UBI without quality public services is a neoliberal’s paradise
opendemocracy.net
opendemocracy.net
That's pretty clearly because "free, quality public services to all" are really hard & expensive to deliver. Without prices & competition, they're prone to massive inefficiencies, over-provision or under-provision due to various political distortions, and resource- or agenda- capture by insider managers/public-employees/organized-lobbies.
Smaller, tightly-knit polities can often manage more-efficient public services. The two examples given in this article – "quality public housing" and "free public transport" – work well in some places!
But giant geographically, economically, ethnically diverse polities like the US have a much harder time. Public housing in the US sucks. Mass public transport here faces costs 5x as large in as other developed countries – due to the sclerotic interplay of dysfunctional bureaucracies, mercenary contractors, and powerful public employee unions. That is, those exact unions in the "Public Services International" federation which employs this op-ed writer. So of course she's arguing, "pay us first, and more, before spending more directly on the poor".
But the point of UBI, if it were to work as hoped, is to route around such non-poor middlemen – those who claim to be serving the poor, but rarely seem to reduce overall poverty. Cutting checks is comparatively easy to do, and most non-addicted adults can spend $X for their own welfare better than any supposedly altruistic outsider could spend the same $X.
https://newint.org/features/2018/05/01/the-private-sector-ef...
Also, there is a difference between how efficiently those services provide, and how well those services actually match consumer needs. The government can likely build cars more efficiently than anyone else, but would do a very bad job at determining what should be in a car or determining who those cars go to.
In addition, I'm curious in what ways is this source biased? I'm not sure an unbiased source exists, but I'm curious of your reasoning here.
They can build cars cheaper than anyone but can allocate them inefficiently.
On a separate note, I'm still very curious of your answer to my question referring to the source.
They specifically call out that they are an alternative journal, with a focus on very left policies. Which I can respect, but I thought it was a poor choice of source to make the point. A stronger case could be made by pulling a more independent observer who may site a more gracious collection of sources.
And I would like to point out that the article advocated for eliminating all means testing. So in the case of this (admittedly strained) argument. I get a car, but it must be the same car for all.
It shouldn't be!
Healthcare also being a public good that almost every other developed country handles at a national level with greater success (life expectancy/ childhood mortality, other major kpis) and far lower costs.
Are you unbiased?
There's no such thing as an unbiased source. Having actually read the linked article, it's a detailed, well-cited, and effective piece. Indeed, it seems the bias you complain about is based on the political stances of the publication and not any merits of the piece itself, as if critiques of capitalism are only valid when written by proponents of capitalism.
Further, this kind of vague belly-aching about the supposed "bias" of an article is very much against the spirit of the board. It casts aspersions, intentionally or not, not only on the article that was linked, but on the commenter who linked it. If you'd like to criticize the article, please do that instead.
Or look at education at all levels, where costs have also skyrocketed and public options keep getting cut because bureaucrats from “competing” private industries try to push their agenda (you could argue this is even worse in healthcare and pharma).
Competition and profit motive hasn’t been proven to work so well for public goods, in my opinion, but would love to hear of examples where it worked. This is why for some things we still agree we should pay for at a government level (local or national), such as firefighters, defense, mail, etc, etc.
Not even going to get into how inflationary ubi would be, instantly driving up costs due to “rational” economic behavior.
there's no reason to believe it is better than democratic, central planning (note: not stalinism) in either this or the last century. public planning would, of course, go out of its way to incentivize automation and further technological improvement... something that has historically been publicly funded anyway.
edit: typos and stuff
Can you name an example of this succeeding at the same rate American capitalism has if Stalinism is not one?
I will say that despite massive sanctions and material scarcity, and an incomplete level of democracy, Cuba gets a lot of things more right than the US (for instance, healthcare for non-rich people). They are also fucking up their environment way less. But it's still scarcity socialism and could be way better.
the US also has a very incomplete level of democracy
edit: escaping asterisks
Could very well argue that it's not possible because you can't shop treatment for a heart attack to get the best price, but I can say with confidence that trying to keep costs down for prenatal/labor/delivery was unlike any other buying experience I've had.
Lasik is a good example of how a less-regulated medical procedure got more cost-competitive over time, but again, it's elective. https://surgerycenterok.com/ is an example of a place that's at least doing flat, visible pricing, which shouldn't be a revelation in a market-based system, but is.
https://fee.org/articles/imagine-if-we-paid-for-food-like-we...
this is not really true. if you are having nontrivial repairs done on your house or car, they will give you an estimate upfront, but there can easily be unforseen problems that cause the work to cost a lot more. you might decide to have your car fixed later, but it's hard to pull the plug on a kitchen remodel halfway through. there's all kind of work that gets done without knowing how much it will cost beforehand.
I'd qualify my statement with preventive* healthcare, the near entirety of which can function on upfront prices.
There no effective competition which is why the "race to the bottom" is not taking place.
>Competition and profit motive hasn’t been proven to work so well for public goods, in my opinion, but would love to hear of examples where it worked.
Shipping everything larger than a letter comes to mind.
>This is why for some things we still agree we should pay for things at a government level (local or national), such as firefighters, defense, mail, etc, etc.
Just because the government regulates and pays (fully or partially) doesn't mean the government should deliver the service. Private utilities seem to be slightly less dysfunctional than government owned ones. Private EMTs work fine. Private security isn't known for brutalizing people without a good reason. The roads are plowed at pretty competitive rates by private contractors.
Don't get me wrong, some "essential for society to function" services should be provided by or managed by government to varying degrees but the degree depends on the service. In housing a service does not inherently make it better.
Yes, we have the worst of both worlds: We socialize losses and capitalize gains. Banking/healthcare are two examples of non-free markets, because there is no ability to let them fail. When you cap the downside, you get exactly what we have.
This is a good example of poor market interventionism, not free marketeering, which is not to say that a free market is the right approach for healthcare (I think it should be fully socialized).
If you run your country properly and efficiently, none of the things that you mention must be true. This is really a question of mindset and culture, nothing more. Of course rich people and their lap dogs, like Milton Friedman would like you to believe differently. Ultimately if the private sector outcompetes the public sector for (most of) the best and brightest, you will end up in a situation like in the US. At various points in time, you could not achieve much higher prestige than being an elite public servant in France (all the grand ecoles recruited for that) or be part of the diplomatic corps in Germany. Some of these positions still have very competitive salary to this day.
Hopefully converting government services to digital services (the German government is planning to do this for all of its ~500 functions over the next decade) will eliminate a lot of the lower / middle management in the administration.
https://www.bls.gov/oes/current/999101.htm -- annual mean wage of the 2,639,180 employees of the federal government, $76,810
https://www.bls.gov/oes/current/oes_nat.htm -- annual mean wage off all 144,733,270 employees in the nation, $51,960
Of course the federal government might legitimately need higher average skill levels than the rest of the economy does. I wonder how that ratio, $76,810 / $51,960, compares to the ratio in other countries, particularly those with a reputation for being well-governed.
Yet people throw rocks at "Americans" as if your average person from Oregon is at all similar to your average person from Mississippi.
They are. Speaking as someone that has lived in California, Kentucky, Maryland, Maine, New York and Florida - the average person in each of these states is almost exactly the same.
And provide a nice supply of testers! Nothing can beat German efficiency!!
Have you ever wondered why very large companies are run inefficiently and have a lot of bureaucratic morass in them, while startups and small businesses actually get things done?
Now compare the size of the United States' landmass, population, and GDP vs. individual European countries.
There was a time when the United States' model was supposed to be like the European Union, with strong individual states governed by a national body, where each state would have wide latitude over how they conducted their business. In such an alignment, you might see examples of efficiency (Germany) and examples of stupidity (Greece). Alas, this is not the direction the US decided to go, and instead has a pretty inefficient strong national state that gets very little done specifically because of its size.
Plenty of small startups are innefficient, and produce bad products that are badly thought out, and fail to meet any demand.
There are also plenty of government workers that are responsible, honest and hard working.
Basing retorical questions on opinions goes to nowhere. You asked a leading question that begged a very specific answer.
I've heard this refrain from a number of otherwise sensible people and it always makes me shiver. Not only does it imagine all the world's non-US megacities are quaint "tightly-knit" monocultures, but the dog-whistle "ethnically diverse" component is particularly repellant. To give the benefit of the doubt: that's probably not intentional, but I really wish we could end this meme as to why the US has inadequate public services.
And it's not just ethnicity – it's many dimensions of "largeness" and "diversity", including geographic dispersion, variety of economic industries and incomes, religions, density, etc.
Only 2 countries in the world have a larger population than the USA: China and India. They're not known for top-notch free public services, either – though China's anti-union, anti-local-control authoritarianism allows public infrastructure development at a crazy pace, and (forced relocation into) public housing. The other 7 most-populous countries (Indonesia, Pakistan, Brazil, Nigeria, Bangladesh, Russia, Mexico) aren't stellar examples of public services, either.
The "high services" models most often highlighted tend to be less than 1/30th the population of the USA and far more culturally/economically homogenous (the Nordics), or at most 1/6th to 1/5th the population of the USA (UK, France, Germany), and still less varied geographically, economically, and culturally.
You're going to need more than wishing for this to go away, because as other commenters have pointed out, this isn't dog-whistling. It's empirical fact that a greater share of tribalism and sense of community (of which, surprise surprise, similar race/ethnicity is a factor) improves socialized goods/services.
Inconvenient facts are not racist when simply noted, and that's a meme I'd wish would go away.
yes, but spend on what? Rent, privatized healthcare, and uber rides? This article is exactly right, it's idiotic to think that giving money to people with no affordable services to spend it on is going to improve their lives.
Give people $1000 per month and watch the next rent cheque go up by $900.
Though, this must be combined with major healthcare reform (single payer or something akin to Europe/Japan/Canada). If people have food, housing,and medical without fear of losing any of those then they will have less stress. Less stress = less anxiety, anxiety leads to fear, fear leads to the darkside aka crime/suicide/mass-murder then suicide/becoming Donald Trump.
In my and the author of the article's mind, UBI only makes sense as a form of supplementary, discretionary income. If a UBI recipient is made to trade off housing payment against health insurance payment, they're required to make a choice between two essentials; if they're both essentials, they're not really fungible in the first place.
The argument often goes hand-in-hand with greater privatization of public services, which inevitably commodifies what should be for the benefit of the public.
"public stuff is inefficient" is the worst sort of received wisdom. it's exactly propaganda by rich people who want to skim profit off of things.
Though public options are often heavily restricted so context is important.
> "public stuff is inefficient" is the worst sort of received wisdom. it's exactly propaganda by rich people who want to skim profit off of things.
This is a VERY bad faith argument. You are assuming the only people who disagree with you are either malicious or brainwashed.
anyway those choices don't exist in a vacuum and markets don't have the all-seeing empirical knowledge libertarians think they do.
And these marginal trade-offs are exactly what drive the normal economy - small improvements for price-conscious consumers. As much as I may agree something is essential, that doesn't mean I think it should be one size fits all or centrally allocated.
If you are wealthy, you can choose to "forgo a bigger house". If you are middle-class or lower-class, the options are pretty much binary already, today, in the real world. You eat, or you don't. You have a roof over your head, or you don't. You get medical treatment, or you don't.
There's no way to "penny-pinch" , when you are already at the bottom, because all possible savings an individual could make are already priced in. Comparison-shopping isn't a choice, when you are already priced out of all but one of the options.
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Unless UBI ends up being some huge amount of money (like say, $60k USD/yr/person), there won't be any meaningful non-binary trade-offs for any of those folks to make, regardless of whether UBI happens or not.
Agree entirely. I'll add transportation, education and utilities to that list. (K-8 + community college, train/subway transit, water+sewer service, electricity + phone + basic internet)
> Is there anything that should not be?
Everything non-essential to basic life? Hollywood motion pictures, video games, fasion-based apparel, toys, luxury furniture, hardware, collectable cards, privately-owned books, airplanes, etc.
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This isn't a crazy idea. All of the US has a "public option" for postal mail, delivered to nearly every citizen in the nation at effectively zero profit margin. FedEx and UPS can happily exist and be wildly profitable, but they can't go too evil with their pricing or availability, because people will just switch to USPS. It keeps these private companies from exploiting everyone too much.
Similarly, most of the US has a "public option" for water, which is provided by the government to every single person in the district (regardless of income), directly at their home and at zero profit margin. You can buy "luxury water" (Bottled Dasani, Nestle, 'Culligan Man', whatever), and those private companies can happily make massive profits all day long. But these companies can't exploit the market for water too badly, because there is always a public option to fall back on and opt-out with, when these companies inevitably become evil.
Nearly every part of our society that is currently broken, is that way because it's a required purchase critical to sustain basic living, and there's no reasonable way to opt-out.
If Hasbro goes evil and prices toys at $10k each, it's fine, because I can just choose not to buy them. I don't need toys to live. In this way, their greed can be kept somewhat in-check.
But if a hospital prices the ER room at $10k, I can't opt out, or I'll literally die. If local housing market charges $10k/day rent, I can't opt out or I'll immediately become homeless and unemployable and, effectively, dead. There is no "check" on these people's greed, because all humans are required to purchase these things, just to sustain their own life. So the price can just grow indefinitely, and none of us can really directly do anything about it.
This is why public services are so vital, why it's so critical that they exist and work well and grow.
This is a lie. Most 'poor' Americans have lots and lots of expensive things; they could choose to do with less. This is not to say all could, but the poverty level metric is so excessive, that many have lots of discretionary spending that many 'rich' households do not.
This has to do with how we define 'poverty.' The poverty level as set means that many americans with lots of discretionary spending (for example, television) are classified as poor, despite having easily fixed overspending. For example, according to data from the department of energy (accessible here: https://www.eia.gov/consumption/residential/data/2005/hc/pdf...), 26million / 39million households eligible for federal assistance (~64%) had cable television, meaning almost $70/month in unnecessary expenditure. For those below the poverty line, 10.6mil/16.6 mil had cable or satellite (again ~64%). This is data from 2005, but other years are similar.That is a bit ridiculous.
If the claim is that those living below the poverty line are going hungry (i.e., "there's no way to penny pinch when you're at the bottom", then claiming $70 (which can buy a lot of groceries) is 'mild discretionary spending' is incredibly disingenuous.
Groceries are not fungible for entertainment, and if you choose to spend a reasonable by middle-class standards amount on it you shouldn't be punished with misery and people tut-tutting at you for it.
Furthermore, I don't know what your point of revising the poverty line downwards is, apart from to tell people that they should be satisfied that their life isn't worse.
My point is that there should be various levels of poverty so comparisons can be made apples-to-apples. There is an income range where people cannot afford food, and there is an income range where people can afford food but cannot achieve a certain standard of living, etc. These need to be distinguished to make intelligent policy points.
> Most members of the middle class would classify it as mild spending, so I don't see anything disingenuous about my claim.
And many members of the upper class would say having a personal nanny is mild spending, but that seems ludicrous to literally everyone else. Luckily, my statement that 'If you cannot afford <insert basic need>, then <X> is a luxury' is a statement that could apply independent of the economic class of the speaker.
> Groceries are not fungible for entertainment,
Yes they are. I do not have cable so that I can purchase more food which I find more entertaining than vapid television shows. Also, consumeristic entertainment is not a human need. I will grant that humans need some level of entertainment. Luckily, libraries have free videos which are woefully underused. The radio is free, as is broadcast television. Also, humans have entertained themselves for literally as long as anyone can remember.
Look, the guy I replied to made a point about 'middle-' and 'lower-class' people, by claiming there's no way to penny pinch when you're at the bottom. I pointed out that, by the federal standards, those at the bottom (i.e, in poverty) are spending about $800 a year on cable (based on cable rates in my area, which may not be representative, but whatever). Thus, it seems clear that there are ways to penny pinch at the bottom. I'm not sure what is controversial about this statement. There are clearly ways to entertain oneself reasonably without cable, as I and countless others demonstrate.
This reduces new housing being developed in response to demand and thus increases the price when there is an increase in demand by an inordinate amount.
UBI will increase demand universally across the board in the form of cash for everyone, and inelastic supply constrained essential goods like housing will go up as a result.
This RE investment article explains it a bit more: https://www.nreionline.com/finance-amp-investment/why-supply...
People say it's a stock argument, but I haven't seen any good refutation of it yet. And I say this as a fan/supporter of UBI.
The problem isn't the idea that some cost-of-living things will increase in response to UBI. It's a defeatist "What's the point, the landlords will get it all" attitude that doesn't take into account the complexity of what people spend on and the supply/demand relationships of those things.
http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html
A couple of other (bad) examples is how national health plans are implemented in other countries, making things like being exempt from the national healthcare system illegal. Or the insurance mandate from obamacare.
I'm not saying UBI shouldn't be implemented in a why bother manor, I'm saying you need both if it's going to be an effective system. If you don't, you will significantly reduce it's effectiveness.
On the other hand, in popular places to live (major cities), housing will continue to be a scarce resource. Adding UBI won't mean all the poor people get to move to nicer neighborhoods. But it also doesn't mean that increased rent will eat 100% of their UBI. Rather, it'll increase the amount of money they have relative to what they pay for housing, money that can go to less constrained resources like food and education.
And I was unclear, I should of said economic rent. The supply constrained basics of life will expand to consume new demand in the face of a UBI subsidy. Not just your rent.
And even in cases where much of it will be consumed by cost of living, UBI will offer considerable flexibility, relative to current systems. Those who are homeless and/or long term unemployed will at least have some cash income that can be used to relocate or get them by. Lots of homeless people live out of their cars - and UBI will keep that car running and out of impound. That's just one example.
In rural or small-town areas, cost of living isn't so much of a factor, if income is available. UBI will make things much easier for the rural poor.
It will also have a tremendous impact on the middle class. It will reduce the dangers of financial emergencies and increase the savings rates for that majority who aren't in poverty but aren't rich either.
Since need-based evaluation is no longer needed, administrative costs will go down considerably relative to the welfare state. And people will no longer be punished for working with a loss of benefits.
To me, this is actually an argument for UBI. A poor single mother deserves access to the same market of housing as everyone else! And public transit is great, but your living and employment options are super limited if that is your only choice.
Absolutely, we need to study how much social services would actually need to be offset. Perhaps free housing and buses are still valuable even with UBI. But having dual-class public and private options is not true progress.
It seems that in this author's view, a UBI is only a means to an end for tackling inequality, and doesn't believe the actual poverty alleviation aspects are of value. While I respect the point being made, I would argue that this in itself is a pretty privileged position.
In most countries where UBI is even remotely a realistic possibility politically, public transit is just fine and how most people get to work. Indeed, for a single mother a personal car may well cost far more than the actual utility it provides. The USA is an odd one out in this respect.
The other purpose is for signalling within the commercial system (tortilla chips are more / less popular that potato chips) which is crucial for the functioning of an economy.
As a welfare replacement it's terrible because it suffers from diseconomies of scale.
Every time you use a credit card you increase the money supply, though it is sterilized when you pay your bill at the end of the month (or when you default).
Arguably it's not really ex-"nihilo" as there is economically valuable activity (extension of credit) which is paid for via interest. Increasing the money supply to match economic activity (as best it can be measured) prevents deflation, among other things, and debt is the tool used, surely better than simply running the presses.
At a microeconomic level yes, this seems absurd, but microeconomics and macroeconomics are disciplines as different as physics and chemistry: the emergent macrobehavior is quite different from the micro behavior and calculation based on micro is not tractable.
the point of UBI is to maintain liquidity of goods and a baseline level of demand for goods amidst a financial environment of increasingly extreme economic inequality which would otherwise cause sharp contractions in demand as a result of the public's lack of money.
if public services expand, each UBI dollar goes that much further. expanding public services alongside UBI creates a virtuous cycle in which a larger portion of each UBI dollar can be spent on non-essential goods, stimulating demand and subsequently funneling more money into the tax fund.
if public services contract, each UBI dollar has less purchasing power because a larger portion of its value is earmarked to purchase substitutes for essential public services. for instance, if your municipality slashes its water purification services, you'd need to purchase more bottled water than before, so you'd have less spending money because you'd still be paying the same amount of taxes yet you'd be forced to take on an additional expense as a result of the cuts. this situation completely undermines the economy as a whole because the cost of private sector substitutes will rise with every additional service cut until they are unaffordable, at which point demand will finish crashing and be incapable of recovery.
That is so far fetched. We can't even build more than 10% of the housing we need, much less add enough public housing.