely believe this is just all for show or disingenuous, but I do also believe that it's part of the resume building elements of individuals and organizations.

Remember Google's original premise was to do something about 'ads that were destroying the internet' and to 'do no evil'.

This PR and brand positioning - even if everyone on the inside has fully drunk the kool-aid and believes it to be true. In fact, it works better when founders drink their own kool-aid.

But to say that YC is doing more good for humanity than Airbus ... is debatable.

Just some very minor legislation that changed how drugs and medical services are priced ... could yield some pretty big social change in terms of quality of access etc..

So we don't want to be too cynical, just enough to recognize that public figures calling for some moral thing usually have something indirect to gain from it personally.

Someone who risks homelessness may have more incentive to find a job, but they're also going to have more difficulties. It's easier to look for a job on a full stomach; it's easier to look for a job with a roof over your head; it's easier to look for a job with internet access; it's easier to look for a job when you're not constantly worried about losing it all. Welfare gives you a stable place from which to find employment.

If your argument is that people abuse the position of welfare, and don't look for a job, then that's a criticism of its enforcement, not welfare itself.

Does he have any friends from these walks of life? Drinking buddies down at the local pub maybe? How much of his time has he spent actually listening to them talk, befriending them, earning their trust?

I have many friends and acquaintances who have nothing to do with the tech industry, come from meager means and never rose above those means (economically speaking).

Many of these people just aren't ambitious. They have no interest in unlocking their "maximum potential." And there's nothing wrong with that. They're just not wired the way that tech industry hyperachievers are. Maybe they don't care a lot about money, maybe they're risk averse, maybe they don't understand how business works and find it boring. Some are stuck in a rut, but some have simply carved out a little routine which may seem unfulfilling to you but it works for them.

These people will probably accept UBI if you offer it to them but UBI emphatically will not motivate the majority of them to become the next startup founder. Or anything other than what they are now.

I'm guessing Sam (like many on HN) lives in a bubble of hyperachievers and the people in this bubble have a really hard time understanding that most of the world isn't like them, and doesn't want to be.

YC applicants are nothing like the general population. A lot of people just want to coast. And there's nothing wrong with those people.

$12k is the cited number that you see a lot in basic income discussions. That's just over the poverty level. That's not enough to live on and it's practically a bonus for some members of this site. It's not enough to do anything with. Even upon receiving that, many people would still work massive hours to obtain the best house on the block.

But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget. As you stated, that IS the entire budget.

Now basic income advocates will say you can make up some if not most of that by cutting welfare programs, but given the nature of welfare programs - good luck. That UBI stipend is also not enough to pay for healthcare, so you can't cut that.

How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too?

I'd love to be wrong, but I've never seen any numbers that are workable, especially in a political climate anything like today. There could be a complete paradigm shift in the future, where machines literally take care of all needs in an automated way, but that's such a strange reality that welfare reform is honestly about the last problem we'd need to discuss.

> Wouldn’t the enormous wealth that our increasingly productive society is generating, which now flows into just a few pockets, be a fair source? Some of the concrete ways this could happen are through the transfer of existing federal assets like land, buildings and portions of the wireless spectrum into the new fund. Other measures could include increases in taxes on capital that affect mostly the wealthy such as estate, dividend and financial transaction taxes and the creation of a new type of corporate tax that requires companies to directly issue new shares to the social wealth fund on an annual basis and during certain corporate moves such as initial public offerings, mergers and acquisitions.

> Another way to bring assets into the fund would be to modify the way the Federal Reserve pumps money into the economy. Currently, the central bank does that by buying up Treasury bonds. If instead we used newly created money to buy up stocks that are then deposited into the social wealth fund, it would gradually socialize wealth ownership without the need to raise taxes on anyone. As Roger Farmer and Miles Kimball have argued, these kinds of asset purchases could also be ramped up during recessions, allowing the federal government to acquire significant portions of the national wealth relatively cheaply while also stabilizing financial markets and stimulating the economy."

Noah Smith makes the additional economic case that a social wealth fund is a buffer against decreasing labor share of income driven by technological change: https://www.bloomberg.com/view/articles/2017-12-05/robot-tak...

The numbers haven't ever and will never add up, unless you just advocate straight-up jacking the taxes on the upper brackets sky-high.

The government doesn't face what we would think of as a typical budget constraint. There is a limit to how much money the government can spend, but that limit is determined by how much spending the productive economy can absorb without causing inflation or interest rates or taxes that are too high. It's the amount that closes the output gap without attempting to push past it.

The only way we can discover the appropriate amount of basic income by gradually ramping it up until further incremental increases no longer provide a benefit.

> How would a BI work

By increasing revenue, for one thing.

> Seems like BI would need big tax increases to become viable.

Yes, essentially no one, including BI proponents, disputes this.

> US gov revenue is 3.31 trillion and the population size is 323.1 million. Which leaves about $10244 per capita to play with.

> How would a BI work, give people $7k per year and save 3k for military and basic services? Seems like BI would need big tax increases to become viable.

The trick with Universal Basic Income is that it Universal. It is paid to everyone. That means everyone is both a contributor to it and a recipient of it. So you can't add up the cost without also considering the benefit. If you give me ten dollars and I give you nine dollars, it doesn't mean that you're down by ten dollars. UBI must be looked at in this way. At a national level, it's just a straightforward cash transfer. The national cost plus the national benefit would simply be zero.

But of course what people are really interested in is how much it would cost them.

The per capita Gross National Income is $58,000. To extract a $12,000 UBI from that $58,000 -- via a simple individual flat-tax -- would require a 20% tax rate. However, the person making $58,000 would also receive $12,000 per year in UBI. So they would pay $12k and receive $12k, making the total cost to them zero.

Of course the person earning earning $100k will also have to pay 20%, and they of would only receive $12,000 back as UBI -- putting them -$20k + $12k = $8k out of pocket. So for everyone earning $100k, the cost of UBI is 8% of their net income. Actually -- because about a quarter of this UBI could replace existing benefits programs, the tax increase would be closer to 8% * 75% = 6%.

So although it would notionally require a 20% tax increase (or 15%, if you account for the savings it would create), for the vast majority of Americans it would cost nothing, and for no American would it cast more than 20%. Here is how it would break down:

  Income pre-UBI | Income post-UBI | cost/benefit | Tax increase | % of Americans at or below [1]
  ---------------|-----------------|--------------|--------------|---------------
   $0            | $12,000         | + $12,000    | N/A          | 
   $20,000       | $28,000         | + $8,000     | N/A          | 35%
   $40,000       | $44,000         | + $4,000     | N/A          | 61%
   $60,000       | $60,000         | N/A          | N/A          | 77%
   $80,000       | $76,000         | - $4,000     | 5% (4%)      | 86%
   $100,000      | $92,000         | - $8,000     | 8% (6%)      | 91%
   $120,000      | $108,000        | - $12,000    | 10% (7.5%)   | 93% (?)

THAT is how you finance a UBI.

1: https://en.wikipedia.org/wiki/Personal_income_in_the_United_...

That's an interesting point, especially concerning the US. My understanding is that many (not all) people join the US military mainly because they can't get other jobs or find other ways to finance college. With the UBI, this motivation will disappear, and with it a whole lot of military spending.

So net-net, it's only the bottom end of the income levels that keep the entire payment.

These two things aren't even close to the same thing. If Y Combinator accepted every single applicant, than yes, it would be equivalent to UBI. They obviously do not.

What happens to the people who blow their UBI on drugs/gambling etc instead of healthcare and prosperity. Who will pay to re-fund them? (and fund them again?)

I don't know, I'm sure there would be some decrease in economic activity from life changes by people who hate their jobs and have reluctant relationships held together by financial dependencies. But these would be probably be more than compensated by the productive impacts on people's lives.

How's that?

> The right question is "how do we unlock the economy's prosperity-maximizing capacity?"

Asked and answered: free-market capitalism. Nothing has resulted in the sort of rapid prosperity we've seen recently with market capitalism spreading globally.

Governments can often be trusted to maintain a stable value of currency. That's why fiat currency out-competed gold and why Bitcoin will never be able to compete with a well-managed fiat currency.

> we should introduce a system which makes our livelihoods dependent on the whims of bureaucrats.

There are robust ways to implement basic income that don't depend on "the whims of bureaucrats."

Regarding the UBI personally I think if someone manages to make it work without the government I am all for it.

It's a hard problem in some ways similar to a working decentralized currency that seemed impossible and took forever to crack, maybe even cryptocurrencies/blockchain technologies are part of an elegant solution to this UBI implementation problem, maybe a Startup can make it work.

Right now, yes, that's definitely the case. But does it have to be? Our campaign finance system provides a direct and unlimited conduit between wealth and political power, but we can change that.

Ridiculous.

Yes, the UBI will free the labor market to be an actual free market in which services are priced fairly. If you need a janitor, you will have to provide pay that the janitor is willing to work for, even if not threatened by starvation or homelessness.

Also it's not the main benefit of UBI. It's just one benefit (or side effect) of UBI - when it's universal (not just a pilot) you can reduce the overhead of administrative costs.

No, the main benefit is that eliminating means testing eliminates perverse effects which reduce the benefit of outside income when in means-tested benefit programs.

Reduced total program overhead is a peripheral benefit of a mature UBI vs. existing means-tested benefit programs.

No no no. The Universal means it's given to everyone, not that it is the universal welfare program.

I would say no. The main benefits of basic income are increased levels of economic stability and increased levels of social prosperity.

It may end up being the case that after we implement a basic income, we discover that our society does not need some of our welfare programs. Then we can eliminate them. But that's not the main benefit of basic income.

https://news.ycombinator.com/item?id=15264024

It makes a fair amount of sense, and puts the incentives in the right place.

So instead of having an incentive to raise their prices, producers will have more of an incentive to produce more. And as long as you're not coming up against resource limits, prices will stay low. If producers tried to raise their prices, they'd lose customers.

Does that make sense?

If by "discourages" you actually mean negative incentive to work, that would be awful.

But I suspect you mean it lowers the incentive to work. And that's not necessarily a bad thing.

Productivity per hour keeps increasing. It's okay to let the average workweek get smaller. Minimum wage government labor is likely not the best use of a lot of people's time.

If UBI reduced minimum wages (say by $1/hr. for each $2000/yr. of UBI, from a pre-UBI target level that increases with inflation) and is not available to immigrants other than permanent residents, it might reduce immigration demand in categories that require a period of non-LPR status (and particularly attractiveness of resort to illegal immigration) by reducing both wages (but not total income, for citizens and LPRs) for unskilled workers directly in both open employment and, by indirect pressure, under-the-table employment.

I've tried and failed to figure out a less confrontational-sounding way to ask this, but do you have any data to back this claim up, or do you just not trust the poor?

Why would you want such a guarantee? You don't think people who need housing and food will buy housing and food with their money? I mentioned this in another comment, but I'm not aware of any kind of epidemic of people who can afford housing not buying housing.

If we do have such a problem, then I agree with you that we should help the people who are suffering from bad judgment. But why not do that in addition to providing them with a basic income?

https://news.ycombinator.com/newsguidelines.html

However, I would question a couple parts:

> every US resident who has been a US citizen for at least X years

Why limit it in this way?

> conditioned to willing to have employment

Why? Isn't one of the biggest benefits of basic income that it gives more people more of an option not to work?

And what does "willing to have employment" mean? Every man has his price. If you pay people enough, they will work, no?

A lot of positive externalities that UBI will bring simply won't kick in at low payout levels, whereas the negatives which will be brought in by diversion of funds will be apparent.

The externalities I am talking about are of this form: -Increased benefits to public health as people are less stressed about losing jobs -Increased entrepreneurship and all the benefits that come from it -Increased cultural output and the increased geopolitical influence

The whole point of UBI is that's it's not another handout.

It's giving everyone an option to not have to work a day job to survive (something that moderately well-off people, or people with upper-middle-class parents already have).

The impact of "what if most of the citizens didn't have to work to survive" can't be estimated with a small hand-out, because it will not achieve that.

In other words, UBI is somewhat binary in nature: either you have it, or you don't. It doesn't scale down beyond a certain point.