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Comment by gruez | Hacker News Reader

>They simulated the reward structure of different forms of social security in an experiment. ‘We got people to do a task on a computer,’ says De Kwaadsteniet. ‘In multiple rounds, which represented the months they had to work, they did a boring task in which they had to put points on a bar. The more of these they did, the more money they earned.’

"short term experiments done in a lab" seems to be psychology's equivalent of "in vitro" (aka. in a test tube). I'm not really sure how you can draw any conclusions about someone's lifetime behavior, using a experiment that looks at the behavior of people sitting at a few hours at a computer.

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Yep. Meaningless. Yet the paper will be blasted from one end of the earth to the other by people who care more about their agenda than the universe's frequently unhappy truths.

Probably the same people who said that increasing the money supply wouldn't cause inflation because MMT or some other tendentious garbage.

Meaningless.

It's not meaningless. It's not enough to prove that basic income will have a long term positive impact, but it is enough to show further experimentation on a larger, more long term scale is worthwhile. It's decidedly unreasonable, not to mention unscientific, to dismiss something because you don't like it.

We've done that experiment. The results are self-evident.

This isn't suggestive, valid science. It's the equivalent of setting up a "scientific" contraption that purports to be a perpetual motion machine. You can create a pretty convincing fake perpetual motion machine, but because we have a broader theory of mechanics, we know perpetual motion is impossible, that the purported machine must be cheating somehow (even if it's not immediately obvious), and that to give funding for further study based on that machine's existence would be absolutely stupid.

Which experiment? You mean the welfare queen concept?

> We've done that experiment. The results are self-evident.

Do you mean the Alaska Permanent Fund, or something else?

That’s exactly what I assumed. I think it would be a pretty hard argument to say that Alaskans are lazy because of their permanent fund.

Last year’s APF dividend was $1100. That’s a figure for the whole year, not monthly. Food stamps pay more than that.

We've done a long-term wide-scale UBI experiment? Where?

I hope you don't mean any fickle systems tied to covid, and I especially hope you don't mean the unemployment boost the US did; unemployment pay is very different from basic income.

And even if something fails, that doesn't prove it's some kind of impossibility like perpetual motion machines.

The closest analogue to true UBI goes on in the oil-rich Gulf nations. Citizens are basically guarenteed a job where they don't even need to show up, which is basically an inefficient form of UBI. Some, like Saudi Arabia are transitioning to true UBI. The result of this is that these nations are completely reliant on foreign labor. Both skilled on unskilled work is dominated by foreigners. The latter have enough leverage to live comfortably. Unfortunately for unskilled workers, they're kept in slavery-like conditions and even have their passports taken away because otherwise, the cost of living would be too high for citizens to live off state income.

And the closest Western equivalent is the pension system. Also not a perfect comparison since pensioners are obviously older and have more assets on average, and some have large private payouts at the time state pensions kick in. But few people carry on working full time, and the system relies almost entirely on the labour of people who are not entitled to pensions to sustain it, to the point pensionable ages are needing to increase because healthier, longer lived people don't retire any later.

I've seen enough of my elders get their pensions to know what happens. Suddenly their schedule gets MUCH busier. Just because they're not necessarily doing paid work, doesn't mean that they're not doing useful things in society.

> to the point pensionable ages are needing to increase because healthier, longer lived people don't retire any later.

It's not obvious that that's the guaranteed outcome of pensions, or a consequence of an unexpected change in lifespan in the mid 20th century.

How much does that job pay compared to other things, and compared to the poverty line? What's a specific country I should look at here?

It's definitely possible to give away too much, but that's not a good argument that $0 is optimal.

Hard to find good sources but Kuwait had a median household income of $40k. Meanwhile, almost 1 million workers make less than $300 a month, so Kuwait citizen families likely make a lot more than $40k.

https://gulfnews.com/world/gulf/kuwait/almost-1m-foreigners-...

The purpose of money is a medium of exchange for goods and services. Giving money for the sake of nothing defeats the entire purpose of money, because you're giving everyone money without creating new good and services. Note that this is different from conditional payments like food stamps or pensions, which serve the purpose of insurance. This is also different from welfare, which is targeted towards certain people in hopes of improving their well-being.

> Hard to find good sources but Kuwait had a median household income of $40k. Meanwhile, almost 1 million workers make less than $300 a month, so Kuwait citizen families likely make a lot more than $40k.

Yeah that sounds pretty unbalanced.

> The purpose of money is a medium of exchange for goods and services. Giving money for the sake of nothing defeats the entire purpose of money, because you're giving everyone money without creating new good and services. Note that this is different from conditional payments like food stamps or pensions, which serve the purpose of insurance. This is also different from welfare, which is targeted towards certain people in hopes of improving their well-being.

People get lots of things for "free", like infrastructure, and that doesn't defeat the purpose of money. Basic income isn't "for the sake of nothing".

What conditions do you think are important for food stamps and welfare?

If a certain level of low income is good enough, that's basically equivalent to universal income plus progressive taxation.

>Yeah that sounds pretty unbalanced.

So how would that be different from Americans getting ~$12000 and buying goods from developing countries where workers also make $300 a month.

>People get lots of things for "free", like infrastructure

Infrastructure serves a specific purpose. Why should we give money to people for free when we can instead use it to build infrastructure?

>What conditions do you think are important for food stamps and welfare?

Welfare targets people who cannot provide for themselves, such as children and the disabled. We don't lose much productivity by giving these people money. Every able bodied adult should be expected to give back to society.

> So how would that be different from Americans getting ~$12000 and buying goods from developing countries where workers also make $300 a month.

I don't really know how to respond to this because we buy those goods anyway.

> Infrastructure serves a specific purpose. Why should we give money to people for free when we can instead use it to build infrastructure?

Every category of spending has diminishing returns. You'd never want to spend everything on infrastructure, or zero in any effective category.

> Welfare targets people who cannot provide for themselves, such as children and the disabled. We don't lose much productivity by giving these people money. Every able bodied adult should be expected to give back to society.

We also want to have certain standards for non-dehumanizing employment, and not everyone has access to jobs that meet those standards. Basic income is a way to help that situation a lot, but do you have better ideas?

Also how much productivity do we need to demand from everyone? Somehow a century after establishing 40 hours, with productivity per hour skyrocketing over that time, we're demanding more than 40 hours from so many workers just to make ends meet.

>We've done that experiment. The results are self-evident

I think the real experiment is perpetual consumerism and unchecked global free market capitalism.

Some places that could be considered a UBI welfare state would be Scandinavian countries or parts of Canada, hardly examples of self-evident failures.

>Some places that could be considered a UBI welfare state would be Scandinavian countries or parts of Canada

Canada does not have any UBI. What are you referring to?

The welfare and employment insurance system in parts of Canada (ie: those parts with little or seasonal employment) are effectively UBI.

EI is not even close to what is commonly described as UBI. Not universal at all.

Welfare and EI combined = jury rigged UBI

People can have different opinions about the generalizability of the lessons from a single experiment.

So let's not be quick to call others' views "stupid".

Is it a truth though? Or is it merely a stubbornly persistent instilled cultural belief? The whole point of experiments is to separate the two.

> universe's frequently unhappy truths.

This phrase is usually used to force through otherwise unpopular economic policies. But here’s the thing, this isn’t actually an argument. You’re unilaterally asserting that you’re right and that anyone who disagrees with you is a child that refuses to accept “hard truths”. But you have offered literally no evidence for your assertions, only bluster. This is mere abuse of rhetoric, not an argument.

Oh, and it’s funny how only other people have an “agenda”. As if you aren’t also expressing a policy preference too.

I suspect the parent post is downvoted because it's guessing that bad behavior will occur, and then criticizing the anticipated perpetrators.

I'd prefer a comment that simply and politely argues for a particular interpretation.

There have already been real world basic income experiments with similar outcomes

The fact that properly done experiments have the same outcome doesn't mean that these "let's go to the psych department from 1-4 this afternoon to get a $50 gift card" pseudo-experiments hold any real value.

They have the same problem: the participants know it's only an experiment. They know it's temporary.

If someone seriously wanted to run an experiment/trial it would need to be on the scale of a medium sized city and a decade before I’d be willing to draw any conclusions at all.

If you're referring to longer-term experiments, do they show actual statistical significance? One of the two I've read through, the UBC experiment, showed a similar outcome but was only significant at the p≈0.13 or p≈0.24 level, depending on the precise statement of the null hypothesis, which is not particularly enthralling. The Stockton one I recall showing something similar but don't have the precise numbers for.

If I'm receiving $1000 a month for a six month program run by a university research group, which states very clearly that the program will end after six months, I'm not going to go quit my job.

That's the problem with these "studies". They are completely different from a permanent government program. They can't tell you the impact on inflation, the impact on the labor market, or if it is affordable over the long term.

20+ year year old permanent program

https://www.wired.com/story/free-money-the-surprising-effect...

Again, inflation isn't accounted for.

Obviously, receiving free money is better than not receiving free money. There's nothing surprising about that. The question is where this money will come from. You can't support universal basic income from casinos or oil wealth, both of which have major negative externalities to boot.

Paywalled, anyone have another link?

This is functionally no different than dividends paid by a company to its shareholders (although this Casino enjoys a local state-sanctioned monopoly, and the shareholder is the tribe council, so it is slightly different, but economically similar).

UBI on the other hand is done by taxing ourselves to pay ourselves, or worse, printing to pay ourselves.

>Even in Cherokee country, where the additional income is quite sizable, the payments are not enough to live on

>The Alaska Permanent Fund has been giving $1,000 to $2,000 a year to its citizens for decades

Neither of these are amounts to not work on. Many people quit working after reaching a specific "UBI". Either through social security or retirement/investment accounts. This is also the goal for many folks such as FIRE.

I also wonder if we can't make some conclusions from real world data over the last two years. Yes, the pandemic is a bit of a confounding variable, but from what I've been reading we have at least strong reason to believe that the support payments from unemployment both substantially contributed to inflation, and also reduced marginal propensity to work.

Fortunately or unfortunately, I think there's not much of a chance of this getting implemented in my country during my lifetime. We can't even agree to give people universal healthcare. I think if anything the pendulum seems likely to swing in the opposite direction given the political landscape nowadays. But even if I could decide this unilaterally . . . I'd probably want some other country to try it first, and see how it goes. It doesn't obviously seem like a good idea based on what I know today.

> we have at least strong reason to believe that the support payments from unemployment … substantially reduced marginal propensity to work.

I always see people blaming benefits for people not working, but nobody ever seems to offer an explanation why these same people didn’t return to work once the benefits were cut down to their pre-pandemic levels.

I'm not sure that they aren't gradually doing so? I don't expect cessation of benefits to have an instantaneous effect.

Why wouldn’t it have a rapid and sudden effect? If you suddenly slash the UI benefits for an entire state at once and people only start trickling back to work slowly, then it implies that there are other unexplained factors at play. After all, the hypothesis is that UI is allowing people who otherwise would have to work to survive to not work. Shouldn’t the sudden cliff in payments make these people go find a job once their meager savings are exhausted?

It’s also incongruous with the other hair on fire arguments you see about UI causing labor shortages; it’s inconsistent to say that UI makes people not work, then hand wave away why months and years after cutting the benefits were still facing a “labor shortage” in a lot of job markets. If it’s really down to UI, then you’ve got to propose some mechanism for why canceling UI didn’t fix the supposed labor shortage.

> once their meager savings are exhausted

Doesn't the fact that they have savings explain why it's a slow trickle?

The issue is that the median American doesn’t have enough savings to not work for a long time. The median American had $5,300 in 2019, and the median rent was a bit over $1,000. These numbers are just not consistent with huge swaths of the economy deciding to hold on for months and months of unemployment once benefits were cut. Since the numbers don’t add up, something else has to be going on.

But not everyone has the same amount of savings, or the same cost of rent, so there's a trickle as each individual runs out. And didn't unemployment bonuses only end 4 months ago?

Right, and a lot of people have a lot less savings than the median, and those who had to count on enhanced UI during the pandemic likely had less still, since more of those were in low to minimum wage service jobs. The second quintile had only $2,100 in savings, and the bottom a mere $800. I sincerely doubt many of them were able to save up enough to last more than a few months.

The issue is that the story of enhanced UI isn't internally consistent. Apparently UI made all the (implied) lazy people stop working because it was more profitable to not work than work[0], which made it critical to turn off the benefits as soon as possible in order to force people back into the office. Except once they turned off the benefits people decided not to work and spend down their savings because ... erm, why would people do that? And doesn't this undermine the premise that people stopped working because it was cheaper to not work, if they're deciding to go broke not working for funsies?

Personally I think that the story of the labor shortage is explained as such:

1. Loss of workers due to death, disability, retirement, changing careers, and general re-evaluation of life choices in the face a deadly pandemic

2. For those that remained in the service industry, a brief exposure to being treated with dignity and as an essential part of the economy was a real awakening moment for a lot of them, and many are no longer willing to put up with workers that pay poorly and treat them as sub human. In my parts the restaurants that offer good wages always seem to be fully staffed, while everywhere else has signs crapping on people's work ethic and apologizing for slow service. Coincidence? I think not.

I think UI was critical to get people through the early period of the pandemic due to the chaos and the uncertainty of the early pandemic, but I am extremely dubious about the effect that UI had as compared to the deadly pandemic.

> And didn't unemployment bonuses only end 4 months ago?

Oh lord no. A lot of states started disabling enhanced UI back in June and July. My state ended it July 19th, nigh upon 7 months ago. I am doubtful many working Americans

0 - I've seen this floated a lot by CNBC types, and they never seem to engage with the fact that the most lethal profession during the pandemic was line cook.

> once they turned off the benefits people decided not to work and spend down their savings because ... erm, why would people do that? And doesn't this undermine the premise that people stopped working because it was cheaper to not work, if they're deciding to go broke not working for funsies?

Once you get used to 100% of your time being leisure time for months to years, it's hard to overcome that inertia and start looking for work again, even when it's the rational thing to do.

> changing careers, and general re-evaluation of life choices

People changing careers wouldn't contribute to the total number of unfilled jobs being higher, though. And if "general re-evaluation of life choices" leads to quitting your job, aren't the only two possibilities that you either get a new job, or you don't work anymore?

> A lot of states started disabling enhanced UI back in June and July.

But what about the rest of the states? And the federal government left their money faucet on until September.

> People changing careers wouldn't contribute to the total number of unfilled jobs being higher, though

Are there actually any evidence that there are more unfilled jobs though? Unemployment is actually at 3.9%, which is down to pre-pandemic levels. That's better than 2017 and most of 2018, actually.

Heck, now that I'm pulling up real numbers (should've done this earlier), unemployment spiked up to 14.7% in April of 2020, and was on a continuous downward slide after that, including before any state cut its enhanced UI. Nationwide unemployment was at 5.9% when states began cutting UI. This is more consistent with "crisis over, we don't need to keep this" than "oh god we have to cut UI or they won't go back to work. My state had an unemployment rate of 3% when they turned off enhanced UI, no need for a stick there!

For comparison the official unemployment rate was above 5.9% between August 2008 and October of 2014.

I think that the best argument for here "UI lets people be lazy and not work" is not that people stopped working during the pandemic because of it. I think the best argument is that people knew that this system was temporary and that they had to get a new job and start working when they felt it was safe, because it was temporary. One might expect different results if the system was more generous permanently, I don't know.

> And if "general re-evaluation of life choices" leads to quitting your job, aren't the only two possibilities that you either get a new job, or you don't work anymore?

Either possibility is incompatible with the general thesis that UI was why people stopped working, and we had to cancel UI in order to get people back into work. Either they didn't need the job and no amount of UI tweaking will bring them back, or they decided to get a different job and no amount of UI tweaking will fill their old one.

> But what about the rest of the states? And the federal government left their money faucet on until September.

I could be wrong here, but UI is administered through the states. The federal government had the money tap on to the states who then gave it out through their system.

If benefits were indeed providing more income than people previously got from their jobs, they have a good chance of building savings from that income. Those savings won't instantly evaporate when the support is cut off, they'll decrease over time. As the savings run out, people will return to work.

Personally I think this is a good thing, both the buffer and the staggered return to work.

Can you show some of these? My research has shown the opposite

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