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Comment by alkonaut | Hacker News Reader

I can't see how it's theoretically possible to do a small scale experiment with UBI. If not everyone gets it, you can't see the big impact on the economy (what happens with supply/demand/inflation). And if it's with a short horizon, then people still have to plan for life after the UBI experiment.

You can't give up the career you are going to need to make a living in 2 years time, just because you get paid a small sum per month for 2 years.

So I can't see how experiments are worthwhile unless you actually go in head first. UBI should be announced as universal and forever, or it isn't "proper" UBI, and doesn't show the effects of UBI.

This is also the reason why no one tries it.

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There are already large versions of UBI already in place, just by another name. If you take a look at Saudi Arabia and other rich gulf states, there’s essentially large cash transfers to citizenry for just being alive (and of course not revolting).

It is of course telling that Saudi Arabia has no sort of industry and the little they produce via Aramco has large swaths of imported experts working for them. Same applies to the other gulf states, importing everything from house cleaning to engineering labor.

As to an American UBI scheme, one can look at the handful of rich pockets of Native American tribes who run successful casino operations. In Florida, the Seminole tribes distribute thousands of dollars/month, to each of their members just for being alive. Many of them end up having chronic issues with drug and alcohol abuse.

> In Florida, the Seminole tribes distribute thousands of dollars/month, to each of their members just for being alive. Many of them end up having chronic issues with drug and alcohol abuse.

Okay I was with you for a little bit but this part of your comment is completely off the mark. The casinos are built on tribal land. And in many cases owned by the tribe. For all intents and purposes the tribe is a corporation. Members get a monthly dividend based on their percentage of native american blood. It is not UBI and not a welfare. If you or I, assuming you aren't NA, move to tribal land we still wouldn't be entitled to that money, nor through marriage. We aren't a stakeholder.

I've been to Miccosoukee and Seminole country before and after the casinos. The additional income has made a lot of difference in improving their way of life. Hurricane hardened homes, fully funded schools, and reliable cars.

As for alcohol and drug abuse. That is an issue with tribes who don't receive any money at all. That is a separate issue related to education, job prospects, and, yes still, racism.

BTW, the Seminoles didn't just spend their dividend money on alcohol and opiates. They've been busy investing that money as well. They have bought the entire chain of Hard Rock restaurants and resorts.

IMHO this is more correct than you give it credit for. Humans need to feel a sense of accomplishment to maintain their mental health over the long term. Just giving them money to survive without giving them something to do leads to high rates of depression and self destructive behavior. A good percentage of the population is not self starters, they'll sit on their ass all day long if nobody forces them to get up.

IMHO New Deal type projects are a better use of resources than UBI. Put people to work building/repairing infrastructure instead of just handing them cash and hoping they don't just spend it on drugs.

I'm not sure what a good percentage is but I know the majority of the population is self-motivated. What that motivation is can very greatly and is affected by resources. I've sat on my ass plenty of times and watched TV simply because I didn't have the money to go anywhere.

Will there people who abuse that goodwill? There is in almost every system. Just like you can't design the perfect lock to keep all thieves out and still be useful you can't design a UBI where everyone is going to use the money as we judge best.

A new New Deal I think should cover more than just infrastructure. There are public works of art that we have now that would not exist if not for the fact that some administrator in the New Deal era thought having artwork was also important.

Maybe, but I've done charity work in south West Virginia and welfare depression is a serious issue in former coal country. You want to see the people do just anything but they've lost all motivation. It's not everybody, but it's a big enough percentage of the population to cause a lot of problems.

Is there any avenue for investment and personal growth for the majority people in coal country, let alone those on long term welfare? I ask because a wealthy friend sends a substantial amount of money home to relatives in WV ($2k per person or so) and even though they save quite a bit, there is nothing for them to do with that money other than move out to a more economically active area if they want to improve their lives. Starting a business or getting an education is pointless because there's no market for anything but the bare necessities. They even had trouble finding good local caterers, photographers, and a wedding planner even though they had saved up enough money to cover a decent wedding in an urban city.

Basic income at least has the ability to thrust everyone in a region into the market by giving them disposable income so that there is actual activity that can provide opportunities.

State level welfare is not UBI.

For almost every state youll get 200 dollars in EBT/person. These are nontranferable, you must only buy unprepared food, etc. Yes, even now people abuse this. You cannot make a perfect lock.

If you have a kid you also get a bit of cash aid (less than 200 dollars.)

Try living on 400 bucks for the next month or 12 and see how depressed it will make you.

> I'm not sure what a good percentage is but I know the majority of the population is self-motivated.

This is simply totally incorrect.

If it was close to true we wouldn't need schools or universities. Everyone could self learn through books.

Even MOOCs can't yet work out the motivation issues with drop out rates of 90%

I will concur with this based on my own anecdotal evidence. I know someone who has a good paying job that gives them nothing to do and they have struggled with depression ever since taking the position.

There is a key difference here between your friend's job and UBI. If your friend instead of having their job got UBI they would still be able to go and find fullfilment in the workforce and bolster what they recieve from UBI with a salary.

In the scenario you mentioned they are probably locked in by way of a contract from being able to find fillfilment unless they do it in their, probably small, amount of personal time.

I mean, my little sister grew up with a member of the Seminole tribe in SFla, I can tell you from experience that her family didn’t have what is considered a “job”.

Also, my friend was a medical doctor tending to a large group of them and would constantly comment on their alcoholism and shenanigans (which sounded awesome) with atvs and off-roading.

I don’t really understand what you’re nitpicking with the money passed to tribesmen though.

In theory UBI is passed to every one in the US based on citizenship. Same applies for that cash transfer for the seminoles. Same thing goes for Saudis and other gulf state members. Same thing applies if you were a stupendously wealthy man, you’d probably pass some cash around down to your descendants.

A rose by any name, I’d say.

Most of the rentier class also don't have a "job". Dividends, leases, and IP checks arrive into their bank accounts and they are free to choose what to do with it. Invest wisely or blow it on vices.

In concept UBI is closer to welfare than the tribal or Saudi model. Gamblers willingly go to their casinos. We willingly purchase Saudi oil. Since the government owns the means of production they are within their right to give it to their constituents. If fewer people gamble, buy tax-free cigarettes, or use less petrol that is less money the tribe and Saudis have to give out.

UBI is not voluntary. The government extracts that cash from me in the form of taxes to distribute it. I cannot use fewer government services and therefore give less money to them.

> Many of them end up having chronic issues with drug and alcohol abuse.

I don't think this is a constructive statement to make unless you compare rates between UBI and non-UBI.

I still don't think this addresses the parents comment about the UBI operating on a country-wide scale.

The Native American tribes, people in Alaska etc. are still a fraction of American society. Not to mention... there are other socio-economic factors that prevent the American tribes from being successful (e.g. perhaps a genetic pre-disposition to alcoholism as well).

I would like to see what happens when a major population center, either a US state or a populous city, implements a form of UBI. That is when the true economic impact may be evident.

Of course that's not just a basic income, that's a full cushy income. A better example with be Alaska which uses ok revenues to give a subsidy to residents of the state.

We get about $1000/year, and the cost of living here is higher than just about any other state. You can't really compare the Alaska PFD to a UBI.

When I lived in Wisconsin, we got $400/year. Officially it was to help pay for heat in the winter, but I always thought of it as a consolation prize for having to live in Wisconsin.

I hear Minnesotans get a stipend, too.

In 2008, the AK PFD hit its all time high of $2069, and we got an "Alaska Resource Rebate" of $1200. Every family in the state who qualified got $3269 per person. In large families, that was a windfall.

That said, I think that was the winter that was extra cold and windy. We were living in a house with a boiler, and it wasn't adjusted right one month. That month's heating bill was over $500.

Heating costs are serious business. We got a deal on the house we bought because renters couldn't afford to heat the whole house one winter, and the cold and damp in the rest of the house caused enough damage to bring down the value of the house.

I didn't know there were other states that offered blanket assistance like you described, that's pretty interesting to know.

I am very skeptical of claims that outcomes are discontinuous in policy space. Going one step in direction A should give you information about going further in that same direction, at least on some scale of change. Clearly the people running the experiment agreed, because they designed it with the intent to get that information.

> Going one step in direction A should give you information about going further in that same direction

So eating healthy for 1 day/week will change your blood results and tell you that a year of it will make you lose 50 pounds?

So going to 1 day of college will make you measure differently on a test that checks critical thinking?

Different things take different amount of time to see results. I could see behaving very differently between

* This is a very temporary 1 year test of UBI *

* You have a social safety net of UBI for your entire life, and can count on the income no matter what happens

It's more that shorter experiments might tell you whether there are deep downsides even in the short-term. Not great information, not full information, but information; even if it's just a one-way test.

It’s not that they are completely useless it’s that they cannot test the actual affects on the economy.
If you have a small scale UBI even if it’s on say a scale of a whole town it’s still not enough to evaluate the economic impact because the supply/demand economy isn’t that localized.
We have other experiments that have shown to have a negative effect for example rent allowance in the UK which essentially set the lower limit for rent as no one rents below what the council would pay, this has increased rent prices even in places where there was no negative change in the supply and demand.

It's good to be skeptical. There are a whole class of problems that are discontinuous, but it's way too tempting to label things that way.
That said, UBI _seems_ a lot more like herd immunity than most policy problems, especially social safety net policy.

Well outcomes are discontinuous where the policies are discontinuous. There's a huge leap in the graph from 'this is temporary' to 'this is permanent.' We can't just write off the effect that has on human behavior.

First, nobody is saying they're discontinuous. But there are plenty of continuous results we can see that are concave up, i.e. they require commitment beyond a certain point to be more effective than not implanting them at all.
For example, let's say initially we build a single road from coast to coast in the US, starting with no roads. There wouldn't be many places to drive to, there would be a small market for cars, and as a result of lacking economies of scale, cars would be expensive. There wouldn't be much infrastructure for purchasing or maybe even extracting gas, so that would be more expensive too. The road probably wouldn't get used much, and wouldn't be worth it.
But if you build a bunch of roads all over the country between where people want to go, eventually they'll become worth it.

I imagine that researchers designed the experiment they thought would be accepted rather than the experiment they wanted. Yes, they intended to learn some things and most likely did.

There are such things as network effects and thresholds for complex systems. So outcomes can and will be discontinuous in policy space. Perhaps for the simple reason that human society is pretty complex and certain things about it are still not very well understood.

If the criticisms of a policy is that subsidies for the voluntarily economically inactive can only be funded with massive tax increases and cuts in benefits for some of the poorest members of society, that the biggest chief beneficiaries will be house-rich early retirees and that it isn't economically sustainable, then a test which tops up a proportion of people's existing benefits out of general government funds for a short period and discovers they like free money isn't very informative.

Also, we can predict a lot of the major impacts something like UBI will have, however part of the plan must be to implement plans and strategy to manage for these - in particular, whenever new money is introduced into a system, many for-profit systems will increase their pricing, which then trickles down into every other system requiring to increase their pricing. There has to be a floor created, and there needs to be management of otherwise unmanaged wild west economics.

I think it's also important to remember that the effects would be wildly different between countries with big social safety nets (such as Finland), and countries withouot.
For countries with lots of extensive welfare programs, a small UBI is shifting money from various programs into UBI, thereby removing administrative overhead - rather than "new money".
For example: every parent in sweden gets $160 child allowance ($320 for a single parent), regardless of income, and with no application required. We don't have dental included in the universal health plan - instead there is a subsidy of $70 per person per year. Students get an allowance of nearly $400 a month (allowance, not loans)
And so on and so forth. There are lots of these allowances and subsidies that under a UBI system would just disappear and be part of the UBI in the nordic countries.
That's why I don't see it as such a massive step. First you go to an enormous welfare state, then you change that to a UBI system. It's then less of a leap.

You can balance out a UBI program with other programs, it would be better anyhow, as an example, you can incentivize more people to be a student.

Right. It's like promising immortality for two years.

Sounds reminiscent of "Socialism doesn't work if not applied globally".

I wouldn't go that far, but I'll go as far as saying that socialism near useless for a single person, and only shows any promise whatsoever for two or more people...

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