Basic Income caused crime to drop by 40% and strengthened workforce? | Hacker News Reader

Basic Income caused crime to drop by 40% and strengthened workforce?

theincomer.com

166 pointsjoeyespo150 comments

Every time you want to evaluate results from social research, you need to ask yourself two questions:

1. Are the results internally valid? That is, did the authors reasonably control for factors other than the treatment (in this case, UBI) that could affect the observed results? Turn out, that this is actually difficult to do outside of randomized control trials. Quasi-experiments and natural experiments all lack random treatment assignment. This leads to biased estimates and wrong conclusions.

2. Are the results externally valid? That is, to whom do the results apply? Most UBI experiments are done in contexts that are different than the US (if you are interested in what would happened if UBI becomes law in the US). Local factors could impact the way that people react to UBI. Because these factors do not apply to the US, the study results do not readily translate to the US.

For example, the article cites this NBER working paper[1] as proof that UBI has positive impacts on unemployment. The article uses a difference-in-differences model with a systemic control group to get to a causal estimate of receiving dividends from the Alaska Permanent Fund. This boils down to compare changes in employment between Alaska and states that had similar employment trends during the pre-treatment period. Their analysis seem to be sound and they conduct multiple robustness checks.

As far as external validity, how similar is Alaska to the rest of the US? Would results from that setting translate to California, or Mississippi, or New York?

[1]: http://www.nber.org/papers/w24312.pdf

Yes, this is unfortunately pretty lazy research used to push an agenda.

Related to that, the main claim: the 40% reduction in crime (no link, why?) is in Namibia. Is there anything about Namibia which makes it different from a developed economy like the US?

I know it comes off as pedantic to complain about such stuff, but there's gotta be higher standards for evidence, otherwise you don't really trust your own argument.

I wouldn't necessarily call it "lazy research". It's imperfect, but there aren't exactly that many natural experiments in UBI that provide you great data. Sometimes you have to piece together insights from imperfect data.

It's not the research itself that is lazy, it's the way results with very limited scope are used by people to push an agenda. I guarantee you the authors are aware of the limits of their research. They aren't the ones making overarching claims. I challenge you to look up how social scientists themselves (and not one stop issue sites) feel about UBI.

You can't bother to provide a link when you are citing a statistic? That's just lazy. In graduate school they train you like an attack dog to find this stuff, so it's pedantic, but that really doesn't bother anyone? Just a link supporting your main claim - too much to ask?

The association with academia and "stats" without the same standards is weird.

The reference chain for the Namibia experiment is an Huffington post article[1] and a report by Bignam[2].

It looks like "Otjivero-Omitara was selected for its manageable size, accessibility, and poverty situation" (p.19). Ask yourself, could any of those characteristics impact the reduction in crime regardless of UBI?

Also, I wasn't able to find a control (or comparison) group for those results. The time series that they provide seem to indicate that there are positive economic trends (see the reduction in poverty reported at page 49) in Namibia during the study's time frame (2007-2009). If these trends are not accounted for (e.g., using a difference-in-differences approach), you risk to conflate outside factors with UBI.

Another issue is attrition in the study. Their 40% result only takes in consideration the people who were present in the village for the 2-year study. Now, we could imagine that unemployed people might have migrated out of the village, mechanically pushing crime down thus biasing the UBI results. (see page 56 and 71)

The moral of the story is that social research is hard, especially research that wants to be causal. I would be skeptic of all click-baity results unless backed up by strong evidence.

[1]: https://www.huffingtonpost.com/scott-santens/universal-basic... [2]: http://www.bignam.org/Publications/BIG_Assessment_report_08b...

Thanks, I did come across the Huffington Post link but the title itself wasn't obviously about Namibia so I missed it.

I appreciate you breaking this down. I've published nothing but I've worked with those who have and I've seen just how difficult this kind of research truly is. There's so many confounding factors, but they try and usually do a good job.

It frustrates me when these very complex issue are intentionally distorted. Reality and policy don't give a damn about anyone's beliefs, so it's important that we understand the holes in studies like this.

Thanks again.

From an armchair perspective, there are significant ways in which Alaska is behind the mainland US, so it's encouraging to see that the APF distributions provide a positive impact.

I would suspect that the results would be broadly applicable to underdeveloped and rural areas, so of the three examples, there are certainly areas in rural north California, rural Mississippi, and New York (probably upstate) that would benefit.

I think extending it to apply to urban or highly developed areas would be pretty questionable, though, I'd guess Manhattan is not going to behave similarly enough to draw any conclusions.

I'm not an economist, but when I once asked examples of good econometric methods to study especially related to synthetic control. I was given just that Marinescu's Alaska paper you are referring to.

They needed a counterfactual for exactly one state. They create "synthetic Alaska" elsewhere in in the United states to make the comparison valid. Even if the researchers did not intent it that way, the selection methodology selected areas in the continental US that have geographic featurs similar to Alaska. It's really fine paper and good methodology.

Another fine point about basic income in the paper is that it makes difference between tradeable businesses (can be are exported) and non-tradable businesses (stays local). Employment rates in non-tradeable business don't change. By contrast part-time work did increase, and employment fell in companies that sold goods outside Alaska (this has implications for wider applicability I guess).

I think that the original synthetic control paper is this paper by Abadie and colleagues[1].

Figure 1 and 2 give you the intuition behind the need of using the a synthetic control rather than compare California to the rest of the US.

You can notice figure 1 that California’s sales of tobacco products was decreasing before the prop 99 and that this trend is different than the rest of the US. This violates the required parallel trends assumption that is required to have an unbiased estimate in a DD model.

Abadie et al. reweight the results from the other states to create a synthetic comparison group. This gives them a synthetic California sample that is similar to pre-prop 99 California. You can see that in figure 2.

They claim that any deviation from this synthetic group is due to the effects of prop 99 on tobacco sales (Do you believe them? This paper’s conclusion rests on your answer to this question.).

Bonus: Figure 3 shows the normalized results. I always appreciate Econ papers that put their results in a graph. Tables are hard to read sometimes.

[1]: https://economics.mit.edu/files/11859

To your points, I'm sure communism comes out looking quite incredible in a limited-time trial with a small population. It's just that dang problem with scaling it up.

About point 1: Since we are dealing here with humans, this criteria is almost impossible to satisfy. You cannot enroll people in a control trial if you know this has a chance to make their lives worst.

> This leads to biased estimates and wrong conclusions.

It does not necessarily leads to 'wrong' conclusions. In social sciences, you have to deal with a truth level that will never yield 100% certainty.

The real issue is that the "true" confidence levels in the social sciences are nowhere near that. We can hack together models and fit them to make an argument look compelling, but most of the stuff we "know" to be objectively true is descriptive, not prescriptive.

I think any good social scientist regarding UBI will tell you that we honestly don't have any fucking clue what would happen because the differences between Namibia, Finland, etc are so vast and we have so little data. These studies are important parts of building up that dataset, but to make policy considerations (or even something like an assumption in social science) is much, much more likely to provide a "wrong" or "bad" choice, than after we've got better data.

If you really were to dig into any given study, you can in many cases find a lot of assumptions which we have to accept to even attempt a study.

We all tend to be pretty bad at measuring truth levels, that's why the criticism is necessary.

"a quora member answered when asked about the UBI"

And at that moment, any semblence of legitimacy disappeared...

The main question about UBI is who pays for it and how. In the UK, a back-of-a-napkin calculation showed that all current benefits equally divided into a single BI would be around £4K, way below anything that most people would consider enough to live on.

So to get a BI of £12K, average taxes would have to go up by £8K per person. And since about 2/3 of the adult population are taxpayers, that gives £12K per taxpayer, which balances the payout they'd receive from BI. People with above average incomes would pay into BI, and those with below average incomes would net from BI.

Assuming we're talking about the UK here, that would require £517,000,000,000 - or about 70% of current tax revenues.

Yep; though the usual corollary is also that you'd cancel a bunch of other welfare programs -- that is: you're replacing benefits with UBI, not just tacking UBI on. (Not advocating for it; just saying that 70% of tax revenues makes it sound like you'd nearly double taxes to cover UBI, and that's not quite true.)

Assuming zero other changes to the tax code or spending which as far as I know nobody wants to do.

The US example is usually to remove Social Security, food stamps, HUD, unemployment insurance, low income tax breaks, etc which means close to zero net cost but a massive shift in benefits.

Overall I think the driver for UBI is more about complexity than welfare. For example without changing revenue you could eliminate the need for tax prep. However H&R block for example really loves their billions per year in waste. So in many way's that's the context UBI should be judged not just it's direct impacts.

That number is fairly meaningless though, since a majority[1] of people will be receive more money from BI than they'll lose in the increased taxes. Only the very rich will see significant real increases.

1: the average income is significantly higher than the median income.

Well, I think it's quite meaningful - it's the amount of money the government would have to raise to pay for this, compared to what they raise now. I bring it up because the revenue side seems like the harder half of the basic income equation, and the one that's more neglected.

It looks like the highest marginal tax rate in the UK is 45%. You could raise that higher, of course - but it's not clear how much, and if doing so would actually raise revenues - where the UK is on the Laffer curve.

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

(Clearly, if you raised it to 100%, it would lower revenue - you can't tax the rich if you don't have rich people anymore. And if you're at 45%, how much higher can you go?)

In other words, legally redistribute wealth from the rich to the poor. Not saying there’s anything wrong with that, but that’s what this program is.

That's absolutely what it is at the core. The problem with it's application has been proven over and over again; the very wealthy have the means and motivation to avoid it while the burden falls on the same segment of the population over and over again.

The solution is simple: legislate so the very wealthy can't avoid it, while remaining in the country. It's really not that hard: if they have assets here and reside here, then you tax them, and seize them if necessary. The only reason this isn't done is because too many people vote for politicians who pass laws favorable to the very wealthy.

You don't think they've tried to "legislate" it so people can't avoid it? It involves guns and prisons.

No, I don't think that. The one thing governments don't try is to homogeneously tax rich people.

I do think governments all over the world work hard to find some way to tax their foes and let their friend pay a pittance. At the same time, they don't care any bit about the people with just barely a surplus, that end up collectively paying most of it.

> The solution is simple: legislate so the very wealthy can't avoid it, while remaining in the country.

... then they'll leave the country. I don't think you've thought this through.

At least in the USA, its very hard to expatriate to avoid taxes. IIRC it requires a one-time payment of ~40% of your net-worth and you to have citizenship somewhere else.

Other countries could follow suit, though the USA probably has the easiest time enforcing due to its global hegemony.

America has a real problem with money in politics which has prevented strong penalties on top earners. But, the US does currently levy a minimum tax total for overseas personal income, it basically can be summarized as "If you earned X in the US you'd owe us Y, you payed the government of the country you're residing in Z which is less than Y, you owe the US government Y-Z", this law is extremely poorly enforced currently but even if they leave the country they still owe the taxes, legally speaking.

If they flee to other countries and illegally circumvent the law then that's where the US should start flexing it's muscles.

Yep, and you can just renounce your US citizenship. That Facebook guy did it a couple years ago.

How do you take real estate out of the country?

1) As the other poster said, how do you take real estate out of the country?

2) Where are they going to go? Somalia? Other countries are going to tax them at least as much. These rich people aren't idle rich, they're rich because they're working in some capacity. You can't do that in Somalia. They get their wealth from being located here. That means they can be taxed here.

>As the other poster said, how do you take real estate out of the country?

Sell it. Or don't, it's their choice. At some point real estate holdings aren't worth it if your host country decides it's entitled to 95% of your wealth.

>Where are they going to go? Somalia? Other countries are going to tax them at least as much.

There will always be another first-world country more than willing to undercut other first-world countries for the opportunity to host wealthy citizens. It's the same principle that gets us to where we are today, with states competing against each other to give tax breaks to corporations to entice them to set up shop.

It's funny how there's no end to people complaining about how the wealthy always seem to get out of paying their "fair share" through loopholes, but THIS TIME, we've got a foolproof plan to redistribute their wealth that they can't weasel out of! Sure thing.

What exactly are these people going to do to earn money in these new countries? We're not talking about idle billionaires here, we're talking about very high-earning people.

Legislation unfortunately involves legislators, people who really like the money those wealthy people give them. As long as we have legalized bribery I don't see it happening.

Well, just as I said before, it's really not hard. Ban bribery. Plenty of other nations don't have legalized bribery (such as just about any western European nation), so it's not like it's an impossible task.

This would cause massive capital flight and long-term capital avoidance of that jurisdiction.

Not wealth, income.

Indeed. I think that probably a fairer way to allocate taxes for this sort of purpose would be either a wealth tax or a georgist land tax.

Which will cause the upper middle class to stop working as hard, because why bust your ass for not much of a better life. Fall back down with the common class which would cause the whole thing to fail.... god I hate socialism.

I thought BI was equal distribution across the population; how can you charge less than its value per person, and pay it off?

Some of the population would pay more towards BI in taxes than the amount they receive as BI (just as some of the population gets taxes more than they receive social benefits currently).

By cancelling current benefits programs, which the OP calculated at 4K per person.

We should tax the rich more then.

>In the UK, a back-of-a-napkin calculation showed that all current benefits equally divided into a single BI would be around £4K,

Does that back-of-a-napkin calculation include the savings you'd get by shutting down most of the government bureaucracy involved in administration of current benefits and not paying salaries to all those government workers? In any country, a huge amount of the money spent on benefits are used just for administration. With UBI, you can get rid of all those workers and use the money for UBI instead.

>a huge amount of the money spent on benefits are used just for administration.

I think a lot of people way overestimate the administrative costs. For example U.S. Social Security administrative costs are around 6 billion a year. Sounds like a lot but it's only 0.7% of the total cost of the program[1]. Sure there's a handful of different programs all with their own costs, but it's maybe 20-50 billion a year. That's not that much considering UBI might increase spending by trillions.

[1] https://www.ssa.gov/oact/STATS/admin.html

SSA gives away money, administers programs and adjudicates disability claims. It’s nothing, relatively speaking.

The lifting for social services is at the state and county level. There’s probably 3 million people engaged in that function, depending on what you scope into it. I betcha there are 10,000 people just doing children’s services in NYC.

>I betcha there are 10,000 people just doing children’s services in NYC

Ok, but we aren't talking about UBI replacing CSA or really any of the local services are we? It's not like child abuse is going to disappear because everyone gets a UBI check. A lot of the state and county level social services are not going to be obsoleted because of UBI. I would think it's more of a federal/national program meant to replace federal/national social services.

It's all inter-related from a funding POV. All service delivery for social services is via county government in the US.

Even something like CPS is significantly funded via other programs. They perform functions like managing foster care, early intervention, medicaid enrollment, etc and draw administrative funding that is shared among programs.

It doesn't mean the UBI is bad, just that you cannot bank all of the "legacy" spending.

It would be possible with a blockchain based system that included a crypto currency. No one would need to be taxed, and in fact current taxes could be dramatically lowered.

How much is the data of a nation worth? For some, it could be incalculable. Not just government for and by the people, but also its data and computations.

Easy. You tax wealth by printing money.

The big problem with UBI, aside from how to pay for it, is that it will not survive as either universal or basic once the voters get their hands on it and decide that, say, UBI benefits should be cut for felons, increased for single mothers, indexed to the cost of rent, etc.

In other words, we have a bunch of different welfare standards for people in different situations because that is what succeeds politically, and there is no reason to believe the same impulses that got us our current welfare system won't influence UBI also.

To be fair, I'm not entirely convinced that a truly universal system is the best. After all, a single parent has significant additional expenses - and should taxpayers be paying to give violent criminals a work-free existence? (Would you pay a living wage to someone who sexually assaulted your daughter?)

In the US, this is especially a problem. The cost of living in Texas is low enough that my salary as an engineer gives me a very high quality of life - but the same salary in NYC would be very different in life results. A federally set UBI then seems... well, to have the same issues that minimum wage do.

With money comes mobility, so people are free to move somewhere cheaper. Currently, those in the poverty cycle are trapped and chronically stressed, making it quite difficult to execute a plan that involves anything more than what's right in front them—moving out of city or out of state is out of the question.

One of the biggest problems facing humanity is sustainability towards the planet. Unbounded population growth eventually breaks everything we all need to survive. If we incentivize having children more than it already is, some people will spawn just to get at that extra money for themselves and do the bare minimum to "raise" their children. And the kind of person that does that does not raise stable, healthy children who will come into their own as productive, healthy members of society...

> With money comes mobility, so people are free to move somewhere cheaper.

I'm skeptical that most people who are currently trapped in poverty would receive enough UBI to make that practical.

Money doesn't stretch as far in a strange place with no network to fall back on, even if nominally the cost of living is lower.

> With money comes mobility, so people are free to move somewhere cheaper

I think generally people are not very willing to move regardless of cost. It takes (on average) quite a large economic gradient to move people out of a location they are comfortable in. Social ties to a location can be very strong indeed.

> and should taxpayers be paying to give violent criminals a work-free existence

This is exactly the problem.

Recidivism is high because society doesn't give released prisoners any way to support themselves. Giving ex-cons a lifeline as soon as they get out would go a long way toward keeping them from ending up back in prison.

So yes. Taxpayers should give ex-cons (even violent ones) a way to support themselves without resorting to crime again. And we shouldn't release prisoners if they're still a danger, which means we should focus on rehabilitation instead of just punishment.

> should taxpayers be paying to give violent criminals a work-free existence?

If doing so significantly reduces the recidivism rate (which I strongly suspect it would), then yeah, I'd say that be an easy 'yes'. I wouldn't be at all surprised if $X in free money given to ex-cons translates into much more than $X money saved by society.

Getting mugged costs a lot more than just the money that was in your wallet. There's (often) medical bills, there's police officers to pay, there's lost productivity due to having to replace ID cards and whatnot, etc. If someone then gets charged with the crime, the costs balloon even further as you deal with further police costs, jail time, time for taking the case through the courts, etc. And if they get convicted, there are even more costs associated with that.

There is also the concern for what kind of welfare programs to implement (or keep) even with UBI - for example, if I blow all of my UBI on gambling/drugs/alcohol/electronics, will society let me starve to death in the street?

What happens now if you blow all your money from social security etc.? Why would that change?

I really don't know what happens - my point was that there will still be need for things like homeless shelters, food programs, etc.

People already remove the universal right to vote for felons so what would the difference be here? One can always talk about universal and then not actually do it.

If UBI is not universal there is no point to doing it -- it would just be a complicated welfare system, and we already have one of those, and we certainly shouldn't throw it out just to end up creating another one.

There is a world of difference between taking away benefits from someone convicted of a crime and saying that "such and such people qualify for assistance if they fill out forms x,y,z and do a,b,c."

It would be analogous to saying that since we send some people to prison, we should all be in prison. It makes no sense to compare these two things. A person who commits a crime loses some rights. That may include a UBI, it may include voting rights, it may include loss of limbs. Felons are fundamentally treated differently than non-felons.

How they are treated does reflect greatly the moral fiber of the population. I personally would not want to take either a UBI or voting away from felons, but that is a completely separate debate and should not be a factor in the UBI being applied to the other 99% of the population.

The UBI debate is about what distribution of resources leads to the best society. It is about who has power, who does not. It is about who gets to make the decisions of what is made and to whom that stuff is given. It is about whether people can live secure or in constant fear. It is not a debate about the criminal justice system though that debate needs to be had as well.

They are not totally independent, of course. There would be a great deal less crime if the stress of surviving was removed from much of the population.

This is my biggest concern as well. Just to address your points:

* My firm belief is that once felons do their time, their debt is paid and they should be full citizens again. They should definitely have the right to vote, although gun ownership might need to be addressed on a case by case basis for violent criminals for the safety of society. So UBI might need nondiscrimination laws attached to it.

* If UBI is per capita, then a single mother with 2 children who doesn't receive child support would immediately see a roughly 3x increase in funds. This could be used to dissuade special cases for allocations.

* Rent will almost certainly go up in places that have no appreciable disposable income currently. This may be a straw man argument however, encapsulating the fallacy that inflation would increase with UBI. If no additional money is being printed, then prices will even out somewhere else. For example, people might be able (as a whole) to afford mass transit or urban renewal projects which would open up competition for cheaper housing in other areas.

Aside from specifics, I see your point however that people working for the general welfare may inadvertently undermine the efficacy of UBI. This is probably the single biggest threat to it, since I don't see any serious technical or financial hurdles.

I'd vote to start everyone with a UBI plus a stipend that adds up to each welfare recipient's current payment (financed with debt initially). Then put a hold on welfare increases for 3-5 years. My guess is that the federal government wouldn't end up paying substantially more than it does now, although I'd like to see a study/projection on that.

Also this all needs to happen outside of self-funded agencies like social security. I think that sacrificing so-called entitlements for UBI would be unethical, since people have paid into social security their entire lives.

> My guess is that the federal government wouldn't end up paying substantially more than it does now, although I'd like to see a study/projection on that.

How could the government maintain current welfare payments and also give UBI to everyone at the same time without a massive spending increase?

Because in the long run, most forms of welfare are self-funded. For example social security and medicare are paid for by workers paying into the fund, and food stamps have an economic multiplier effect of about $1.8 dollars for ever $1 spent:

https://www.fool.com/retirement/general/2016/05/23/how-is-so...

https://www.medicare.gov/about-us/how-medicare-is-funded/med...

https://www.foxbusiness.com/markets/how-food-stamp-cuts-coul...

Also defense and national debt payments total more than welfare:

https://www.usgovernmentspending.com/us_welfare_spending_40....

The above can be looked at as corporate welfare for defense contractors and the independently wealthy/large institutional investors.

It looks like a $12,000 per capita UBI would cost about $4 trillion per year for 325 million Americans. This is about 1/5 of US GDP and roughly equal to the current US federal budget. So UBI would cost an additional $3 trillion if we get rid of welfare, or an additional $4 trillion if we keep it.

I guess I jumped the gun a little on saying it's not that substantial, although I do wonder what kind of multiplier effects a UBI would have on the economy. My guesstimate is that it would be comparable to food stamps at 1.75x and probably generate an additional $3 trillion or so. But without a full study, it's hard to say. Hope this helps!

I find this mostly click bait. We should expect results like this or frankly better. Results from one small African village are not globally applicable. The issue is where does the money come from and is it truly universal. All the experiments to date have been of the "we gave free money with no restrictions to X thousand people for Y months and it was great". This is necessary but not sufficient research. We could have huge savings in the US with simplified welfare programs but we shouldn't forget that most of those savings come from firing some number of thousands who now also need UBI and have diminished pension benefits. All of these systems are inter-related and we will have to keep trying things as the financial divide grows.

Furthermore, while there is some overhead associated with administration/policing eligibility/etc., a lot of the social safety net people costs are also roles like social workers, etc., the need of which doesn't go away just because you are now just giving everyone a no strings attached check.

I'm still waiting for the UBI trial that includes allowing everyone receiving it to vote for how much the UBI checks are for.

That aspect never seems to get included for some reason.

Any democracy could decide to write a check to its voters now.

We already do (at least in the US), in the form of entitlement expenditures, the military/industrial complex, federally subsidized student loans, and more. It doesn't happen overnight, but I don't think anyone doubts we're spending and taking on more debt than ever.

It'll just undoubtedly accelerate the issue with no feasible exit plan.

Great point.

Politician #1: "I'm going to increase UBI to $2000!"

Politician #2: "I'm going to increase UBI to $5000!"

Politician #3: "I'm going to increase UBI to $10000!"

I'm totally voting for politician #3!

And don't forget: proponents are claiming this is necessary because large groups of people will be incapable of obtaining gainful employment. This means, by design, this cannot just be "the necessities" because increasing groups of people will be relying on it to live out their entire lives.

That means we'll be discussing how many vacations should be paid for. After all, you wouldn't tell a huge group of people they'll never be able to afford a vacation their entire life, right? And this will include a car, at least for most of the US. How much money should be allocated for that? Should they be able to afford home ownership, or just rent? Will it be enough to let them choose where they want to live?

These questions (and many like them) will be debated over and over again. I don't think it'll be as on-the-nose as you laid out, but over time, the end result is the same.

> That means we'll be discussing how many vacations should be paid for.

If people don't have work to do then they are already, practically by definition, on vacation.

If you mean going on package tours and the like, there's no more reason to discuss those as a Basic Income "entitlement" than there is with social security payments.

Perhaps "travel" would have been a better word, but the point still stands.

--Social security isn't intended to be a single monetary payment people will, by design, rely on for their entire lives. That's the key difference.--

EDIT: Actually it does do that for specific subsets of people (those with disabilities and similar), but it's a very limited subset as opposed to the entire population, and I think the difference is significant.

Basic income proposals that stand any chance of being adopted are for it to replace other forms of government provided unearned income (unemployment benefit, old age pension), and are approximately revenue neutral, so those out of work and claiming benefits would receive the same amount, those working or earning private unearned income would on average see their tax bills rise by the same amount as the basic income they would now get, and those not working and not currently claiming any benefits would receive it, but at the same time there would be savings from simplifications of the benefits system.

I've heard those theories and am quite skeptical, but they don't relate to my claims.

My point is that even if everything you claim works out exactly as hoped, that will only be on day one. It is not the case that a growing majority of voters will simply be content with whatever is handed to them and be grateful. There will be ongoing debates about what that number should be, but it will almost never go down.

And I've still seen no reasonable "exit plan" for how to transition away from a UBI society where some huge majority of people have, for decades or generations, been told they will never be working a day in their life.

Once implemented, it will be impossible to turn UBI off. In fact, they'll never take away existing welfare programs in favor of UBI--they'll just add UBI on top of it. Think of the children, they'll say.

And if we think people will be happier when handed money that allows them to not work, we are sadly delusional. No one is happier NOT working. People are happy when they are productive members of society.

I mostly agree, with a few caveats:

> In fact, they'll never take away existing welfare programs in favor of UBI--they'll just add UBI on top of it. Think of the children, they'll say.

They won't even have to say that.

The idea that the poorest among us have the financial literacy to be simply given money, budget appropriately, and spend with proper prioritization is empirically false. That's a big part of the value of food stamps, subsidized housing, Medicaid, and similar programs: They only apply to a very specific thing. You can't plan poorly and spend too much on your food stamps and be unable to come up with rent.

With UBI replacing those programs, it will happen, so I expect the "you won't need those programs with UBI" premise to be dropped pretty early on.

> No one is happier NOT working. People are happy when they are productive members of society.

I think people can be happy as long as they think they are contributing to society, even if they are actively making it worse. For a lot of them, I think there will be plenty of union power and political activism among this large group of bankrolled, but unemployed people with plenty of free time. Those people will be able to find happiness and meaning through activism.

I'm curious to hear how folks, who are more knowledgeable than I and have done more research, reconcile data points like these with the data showing lack of success in places like Finland.[1]

[1] https://nypost.com/2018/04/25/finlands-universal-basic-incom...

How long did the experiment last?

I don’t know anything about the program but it doesn’t sound like it was really UBI at all from this description in the article. If it was a) only available to unemployed and b) only a pilot with 2,000 people then I guess it’s easy to ignore it as a data point. Though maybe that paragraph is poorly worded and it was actually more extensive?

>>> “Finland was considered the first European country to pay a monthly check of $685 to its unemployed between ages 25 and 58. It was considered a pilot program — serving 2,000 randomly selected jobless people — that its founders hoped to expand.”

Edit Additionally Googling for Finland UBI experiment yields countless articles claiming it was neither a failure, nor proper UBI

From a guardian article: "Olli Kangas, an expert involved in the trial, told the Finnish public broadcaster YLE: “Two years is too short a period to be able to draw extensive conclusions from such a big experiment. We should have had extra time and more money to achieve reliable results.”" https://www.theguardian.com/world/2018/apr/23/finland-to-end...

Further: "The scheme – ... – is strictly speaking not a universal basic income (UBI) trial, because the payments are made to a restricted group and are not enough to live on."

I'm still hopeful. Also, what other plan is there to deal with wealth distribution and automation dissolving jobs?

There's really no indication of whether it was a lack of success or not.

If it showed worse health and/or employment outcomes for recipients, that'd be a data point. But the fact that a government cancelled it without any explanation really doesn't say much, except that it's subject to politics.

Finland's experiment was not actually a UBI experiment. I mean, originally it was going to be a really big basic income trial... but by the time they finalized it, they’d chickened out and made it basically a tweak to their existing unemployment benefit for a tiny sample of people who were already on unemployment.

Additionally, Finland had to release a response to the article you linked because of misleading reporting by US media: https://www.kela.fi/web/en/news-archive/-/asset_publisher/lN...

So officially there are no results since the experiment is not over. But whatever the results end up being, they won’t say anything about actual UBI one way or the other.

There ought to be a name for a minimal UBI that can allow people who are normally just scraping by to bridge short periods of unemployment, unexpected expenses etc. £4K wouldn't be much for the average Hacker News reader, but for people on minimum wage it could make a real difference. You can't really call this "Basic Income" though, because that term comes with the build in assumption that it's enough for a person to live pretty comfortably. I've been thinking of this as a "Really Basic Basic Income" ("RBBI"?), but nobody seems to be talking about such a thing.

Survival Income?

We have that in the Czech Republic, according to English Wikipedia, it's called "living wage".

I've always thought there should be an essential basics program, where you can always receive an adequate amount of flour, rice, beans, corn, and other basic foodstuffs to survive. I'd also add toothpaste, soap, and other sanitary items.

We can still have food stamp programs that allow people to spend as they please, but the guaranteed floor ensures literally no one need go hungry.

Sticking to basics keeps the costs far lower than trying to subsidize processed foods, and the extent we susbsidize our farmers also subsidizes the program.

Unfortunately the largest cost is rent, but I like your idea. I'd even be happy to donate to such a service.

What are you going to do with flour, rice, etc.? You need a way to cook it. That means you need an apartment, with a kitchen, with working electricity or gas. Those are the things that really cost people. Giving a bag of flour to a homeless man isn't going to help him.

I disagree somewhat, this program isn't intended to replace all others, it's just minfood.

The additional complication is problematic, as is the additional control / disempowerment.

Such as: - Who decides the list of goods? - Who provides them? - Who delivers them?

Ex: Pizza as a vegetable.

Sure, you'll have people make shit decisions - but part of the point (IMHO) of UBI is that a shit decision this month doesn't have to screw you next month.

My brother also always points out that "shrinkage" (from retail) is a really good concept to apply to welfare programs: The cost to 100% anything far outweighs the benefit to 100% that.

Yes, it's a program that is at high risk of overexpansion like many others.

It would be constantly attacked for not providing "healthy" options like fresh fruit, organic flour, more variety and whatnot.

I just wish we could do stuff like this. Same with housing, provide budget accommodations in low cost areas and you'll be accused of creating ghettos and modern day internment camps. So we spend much more to subsidize housing in the highest cost, most desirable regions, leaving far too many without anything.

Right. Or you give people the capacity to make their own choices (and make sure the market can function as properly, which is non-trivial).

Any kind of goods/services delivery removes people's capacity to make their own choices.

Sounds kind of like the unemployment income most states have.

How is this different from unemployment checks?

An issue with that approach is that you may end up giving more $$ than the person could earn from any job they could take, effectively forcing them to stay jobless

Unemployment checks usually stop once the person has a new job. UBI does not. It does not create an incentive to stay jobless, or does so to a much lesser degree [1].

If I get $400 in UBI and $500 in salary, the only loss is that I am paying higher taxes on the $500 than I would be in a non-UBI society.

This behaviour also results in the fact that, even though taxes are higher, those in the lower revenue rungs still come out ahead in an UBI society vs a non-UBI scenario.

[1] There is a minor incentive caused by the decreasing utility value of money: The first $100 you earn are much more valuable than the $100 you earn on top of $5000. UBI moves the salary revenue a bit up in this scale, thus making it less valuable.

Universal Dividend, the idea being that we all are investors in the world around us, particularly in the act of creating the next generation and staying alive to be the workers, consumers, etc. So everyone gets a cut of the general profits.

If one is against this idea, then ask why any investor of money into a company should get money back from it when they did no explicit work for it? If you reject the universal dividend idea, then one, to be consistent, should really reject the idea of investment. Good luck with such an economy.

So instead of the demeaning UBI narrative that people need money to survive, it suggests an uplifting narrative that we are all valuable and that we all get a bit of something back to reflect our useful existence as well as a little something in order to "invest" it into the next act of creating something. It captures the idea that our society is built not just economically and bureaucratically, but also socially. That having neighbors, coworkers, customers is important for economies and governments. These are hard things to support with metrics, etc, so we just decide on a basic level and give it out.

What that level is would be debatable, just as how much an investor makes from dividends or buybacks, is debatable. Since I think the ability to walk away is the most important aspect of freedom and that freedom is an important value, I would want a higher amount than you suggest. But a lower amount would work as well with that label.

Spit ball: What is a mediocre growth return rate? Maybe 4%? So tax wealth at 4% and distribute it across all the citizens. Anyone who can use their wealth to generate more than 4% will see it grow (these are the successful people) while those who cannot will see their wealth dwindle and would be the typical case. This also addresses the wealth inequality issue. Incidentally, at 100 trillion dollars of wealth, this leads to 4 trillion to distribute across the population of say about 330 million leading to about 12,000 dollars a year or so.

This also suggests that the dividend should be applied equally to all people which includes, especially so, children. This is an investment in human existence and a celebration of all of us. Note that this also addresses the concern of a single mother of 3 who would get 12k for herself, 12k for each of her children leading to 48k to take care of her kids, keep them out of poverty, keep them nourished, loved, protected, not abused, etc. It also makes even an unemployed spouse economically useful to have around, but it also enables one to economically walk away from an abusive spouse. This would also lead to the ability to eliminate forced public schooling and much more organic growth of true individuals, free of labels, bullies, adult abuse, and indoctrination.

One might view it as almost a Universal Investment for the young, Universal Income for the middle aged, and a Universal Dividend for the old.

> If one is against this idea, then ask why any investor of money into a company should get money back from it when they did no explicit work for it?

Because they did. They put their capital (that they worked for, or their ancestors did) at risk so someone could use it. It's only fair that they get a cut.

If you trace the history of that capital to a violent past, such as slave owners or government eviction of natives or violent suppression of people's rights or unfair distribution of wealth by the government or redlining, ... is it still fair?

If fairness is a concern, one would seem to be led, at the very least, to want to wipe the slate clean for every new individual; no transference of wealth or privilege from one generation to the next. Only self-made people, self-made by above board behaviors, nothing morally or legally questionable. Then sure.

Since that has nothing to do with the actual distribution of wealth in the world, saying it is only fair seems an inadequate justification.

In general, I have always thought the idea is that successful investors can invest successfully and so giving new capital to such individuals leads to further successful invested in ventures, enriching society further.

The same thing goes here. Living individuals have been successful at living, which usually requires great effort and skill by both the individual and the community, and so why not give a bit back to further that journey, a journey that enriches us all.

If you can trace inherited money back to an immoral past, then it's not fair, IMO. However there really isn't much of this kind of wealth anymore.

I completely disagree with you about fairness though. I'm working so my kids can have a comfortable life, that's almost the only point of the work I'm doing, and it's not fair to not let me work for them.

Perhaps the most ironic thing I've read in a while:

"Suicides would also decrease, as the most of them are result of depression, which is mostly caused by anxiety about survival."

"Grand claim because grand claim and other grand claim, evidence not needed."

None of those references are primary sources or peer reviewed. I've also personally never heard of "the incomer". I feel like I'd prefer to take those claims with a grain of salt. It feels like a lot of work to try and spend time digging in to whether this is true or not.

It might be true - but this doesn't feel like a credible source.

If you're doubtful on where the money for UBI comes from, for the US Andrew Yang (running for 2020) suggests to increase VAT.

He was on SH's show [0] and apparently has a book on it [1]

[0] https://samharris.org/podcasts/130-universal-basic-income/ [1] https://www.goodreads.com/book/show/36204293-the-war-on-norm...

Did anyone up voting this read it?

Worst article I've ever seen so high up on Hacker News.

It's practically incoherent

It might be politically unpopular, but maybe we should just raise taxes and index them for measures of inequality. The GDP per capita of most modern economies can easily handle a basic income sufficient for all but the most expensive cities.

That assumes that GDP would not be impacted negatively by the massive tax increase.

I'm sure there are many theories, in both directions, of what would happen to the total tax revenues if you were to raise rates significantly, but it's surely far more complicated that your idea makes it sound.

Moving money from rich people to people much more likely to spend it rather than hoard it should result in a significant GDP boost.

Maybe not. Rich people are more likely to invest it; the economy also needs that.

Owning stock is not investing in economic terms. Companies are going to maximize profits independent on how much individuals pay in capital gains because nothing about capital gains changes the companies costs or profits.

Buying existing properties is the same thing. If no assets are created then it's not an economically useful investment.

VC money is often thought of as rich people investments, and it is an investment in economic terms. However, Pension funds, endowments, charitable foundations, insurance companies, sovereign wealth funds, and large corporations are more often than not the source of these funds.

Generally rich people are rich because they have invested their money they don't simply sit on piles of un-allocated resources.

Buying stock is investing in economic terms if it's a new issue. Buying bonds is investing, too (again if it's a new issue), and the bond market is twice as big as the stock market.

A relatively small amount of new stock is issued each year on the open market when you exclude companies that trade their own stock. Bonds are often issued for things like taking a company private which are again not really investments just asset transfer. Further, profitable companies often issue bonds even if they have cash on hand or regular dividends.

So again it might be a useful investment, but that’s not nessisarily true.

You misunderstand the fundamental mechanism for improving standard of living: productivity gains. Consumer spending does not improve productivity. Rather, investment in capital goods (by those rich hoarders) leads to productivity growth.

If you're considering "investment" as included in GDP, it's not just "saving money", it's "business spending on depreciable assets", essentially. Owning a share of Apple doesn't make you "an investor" in the GDP sense, but Apple does a lot of investment.

I'm not sure that "rich hoarders" have an appreciable positive impact on business investment in depreciable assets. Most capital assets are purchased to produce goods and services to meet demand, which might be stimulated more by redistribution.

That's a fairly basic liberal view, profoundly flawed. Consumer spending improves productivity as a second order effect. Consumer spending improves the demand side of the economic cycle, prompting opportunities for investing in efficiently supplying that demand.

The disruption of the demand side of the economic cycle is the reason behind the loss of competitiveness of economies with high inequality. You get capital accumulation that finds no outlet for investment, other than riding economic bubbles.

This open lecture by LSE, although focused on the UK, touches most important points about inequality: http://www.lse.ac.uk/Events/2018/07/20180717t1830vOT/peak-in...

But those productivity gains need to be directed efficiently, which requires some mechanism for the market to know the needs of a broad swath of the population. People get to vote on what problems need solving and that directs productivity growth as capitalists chase revenue.

However, if income is too highly concentrated, then folks with serious problems don't get many votes on what problems need solving and the folks who do get those votes are disconnected from those with more dire problems.

That assumes that the GDP would not be positively impacted by redistributing the funds to those who will spend it. A revenue-neutral taxation and distribution system should be more or less free of bias and significant negative effects on the economy, and that's what such ... socialist luminaries ... as Friedman proposed in the form of negative income tax brackets.

GDP isn't the best measure though of the actual health of the economy. In the current situation maybe doing what you're suggesting would work, somewhat... but I could imagine situations where it wouldn't.

For example, Elon Musk is rich. If we just redistribute all his money to "people who still spend it" (the poor), we get a bunch of people buying slightly better cars instead of getting significantly better rocket technology. At that point it's less of a clear benefit.

Completely agree. I think my back of the envelope calculations were that paying for a reasonable UBI in the US would require a new flat income tax in the 12% range, a wealth tax in the 2% per annum range, or a land value tax in the 8% range. I don't think that any of those would be too huge a disincentive for Mr. Musk - most of his ventures seem to yield either -100% or +30% per annum.

But adding another 12% on upper middle class workers such as myself would create a very large disincentive to work harder.

People in expensive cities shouldn't get any more basic income money than people anywhere else; that'll just make more people want to move there. If the nationwide amount isn't enough, the answer is simple: move someplace cheaper. When you have a guaranteed basic income, this should now be possible. This will have two effects: 1) keeping the cost-of-living from continuing to spiral up so much in those cities, and 2) forcing employers in those cities to pay better, since their workforce can more easily move away to someplace very cheap.

Nowhere in this article does the author provide a source for the mentioned 40% drop.

The article isn't very well written. The drop was 36.5% and is reported in http://www.bignam.org/Publications/BIG_Assessment_report_08b... starting on page 45.

Clickbait from a new website.

The "strengthened workforce" if you click through is actually about this paper with the alaska fund: https://www.nber.org/papers/w24312.pdf

Not about basic income per se.

The work disincentive of basic-income-like cash transfers, in studies so far, is actually somewhat consistent at around 10%. Some papers referencing this approx figure:

https://www.dropbox.com/s/r19npwc30trejb6/Basic_Income_in_a_...

https://www.dropbox.com/s/oi0kv3vcya9o0ad/The_Rural_Income_M...

https://www.dropbox.com/s/hkd489vcarcrorg/Findings_from_the_...

https://www.dropbox.com/s/5m2k5qzgv699dfe/THE_TOWN_WITH_NO_P...

https://www.dropbox.com/s/dsucn7jone74g65/New_Jersey_Graduat...

(from research on a long BI article I wrote)

The part about people not leaving the workforce is based on a non-peer reviewed working paper arguing that the Alaska Permanent Fund, which pays ~$2000 per person, has not decreased employment: https://www.nber.org/papers/w24312.pdf

I doubt any rational person would quit a job for $2000 a year. Or for a temporal UBI that may last a few years, leaving a gap in their career. I'm curious, does anyone know of any UBI test in which the amount was enough to live decently, and was assured for the lifetime of the recipients?

Ontario recently cancelled their experiment with universal income. Which points me to the fact that even if UBI becomes reality at some point, it's only one government away at any time from being cancelled or adjusted. So your livelihood at any given time is dependent upon government balancing its books. Considering how bad many modern developed governments are at doing this, it gives me little hope of UBI being any sort of good, substantive thing happening in the near future.

As did Finland.

What's wrong with having UBI for 2 years and then suddenly having it cut off?

Jack London, the famous homeless / hobo writer of "Call of the Wild" and "White Fang", was only able to write his first book because of the support of community libraries and random strangers who gave him a bed occasionally. Eventually, he was able to pull himself out of poverty and become one of the most famous writers ever.

If you can help those homeless people for a few years, that's all that's needed to permanently change some of their lives for the better. It will suck when the program ends, but some-help is better than none at all.

-----------

These programs aren't supposed to be sustainable living forever-and-ever. They are parachutes to help people who are in tough times. They provide a pathway out of poverty.

So Jack London had UBI? What is stopping someone else from doing exactly what Jack did? The government shouldn’t be a charity — that’s what charities are for.

Charities are inconsistent across the nation.

If Charities can rescue people some of the times, then the US Government can apply those principles and rescue people all of the time.

A good idea can be done by a Charity, by your neighbor, or by the US Government. It doesn't matter who does it, as long as it gets done.

> What is stopping someone else from doing exactly what Jack did?

Well, eventually Jack London ran into Hobo and anti-loitering laws and landed in jail. Jack London then traveled to areas without Hobo laws and anti-loitering laws.

Although, the times were different. Jack London was homeless due to the depression of the 1890s, and the number of Hobos were so large that they grouped together and formed "Hobo Code" and kinda their own society. Ideally, we should never have that huge number of homeless people ever again.

You are trying to use a universal solution to a specific problem. Furthermore, visible homelessness is often a presenting symptom of other, non-homelessness problems. Look no further than San Fransisco or Seattle for how little throwing money at something will change the outcome.

Or, look at the education system in Washington DC- highest expenditure per pupil, with sub-par results.

Giving everyone for an undefined, but definitely finte, period a lump sum of cash will certainly help a small number of people. Others will not leverage the windfall and will once again be destitute when the charity ends.

What do we do then? I would rather have a more systematic solution [edit: set of solutions] to help people whenever they are in need, rather than a blanket solution.

Some arguments I've seen boil down to "well, let's do both!" at which point all they are arguing for is sticking with the same broken system, but throwing more money on top of it. It doesn't change the fact that what we have isn't working, and isn't going to be solved by further crippling the middle class (since "the rich" typically adjust income strategies whenever taxes change, they're not going to be affected in the way "tax the rich" folk expect).

> You are trying to use a universal solution to a specific problem

Wat? It (UBI) is a self described universal solution. Inability to avoid becoming degenerate (where your daily situation will gradually worsen) in the western world is not a specific problem. The idea that leveraging UBI for 2 years (which is oddly specific) is beneficial, is laughable. Almost every degenerate (not a pejorative usage here) started from a stable lifestyle, belies the problem with that approach. You've staved off a few years, but not addressed the underlying issue. If you aren't adapted (intelligent, able bodied, whatever) to survive in modern western society, is sterilization (or lawful restriction on childbirths) for permanent UBI moral? This avoids the octomom welfare queen issues. It's worth thinking about, I believe.

Based on my association with welfare workers (and one in particular that specifically works with the homeless) "visible" homelessness is most frequently a result of mental illness and / or drug abuse (which renders a person roughly at the same capability level as if they had mental illness).

Throwing money at them won't change their condition so much as providing treatment for the underlying cause that allowed them to become "degenerate" as you say.

Unfortunately, many have no desire to accept treatment- either they feel they don[t need it, don't want it (hard to give up drugs) or fear repercussions of accepting treatment (i.e. come under close scrutiny, lose freedom, get locked away, etc).

The sort of homelessness that is harder to "see", so to speak- and that's the sort of people who are temporarily out of a job and lost their home, or suffered a medical setback, or what have you. Sometimes, money is enough for them to get back on their feet. Other times, they simply lack the financial skills necessary to make wise money decisions (aka have a savings account built up for emergencies) and could also benefit from financial training to avoid landing right back in the same situation again.

No matter how you look at it, a tailored solution is more effective than throwing money at people, because the problem you see isn't necessarily the root problem that needs to be addressed.

> (aka have a savings account built up for emergencies)

As far as I can see it, "not having a savings account" is primarily a function of money.

Intelligent people have low savings because rent is higher than their take-home pay. Remember that the average American family lives under $50,000 / year wages. That's a family, which typically includes TWO wage-earners.

Average wages is below $35k / year. Drop out a bunch for taxes and it becomes difficult to build up savings.

Go to "below average" jobs and you straight up are unable to afford rent, unless you band people together somehow.

>> What's wrong with having UBI for 2 years and then suddenly having it cut off?

re: Ontario's cancelled "experiment" - the recipient they talked to felt she had been "betrayed" and "wasn't going to be able to make ends meet"

So after less than 2 years it transformed from a narrow experiment into a entitlement, like many (most?) government programs. It was no longer treated as a "top-up" but a core component of survival.

It seems to make sense that a fixed-limit benefit would prevent this, but history shows that a non-trivial percentage of recipients just use it as a reprieve from the inevitable.

> re: Ontario's cancelled "experiment" - the recipient they talked to felt she had been "betrayed" and "wasn't going to be able to make ends meet"

Well yeah. But that person's life is surely for the better because the program existed for those two years?

I don't want to demean that person's feelings. But two years with basic income is strictly better than two years without basic income.

If the only argument against UBI is that "Penny-pinchers in the future might shut down the project", that isn't really a counter-argument at all.

I agree. govs are not trusted because public knowledge is broken. I believe we have to fix it. Also, I think inequality must be kept under control (taxes?) to protect democracy from private hands with too much capital. But taxes are useful only when public knowledge is fixed. When gov is transparent and trusted.

You could say the same about public healthcare programs, although in many countries they have now been around long enough that their destruction is now politically impractical.

I found the source for those who like me couldn't understand the article (had to click several links). PDF

http://www.bignam.org/Publications/BIG_Assessment_report_08b...

A better headline might have been "Basic Income caused crime to drop in Nambia".

I think there are a lot of variables that deserve closer study before jumping to conclusions about what might happen in other places.

The English is really bad in this, was this article translated or something?

Going by the name of the author (Atha Fromy), I would guess it was written by someone who has English as a second language. This being my assumption I am going to give them a pass on slightly dodgy grammar since I couldn't write an article in any other language.

Meanwhile, in the real world, UBI is too expensive and unsustainable. https://www.theguardian.com/world/2018/aug/01/ontarios-new-c...

I am wondering often with UBI: if everybody gets a certain amount of money. Wouldn't prices just adapt and everything gets more expensive, and there would be the same divide as before? Similar to Scandinavia where prices are very high. What mechanism could prevent this from happening?

Why exactly do you think this would happen? It doesn't actually make sense. Let's say Company A charges 2$ for an apple and each apple costs 1$ to procure, and then at some point a UBI is implemented. What changed that suddenly allows company A to raise the price of an apple without being undercut by Company B? The cost to procure an apple might increase somewhat because laborers have more leverage under a UBI, but there's an upper limit to this with automation anyway. A more equal distribution of wealth in itself will not cause any increase in the cost of goods.

Yeah, i guess you are right in a perfect market. My hypothesis was that increased buying power leads to more demand. In your case for apples it would allow apple producers to increase prices and raise margins, as long as competitors don't undercut them.

What is the original cause that drives prices in countries like Switzerland or Norway higher? Is this only due to currency trading and a country's credit rating?

Prices are stable and not really rising in Switzerland, same for salaries.

Prices in Germany are rising but salaries are stagnant.

Just my observation.

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