Universal basic income seems to improve employment and well-being
newscientist.com
newscientist.com
I'm not sure there's any way to account for it unfortunately, it is such a compelling idea though I think we kind of all want it to be real.
It reminds me of the EU CO2 cap and trade system. In theory it would be a highly effective tool. In practice lots of sectors are excluded, a lot of free CO2 certificates are given away and many to the biggest polluters because they may become uneconomical, which is the entire point of the system in the first place. Basically, the system gets distorted so that the status quo remains. This doesn't mean that the system is not doing something but my point is that you'll have to tone down your expectations.
If we ever see a widespread UBI it will probably be means tested and with a limited duration which is exactly what this experiment is doing. It will probably be more effective and less costly but it won't bring wonders. It'll just be an incremental update to the conventional welfare system many countries have.
If you can work, we have a job for you.
Part-time, full-time, your choice. We'll even train you up.
Especially in the US -- there is tons of work to be done on infrastructure, plenty of research to be sponsored with results placed in the public domain, etc.
We derive a large chunk of our personal value, out of what we contribute to our tribes -- our community, our friends, our company, etc. If somebody is willing to contribute to society, we should encourage and enable that.
"we have a job for you". Great, but I'm certain that it means most of the people doing those jobs would not like them and would no work great. Because being forced to do something you don't like/don't want to it not a good idea. For the ones being forced and for the ones working with them but liking what they do.
What is the point of all those inovations if it's not being able to tell to people : you don't wan't to work ? Great, you don't have to !
Today we have smart people doing jobs that give them enough wealth but they hate their jobs and instead they could be artists doing "nothing" but at they end they could be happy and maybe bring to society with their art. We have no so smart people that do shitty jobs they hate because society needs someone to do it but the salary is shit, and those people are miserable. Instead they could do "nothing" and be happy, while we give real money to people deciding to do shitty jobs, or people creating solutions to avoid other people doing those shitty jobs.
Why having as much people as possible being able to do "nothing" isn't the ultimate goal of humanity ? I mean, it's exactly what wealthy people want for themselves so...
There are a lot of jobs that need doing if you want to enjoy things like "running water" and "food".
Many of those jobs are unpleasant. That's why you get money for doing them.
And any job worth doing is worth doing well.
If sewage workers -- people who literally have shit jobs -- can do this, then unemployed people given a job cleaning up local parks or canning food can do the same.
I have done manual labor. And worked in fast food. The work sucked, but I took pride in being good at my job.
I could crack eggs onto that griddle like a machine.
(As an aside, I have very little patience with people that are rude to fast-food workers, janitors, and the like. Those people make your life possible. You can be polite to them and treat them with respect.)
> Because being forced to do something you don't like
Who is forcing anybody?
Take a different job. Or start a business. Or don't work.
> Why having as much people as possible being able to do "nothing" isn't the ultimate goal of humanity?
No.
> I mean, it's exactly what wealthy people want for themselves so...
Also no.
Social advances and technological progress haven't eliminated that burden, they've increased it. Now we also need to maintain complex infrastructure, educate the young, care for the elderly and disabled, and create entertainment to ease the psychological stress of a life so far removed from our basic instincts.
And at this time, very little of that work is done by robots and AI. Asking not to work is just expecting other people to provide all that for you.
There is more and more people doing less than needed jobs while there is less and less people doing useful jobs.
The Covid crisis showed this to us (at least in Europe) : the people doing the real work are the people with the lowest incone and the lowest social protections.
So instead of giving good incomes to guys like me faking being useful to society, I'd prefer we give real incomes to useful people and let other doing "nothing" instead of having jobs with no "natural" purpose.
If we were in a society like that, I would have never chose being a software engineer, I'd rather be in the fields, growing food. But I'm a coward so I picked the salary instead of the meaning.
What use is a grocery store cashier without the whole supply chain that brings products to the stores? What would happen to that supply chain without modern infrastructure and the government that maintains and defends the infrastructure? What becomes of that government without elections and the information infrastructure that keeps voters informed?
Presumably someone pays for the work you do, so they find it useful. Even if you can't see it's ultimate purpose, it probably does contribute to society.
The simplistic answer is: you do work that is required (in some form, on some level) for "everything" or nobody would pay you to do it. You might be a few hops away from "putting food on the tables of people", but your work is somewhere in the network that supports society. Yes, there are some exceptions, some negative side-effects of the market approach, but they seem to be too small to make the whole system less effective than a carefully planned non-market system.
> The Covid crisis showed this to us (at least in Europe) : the people doing the real work are the people with the lowest incone and the lowest social protections.
That's mostly because that "real work" is usually work that you can easily train for. I still think we should pay better (and pay more people) to work e.g. in health care, but the reason why we don't is that it's easier to train a software developer to work in nursing than training a nurse to work in software development.
> So instead of giving good incomes to guys like me faking being useful to society, I'd prefer we give real incomes to useful people and let other doing "nothing" instead of having jobs with no "natural" purpose.
I know the feeling, but I don't think it's accurate or helpful. If you hate your job, find another one. Especially in software, there are plenty of jobs where you can very directly see the positive impact of your work on people.
> If we were in a society like that, I would have never chose being a software engineer, I'd rather be in the fields, growing food.
Who did more for society, the person growing food or the person developing a tractor?
https://nintil.com/the-soviet-union-achieving-full-employmen...
Resulted in overmanning (a sort-of "hidden unemployment") and lead to work shortages for new projects.
- Starting a business is illegal.
- You are required to work. Not working is illegal.
- Growing and eating your own food is illegal.
Illegal meaning you either go to a forced-labor camp, and are later killed after the State has extracted every last ounce of value, or the State executes you outright to send a message.
I am not proposing full employment. Consent and choice matter. If you don't want to work, don't work. Or start a business. Or be homeless. Your call.
But if you want to work, and can't find a job... let's fix that problem, and in doing so rebuild our infrastructure.
But, being killed for not working? Never. Start your own business? Sure, just pay the taxes and observe worker's rights. Growing your own food? Every rural household had a garden and some had decent sized fields.
I guess you meant communist Russia at some (signifacant but not large) window of history?
Depends on country. I grew up in socialist Czechoslovakia and private businesses were almost unheard of (there were about several hundreds of small private businesses in country of 15M people). Most private tradesmen offered they services unofficially/illegally (in addition to their regular daily job).
From what i heard, regimes in Poland and Hungary were more lenient in this regard.
> But, being killed for not working? Never.
Killed in work camps? At most in 1950s. But regular prison sentences for not having a work still happened in 1970s and 1980s.
Sure political prisoners were sent to work camps. As long you did not speak against the regime you were safe, though.
These are all historical anecdotes, nothing more. No claim about it being or not being intrinsic to the socialist society etc.
Where and when, if I may ask?
> I guess you meant communist Russia at some (signifacant but not large) window of history?
In terms of "no private businesses" and "from each according to his ability" -- e.g. not working was considered stealing from the state, and thus illegal?
Russia from around 1920-1980, East Germany from about 1949-1980... really, you can look at all of the Eastern Bloc: Poland, Romania, etc. China from 1949-1976, North Korea along the same timeframe, Cambodia under Pol Pot...
To be fair, the executions ramped down a bit after the first 40 years or so, and you'd just be fined and/or imprisoned.
Again, not half as bad as your statements suggest. I have never heard people being coerced to work en masse. Everybody had a job and there were plenty who did very little, as I said in my previous post. In some sense, I guess it was considered bad if you lived in the city and didn't work but plenty of people lived in countryside where they just lived off the land. As far as I know, nobody cared if you had a job or not.
I am not saying it was good. Free political thought was not allowed, speaking against the regime got you into nasty prisons, where, yes, you were coerced to work like a slave. I knew a few people who went through that and that really was bad :( What I am saying is that most people still led relatively normal lives.
Also looks like there was US aid involved as well. Interesting. Not sure why the Soviets didn't push for military action, though.
No, it wasn't. Артели and кооперативы (look them up) in USSR were quite popular up to middle of 1950-s and after about 1985. They were supported by government and given preferential treatment.
Reading through [1] and [2] seems to indicate that you could form state-sponsored groups and engage in labor, but not for profit... which is the point of starting a business.
What am I missing?
[1] https://ru.m.wikipedia.org/wiki/Кооперативы_в_СССР [2] https://ru.m.wikipedia.org/wiki/Артель
And it was great, if you have my opinion.
I'm repeating it every time: these kinds of studies are the same as measuring the output of "free energy machines" that supposedly work by breaking physics... while ignoring that they are plugged into a wall-socket. To prove that they work, you'd have to unplug them, otherwise you don't need the sophisticated machine and the fancy theory, an extension cord will do the same much cheaper and more efficiently.
No, not really, unless the money for the experiment comes from outside the region. The problem is that the argument for UBI is either that "it'll pay for itself" or "it doesn't cost more than today's system". So we'll need a test that actually tests that.
Maybe it doesn't work and we'll see "okay, it'll be 10% more expensive than today's systems". That can be achieved by raising taxes, and the result of doing that can be seen in the experiment as well: do people leave the region because they don't want to pay an extra 10%, or do they find UBI's benefits to society at large to be so large that they don't mind?
Maybe we'll see that UBI does what the proponents promise: free human innovation and productivity and easily more than pay for itself. Once that result is proven, you'll have no issue to convince anyone.
Not trying to test that at all and then saying "well, even if we would, nobody would accept that" isn't the right approach in my opinion. And it feels like there's something left unsaid: that the proponents also don't believe that it would work and therefore don't want to actually test it, because they're convinced the test will prove that it doesn't work. And as long as it's not tested, they can claim that it totally would work (in theory) without having to prove it.
I guess that's what I'm not seeing: any tests done so far are too small and not long enough and are known ahead of time to be a test. Okay, fine, let's conduct a test that's larger and long-term, with an eye toward permanence. How large, though?How do we avoid the criticism seen on this very page that limiting the number of people involved distorts things? How do we avoid the converse, which is that unless you're Alaska, letting it be known that everyone in a certain area gets free money means an artificial boom in that area?
But still: yes, you'll need a larger unit. It won't necessarily have to be a state, though that depends on the country and the tax-setup within. It would have to be something that can set their own taxes. A village would likely be too small, but a medium sized city of 20-50k should certainly see the benefits if they exist. And it wouldn't need to be limited to a few years: convince the inhabitants and you can democratically vote it in, it'll run in perpetuity, or until the money's gone in the case that it doesn't work.
> How do we avoid the criticism seen on this very page that limiting the number of people involved distorts things?
That's not really what's criticized. The issue lots of people have with these tests is that they're only testing the distribution of money, but not the funding. You don't need to have millions of people. I'm pretty sure if you can get 10000 people that are broadly representative of the population at large and get them to fund their own UBI, collectively, and play it out, that'll be a good test in most people's eyes. I'll certainly pay attention, because it'll actually test UBI, not just "if we take money from the national taxes and give it to 500 people, what will happen?"
> How do we avoid the converse, which is that unless you're Alaska, letting it be known that everyone in a certain area gets free money means an artificial boom in that area?
An artificial boom would still be a boom. Would people invest in an area if they knew that they'd have to pay high taxes? If so: great, let them do it, that's not so bad. The problem arises when the number of people asking for UBI grows faster than those investing & funding the UBI. But that's exactly what has to be tested, because it's pretty obvious that the same would happen on a state or national level - unless we're talking about closed borders, which sounds anachronistic.
> It would have to be something that can set their own taxes
In the US, at least, income taxes are levied at the state or federal level, not anything more local than that. Even sales taxes are generally limited by the state, if not set outright. I haven't lived in every state, so it's possible that there are exceptions somewhere, but generally I think such a test would have to come from elsewhere.
TL;DR: the smallest unit in the US that can set their own taxes is a state, making any test smaller than a state somewhat unhelpful.
> I'm pretty sure if you can get 10000 people that are broadly representative of the population at large and get them to fund their own UBI, collectively, and play it out, that'll be a good test in most people's eyes.
Ah, this strikes at the game theory heart of it! And yet still seems to be unworkable in the US. A representative cross-section would need to include both rich and poor, as the nation as a whole does. Either all are asked to pay additional taxes over and above their normal taxes, or the state in which they reside is asked to do with less tax income than normal, as some or all the taxes of those 10k would instead be redirected to the UBI trial. Both seem like a tough sell, either to the richest of the cross-section or to the state itself.
> unless we're talking about closed borders, which sounds anachronistic
Speaking of the US, while we're very poorly suited to doing a small-scale test, we're actually reasonably well suited for having somewhat closed borders, on account of being separated from most countries by big oceans. Movement within the US is trivial, while movement into or out of the US is very difficult. Presumably UBI would have some measure of buy-in that would exclude people who cross the border without documentation, at least initially.
It's even possible that we would end up with a situation like we have now, in which people working without real documentation pay taxes into social security, while never having the ability to draw on social security later in life.
Given the difficulty of finding a cross-section of volunteers and a willing state government, I wonder about alternatives. I think a case could be made that funding a UBI trial from normal revenue could still be instructive IF people participating in such a trial were opted out of all other benefits. That is, let's test the claim that UBI would be cost-effective in part because it would replace existing programs. Pick a cross-section of people, track how much is sent to them and how much is received from them, and make it closed system by denying them access to other support programs. We should be able to track what difference that makes for revenue and expenses, no?
If the theory says that it works and the small scale trial says that it works, it's time for the large scale trial.
Will tax payers in the UBI community accept their increased taxes? Will those paying taxes move out of the community, leaving only those on UBI behind (who will then not be able to fund the UBI)? Will we see an influx of unproductive citizens into the community to gain the UBI benefits?
Once that's answered, we'll have a better idea of the feasibility and requirements. If people want to avoid the increased taxes so much that they'll move, we'll know that we need to close the borders to force them to stay, for example.
But then you have exactly the same problem -- a small scale experiment doesn't tell you that.
If you did a UBI experiment that applied to a single street in a single neighborhood then of course people would do that, because moving across the street would net you $10,000/year while still effectively living in the same community.
But are they going to move to another state, leave their job, community, business contacts, family, friends and everything they've ever known? Much less likely.
You also need a certain amount of scale to encompass a realistic level of diversity. If I want to disprove your point I could do a UBI experiment in East LA where there are no rich people to move out, or in Newport Beach where the cost of living is too high for someone to be able to afford to move in just to receive the UBI.
The real question is whether it would work at the state level, which you can only tell by actually implementing it at the state level.
And your concerns wouldn't even apply to doing it at the national level because we do have national borders and citizenship.
So it has to be world-wide immediately? Of course, if you only do it in e.g. Denmark, the Danish might escape to Northern Germany or Southern Norway or Sweden, while still living broadly in the same region.
Anything that's "we can't really show how great it will be until all of humanity has been convinced to go all-in, but trust us, it'll be great" has a super high risk: it might not be great at all, but since we've all committed to it, the damage isn't even contained.
> But are they going to move to another state, leave their job, community, business contacts, family, friends and everything they've ever known? Much less likely.
For a 30-50% increase in taxes? I'm not so sure. Given that their peers are usually similar to them and will also look to emigrate, you might see whole communities leave... at which point you'll need the tried & tested barrier of building literal walls with armed guards on top to keep people from escaping the utopia you've created.
It's not like we haven't tried that before, and it's not like it ended with people being shot for trying to leave. And, once the regimes fell, we've generally considered their actions crimes against humanity. Do we really need to repeat that once every other generation?
It has to be at the scale you want to know if it works in order to see if it works at that scale. If you want to know if it works at the state level, you try it at the state level.
> For a 30-50% increase in taxes? I'm not so sure.
You're forgetting about the counterbalance. If you make somewhat more than average then you pay $16,000 in taxes and receive a $12,000 UBI. On net you're paying $4000, not $16,000. And you don't have to pay taxes to fund welfare anymore, so you were already paying most or all of the $4000 to begin with, and still would be in the place without the UBI.
> It's not like we haven't tried that before
There was a country that tried a national UBI before? Which one?
Not a bad idea, but wouldn't that essentially degenerate into a capital allocation business with a functioning taxation/wealth redistribution system?
Let's be honest here. There's nothing "magic" about UBI. UBI is just what happens when you successfully tax the top of the wealth accumulation frustrum such that overall the distribution of wealth is less a pyramid and more a recognizable trapezoid. Less triangular, more quad.
The main problem is tax havening, Hollywood accounting, and abusable tax loopholes. Fix the international taxation scene/arrangement, cut down on the viability of tax evasion via legal fiction engineering, fund the capability to track down and successfully audit examples of gratuitous tax evasion (or implement bug bounties for those who help flesh out corner cases in tax law) and actually implement decent social safety nets and we could be on to something.
I get it isn't easy, that there is a lot of difficulty in getting things just right, but I dare say that in terms of seeing actual credible attempts at implementing what needs to be implemented to make it work I've seen astonishingly little; especially given that these measures would be largely deleterious to the beneficiaries of the current status quo, and would greatly shift the calculus around capital allocation away from billion/trillionaires funding personal space programs to actually enabling national scale endeavor coordination; which also brings with it the absolutely critical aspect of getting the political operating smoothly again to unlock that newly collected capital potential by keeping it flowing back into the input layers of the economy.
I can't be the only one seeing the economy as a massive NN, in which individual people are the input nodes, legal fictions are hidden layers, and government/taxation are the feedback/error propagation mechanism am I?
But this is one of the other things that a UBI makes easy.
One of the best taxes in terms of resisting avoidance is a flat rate consumption tax. You can move your headquarters but you can't move your customers. You can't arbitrage the rate because it's uniform. The burden falls disproportionately on uncompetitive industries which have to eat the tax when a cost increase across the industry doesn't allow them to raise prices any further because they were already charging monopoly prices.
The normal problem with a consumption tax is that it's regressive. Everybody pays the same rate. But that's the part that gets fixed by combining it with a UBI. Someone making $50,000 may be paying a 35% marginal rate, and $17,500 in tax, but they get $12,000 of it back. Their effective rate is only 11%, even though everybody is paying the same marginal rate.
You get to have an increasing effective rate with increasing income while still having the fixed marginal rate that makes everything administratively simple, and the complexity was what enabled the avoidance.
Tax havens and loopholes are a problem even today, but hard to fix. Germany or France would (ostensibly) love to fix them, but can't make Luxembourg or Switzerland stop offering deals and havens. Introducing UBI (and higher taxes that provide even more incentives to leave) in France or Germany won't change anything on that front.
Anything that requires global cooperation seems outside of current possibilities. Building something on the basis of "that'll work, no worries" sounds like leaving out authentication of a bank system and saying "no worries, we'll convince everyone not to cheat and log into their neighbors' account". Sure, in theory that's a great concept, but practically I'd personally avoid using that bank.
If a country fully implemented permanent UBI today, all of this would still be true. Controversial political decisions are likely to face constant challenge, and this especially applies to those decision which do not benefit the most powerful.
Being critical of this as an imperfect experiment is an odd take to me. This is what reality looks like. Having a real-world test like this is an important stage of the process of implementing UBI.
Nothing would go crazy. People would have more money. They’d work the same amount except select groups (students, disabled, elderly) and be slightly/moderately happier at least in the short term. We’d either have higher deficits or taxes, probably both.
For example people almost never mention the ethnic homogeneity (and the big problems when that does not happen, see Malmo), that free selection of jobs makes gender split even more unequal than expected or the chronic alcoholism in most of Norway. Cherry picking some parts and ignoring the big picture is a fail.
So, big problem is generational and inheritance on its own, giving ability to certain groups of people to gain wealth beyond comprehension.
People in general do not have feeling how big is the gap between 100K income and 1 billion.
Biggest question is if AI does all the work, how will population of 8 billion minus 1000 wealthiest get means to survive? Further in world of smart machines, who should be owner of that AI and the wealth creates? Lastly what will people do, and should they do anything that requires "earning" to survive?
I think a more appropriate comparison is with Canada, whose system is also flawed in my opinion (I don't like the Scandinavian model either because it doesn't work anymore nor does it scale.)
Ethnicity just happens to be a good predictor for culture, and culture happens to be a good predictor for the ability to be a net-contributor in a modern society. Ethnic homogeneity predicts cultural homogeneity.
If you care about poor people, why not just try to fix welfare with e.g. Negative Income Tax proposed by Milton Friedman (https://en.wikipedia.org/wiki/Negative_income_tax)?
Not “just” and not “everything”, but yes.
> Most people who work will continue to work, most people who don't, won't.
If UBI replaces or offsets, in whole or part, minimum wage, it probably increases employment immediately. The reduction in labor market friction and perverse incentives of means-tested welfare probably increases it in the long term. So, I wouldn't be confident in that description.
But even in the usual “funded by high end taxes” formulation, it increases velocity of money in the domestic economy and consumption spending, so it should produce some upward price pressure. The basic upshot of this is that the downward redistribution will compress outcomes, but raise the bottom so that less that would be assumed if you took the benefit level and compared it to pre-policy price levels.
> If you care about poor people, why not just try to fix welfare with e.g. Negative Income Tax proposed by Milton Friedman
NIT and UBI funded by progressive income taxes are identical policies.
Not really, because under UBI, literally everyone would get money from the government, hence the "U". If you remove that feature of the system it wouldn't be UBI anymore, it would just be yet another means-tested system. Unlike UBI, Friedman's negative income tax would phase out and not everyone would be eligible. With NIT, some people would get money, some would pay no taxes, and some would pay taxes.
> Not really, because under UBI, literally everyone would get money from the government
Yes, really; every possible NIT is exactly equivalent to some combination of UBI + some configuration of rates of positive income tax brackets in a progressive system.
> With NIT, some people would get money, some would pay no taxes, and some would pay taxes.
With a UBI in a system that also has progressive income taxes, some people would get net money, some people would break even between UBI and taxes, and some people would pay net taxes.
UBI + progressive income taxes = NIT.
The idea of UBI is that everybody gets it, but many/most of us will pay higher taxes that send it right back. It'll just add a little bit of overhead by moving the money around, but you don't get to keep it.
That's the worst sales pitch I've seen for it.
If most of us won't benefit, then most of us won't support it. How would it be different from one of the many means-tested welfare systems that already exist?
Net tax payers won't be paying for a huge administrative bureaucracy whose entire purpose is the inefficiency of duplicating functions already performed by the progressive income tax system, namely, means testing.
Also, unlike the aggregate of existing means tested welfare programs, it won't have ranges where the rate of net loss of benefits from additional outside income exceeds 1:1, eliminating some very perverse incentive. Also, instead of effectively a mostly very high (but wildly varying with small variations in income) marginal “tax” (actually, benefit loss, but it amounts to the same thing) rate across the low income range from the means-testing impacts of public benefit programs with a drop to the low end of a system of progressive marginal rates after that, you'll have a system progressive across it's entire range, minimizing in an even more general sense the degree to which you are expending resources to inhibit the ability of people to move up and out of the bottom.
It's true, if a UBI is fully funded by increases in existing progressive taxes, not everyone will get net nominal income increases, but I think if one has a decent concern with what is being done with tax money, they still benefit.
OTOH, even if UBI is done by printing money and not funded in the fiscal sense at all, not everyone will have net real income increases, and the people that lose are the people with the smallest proportional increase in nominal income, e.g., the same people at the high end of the income scale that would lose if taxes were fubded by increased high-end taxes in a progressive system.
You know that's not what would happen, right? We would end up with our existing systems plus UBI for a long time, because people would not be willing to abolish the existing systems.
No, I don't.
> We would end up with our existing systems plus UBI for a long time, because people would not be willing to abolish the existing systems.
UBI/NIT supporters on the right tend to prefer either of UBI/NIT or abolition without replacement to current welfare programs; some actually prefer UBI/NIT, some prefer abolition but think UBI/NIT is a compromise that can get sufficient support from people more to their left to be viable, whereas straight up abolition without replacement is harder to win. Those people aren't going to want to keep existing means-tested welfare.
Opponents of UBI/NIT on the right tend to oppose means tested welfare to; if they lose and have UBI/NIT thrust upon them, they aren't going to seek retaining means-tested welfare to soften the blow.
UBI/NIT supporters on the left tend to prefer it as a replacement for at least those means-tested programs that it would eliminate eligibility for if counted against the means test, though they may prefer keeping other means-tested programs (though with much smaller caseloads, and caseload is the main driver of administrative expense in such programs.)
Basically, the constituency for retaining most existing means-tested benefit programs is left-wing opponents of UBI/NIT. But the right-wing supporters of UBI, left-wing supporters of UBI, and right-wing opponents of UBI together are almost certainly going to be a bigger block.
You forgot another voting bloc: beneficiaries of the current welfare systems, who might well get less money from UBI than they do from the current systems.
With a UBI, you have an ordinary tax system that isn't secretly putting higher marginal rates on lower income levels, so then e.g. everybody pays a 30% flat marginal rate. But if you're in the middle your effective rate is lower, because the UBI phases out slower -- you only paid 30% on your first $20,000 in income rather than 70%.
You were paying net taxes to fund welfare already, but now you're not paying as much and someone who makes more money than you is paying more.
Moreover, what people receive is cash rather than stupid garbage like housing projects that turn into slums (but that you still had to pay for), which makes what they receive more efficient (they can buy what they need instead of what the central planning committee thinks -- and you don't have to pay the salaries of the central planning committee or the means testing bureaucracy), which means it costs the taxpayer less for the same level of assistance.
It's a much less dramatic change than people seem to think it is, and creates a greater incentive for lower income people to work because people get to keep 70% of the marginal dollar instead of 30%.
Means tested welfare is a problem because it actively disincentives working by reducing or removing benefits as you increase income from work. It effectively reduces your hourly wage. Trading 40 hours of your time a week for work, when the effective wage of that work is about half the minimum wage, is a pretty poor tradeoff. It creates a benefit trap.
UBI has none of that. Sure, the payment from UBI is eventually matched by tax payments, but there's no sharp threshold. (Of course, UBI has to be pared with a sane progressive tax structure which doesn't also provide sharp discontinuities in tax).
Well, i hope that there are many people who choose their preferred policies based on how these influence society as a whole and not just whether they would profit from them personally.
How is that fair to working people with ambitions?
Can't tax the corporations and the rich or else they will "move elsewhere and increase unemployment" as we're made to believe so why then do I fear that the middle class worker will be hit yet again?
I'd rather we lower taxes on the workforce than increase them to give away free money.
Well, why do UBI at all?
I think the goal is to simplify our means based well fare system, which can create some economically inefficient incentives.
For example, imagine someone receiving disability checks who could go back to work. Going back to work would mean they stop receiving disability checks, and they could easily end up reducing their income.
Well, later it's possible to vote for a candidate, which promise to reduce taxes by 3x and increase UBI by 3x, like at Alaska: https://www.vox.com/future-perfect/2019/9/5/20849020/alaska-...
The GP comment wasn't great either but this was much worse.
Where would we get it from? Are there any extensive papers explaining it? I'm super curious.
Negative income tax would probably not work as efficiently. What if it takes a year and a half of administratoin for the negative income tax to reach people living hand to mouth? That's a very slow tool to get money into everyone's hands...
UBI would have to be funded by a corresponding increase in high tax brackets.
> If you care about poor people, why not just try to fix welfare with e.g. Negative Income Tax proposed by Milton Friedman (https://en.wikipedia.org/wiki/Negative_income_tax)?
That's like UBI for people who can hold down a minimum wage job, but it does less to help the very worst off. Why do you prefer it over UBI?
Actually, it is exactly like UBI, under NIT you also get money if you don't have a job.
A UBI and a negative income tax can end with the exact same amount of net money dispersed to anyone, it just requires tweaking the income brackets and rates.
Intuitively it kind of makes sense that everything would get more expensive but if you consider millionaires spending on stocks, the stocks don't rise in price when the millionaires get more money, they are kind of independent. I think the same for poor people. Prices shouldn't rise because more people can afford to buy something but it makes sense that some would rise prices as more people will be able to afford the product. I guess the market and competitors is meant to keep prices down.
Regardless of any change in prices of those goods there will be more economic activity to meet the demand. That economic activity comes from somewhere and could increase costs, and therefore prices elsewhere in the economy. So I think some inflation is inevitable.
The rise in stock prices since the pandemic crash is largely driven by the increase in the money supply. That money sloshing around has to go somewhere, and it's poured into stocks. This is because people aren't spending as much in the lockdown, so the excess money is going into savings.
Do things rise in price when the people who usually buy the things have more money?
Are things more expensive in more populated areas or less?
Consumer inflation = price of consumer good increases
Consumer deflation = price of consumer good decreases
demand exceeds supply = price of consumer good increases
supply exceeds demand = price of consumer good decreases
Now use these four basic definitions to answer your comment.
>Do prices for consumer goods rise when there are more consumers?
more consumers = more demand
UBI = less people work = supply stays the same or goes down
In this scenario "demand exceeds supply" is true. Prices do rise and that rise is called inflation.
>Do things rise in price when the people who usually buy the things have more money?
Again. UBI = less people work = supply stays the same or goes down
more money = more demand
People may buy more than one product if they can afford it or they may buy a higher quality one.
In this scenario "demand exceeds supply" is true again. Prices do rise and that rise is called inflation.
If you were to introduce price controls and set a maximum price for TVs then it is possible that one person buys 3 TVs and two other people can't get a TV at all. The answer is to raise the prices until everyone who wants a TV can get one.
>Are things more expensive in more populated areas or less?
Well, it depends on what "things" you are talking about.
A UBI does not influence the amount of land available so the supply of land would be fixed but the amount of money being received through UBI grows with a greater number of people.
supply = stays the same
demand = increases as more people live in a community
Therefore we see inflation in land prices.
If you were talking about something like an iPhone that can be manufactured in China and then shipped to New York then no, it would not cause inflation because denser populations do not prevent the Chinese (or any other company that's operating outside your city) from building bigger factories and thereby increasing supply to match demand.
supply = increases with demand
demand = increases as more people live in a community
Pretty much, but that's not a flaw of UBI, that's how the economy works and if the amount of UBI is picked carefully by skilled economists it would be very easy to achieve the desired amount of inflation. Everyone is somehow scared of inflation because we have been in deflation or at least near zero inflation for at least a decade.
Of course they should, and they would. It's really econ 101. More demand = higher prices. Why wouldn't it?
If you were selling apples for $1/kg, and you have it sold daily very rapidly, wouldn't you try to make $1.1/kg? $1.2/kg? $2/kg? Until you can't sell everything you produce, or, more precisely, until you can't make more profit.
If a grocer tried to double their prices then their competitors would out compete them.
Property in SV might be a different matter although I’m guessing this is going to be cost neutral for most people there or even negative.
https://www.scottsantens.com/negative-income-tax-nit-and-unc...
2) I can’t help but laugh at how comical these tests are at measuring the impacts of a UBI policy. 2yr temporary welfare payments of 6,720 Euro a year to a tiny, biased subset of the populace is NOT going to give us an idea of the impacts of a UBI policy. Please, someone, at least agree to the payments in perpetuity.
For example, a UBI of $1000 and 25% tax is the same as a (possibly negative) income tax of 25% above $4000. That's because:
(1-0.25)*x+1000 = x+0.25*(4000-x)
1) UBI is targeted to citizens, while income tax affect tax residents, these may be different groups of people.
2) tax refund is paid once a year, which would be problematic for people with bad money management abilities.
I know a friend who would love to work as a software developer but can't afford even the relatively small tuition that a German university charges its students with his current job. A negative income tax would help him out.
Even if some people opt to just do nothing and get money for that, it's no big deal. I'd much rather see people spend time with their kids and get UBI than them having to work bullshit jobs that benefit no one (telemarketer or whatever).
What is happening? You have lots of work migration from Romania to UK where both parties are very happy: employers would much rather hire people that are there to work and make money, as opposed to people that are just clocking their 12 months. And employees are happy to work hard and make a lot of money.
I'm not venturing to comment on what conclusions should be drawn from this, but I do caution against knee-jerk ones. On one hand the system seems to have self-balanced nicely. On another, it's basically taking advantage on the east-west difference, and that has an obvious time limit.
If so, what has prevented you from saving all the excess money beyond minimum salary and retiring (or taking several years off), living on minimum expenses while playing videogames?
I don't see what this has to do with UBI, other than maybe you're trying to counter the presented hypothetical by asking if the parent poster would actually be happy to live frugally.
Not only are there plenty of people with professional success that save aggressively or have other goals (e.g. skiiers that makes six figures and still live like skibums), but they're a different category than people that would be willing to coast by minimally if given the opportunity.
But the labor market doesn't work like that.
Nothing, except that UBI is a basic income, so you don't have the money for the latest and greatest gaming PC. You have enough money to not go homeless, but not a whole lot more. If you want that PC, you have to still work for it.
If you look around, most people aren't exactly living the most basic life possible with the least work possible, they quite like their luxury goods in exchange for work.
I took a over a year off from working two years ago, and it probably took less than 6 months for depression to begin setting in. By a year I recognized how awful and lethargic I felt, and when I started working again a few months later I was ecstatic to get out of bed at 6:30am to actually go do something every day. In the past this is something I would've loathed, but it was so much better than sitting around all day playing games.
I can't speak for others, but I know personally I need "work" to be happy. I don't think it has to be a job at an office, but something to make me feel like I'm contributing and striving towards something useful & bigger than myself.
I'm sure some people would be perfectly content living like that, but the vast majority want more. They want a nicer house/apartment, they want nicer food and snacks, and they want to travel, go to restaurants, go see movies, have parties, and so on.
Because most people generally want more than just the bare minimum basics, they are motivated to work for that extra comfort and ability to do things.
UBI simply provides a safety net for how far towards rock bottom you can fall.
Most people want luxuries associated with middle-class lifestyle, that is pretty clear. Reasonable UBI would be less than 1/4 of median wage, but there are not many people with median wage switching to quarter-time jobs and living ultra-frugal life while spending rest of their time playing videogames.
I think after a while I'd start my own projects
This is the only argument I present to people that talk to me about UBI in a positive way, ie they want UBI.
If people are given enough money to live on for free I would wager there is zero incentive for them to be productive within society. Zero.
Change my mind!
And like I said in my other comment, there are a bunch of incentives. People usually want to have more money to save up, buy more stuff, feel more secure, etc. so people would work to have more money than the basic income. Apart from that, people want jobs to have a higher status among their peers and some people genuinely like what they do.
If UBI was introduced, would you personally sit around all day or would you continue working? If you'd continue working, what makes you think you're the only one?
Utopian societies don't exist but giving people free money that is paid for by the middle class (yes, the middle class will fund this, not the billionaires!) is not the answer.
12k is enough money to live but your standard of living is worse enough to be visibly felt.
If you look at https://www.gapminder.org/dollar-street/, 12k / yr generally the level where most essentials are visible around the world. But you're likely not going to have:
1) A car
2) A house
3) Feed a family
4) Savings
5) An expensive hobby
You'd need about another 5-10k on the UBI check to really make this argument for UBI... which you get through working.
Second, you ignore the basics of economics of demand and supply: if a large enough proportion of the population lies on UBI you will even find cars cheap enough for them, either second hand or purpose built. True story, Renault is a car manufacturer that sells their cars for prices very similar to everyone else, but they built for some years a model that was selling for 5000 Euro (about $6000 at that time) new, with a modern and solid engine and all the safety features mandated by law in Europe. That car was also sold in France for a lot more (8000 euro or more) just because people in France afforded to pay more. Now Renault is still selling 7000 Euro cars (Dacia Sandero) that are really good for the money, while selling Renault branded cars for around 20,000 Euro and more.
Also, no, the basics of supply and demand will not make cheap cars a thing. It's not the cost of a car that you can't afford, it's the cost of maintenance. Fuel, maintenance, and insurance (mandatory in the US btw) are all costs to use the car - the average being around $100/mth.
https://newsroom.aaa.com/tag/cost-to-own-a-vehicle/ -> 1.1k
And also no, new cars will not become cheaper over time in the US. There's already 19% of the US families who make under 24k a year (we roughly double UBI to account for 2 adult UBI incomes and one car per household rule). That's 24 million households already out of the 130m households in the US. The market for used cars is actually quite big (17.6 million transactions / yr) which is probably why there isn't an $8200 new US car offering (which, btw, requires savings in order to purchase).
Back to my original point, if you have a budget of 1k/month, you could spend ~$400 on rent, $300 on food, $100 on your car, $100 on personal needs, and $100 on misc / emergencies in a small suburban town (like the outskirts of Pittsburgh) -> I've done this in college before. But realistically you would need an extra ~$600-1000 a month to pay for things like - internet, health insurance, furniture, clothes, laptop, phone, heating / ac bill, eating out every so often, a social life, hobbies, travel, etc. So yes, you'd still want double of your UBI income.
The kind of people that live on UBI (with no other job) are not the kind of people that care about savings.
This is either very poor wording or just plain wrong. UBI is a cash grant policy, nothing more. The intent is to increase overall standard of living of the poorest people in the US more efficiently, not to make everyone have the same high level of standard of living for free.
It's a policy, not an ideology.
In respect to that, I already mentioned that 12k is enough money to live but your standard of living is worse enough to be visibly felt.
yes, people say they don't want to work. but what they really mean is that they don't want to work bad jobs just because they have to.
why do people do volunteer work? again, what incentive to do volunteers work do people have now? lots of work without much reward. yet people still do it. UBI won't change that, but it will give more people the opportunity to do volunteer work, or do more of it.
many jobs today are not actually producutive for society. people do them because they pay. and they will continue doing them because UBI won't enable you to have expensive vacations or other luxuries that you might enjoy.
on the other hand, people stuck in bad jobs may be enabled to quit them, because it won't cost them their home or their insurance. pay will rise because people don't need to accept hard labor for minimum wage anymore.
Take any country with wide social safety nets. You don't really need to work in them to live.
At least in my country most people prefer working. There is a small subculture of some families that seem to pass on unemployment as a way of life to their children but those are really ,really few.
My answer is - I don't know the general answer. In my culture people prefer working to not working, even though they don't have to. But I don't know if this applies universally.
Please give an example of such a country on Earth, it does not exist. Mythical countries don't qualify.
Look at any of the newspapers and there will be plenty of stories of people who learned to game the system and get plenty of welfare money.
Source - I know one of them and I live in the UK.
Work can be fulfilling. If money is not a problem what is to stop you from doing something that interests you?
Being part of a community, learning some cool new skill.
The idea that everyone will become a zombie on UBI sound unfounded.
Yes there are useless destructive people out there, they thrive on misery and pain. Capitalism, UBI, Communism, neither will fix them. But why present them as a example of how system will fail.
What about next great artist that went into ad company and never took a chance to do their art.
Or a next great tinker or inventor stuck in some soul draining 5-9 in a factory buried under medical debt.
What about those who would have a chance to create something tenfold the value they create now?
There is less incentive for people to survive financially by doing unethical work on behalf of powerful and wealthy people, OK, we can agree on that.
But, is (for example) cooking and cleaning and caring for others 'productive'? We don't see that in macroeconomic figures, so it doesn't count - but most people do a huge amount of that without being motivated by pay.
My understanding of the world is that most people are even more motivated to do things for others that don't bring a financial reward.
I'm using it in it's lowest sense: paying back into society to fund all the other stuff that government will want money for.
So, basically, we will have more takers than producers, therefore, it cannot possibly work.
Sure, you'll get poets, artists and the like taking advantage of it and society will be better off in the long run for it... probably. I don't know, never studied that stuff before.
But the immediate problem is that you will have a shit-ton of leeches that will take the money and play video games all day long. It can't possibly be financially viable.
But to pick up a point from your comment:
> Is (for example) cooking and cleaning and caring for others 'productive'?
I'd wager that it can be for two possible reasons:
1. It perhaps allows the person being cared for to help society in some way (either directly through taxes or poetry etc.) 2. The cleaner gets paid and ultimately puts money back into society.
And yes, there are tons of "non-jobs" where nothing is ultimately created, I get it. But that won't go away with UBI: banks will still have too many employees doing nothing all day (source - worked in banks for years!)
On another note: I live in Scotland and I will bet that within 5 years we will have UBI... we're already bankrupt so, hey, what's another £50Bn a year added to the unpayable debt pile :)
Lett's start with the obvious: it doesn't matter that some people will do nothing. It doesn't matter that some people will not be working. Not only are the benefits to society great (the yearly costs for society of homeless people, or similar scenarios are much greaterthan a simple $12k.), you're looking to cut off everyone from UBI because what, 5% would not be working? So, kind of like unemployment today then.
We've come far enough as first world societies that we can ensure that everyone gets a liveable amount of money every month. And don't forget that UBI cuts off every other kind of aid. Go live a life with $1000 a month, and you'll realise that you have to be in a very particular mindset to stay at home and do nothing.
In addition, it's also a great thing for the economy, as money is actually being used to pay things, and circulating taxed away from the cash hoarding dragons that are billionaires. That makes Keynes happy.
I don't believe that it would only be 5% but yes, I am.
Living in the UK means we have a welfare system. It's not fair, hopelessly bureaucratic and probably corrupt as hell but we have one.
There is no way that giving everyone (eligible?) £1000 a month will take a whole bunch of people out of poverty because managing finances is a skill that no one is taught in schools.
People who have good jobs and earn good money can't manage it as is. So by giving free money to millions of people they're likely to fritter it away or piss it away thus wasting billions.
> cash hoarding dragons
Your issue is with them. They won't pay for UBI. I will. You will. Everyone else but them will pay for it.
It will not work.[0]
In half of my country (in Europe) people would be extremely satisfied to live on $1000 per month, it is triple of what they live on today. I know people in Western Europe that would be quite happy to get $1000 and not have to go to work for that (they earn more, but the difference does not make up for their time and effort).
I tend to align with the capitalist worldview. In a democracy where 'majority' rules, politicians can end up in a precarious situation where welfare blocks feeling marginalized can create an insurmountable opportunity cost perpetuating welfare policies. This could certainly destroy an economy if pushed too far. Strangely, either if non-working individuals couldn't vote or if the government system wasn't majority rule perhaps this trend wouldn't hold true.
All of that being said, we can't turn our backs on all safety nets as responsible policy makers. As for where the line should be drawn? Who knows. Just be wary of giving politicians the authority to decrease voter elasticity (the cost an individual incurs when they vote away a political party).
Political welfare decisions are protecting people (or not) more than capitalist incentives are.
The study found that the people on the UBI payments we're more likely to be employed than the reference group - Its clearly wildly incorrect to say that there's zero incentive to find work
UBI at levels needed to sustain your existence would not necessarily mean living alone how you choose to live but pretty much may end up in group homes or similar accommodations where many facilities are shared to make it affordable. Even then some areas of the world or even city will be inaccessible to many.
There's always some that are "fine" with it and don't try or intentionally screw up the mandatory search for work. But in general everything you said simply doesn't happen.
People DO have an intrinsic need for exploring, learning and feeling useful.
You wouldn't quit your job. You would continue working. Like most people would. Why? Because if you didn't work, someone else would, and they would get way ahead of you. From my point of view, UBI would do nothing but cause inflation (at least for now anyway, story will change once lots of people have no skills that are needed in the job market).
Alice pays $8000 in taxes and receives a $12,000 UBI. Bob pays $12,000 in taxes and receives a $12,000 UBI. Charlie pays $16,000 in taxes and receives a $12,000 UBI. $4000 is transferred from Charlie to Alice. Alice buys $4000 more stuff, Charlie buys $4000 less stuff. Where is the inflation supposed to come from?
Charlie on the other hand may invest his excess income and therefore generate no demand for consumer goods. In fact it's the opposite, it's entirely possible that his investment is creating excess supply beyond a reasonable point and thereby causing deflation.
Aren't you now arguing that it wouldn't cause inflation? Even if there was an increase in demand, prices only increase if supply can't respond.
And if there are products where supply is artificially constrained (e.g. housing through zoning), isn't that the root cause of the higher prices and not the UBI?
> Charlie on the other hand may invest his excess income and therefore generate no demand for consumer goods.
But that still creates demand. It's demand for business real estate and legal services and office supplies, but that's still demand.
Inflation is caused by printing money.
> In fact it's the opposite, it's entirely possible that his investment is creating excess supply beyond a reasonable point and thereby causing deflation.
That's not deflation. Moreover, it would require Charlie to be a chump who is investing in a loss-making business.
Inflation is a change in the value of the currency. It isn't a change in the relative demand for different types of products and services. That's something else.
Social security will probably regress to a pretty low mean with open borders though. Within the EU are already problems with different levels of support.
Reading the comments I see no new arguments. It feels like Groundhog Day.
https://www.helsinki.fi/en/news/nordic-welfare-news/heikki-h...
https://www.businessinsider.com/finland-basic-income-experim...
https://www.theguardian.com/world/2019/feb/08/finland-free-c...
https://www.jacobinmag.com/2019/12/basic-income-finland-expe...
https://www.bloomberg.com/news/articles/2019-02-08/finland-f...
https://www.independent.co.uk/news/world/europe/finland-univ...
1) 256 million @ 12K each is 3T, the current budget is 4.7T, current revenue is 3.5T. Good luck raising taxes by almost double. It will never happen. So UBI will need to be means tested. Ideally it would slowly phase out so there is no disincentive to work.
2) how do you handle UBI for large families? Does each child get UBI? If so I promise you people will have more children to get more UBI. If people dont get more UBI per child, people will have too many children, UBI wont be enough and children will go hungry. Which is why we give food instead of cash
3) How will you handle people selling their UBI income stream for a lump sum, blowing it all, then starving anyway?
4) 10% of the population is pretty much incompetent either in IQ or in emotional intelligence. That would be 30 million that simply wont be able to handle being given money.
Always seems to be that 12K is too big for first iteration. 3T is about 15 % of US GDP. When i computed UBI for my home country (not US) with the same level as existing (means tested) minimum income social welfare benefit, i got that it would need 8 % of GDP.
> Good luck raising taxes by almost double
I also found that about 1/3 of necessary money could be get by removing basic per capita tax deduction. Which is technically tax increase, but it is neutral if one counts UBI as negative tax money.
Another more than 1/3 could be get from state pensions by relabeling part of pension income as UBI. Some small part could be get from removing the minimum income social welfare benefit (but not other social welfare). Altogether that would cover more than 80% of necessary money and one would only need additional taxing of 1-2% of GDP (compared to existing 35%).
3) How will you handle people selling their UBI income stream for a lump sum, blowing it all, then starving anyway?
Personal bankrupcy laws?
4) That would be 30 million that simply wont be able to handle being given money.
If they had not be able to handle UBI money, then they would not be albe to handle wage money or existing means tested welfare money as well.
That could be at least partially accounted for by previous under-reporting of working hours, when benefits are means-tested.
https://www.kela.fi/web/en/news-archive/-/asset_publisher/lN...).
Having multiple repeated studies that replicate the same outcomes is a good thing.
But mincome actually did show a reduction in working hours, which is hard to spin as “improve employment”.
You need to define what you mean by UBI before making such claim. It might save money if it means a single benefit paid to everyone who does not work. This has existed in some form in some countries for a long time (e.g. France [1]). Results are debatable because there are several parameters to take into account and several parameters to play with when implementing such scheme. Certainly, "improved employment" is very tricky to achieve, if it is possible at all.
If UBI means handing money to everyone, then it is not a realistic prospect not least because it is un-affordable (the ooposite of saving money...)
[1] https://en.wikipedia.org/wiki/Revenu_de_solidarit%C3%A9_acti...
https://www.helsinki.fi/en/news/nordic-welfare-news/heikki-h...
Well, hold on, from that link,
"The Finnish experiment was about partial basic income targeting able-bodied people without work, it was not about universal basic income."
And further down,
"However, the Finnish government introduced a new activation policy into the Finnish unemployment system at the beginning of 2018 – that is, during the second year of the experiment – which contaminated the control group."
And,
"It is also important to note that labour markets did not pick up before early 2018. That means there could be more visible effects in 2018, but if that is the case, we cannot really know if that was related to basic income."
Finally,
"Firstly, the experiment did not include a baseline survey. We do not know if people’s subjective assessments changed after they started to receive basic income."
Basically they didn't even do a UBI experiment, their control was messed up, they didn't compare before/after, they had a poor survey response, etc.
"The findings suggest that basic income doesn’t seem to provide a disincentive for people to work."
Meanwhile the BBC reported:
https://www.bbc.com/news/world-europe-47169549
"Giving jobless people in Finland a basic income for two years did not lead them to find work, researchers said."
Nothing actually different is said, but the way it is spun will likely lead the reader to different conclusions.
Feel like that has a much bigger chance of going somewhere
It is much more effective to simply give people money to decide for themselves what they need (except for maybe medical care, since getting sick isn't a choice), than having the government try to figure that out for 300 million people at once.
Rights are something that can be enjoyed by everyone simultaneously. For instance, your right to travel does not mean that someone else has to buy you a car or a plane ticket - all it requires from others is non-interference.
> Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
In Article 25.
If you take a look at the wealth of the average population, two thirds are either pensions or property wealth. This is longterm money which I cannot draw on until retired (and most certainly won't affect my children) and property which I might depend on and therefore not be able to turn into money.
Also people are largely not against generational wealth, they're just demanding that rich people pay their fair share when inherting property wealth to their children. Taxing the top 10% correctly and without fraud would bring in enough cash to support the bottom 30% a lot more through public housing, health care and childcare support.
A UBI for contrast, is direct payment to my bank account that I can use however I like, it's not locked by its form of wealth. I CAN use that payment to save more of my own money to eventually get property wealth, but it gives the people at the bottom possibilities that they won't have without it. Also, poor people don't give a fuck about the median household wealth. Because they won't have any. The UBI however applies to all, poor and rich alike, supporting poor families a lot more than property wealth they don't have.
Having to not pay rent is a form of income though.
> Also people are largely not against generational wealth, they're just demanding that rich people pay their fair share when inheriting property wealth to their children. Taxing the top 10% correctly and without fraud would bring in enough cash to support the bottom 30% a lot more through public housing, health care and childcare support.
Another way to say it is that the top 10% got there because they use their money to make more money. Countries need their money to make more money but not at the cost of society falling apart, so we probably need to reallocate the usage of that money to support a better society overall rather than to just make more money.
What would be interesting is to force rich people to invest in social efforts with their money. Instead of taxing them and taking away money from them (which is quite un-American), instead any monetary amount above X should have some percentage of it devoted to social funds or have to pay a penalty fee (which is effectively a tax) if they don't.
Ever heard of tax deductible donations? Also, what makes you think that a private person is better at deciding where to put their money and has less inclination to donate this money to a social cause that has direct positive outcome for them (for example, investing in their already well-financed community and being the 'hero of the town', gaining also political power that way) instead of letting a state, capable of overseeing ALL of its people redistribute the taxed money to the poorest communities or those that need the help the most in some area?
Edit: And I didn't even touch on this point, because it's a whole other discussion but:
> Another way to say it is that the top 10% got there because they use their money to make more money.
Wealthy people are increasing their wealth through financial tools without contributing anything to society. Also, except for a small number of family or solo entrepreneurs, they didn't get rich on their own. They had employees. Most of those people did not benefit like the business owner did, while they actually did the work. So is it really that unjustified to tax this money and redistribute it to the poor and the workers?
Tax deductible donations have the same intent but is a poor policy implementation for rich people who already pay so little in taxes. It doesn't accomplish the effect of redistribution of wealth because so little redistribution actually happens. We want our wealth to return social good, not extra wealth -> that's the point of the policy.
I should have been more explicit that I was proposing a wealth transfer alternative to UBI, which is to create privatized social funds that rich people are effectively forced to contribute money to or lose their wealth significantly over time.
> Also, what makes you think that a private person is better at deciding where to put their money and has less inclination to donate this money to a social cause that has direct positive outcome for them
> instead of a state, capable of overseeing ALL of its people redistribute the taxed money to the poorest communities or those that need the help the most in some area?
Uh... who do you think runs the state? Rich people.
And if you really think the state is the perfect ideal father figure that cares for all of its people... please tell me where you live so I can move there too. "The state", in most of human history, is woefully inept at making good, centralized decisions, and it's decentralization (which is btw a UBI principle) that has given us equal rights, fairness, and societal mobility. For most of history, anytime you aggregate power to a central state, bad things happen.
Back to my point though, the interesting thing about social funds is that they can be privatized and form their own market economies. For instance, Elon musk could use his social fund to combat climate change. Bill gates is already doing this to tackle large humanity issues. Warren buffet will probably use it to help middle america. Jeff Bezos... will probably give half of the fund to his wife.
But it's a pretty interesting policy that goes with the spirit of the American ideal which puts the power of changing the world into the individual's hand rather than centralizing it into the government, which is why I described wealth transfer to a government as "un-American".
Social funds with a committed vision towards non profit activities is really not a bad idea the more I think about it. Some rich people will definitely fund UBI with it.
Germany. I'd also add that the countries doing the most for their citizens are probably the Nordic European States plus Germany and France. All of them Social Democracies, so what Americans would probably call a "strong state" oriented approach. I have a lot to critize about my own country, but the social support structures are probably still among the best in the world only toppled by aforementioned Nordic countries like Norway or Denmark.
I really don't think we should rely on the goodwill of millionaires and them running the state is, on a scale, mostly an american issue. Of course we also have lobbies, with which I have a problem, but our European countries are less controlled by wealth than the US for sure.
Regarding "good" billionaires, I'd suggest you listen to this: https://medium.com/@CitationsPodcst/episode-45-the-not-so-be... You seem to support Chicago school style approaches, with which I will disagree, being a pretty standard Frankfurt school believer. I'd still like to discuss this further. Find my email in my profile, if you want.
There are two competing ideas of governance. One is the umbrella (ie. Godfather) and one is the public servant / slave (ie. Jesus).
- The godfather creates an empire and everyone who lives under him lives really, really well.
- The public servant is an invisible figure that solves all the problems of its people and serves the people, meeting their needs.
The US has most likely lived under a godfather system for the last 70 or so years, after WW2. Like it or not, our billionaires have created empires (their companies) and we live really well because of them. If the people of the US want to continue in their standard of living, they need to keep propping up the billionaires' empires because it's those empires that create the umbrella for the high standard of living we have.
This does turn the US economy into... either you serve in the empires and live well, or you live poorly not enjoying the empire's provisions. So you have a dual economy - those in the US who are running the empire's money printing machines, and those who can't help those companies print money. And the dual economy has two results -> really well off people, institutions, and society, and poor people. The poor people are actually rich compared to the rest of the world, but are poor because the rich economy has inflated the prices and expectation for a normal standard of living for those poor people, and they are getting squeezed by both income and cost of living.
Both capitalism and socialism alludes to this kind of situation, with differing opinions of what to do about it.
Capitalism says we should use godfathers to make everyone live well. Prop up the godfathers enough and everyone can live better off than they used to (very key point is relative to the past).
Socialism says no we need to move towards the public servant model to make everyone live well. Remove all the umbrellas and replace them with servitude and everyone can live in an ideal and fair society (also a key point, standard of living is not relative to the past, it's relative to the ideal).
In capitalism moral judgment is based on if you live better than you used to. If you want to see where we started from, just watch BBC's planet earth - you'll see starving lions with rib bones showing, trying to catch gazelle in scorching heat in Africa in order to eat, since they haven't eaten in weeks. You'll see eagles and dozens of birds fighting over dead carcasses that are rotting. From a capitalist point of view, going from having to hunt for your next meal 10,000 years ago to robust supply chains for groceries and upgrading your iphone every year for practically everyone in the world is what they consider moral accomplishment.
In socialism, moral judgment is based on if you live in society as close to the ideal of fairness that it can be. It looks at the relativeness of the current structure of society instead of the relativeness of standard of living improvements over time. If rich people are enjoying more things than poor people right now, that's considered immoral. If everyone has the opportunity and privilege to live a decently comfortable life, that is moral.
The US is very capitalist in mindset. Keep in mind that in capitalism, companies also help those not within the company by creating better quality goods for consumers (everyone else), so the more empires grow, the cheaper/better the consumer goods are, and the better quality of life is for everyone, not just those who work for the empire.
The US is so capitalist that it cannot imagine a world where standard of living and company growth stagnates. That's how dependent the US is on empires and on capitalism. In some ways, if you accept the capitalist moral judgment as a good moral judgment, the US is trying very hard to be moral even when it's practically impossible to do so!
But then again, tell US citizens that their standard of living is going to go down - that they will not get everything at the quality that they expect, that their income is going to shrink, that their livelihood will take a slight hit - and that's too much to bear for the US population's ego because we've never had to tighten our belts in the history of the US for that past 70 years.
But that's exactly what needs to happen for:
1) healthcare costs to come down (doctors and hospitals need to earn a lot less, like maybe 50-60% less)
2) income inequality to stabilize (basically 10% wealth transfer for GDP every year)
3) climate change to be mitigated (reduce carbon emissions which is basically shrink GDP by 1-2%)
4) housing prices need to go down (basically tell everyone that their primary asset needs to depreciate by 30-50% or even more)
So yeah we live and die by the godfathers and their empires - that's the way the US is. And it really doesn't matter who is in the governance seat - neither rich people nor a strong state will do a good job making policy to cause the above to occur - you first have to change the willingness of the American people to willingly accept systematized and distributed personal loss.
To be fair to Americans, social fairness is growing on the importance scale - but you have to tailor the changes in a way that aligns with existing US values and behaviors. You can't just say "oh, implement the way the Chinese/Germans run their government in the US", it's just too foreign to get any traction or pragmatic action (which is what Frankfurt school eschews, right?).
Implementing policies where rich people keep their empires and wealth but instead are forced to use their empires to not keep printing money but to solve other problems - that's very American sounding to me. No one is saying that Bill Gates is a beloved figure btw; we are saying that he's effective at investing into getting rid of malaria though. Same with Elon musk, he ain't no saint but he can sure get us to the moon. He might also get us to clean and renewable energy if he put his mind to it, you never know.
A lot of my inspiration for my thoughts on these issues comes from the waitbutwhy blog. The whole series on the story of us is fascinating, but especially chapter 4 talks about the American view of consumer capitalism which I recommend to read.
I'd disagree with the statement, that most of the US citizens live a good life while 40% are in danger of being evicted right now. That's only the first example coming from the top of my head. You could easily make an argument how most people living paycheck to paycheck is not a great status also.
> So you have a dual economy - those in the US who are running the empire's money printing machines, and those who can't help those companies print money.
Wouldn't you consider this amoral from the start? There is proficiencies that won't ever be able to get out of poverity for this exact reason. Most artists, writers, philosophers, social workers, health care workers won't ever be able to get out of poverity / low middle class, because they are not "worth" as much, as people working IT, finance, governance.
> The poor people are actually rich compared to the rest of the world
This comparison doesn't really matter when they can't live where they are right now. If you want to analyse their quality of living you have to only consider their material conditions where they live, not how their money would be able to make them live in South Africa or Swasiland.
> The US is very capitalist in mindset. Keep in mind that in capitalism, companies also help those not within the company by creating better quality goods for consumers (everyone else), so the more empires grow, the cheaper/better the consumer goods are, and the better quality of life is for everyone, not just those who work for the empire.
In theory this would lead to better lifestyles for others, but as the capitalist tries to minimize cost and maximize profit, they are moving away from US based production and produce cheaper in China, South East Asia etc. leaving their US workers behind with no wage to buy their products. Capitalism has reached the stage of maxizing profit through globalization, chasing for the cheapest production possible around the globe. This is why US poverity is increasing and unemployment becomes a more and more desperate issue. The capitalist, in the end, doesn't care about the people outside of his profit scope. He should though, since those people buy his products. If nobody is left buying product, their is no profit. Some people argue this can be corrected by "ethical capitalism" which I think is a dream castle, but you might disagree.
I'd argue that we can reach those goals easier, through socialist companies where not one capitalist is controlling the company, but all the workers collectively. They won't go oversees with their production, as they protect their own jobs. They won't cut safety measures for the same reason. Same for health care etc. Workers will protect themselves way better and lead the society to a more balanced way of living this way in general.
I kind of have the feeling you're not that big of a proponent of capitalism as I thought in the beginning... You have some interesting analysis with the appended criticisms.
> you first have to change the willingness of the American people to willingly accept systematized and distributed personal loss.
We agree that this needs to happen. I don't think the numbers have to be quite as drastic as you proposed, if we just take 80% of the wealth accumulated by the rich (there will be enough left for them) and do a sensible tax reform targeting the Top 10-20% correctly. That would be a start. Going the way of reform, we'd start with that and health care reform and see what's the next step from there. The alternative of revolution is an existing alternative, but costs lives and can hurt the system for the next 20-30 years, so not really desirable. The first step towards reform would be getting Biden into office and then pressuring him to actually take the steps he promised after talking to Sanders.
Regarding instead of taxing, making it so that billionaires need to redistribute privately, I don't agree that that's better than a for example workers council deciding what to do with tax money. The Gates Foundation has distributed their donations 96% to US and European organisations and just 4% to African owned and run organsations. I appreciate them trying to help, but I think you need to put more of this money directly into the hands of African orgs as they for sure know best, what their citizens need.
I'll check out your link later today, thanks. And also thanks for not making this an aggressive, unproductive conversation.
My point is that minimum wage in the US -> ($16.50 / hr in many states), is really high compared to many other countries. For instance, the median wage in Taiwan / China is 1/3 of the minimum wage in the US. Why does the US have the minimum wage so high? Why do bus drivers in the US get paid 10-100 times more than bus drivers in India? It's because of "trickle down" economics - because the US economy is so strong we can have really high wages for the lowest skilled jobs in our economy.
> Wouldn't you consider this amoral from the start? There is proficiencies that won't ever be able to get out of poverty for this exact reason. Most artists, writers, philosophers, social workers, health care workers won't ever be able to get out of poverty / low middle class, because they are not "worth" as much, as people working IT, finance, governance.
I wouldn't consider it amoral. The reality is that creating great environments for people to grow up in is hard work, and not a "universal right" by any means. Nature does not give everyone super comfortable and fair lives - consider the cold north or the scorching deserts and you'll realize that this assumption that everyone deserves the same life is... not grounded in the real world. Life is fundamentally unfair. You have certain populations of animals growing up in fertile galopagos without any predators, and you have other animals growing in 10000 ft deep oceans with extremely harsh environments to survive. That's life.
Fairness in life is a good ideal but a bad policy. It's like saying, I don't like how the world has deserts and tundra, I'm going to make the entire world have perfect weather and homogenous, ideal environments for everyone - the engineering effort would be astronomical and also probably cause a lot of problems to the environment. I'd rather have a policy that is grounded in how the world works, which I think capitalism is (as opposed to socialism).
> I'd argue that we can reach those goals easier, through socialist companies where not one capitalist is controlling the company, but all the workers collectively. They won't go oversees with their production, as they protect their own jobs. They won't cut safety measures for the same reason. Same for health care etc. Workers will protect themselves way better and lead the society to a more balanced way of living this way in general.
The assumption that collectives can allocate resources better than individuals is flat out wrong. The reality is that the decision making and skill of the person(s) in charge determine the efficiency of allocation.
This is basic business theory. You don't put a random joe to allocate budget and policy decisions for billions of dollars at the top level; you put a skilled CFO or COO who has 20+ years of experience and has done it many times before to make those decisions.
Capitalism naturally causes the people who have the best allocation skills to be assigned the seat of being the one to allocate resources. This is opposed to socialism, which has no policy or strategy towards who gets the control of the resources.
Where capitalism goes wrong is in hyper focusing on allocating resources to money making. You want the focus to be distributed evenly across money making, social welfare, and innovation.
If you told these CEOs and CFOs running organizations to allocate resources to build better communities instead of just making more money, they would have the skills to do a good job at it. We just don't tell them to do that... because I dunno, American ideals?
> I don't think the numbers have to be quite as drastic as you proposed
I think they have to be much worse than what I proposed. Bloat in the current system is really, really high. In Taiwan, they live the same standard of living as the US with basically 1/4 of the cost.
> if we just take 80% of the wealth accumulated by the rich (there will be enough left for them) and do a sensible tax reform targeting the Top 10-20% correctly.
Understand you may not be from the US, but its probably more accurate to say "for us" rather than "for them". If you're a programmer on hacker news, 95% chance you'd be in the top 5% of the US in terms of income generation.
> just 4% to African owned and run organsations.
It's because most African owned and run organizations are not skilled enough to be entrusted with the money to actually produce results.
If you've tried to run an organization before, it's extremely difficult to allocate resources efficiently to solve problems. That's the key bottleneck of economics and I suspect its the major perspective difference between you and me. I view resource allocation as the absolutely hardest problem in the world, where you think everyone can do it well. 99.999% of people, if given $1 million and a difficult mission, will fail that mission, not because they lack heart, morality, ethics, or understanding, but because they don't know how to use the resources given to solve problems.
Companies are not empires - they are just free people associating with each other on their own terms to create something.
> telling you what to do and how to live, with an implicit guarantee that it would give everyone a decent life.
Why should I need to tell you what to do and how to live? There's gonna be things everyone will have to do from time to time (like cleaning streets, trash drives, maybe canal work, but most of those you can address by making the reward for doing such jobs higher than the average desk job), but other than that, you will have to work less and have more free time in which you will be free to do whatever you want.
I'd argue that our current system forces you way more to do certain things than a socialist system would. If you are poor, you need to work service jobs or hard manual labor, otherwise you die. The system literally forces you to work, otherwise you will not be caught by any social safety net. That's why leftists tend to talk about "wage slaves", because at the end of the day, you can either become homeless and sick, or work.
Also this point only applies to the median family with existing property wealth. Not the poor family that has no inheritance. UBI is designed to serve poor families, not the median or upper class families.
It isn’t evenly speed either, most of it is concentrated in the SE and amongst the older generations.
Interestingly many of those people do get UBI, it’s called a pension.
Business owners will think like this:
"Hey Joe, from today we all are getting X amount of dollars from the government. Thus, I am going to reduce your paycheck by the almost the same amount. You will have more money than now, and our business will get a break in these unfortunate economic times".
For Joe, that would be a good offer: we will get effectively in increase in the money in his pocket, while minimizing the danger of being laid off since the business he works for will get 'a break'.
If businesses reduce their pay they’ll have to pay higher rate taxes on their end (CIT, payroll tax, business rates).
Also in many countries reducing income is illegal, especially in western countries. It’s often can only be done during restricting after going through an employment court as an alternative to redundancy and it’s limited both in amount and duration.
That said truly universal UBI would require a considerably change to how and what we tax as well as the general employment market you likely won’t see basic income until there will be no means of offering sufficient employment to the majority of the population until then UBI is often less effective than direct benefits simply because it’s less.
The main less from these UBI studies is that the threshold for cutting off means tested benefits is way too low and there is quite a bit of benefit to gain at continuing proving direct cash benefits at higher income levels. That said we currently don’t have any reasonable way to fund it, as well as to ensure that UBI isn’t going to be just a wealth transfer program from the working and middle class to corporations.
UBI would appear to be a pretty straightforward way to keep things balanced and stable, in the long term.
This is why free-market advocates have been pushing it for decades as a better form of welfare.
That's it. You're feeding on 100 years of western propaganda and neoliberal ideas.
China is state capitalist, UdSSR was state capitalist.
If you want to see a working socialist state, even though it's suppressed by the US government for 70 years now, which explains most of its problems btw, look to Cuba.
Edit: Okay, whatever, here you go, right from Stanford: https://plato.stanford.edu/entries/socialism/
The study doesn't challenge any worldviews. People like money, news at 11.
But the study does challenge one's intelligence. "Some people given money for some time" does not imply anything about "all people given money forever".