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Comment by jay_kyburz | Hacker News Reader

I understand and agree with how a UBI will benefit those that are currently falling between the cracks and not receiving any assistance. I can also see the benefits of greatly simplifying the social security system. (If it was implemented in a way that was actually simple. i.e. no distinction between sick, unemployed, old, lazy)

But I don't understand why people don't believe the UBI will just become the new definition of poverty. People will still be miserable and feel like they have nothing when comparing themselves to those who get UBI and have a job.

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> But I don't understand why people don't believe the UBI will just become the new definition of poverty. People will still be miserable and feel like they have nothing when comparing themselves to those who get UBI and have a job.

We don't know that people will 'still be miserable', let alone the ratio of misery in the current versus the proposed economy. My expectation is that fewer people will be in poverty / misery, but that's just as speculative as your opinion.

In any case, it's not cause to avoid considering a UBI. We should not be constraining our goals to a perfect first attempt [1] - merely to obtain some improvement over the current arrangement.

[1] https://blog.jaibot.com/the-copenhagen-interpretation-of-eth...

I agree with the notion of not waiting for a perfect plan, and for moving forward to improve the current situation. I consider myself "progressive" in that way.

But if I was writing some code and there was a problem in my algorithm where some people had nothing and some people had too much, I would just take some from the top and give it to the bottom. The UBI seems like a re-writing from scratch.

The troubles with that approach are that a) we've tried it, and it doesn't work very well, b) it's complex - how much is 'too much', how much do you 'take from the top', and how much do you 'give to the bottom', and c) it's expensive to administer, because a lot of time it spent working out the numbers and scheduling (and monitoring to prevent fraud) involved in the (b) bit.

As I understand it, UBI isn't about making people feel better, it's about providing a floor for income. It would be intended to assist those who struggle to pay their bills and afford basic necessities. There are homes today that don't have internet because of financial reasons. Additionally, it could enable those who'd want to pursue entrepreneurial ventures but can't afford to go 2-3 months without a paycheck to do just that. All UBI would be doing is establishing a floor. Right now, that floor is zero and results in many very unfortunate situations.

> There are homes today that don't have internet because of financial reasons.

Homes today don't have internet because of market reasons. Artificial monopolies, lobbying, and decades and billions of dollars spent by the government in failed and incomplete projects have created the current situation. And now without net-neutrality, it's getting even worse. This is all because of policy not finances.

> All UBI would be doing is establishing a floor. Right now, that floor is zero and results in many very unfortunate situations.

The floor today is not zero. Go to a village in Africa, or the Amazon rainforest if you want to see what zero really is.

People will always compare themselves to their peers, it’s true.

But there’s a pretty big objective difference between the poorest person having $0 and the poorest person having, say, $20,000 a year.

Also, getting rid of gigantic perverse incentives induced by welfare thresholds helps people find their way back into the working world. UBI isn't about making poverty more desirable, it's about making poverty less sticky.

The difference is the same as having $0 and having $20,000 in monopoly dollars.

The number printed on the notes is irrelevant, the only thing that matters is what you can get with them, and if an apple costs 20,000 monetary units because there is so much money in the system (as it does in many countries) then everything else readjusts to match those levels.

Exactly. The key to making people happier is not to give them money, but create more jobs that give people meaning and purpose in their lives.

I always hear the argument that UBI will essentially subsidize people's ability to pursue work that gives them meaning/purpose, particularly if it isn't highly valued (economically) by their local market.

What does HN think about that?

It's a bit more nuanced. UBI just gives people more options.

The narrative is that people who live paycheck to paycheck are forced into undesirable jobs because they are under time pressure to make money and can't be choosy. UBI will reduce the time pressure and make them be able to be a bit more choosy in what kind of job they get. UBI will also allow them time to invest in themselves to be able to land higher skilled jobs.

It will also allow people to more willingly enter low pay, higher calling jobs (teachers, etc) if they enjoy it because it has been bumped up from "too little" to "just enough" with UBI.

The US would benefit greatly if the people serving as teachers, daycare workers, healthcare technicians, retail service providers, and similar roles had a UBI.

Exactly. And to ensure people have the freedom to pursue the training and development, search time, or simply freedom to explore, a UBI would be immensely and wonderfully beneficial. Many folks will end up pursuing that which makes them the most happy, not solely the options on the table (which for many in current society is crumbs).

Serious question: How will UBI allow this?

Over time I would imagine that due to inflation and the increased cashflow that everyone will have the prices of basic necessities will increase to the point that UBI just covers them, or worse that simply living will require UBI + a job?

I don't mean that in a snarky tone, it's something I'm trying to wrap my head around as far as UBI discussion goes.

The same way all government spending doesn't lead to rampant inflation: by scraping money out of circulation largely with taxes.

Money is created by central banks, circulated by the government (including with 'entitlement programs' like UBI would count as, but also through things like spending billions on fancy jet fighters) and other banks (and there multiplied by fractional reserve banking).

It's then 'destroyed' by taxes and encouraging people to buy into government bonds and other things that slow down the flow of money.

These are all policy instruments that control how much money is flowing through the economy, and inflation is a product of that flow.

So the answer is, because they would raise taxes on it. A large portion of the money given out would just go straight into taxes from high income earners also getting UBI.

But also they could do things like lower the reserve ratio banks are required to hold to reduce the flow of money into the economy, instead choosing to create money through people instead of banks.

I can absolutely see how it would enable a certain type of very creative, very hard working person to peruse something they couldn't originally due to hard circumstances. But that seems like a minority case.

I'm curious what the other 95% are going to do.

Drugs and alcohol.

They'd probably do it regardless of UBI, but without UBI they do it and are slightly more angry or frustrated at their own situation.

There’s no difference in the money supply here. There’s no inflationary pressure.

Inflation is not flat. When the money currently chasing luxury items like exotic cars or fine art switches to rent, produce and other basic goods their price will rise, it just will.

Real inflation does not require an expansion in money supply because inflation is not flat across all areas of the economy.

The upper end of the housing market frees up, causing everyone, except the rich, to move upmarket.

You can see the same effect when luxury housing goes up in a town. Rents go down for everyone.

That is not the case. If under UBI, which is reallocation of capital, luxury housing frees up it will not mean the uber rich move away and now the rest of us enjoy more selection without any other repercussions (though that will happen at first to an extent), it will mean they'll relocate to less expensive properties, thus chocking the market from both sides.

Why does someone's purpose in life defined by their job? What if someone wants to make music or art? Or pursue some kind of other field that doesn't pay particularly well. Why do all Americans think that the point of your life is to work at a job for a majority of it?

>Why does someone's purpose in life defined by their job? What if someone wants to make music or art? Or pursue some kind of other field that doesn't pay particularly well.

The question is why the people who do work at a potentially unsatisfying job to earn money should be forced to support the people who don't want to do anything in their life that anybody else values enough to willingly pay them for.

Because we have certain shared values, including that folks shouldn’t starve to death due to lack of work.

The United States already supports millions of citizens via a backdoor welfare: disability. This simply takes away the corruption and bureaucracy and gives it to everyone.

>This simply takes away the corruption and bureaucracy and gives it to everyone.

So to those who need it, and also those who don't. Why not just the first group? It'd be a lot cheaper.

For the same reason people already work unsatisfying jobs to earn money: to earn money

But why would they support a policy (UBI) that causes them to earn less money because of more “freeloaders”?

Without paying customers there is no job. UBI allows people to become those customers.

If a person doesn't have money, helping him is not a job.

If a person has money, helping him is a job.

UBI creates jobs by "un-freezing" demand that was previously frozen out of the system due to poverty.

Macroeconomics 101 shows that public welfare creates a demand floor, reducing the severity of recessions and lessens the boom bust of the business cycle.

I would argue that jobs that give meaning to life are the exception not the norm. There is a not insignificant portion of society that would quit their job today if they had any other option.

Hobbies and unpaid creative pursuits are more likely to bring meaning than employment in my opinion.

How will those jobs be created without becoming "Bullshit Jobs" and workfare?

"Create more jobs" the whole reason why Andrew Yang is a proponent of ubi is because he tried doing this for 8 years and realized that the Economy just doesn't work like that.

Exactly. The exceed money from UBI will create more demands thus more jobs will be created. The jobs will be much more `meaningful` than those empty, bureaucratic jobs created by a central entity. Isn't it the basis of capitalism?

This. There is compelling evidence that UBI, over the short term, really is effective at distributing money to a lot of people in need without a cumbersome burden of proof placed on assessing that need. That's why the treasury department used it for stimulus checks in the US. But long term, we don't understand if UBI is an effective tool for dealing with poverty. In effect, UBI would be like arbitrarily adding $15,000 to every persons annual salary. Over the short term this would be great. You'd be able to cover the costs of your bills with that additional money and live a little more securely. But in time, the market would absorb this expansion of the money supply as inflation. More surplus money in some people's pockets would lead to increased demand for goods and services. Increased demand would lead producers and retailers to charge more for goods. Renters would get charged more for desirable property. Gas stations would charge more for gas. And over time, your UBI check would need to get bigger and bigger to carry the same purchasing power that it did when UBI first started. There are examples of what this runaway inflation looks like in countries that pump free money for extended periods of time into their economies. Venezuela comes to mind.

To be effective, UBI might work better if it's distribution were random. And the duration of payments were irregular. Something that a market couldn't set it's watch by and producers couldn't game. If this sounds a ridiculous long term solution to poverty, it's because it is.

If producers are able to totally game a commodity market and control prices so completely than you have bigger problems than just poverty.

And yea, we do. If we had UBI tomorrow and people wanted more apples because they could afford more fresh fruit the apple cartels of today would collude prices up and use regulatory capture to block competition from entering the market to supply the elevated demand for apples.

But thats basically saying "hey, you want a government in your interest, you should probably get to a democracy first". If businesses control the legislature you don't have a democracy to begin with and should probably get that first before talking about... pretty much anything else. Because any other conversation is eminently pointless if you aren't influential upon your government.

> If producers are able to totally game a commodity market and control prices so completely than you have bigger problems than just poverty.

Game is probably more strongly worded than what actually happens : a shift in the demand curve. It's not that a cabal of producers are colluding to raise prices. Its more that, in aggregate, producers will decide to independently raise prices when consumer demand increases [0].

[0] https://www.economicsdiscussion.net/demand/shifts-in-demand-...

Except if its just a price shock than the increased profitability of apples will attract investment in apple farming to produce more apples because of unmet demand and fair market conditions. The price would go up, the profitability margin would be exploited by increased competitive production up to near break even costs, and prices would fall back to where they are today just with way more apples being grown.

In practice in pretty much every industry in the US incumbents put up regulatory barriers behind themselves to prevent competition from emerging.

The market and production gaming UBI will inevitably happen. It's just people's money.

Actually, in Alaska's UBI program, alcohol and drug abuse go up by 15% after all check day (but crime also goes down significantly as well).

So yes, the payouts of it will create some sort of twisted marketing schedules. I think it would be really cool if the payout was daily (if they can make that happen). It would likely encourage the immediate spend of it into small items (like food)... but also probably drugs.

UBI will become the new definition of poverty, and this is a great thing, poverty being you are on UBI is much better than any other definition of poverty in history.

Per the article (and I agree with this) UBI is not meant to uproot capitalism, it's meant to optimize capitalism. A capitalist system where the poorest person is still able to participate on the demand side is quite novel.

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