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Comment by gandalfian | Hacker News Reader

In practice the UK already pays the price for a universal basic income. Most poor people get some sort of tax credit and/or housing benefit. What we don't do is allow people to use it to rise out of poverty. A disabled lady thought saving some of her disability was the responsible thing to do, despite further impoverishing herself, once she built up some savings she was prosecuted for fraudently claiming benefits while having savings. There is this tremendous destructive fear that no one should build up any capital with the help of benefits when this is precisely what would lift people out of poverty long term and reduce the costs on society.

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The laws are like that, because someone feels that it's not in their interest that people actually get out of poverty. The logic behind that interest is simple. You can't make people dependent on you if you simultaneously give them the tools to achieve independence. And these guys love dependent people, because it gives them power. However this attitude is ruining most Western societies.

do you have any hard data or research to back that up?

Hypothetically, if something like that were happening, do you think any of the politicians voting such legislation in, with such an intent, would admit to it in an open forum, for a study?

Well, if you're willing to look for it, there does exist research within political science that shows that "the elites" are systematically favoured in representational democracies, as far as policy implementation goes. In short, these analysis show that policies that has the favour of the elites gets voted in far more often than policies that only has the favour of the regular population.

Two great outliers here are of course the vote for Brexit, and the election of Trump. The elite hated both of those. An interesting paper would thus be to compare the contentedness of these "factions" with their political system between countries that have representative democracy, vs. countries that have a more direct style of democracy such as Switzerland.

Speaking purely from logic, neither the political nor the monetary elite would rationally want regular people to get a possible advantage over them. Moreover, they want people that are dependent on them, because that makes them far easier to control. You do that by making sure they only ever get enough money for their daily bread, without getting so much as to cut into what keeps the elites rich, which is a combination of real estate, banking and industry ownership.

This means both some right leaning, but also left leaning parties, might want to ensure that regular people are never given more than exactly enough for mere survival, but not a penny more. This also goes for education, btw. You don't want to over-educate these guys, lest they become a competitor to the job you're looking for. If you give them any less, you'll have riots on your hand. If you give them any more, you lose control over them.

> You don't want to over-educate these guys, lest they become a competitor to the job you're looking for.

You see this a lot in immigration policy BTW. Why do we have so many uneducated and unskilled immigrants with no legal recognition whatsoever, and so little immigration of skilled workers and business-oriented people, much of it hobbled by restrictions on firm-level mobility (like those around the H1B visa)? Follow the money.

> You see this a lot in immigration policy. Why do we have so many uneducated and unskilled immigrants with no legal recognition whatsoever, and so little immigration of skilled workers, much of it hobbled by restrictions on labor mobility (like those around the H1B visa)? Follow the money.

Well, in some sense you could also follow the labour organizations. Look, if you're a poor migrant who just got a hold of a job, would you love the idea of ten others standing in line for that same job, ensuring that you can't ever ask for a raise? No. If you were a rational human being, you'd start voting for the populist anti-migrant parties in your country of residence, like many immigrants are these days. This is proven by the wages in immigration heavy professions, that have been all but standing still for decades now.

Some people even call this effect reverse colonialism. It's when you're not allowed to earn money off colonialism anymore, so you simply invite the impoverished people for similar jobs in your own country instead. What's worse is that many Labour Party equivalents across the West have even been welcoming this change, since they hoped it would make more people vote for them. But now most of them see that this stance has backfired badly for them. Hence many of them are now experiencing the lowest approval ratings in decades, as many now view them as the direct cause for many of the problems Western countries are now experiencing.

There's a weird chicken-and-egg quality to these arguments where the pro-state party wants to expand benefits, the anti-state party wants to limit them, and we end up at this equilibrium where benefits are good enough for some people to cobble together lives based on them, but not good enough for most of those people to build better lives and get off them. I think it's overly simplistic to put all of the blame on one party (as a sibling comment about Democrats does).

I call that problem the how-much-vs-how: there's a permanent battle about the amount of transfer with exceptions and special cases pushed in from both sides at every opportunity, and result is continually worse incentives and complications like that effective tax rate problem at the thresholds of the receiver side.

I think it's disingenuous to categorize the parties as "pro-" and "anti-" state, when the "anti-state" parties generally contain all the nationalists, supporters of the police state, and those who are willing to increase state military expenditures (and at least in the US's case, increasing government subsidies for their own constituents).

It's pretty clear that "anti-state" in this context actually means opposition exclusively to policies that help the poor and hinder exploitation by the rich.

The drive from this comes out of the right, who believe that work is the only valid route out of poverty. Regardless of actual capacity to work.

> only valid route out of poverty

well, what other routes are there?

For the fuckers currently running the UK, primarily a combination of inheritance and corruption.

If you can't think of any, do you think that means that those who can't work (disability, illness, dependents) deserve to be poor forever?

i'm not saying the deserve to be poor, but they cannot be rich - and at best, society can keep them alive and provide the minimal, necessary sustenance for survival. While they wait for technological improvements to cure them of their illness (if such tech comes to pass).

What would be a viable alternative? If this had happened in the jungle pre-historic times, they'd just be dead. So is it not an improvement?

> at best, society can keep them alive and provide the minimal, necessary sustenance for survival

There is no constraint on a society enforcing this level of support as an upper bound. A society can dedicate as much or as little of its resources as it chooses to supporting those unable to support themselves, each possible amount having a different set of consequences.

Some of the richest people in the world do no work at all. Their parents give them an immense fortune, which is moved around by employees in such a way that earns in a day what most people get in a year. They consume to their heart's content, without ever having to actually work. Breed, die, repeat.

Indeed.

The person above clearly doesn’t value the lives of the those who are unable to work like those who can. Thus, why they think giving them the littlest as they can is fine. After all, we as a society are only mildly capable of being better than a pack of wild animals. It says a lot about how this person views others, themselves, and humanity in general. Overall, they believe humanity has no hope or worthiness of existence.

> If this had happened in the jungle pre-historic times, they'd just be dead.

You're arguing for "The Protestant work ethic", which certainly isn't pre-historic. It's associated with the advancement of capitalism.

Actually you can find strong feelings in favor of strictly demand-based transfer on both sides, that's the one thing they agree on. On one side it's "the money should be given to someone who needs it even more" and on the other it is "the money doesn't need to be transferred at all", but the result is the same. Effective tax rate in the vicinity of 100% (sometimes higher!) for people at the threshold and all that (like the lady who dared to save).

Believe me, this drive also comes out of the bureaucratic left too, because dependent people give them far more power then a liberated people with means of their own. Panem et circenses!

It's worse than that. The drive comes from people who employ labor who believe that poverty is the only way to keep wages low.

This attitude is very topical right now, playing out in US politics: https://theweek.com/articles/982343/republican-theory-unempl...

(Ignore the Republican part; most Democratic politicians would go in the same direction, but Republican belligerence gives them the cover to be silent, and to not alienate a portion of their base which would endanger their tiny majority.)

Do you think it’s honestly that sophisticated and malicious? Public policy is hard. Adjusting benefits appropriately as people climb out of poverty is a known challenge. It’s called a “welfare trap” and has its own Wikipedia article:

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

Yes, it absolutely is that sophisticated and malicious. Have you seen the political environment in the UK?

Yes, there is a huge sentiment among the conservative public in the UK that people should not use benefits to gain capital or for social mobility. This isn't just a policy issue, it does come along with a commonly held attitude.

Can there be social mobility that is independent of social social status, or does "social mobility" have a literal definition where if someone gains social status someone else must by definition be lower on the social ladder. If one follows that definition it seems not too strange logic that social support should go towards those at the bottom of the social ladder, and if you change the social ordering then who receive support will also change.

One way to resolve the problem seems to be to decouple benefits from social status and instead see them as human rights. Health care is not something that you buy, but rather a service that the government provide to every citizen equally. The top 1% get the same cancer treatment as the homeless and both pay zero.

Decouple benefits from social status does not seems to be strictly a left vs right issue, at least not here in Sweden. Is the UK different here?

Yes it's a left vs right issue here. This interpretation will seem very biased, since I am very left wing, but it really is this way:

The left see benefits or welfare as a right, and as a very important way to help people who have found themselves in difficult situations. Here in the UK, left wing people often view those on benefits as victims of their situation or upbringing. They do not think of them as of low social status.

The right see benefits or welfare as just a necessary evil to prevent mass death. Here in the UK, right wing people often view those on benefits as leeches and criminals, who have made the choice to be ineffective at achieving and maintaining a high enough income. They think of them as of low social status.

Sweden is very differently politically to a lot of countries, at least I've heard you have far less party politics. The UK is absurdly polarised on these issues.

For your cancer treatment thing, that's not how it works here in the UK at all. While we do have universal healthcare, unfortunately it varies drastically based on where you live, and if you live in a poorer area, you are much more likely to get overwhelmed and struggling hospitals. So really a hospital in a richer area will give totally different care to one in a poorer area.

We do have a somewhat similar problem where depending on where you live you get slightly different social support, but this comes as a consequence of local government. Local government need to have a balanced book where those that pay more local taxes than the resources they consumes from local government matches those that consume more than they pay.

If a local region has an influx of citizens that consume more of local resources than they pay in local taxes, the local government then only really has one primary option: reducing who get support and how much support. Health clinics can as a result vary greatly between regions, but since there much fewer hospitals, multiple regions have to join up to a single one and thus the difference get more smoothed out.

With covid-19 pandemic there has been one political change where the right has gone out with the goal of fully nationalizing healthcare, which is a bit odd in terms of left vs right.

I really don't think it's hate. I think it's fear and cynicism clouding the bigger picture and keeping us all stuck in a trap of our own making.

What is outrageous if that the UK prevents you from getting any benefit of you have any savings. It's basically encouraging you to not save any money.

Not true. Job Seeker's Allowance is not means-tested. https://www.gov.uk/jobseekers-allowance/eligibility

If you are still unemployed whan that runs out your savings are taken into account but you can still have £16K. https://www.gov.uk/universal-credit/eligibility

Not good, but at least that limit is better than the 10k DKK limit in Denmark, you basically can't even have a proper rainy day fund or own a car.

This is not true. The new universal credit rules allow you a certain amount of savings.

A member of my family has just been on universal credit due to the pandemic impacting her work sector, and they still gave her benefits even with her having savings, it's slightly adjusted down, but she still got payments.

In Spain it's similar, we already have de facto basic income, just much more complicated than it should be. When you lose your job you have unemployment payments, when it expires there is a "long-term unemployment aid" that in theory was a temporary measure for the 2008 crisis, but every government has kept extending and no one has dared to remove, even when the right had an absolute majority. And then there are regional aids for "social reinsertion". So basically everyone is covered by a safety net and can obtain some income except for people who actively refuse to do so.

Still, actual UBI here is an unpopular idea with most of the population, who say that people need to work for a living, that it's a "handout" for lazy people, it will make people stop working, etc. Funny when the two largest problems of our society are probably unemployment (lack of work for people who do want one) and lack of children. And both are problems that ask for less total hours worked, not more.

To me, it's a purely moralistic issue (and based on quite outdated morals). If we are already putting in the money to ensure that people have some basic needs covered, from a rational point of view I don't see the problem with turning it into an automatic right instead of something that people need to apply for and that we pretend is "temporary" (but not even the political right will remove it, no one wants the streets full of people with nothing to lose). And as a side effect, we could get rid of a lot of bureaucratic overhead in the process, plus no longer needing minimum wage and making the job market more dynamic.

I guess logic will triumph in the end, although it's difficult because there is a lot of purely irrational thinking. For example, most of the people who furiously oppose an UBI because in theory everyone should have to make an effort and earn a living for themselves are also the people who furiously oppose taxing large inheritances...

What you are describing is very different from UBI. With UBI everyone gets a certain amount no matter what. There is nothing universal about what you are describing.

That's the point of the comment. The UK pays the price of UBI without getting the benefits of UBI.

Well, no. Only a small minority of people are on Universal Credit.

I don’t get how this follows, at all.

What don't you get? They pay the price of it but don't get it, may as well pay the price of it and get the benefits it provides.

All things being equal, wouldn't that greatly reduce the benefit amount per person?

I don't know about the UK, but in the US a substantial portion of the budget is spent on bureaucrats ("caseworkers" and the like) who would be unnecessary with UBI.

According to the radio (BBC), a substantial portion of the budget is going to contractors who've started rejecting perfectly good applications.

Administration costs go way down. We're spending a ton on making sure that only the "right" people get benefits and policing the poor.

If you take out pensions(~100b gbp), the UK spends (very) approx. 100 billion pounds a year on social assistance. I think OP is suggesting taking that 100 billion and dividing it evenly among the people of the UK vs specifically to the folks who have applied.

> specifically to the folks who have applied

I like how you distinguish between the people who are eligible and the people who have applied, because some eligible people do not know they are and therefore do not apply.

It is brought up in the press [1] from time to time, and the percentage in France is somewhere between 40% and 50% of the eligible people, which is huge!

[1] in French: https://www.leparisien.fr/economie/votre-argent/aides-social...

Is there surplus in these social assistance budgets going unused? How could you expect to spread the same budget over the entire population while maintaining the quality of benefits?

There is no surplus in the social assistance budget that I saw when I went and looked over the budgetary documents to post my original comment. I'm not an expert and I didn't dive deep, I just wanted to look for the numbers that the UK is associating to "welfare" and "social assistance". As far as I saw, the majority of the benefit is via tax rebate, tax reductions, and in some instances direct payment, so in that light, I'm not sure "quality" is much of a factor? The UK already has social healthcare iirc. I think in the UBI world, everyone pays tax normally, and then that money is distributed evenly vs specifically? (Edit: removed my math as it is wrong, as usual)

Why not include pensions? Since your pension could be replaced by your basic income.

But if you do, it's about £3.5k a year each I think. Not a lot of money. Certainly not enough to live on for a basic standard of living in our society.

I agree but I seperated it for whose who might not, this way you can choose how you think about it. :)

Some social assistance programs are probably worth keeping, rather than converting to dollars. Here in the states, for instance, I received regular updates on what to expect as my child developed, what vaccines they should have, what exercise and nutrition needs they have, and when to see a doctor. That info was really useful, much more so than getting mailed a couple bucks.

Universal Credit is very far from universal, of course. It has some deliberate bugs, like a lag in payments that drives people to loan sharks.

This is true, or arguably true, but we need to remember that real-life policies are never clean, blackboard examples. They're not going to just swap out social welfare and council housing for UBI. It'll be layered in somehow.

Hell... you can "sell" politicians on UBI, have them nod along, and expect them to come back with a proposal for a conditional UBI. They like your idea, it just needed to be optimized it so that only those who need it get it.

That doesn't mean I'm against this. I think it's a positive development, for the reason you outline and others... just mitigating expectations.

> when this is precisely what would lift people out of poverty long term and reduce the costs on society.

How, if you disallow stopping the payment?

It seems like what you want to happen is exactly what did happen: she saved, had money, and then the cost on society was reduced.

> A disabled lady thought saving some of her disability was the responsible thing to do, despite further impoverishing herself, once she built up some savings she was prosecuted for fraudently claiming benefits while having savings.

I don't know the specific case you're referencing, and it's possible that they were charged with fraud in relation to a benefit which does come with a savings/income cap. However, the two main disability-related benefits in the UK (Disability Living Allowance and Personal Independence Payment) are paid regardless of personal wealth. I don't disagree with the general gist of your comment, and as I say it's likely that the person was claiming additional benefits where your assets are taken into account.

What you describe very clearly isn't universal.

One of the major selling points of UBI is that it never disincentivizes recipients from earning, saving or investing in their futures.

A negative income tax would achieve the same goal without giving money to people that dont need it.

Except there is not enough redistributable capital around to let it happen. Even if all U.S. capital stock ($70T) was distributed to everyone evenly, it won't let people out of poverty (sustainable income derived from this will equal to about the minimum wage per adult). So even the most terribly unfair capital redistribution imaginable will ok, maybe pay for food stamps for everyone, but hardly much more.

In the last year 33.8% of all personal income in the US came from the government. It’s crazy to think that number could go much higher but no wonder we are experiencing shortages of just about everything and inflation.

That is incredible, do you have a link by chance?

I'm guessing it's a cherry picked statistic that is using covid relief to paint some broader picture that doesn't exist. Of course I'd expect government assistance to increase during the worst pandemic in a generation.

How is that painting a picture that doesn’t exist? I never said that was in normal times. I said in the last year.

https://twitter.com/biancoresearch/status/138937682791591936...

Can’t find a link to an article but here is a writer for Bloomberg with reference to his graphs from Bloomberg.

I'm not sure you understand your own comment because what you are saying is basically that people are asking for way too high wages. Why? Because governments don't force people to work for them, they have to hire them on the open market, which means that they have to pay the prevailing wage and that wage is too high for private companies, which forces them to raise their prices, in short, higher wages drive inflation, which means wage growth is leading inflation, which means workers are actually benefiting from the current situation.

This is true to some extent and it explains 2% inflation, but the boring answer is that gasoline prices are rising much much faster than wages which is another 2% for 4% inflation in total.

Just some back of the envelope work - with 70 million million divided amoung 300 million people, that's 233,333 per person. Assume 4 people per household that's about a million per household. Avg s&p dividend is 2.3% - That's minimum wage per 2 working adult household.

The math does seem to stack up. The problem is distribution, not total wealth it seems

Edit: Ok this is skewed as US stock markets are really a global stock market, but if you took for example global GDP (~115 Trn) and divided by 8 bn people or 4 person households you end up with 60k per household globally.

Here's a trick I was explaining to my son earlier. We really do live in the Matrix. An announcement comes on and they are resetting - everyone gets a new life starting tomorrow - but randomly allocated over the 8 billion possible "players". We can keep the current social order or we can design a new one.

Do you hope the 8 billion sided dice rolls in your favour and you land in Jeff Bezos body? Or do you think maybe we should redesign society ?

Yes but that way of splitting would very quickly destroy for the very very obvious reason - no money must be given to children... And dividing by adults, say over-15s, it's 70T per 257M, $272K per adult or $1044 per month for that family of 4 with 2 adults in it... That hardly solves any questions.

And you can't divide all of it, because it means destroying capitalism, taking the bottom out of society. Only a small fraction of capital stock can possibly be distributed this way.

> $272k per adult or $1044 per month for that family of 4 with 2 adults in it

Something fishy about your math here.

$272k per adult is $544k per family. If you paid it over one year that's $45k per month.

Edit: oh, I see, you are only giving people the interest on the capital and assuming a growth rate of ~2%. Both of which seem quite silly to me, but whatever.

The numbers are silly - but I am not advocating some massive one off redistribution - I am just trying to argue against the idea there is not enough money to go around.

>$272k per adult is $544k per family. If you paid it over one year that's $45k per month.

If it was paid out, you would lose your job.

But we spoke about possibility of creation of sustainable income for everyone, not a one-off money grab? Not a growth rate, but yes, dividends rate - because growth in capital itself will go into inflation, population growth, and growth of living standards, so yeah, 2.3% is all we can realistically plan for.

And then the big question is: how is this society different from Soviet Union? Literally, i am not exaggerating: an economy where capital is, by law, owned only by the government, and private ownership of means of production is a felony (or how else you will take all capital away)? Or if you want to literally give shares to individuals, not to some immense state fund which will do the redistribution job, what will prevent these people from drinking and gambling these shares away? If American rich will be robbed off all their money so they won't be able to buy, to the Chinese rich (they will be able to afford as people will be running to sell off - if they were attracted by 2.3% returns they'd be buying stock now as it is, only reason why they don't is that they don't see it as attractive - so they WILL sell - and stock will be dirt cheap)

It all sounds like a way to kill capitalism, or sell it off to foreigners...

I am not an advocate for UBI, I am an advocate for a fairer society. (And the intra-US wealth disparities are as nothing to globally)

I should not have assumed dividends were of total stock - that's nonsense. But even so stock market is not total wealth - far more wealth is in real estate for example.

First there is no destroying of society, I am assuming a different distribution of the dividends - assume something like the Norway Sovereign fund(s).

And while this is very back of the envelope I am assuming money goes to children (broad assumption that every household is two adults and two kids).

But let's look at say GDP distribution - that's 5.5 trn - which divided by 300 m people is 18k each.

I am just arguing against the idea that there is not enough wealth or money around, so we cannot share it.

There is enough. How we share it is politics.

And it's always worth nothing that history shows if you don't share for long enough, people take it away from you.

> A disabled lady thought saving some of her disability was the responsible thing to do, despite further impoverishing herself

???

So if I earn £100k/year, and I choose to save all of my income then I am impoverishing myself. Do you understand what saving is?

The UK has this terrible habit, like the US, where people are infinitely jealous of other people. Any benefit that someone else is getting, I want it. You get tax credits, I want them too (even though I am making £50k/year). The result of this situation was/is a "welfare" state that primarily gives money to those who don't need help.

Yes, if you have £18k in savings...you don't need help. Do you understand what being poor is? You are not poor if you have £18k in savings.

In the pandemic, it was utterly appalling to see middle-class people who earn substantial amounts of money complain about not being able to claim benefits. How greedy can you possibly get? And then the Tories bring out a huge wage subsidy scheme that lavishes support on the middle-class support, not five or so years after they tried to squeeze £100/week out of people dying of cancer or who literally cannot work to feed themselves. £4000/month to a middle-class person on hard times...no problem. £70/week to someone dying of cancer or someone is homeless...what a scrounger, unbelievable scrounging, greed.

I am British but Britain is a truly amazing place. In the US, everyone seems to think they are middle-class, even if they are in a two-person household earning $400k/year, they seem to resent being forced to pay for anything. The UK is heading this way quickly but from the other way: Blair introduced universal benefits, everyone has their hand out now, no matter how wealthy.

Also, the purpose of benefits is not to get someone out of poverty. It is to help people who need help. The system has been totally debauched by middle-class people who think it is their "leg up". It is not. Spending should be focused entirely upon people who cannot help themselves (for whatever reason).

> Yes, if you have £18k in savings...you don't need help. Do you understand what being poor is? You are not poor if you have £18k in savings.

Savings is not income. One is a stock, the other is a flow. People might be in need of income support even if they've been saving responsibly for a while.

Yes, you can use your savings. Savings are income. The only reason for savings is to consume in the future. Believing that you should have permanent savings that can't be used for consumption is just out of this world...I would speak to someone who has no money. The welfare state exists for people who need help, not those who wish the state to keep them in a luxury to which they have become accustomed.

EDIT: most benefits pay out £4-5k/year, saying £18k is "peanuts" is...a little sickening...it is a monumental amount of money to people on benefits. I would talking to someone who is homeless and tell them that £18k is "peanuts" to you. What an utterly middle-class/greedy sentiment.

> The only reason for savings is to consume in the future.

Yes, but try amortizing £18k over any number of years. It's peanuts when judged on an income basis. This person is just as much in need of help, whether or not they're prudent enough to keep £18k in the bank as a precautionary buffer.

>So if I earn £100k/year, and I choose to save all of my income then I am impoverishing myself. Do you understand what saving is?

You are still living the life of a poor person. You are homeless. You don't have a car. You don't have a smartphone. You have nothing except your savings. The crucial difference is that the disabled lady apparently didn't even own the savings she sacrificed her living standards for.

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