Universal Basic Income Is Silicon Valley’s Latest Scam
medium.com
medium.com
The biggest problem with inequality is the floor and that is a problem UBI robustly addresses. Once people are off the floor they have many options and are not forced into the gig economy or any other specific option.
Inequality is a much bigger problem than just the people at the bottom. It is associated with a plethora of bad outcomes. This includes poor physical and mental health outcomes, happiness, and other core indicators of societal wellbeing.
Yours is a bad faith comparison unless you do this.
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Had Andrew Jackson not overturned the original reconstruction proposal for freed slaves to be given 40 acres and a mule as reparation, instead of simply allowing them to earn wage labor on former slaveowners’ lands, we might be looking at a vastly less divided America today.
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Andrew Jackson was long dead. It was Andrew Johnson who rejected 40 acres and a mule. I guess those Tennessee presidents all sound alike.
Premise 1: There's this big problem of inequality
Premise 2: UBI is not a perfect solution for solving this inequality
Therefore, probably,
Conclusion: We should reject this solution
This is called Nirvana fallacy [0], also known as the perfect solution fallacy. For example: "Seat belts are a bad idea. People are still going to die in car crashes."
But UBI isn't a SV invention, far from it. Applied to SV, it does serve to continue concentrating the wealth. There was an interesting author on KQED forum a day or 2 ago who wrote a book about our betters keeping us down in just this way. I found that guy a bit ridiculous but again, not wrong.
About the subject matter:
My understanding is that, in general, software's winner-take-all economics has joined forces with globalization, robotics, and machine learning to usher in a historically unprecedented era of extremely high competitive pressure. As a result, a growing population of tens of millions of Americans aren't that competitive in the economy, which is Really Bad.
The author says UBI "showers the cash down on the people so they can continue to spend. As a result, more and more capital accumulates at the top. And with that capital comes more power to dictate the terms governing human existence. Meanwhile, UBI also obviates the need for people to consider true alternatives to living lives as passive consumers."
To me, this is not a rigorous or convincing argument that UBI will exacerbate the challenges of our modern economy. Or that UBI will have the effects he claims. Or that those effects are well-defined and make sense at all.
When people eventually become too poor to
continue working as drivers or paying for
rides, UBI supplies the required cash infusion
for the business to keep operating.
The rest of the article is simply philosophical grandstanding about how UBI is really a figurative IV drip in the ICU being a secret plot by hospitals in order to keep people as patients forever.
I don't implicitly trust governments or corporations. The concept of an aggressive company like Uber, an organization that analyzed greyballing their data to subvert lawful behavior, is certainly one to operate their users exploitatively.
But, a supplemental pay check that means the difference between not eating plus getting evicted, contrasted against just hanging out and safely waiting for business to pick up again, in between seasonal dry spells, available to anyone, especially those who normally operate odd jobs as a career, this isn't some sinister trojan horse to lock people into a no-options future of scooter charging.
When people are facing eviction and starvation, and the very cold reality of getting locked into living on the streets, homeless, there are bigger problems at large, and worth fixing.
Universal Basic Income can change the world, but it's not a siren song assuredly leading to total powerlessness. It can't protect people from their own bad decisions. It is probable that both sides might employ behaviors that take advantage and game the system. But that doesn't mean this won't do a lot of good, and solve real problems for a lot of people who need the help.
I guess they could, but even at best that would still only slightly mitigate the effects of the increasing inequality. Since stocks are a way of making money with money [1], what you could buy with UBI (or, more realistically, the much much smaller slice that's left after living expenses [2]) is obviously much less than what someone with either more to invest or directly benefiting from the company is getting.
[1] That is, for the purposes of this argument. Sure they're also a way of funding new endeavors etc.
[2] And that slice of dispensable income is also, generally speaking, much smaller for those with low income than those with high income, both absolutely and relatively.
And there it is - the fashionable people striking back against the geeks who were supposed to grow up and lead lonely, miserable, solitary existences but who have inexplicably found themselves in positions of relative importance. And the popular “in crowd” will do whatever they can to keep that from continuing.
This sounds like a non sequitur. How does UBI lead to capital accumulating at the top? Couldn't it reasonably accumulate to whichever company creates the most value efficiently? Isn't that one of the features of capitalism?
If the issue is monopolistic behaviors of companies, this is what the author should be attacking.
It all depends on how you fund the UBI from different households (and their holding-companies, trusts, offshore bank accounts, etc.) versus how well each of those groups can recapture it from the economic engine.
There are probably scenarios where the UBI could be used to cause a net-benefit to the top 1%, based on net-losses among the 90-99th percentiles. That the bottom 90% see a minor benefit would just a side-effect.
I did the math using ocde and national statistics institute data for my country (portugal), this was a couple of years ago, so I used 2014 data. I calculated that using only the existing expenses in Pensions, unemployment benefits, social insertion benefits, etc... you could sustain a UBI between 300 and 380 euros per month, enough to survive in a small town while sharing a flat. This might seem bad, but the only people who would receive less money compared to the existing distribution would be the 20% of the population with highest income, every one else would benefit from the change in distribution, even if you were to have no other benefit from less bureaucracy, etc...
How do you motivate people to contribute to the social system when they know they will get a flat, low rate they're getting anyways? What motivates a high income individual (the group that pays it all) to not move away?
There are a few places where it might be possible. Very few rich places. Saying that we could have UBI today implies it'd work around the world, at least in first world countries - especially in a thread about USA. This is like saying that the whole world can speak Czech because 10 million czechs do.
How do you solve the problem that if someone gets free money monthly, their work has to be worth enough so it is worthwhile to work, even if it is part time, and thus their products are more expensive, including basic necessities, and negating almost all effect of UBI? Are you aware that this would push prices of food and housing way above what it costs today, relatively speaking? This problem would be solved with automation but we're not even near there and yet you're saying that we could do it today, how?
How do you solve immigration that would necessarily happen and increase costs? Would you quit the EU?
Also consider that there might be much better (more cost effective and easier done) solutions to the problem of homelessness that do not demotivate anyone.
In regards to whether or not it works in the US, or other countries that is something i didnt calculate and quite frankly don't really care about. My goal when checking the data was simply to see if it was both feasible and beneficial in my own country (portugal), so I didn't bother to check the data for other countries.
That being said the primary reason why it is so readily and clearly a better system than the existent is that there is a very large discrepancy between the high income and low and medium income in terms of how many cash benefits they get. For reference, in Portugal around 46% of all cash benefits expenses go to the 20% of the population with the highest income, the next quintile (the 20% poorest) receives only 18%. This, if I recall correctly, is not the case in the US, there the distribution is not so eschewed and so the social benefits to simply changing the distribution is not nearly as convincing.
Now in regards to special cases that you mentioned, then indeed, there will definitely be some amount of people who will be harmed by the change, however we do have universal healthcare and it is quite good, so those people will always be a small minority. There is definitely something to research there, and we should definitely quantify just how many people will be affected, however we cannot justify harming 80% of the population just because we might harm a handful of outliers, that is in my view socially irresponsible.
As for the motivation issue you mentioned, the fact of the matter is that the existing system already has those same issues, the only difference is a matter of intensity, which can be measured and the tax rates and expenditures adjusted accordingly.
In regards to the matters of inflation, I don't see how any meaningful inflation can occur, for the simple fact that all my calculations assumed the exact same amount of spending as it currently exists. Yes, some specific parts of the economy (particularly in low cost housing/food) might see some inflation, due to the fact that people now have a roof over their head/food to eat, but the amount of homeless in portugal as is, is quite low, and there is no famine, so I cannot imagine that there will be significant changes in total consumption.
As for motivation, it seems to me that not having a welfare cliff would go a long way to reducing unemployment (around 8% today, and around 16% at around the time I researched )
The actual solution is wealth creation. And you can only get wealth creation through de-regulations, lowering the taxes, bringing jobs back and companies back into the United States, better education, and skill training programs, etc.