UBI as a productivity dividend
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Musk's idea of a Universal High Income (where money is no longer necessary because robots and AI give us anything we want) sounds great too until you consider scarce resources like land. Who decides who gets to buy the best properties on Earth if money is no longer a factor? What if you want, say, a human hair stylist or therapist: who would do such a job if they don't have to? We would lose the human touch in our lives, and that sounds awful.
This does not have to be the case if higher taxes decrease purchasing power for some.
But inflation (sum total) is a moot point if total supply of dollars for total demand stays the same. Prices might temporarily increase for staples, such as shelter and food, but that should incentivize sellers in the economy to supply more staples, and fewer luxury goods.
The additional supply will eventually bring prices down, but end result is more people have more of the basics.
Also, aside from that question, prices will only rise if there's no competition. In a working market, if more people can afford a higher rent more apartments will be built.
The subsidy isn't the problem per se, it's the net increase in income.
It is obviously self-evident everywhere that high incomes create high cost of living, which can be traced through higher costs all the way down to the land rents (the rent someone is willing to pay to have market access to the high local incomes).
I don't want a higher income, I want to benefit from the productivity gains I and everyone else made happen by having more time to do things I like.
Why don't you just do that now and work half the amount of hours you're currently working?
And that's my point.
Your purchasing power will not change.
Your purchasing power is defined in a competitive equilibrium with your peers.
If you're assuming you can band everyone together to all decide to work fewer hours for the same pay, fine, but you just invented a union, not an improvement to UBI.
> If you're assuming you can band everyone together to all decide to work fewer hours for the same pay, fine, but you just invented a union, not an improvement to UBI.
Why should this come solely via unions? I elect people to represent me, and I want those people to tax AI/tech companies and their beneficiaries, and return some of the wealth they've generated to the people it's been extracted from. The entire point of UBI is that it's universal, including in industries poorer and more vulnerable workers who can't self-organise work in.
Show me the job like mine where this is an option, and I'll take it in a second. Hire another me and we'll split duties.
These sorts of "professional job that pays a professional hourly rate but is for 20 hours a week" are exceedingly rare. You'll usually be taking far less than 50% pay - far worse if you include benefits in the calculation.
I've been halfway keeping my eye open for such an opportunity so I could fund the basics of my life, plus have time to do personal projects with utterly no chance of monetary payback. Just stuff like paint the house, teach myself how to weld, work on backyard art, volunteer, etc.
I could certainly find a job that pays 50% of what I get now for working the same number of hours though. Perhaps moderately less stress and no "off hours" chance of being called in for an emergency. But that's not a great tradeoff since I'm looking to trade money for time.
This may not be the point you're making, but it really is sort of frustrating this isn't an option. I get why - I employ folks too and understand the overheads involved - but man it's the dream!
A Universal Basic Income gives everyone a flat monthly or bi-weekly income. Whatever jobs you work on top of that also provide you income.
As a standard W-2 employee (in US terms) this UBI payment would be factored into your W-4 paperwork (income tax withholding). As your wage increases your withholding increases as well and at the end of the year ideally your return has a clean net 0 under/overpaid.
Below some income threshold your total income tax contribution would be less than the UBI payments and so you'd be receiving a prorated negative income tax throughout the year. You could also call it a prorated tax credit or fixed disbursement social welfare grant or whatever.
At that income threshold you are receiving an interest free loan from the government for the year with loan disbursment on a fixed schedule throughout the year. And of course you promise to pay back in full by the tax deadline (either via withholding and/or with a lump sum at the end of the tax year).
Above that income threshold you are still receiving that fixed disbursement schedule interest free loan from the government but you also start paying additional income taxes on top of that loan. This is of course all still handled via W-4 deductions during payroll and nobody touches your regular UBI disbursement that shows up in the bank as a direct deposit or as a check in the mail. It still shows up every 2 weeks or every month.
But importantly this system is resilient to sudden changes in income. If your income suddenly increases, you factor that in via your W-4 and nothing changes. But if you suddenly lose your job or you move to a much lower paying job, you keep receiving your UBI disbursements on that fixed interval and you aren't left with a tax burden for it at the end of the year.
And so UBI as a system is purely an implementation detail. If we took existing welfare systems. Housing subsidies, food security subsidies (SNAP, etc), insurance subsidies, etc. We factor their per person cost/payout and roll it all together into one fixed interval UBI check. We keep income tax rates the exact same as they are now but shifted to factor in this UBI income (i.e. start everyone at a negative income floor that slowly gets filled to 0 dollars once every UBI check for the tax year pays out). The taxes paid and the net incomes for everyone stays identical (more or less due to variations in thresholds for existing benefits programs).
So at the end of the day your income stays the exact same but there's more money moving around and more consistency for the tax payer/citizen/resident even when suddenly life events change their financial situation.
/rant. sorry for the wall of text
Is the problem that money is becoming worthless and relationships are what matter? I'm not wealthy, and never have been, but I suspect relationships and not wealth-as-in-dollars matters after $500 million net worth or so.
If it's just printed money, it would be.
But if the money is transferred to others and spent on additional goods & services that is when it increases demand and raises prices.
That would happen for whatever direction the government policy is pushing.
I am a landlord.
I am setting prices for renewal.
I have come to learn that 100% of my possible customer base now has $200/mo more to spend.
I raise prices $200/mo with absolute certainty that I will find a renter.
Congrats, mission accomplished.
https://progressandpovertyinstitute.org/wp-content/uploads/P...
But, if the tenants now have more money in the form of UBI, then that argument doesn't hold.
UBI is passed from the tenants to the landlord in the form of higher prices, but is recouped by the LVT, which cannot be passed in reverse from the landlord back to the tenant.
Separately you are talking about applying UBI. No one said the landlord eats anything as far as UBI.
LVT applies a $10k a year tax on a property
UBI gives everyone $2k a year extra
Landlord can increase rent by $2k a year to $17k, but not by $10k a year
Only way landlord can get back to $10k is to increase density, which increases supply, which introduces price pressure
From a moral point of view it gives every citizen an equal share in the country's land. If they use more than their fair share (a 0.5 acre lot in Manhattan), they pay more. If they use less (a 0.5 acre lot in Minnesota) they pay less.
That dividend could be distributed as increased public services, or lower taxes, or just as a dividend.
I actually got my home from a developer right after the housing bubble. They confided in me that they were giving away these homes pretty much at cost and that they had to fire a huge portion of their staff because the market was just crap at the time.
Really, the only way to actually achieve lower housing prices is through the state ownership and build out. The state could also spend a premium on building homes that it sells at a loss or rents at lower rates. But that will be pretty unpopular with the general public.
High enough again to make it hardly profitable (if you're lucky) to do what you're allowed to do on that land.
There are entire businesses that just buy lots, change their zoning, then sell them. It's all priced in.
If people were allowed to build as they wished, they'd build a lot of housing, much of the housing crisis would subside and then the profitability of building house would equalize with the profitability of other uses. But stable point would give a lot more people housing.
It's like... Taxation or similar things can reduce X use of resource Y. Remove taxation and eventually X use isn't any more profitable than other uses but a tautology of markets/economics, not an argument the taxation isn't limit the production involved in X use.
You seem to be under the impression that building housing isn't already a nearly-unprofitable venture. There's no room to for "them to build a lot of housing" – builders are already pulling back on more construction because we have too much. Not "too much" as in everyone is amply housed, but "too much" to be able to do it profitably despite the fact that we still have a shortage.
Cost of inputs is the problem, full stop.
Competition doesn't work for necessities. Someone will rent your room at any price because it's necessary for survival. One of the major crises of our time is the fact that there are more people who need housing than there are rooms to rent to them.
Why don't landlords undercut one another? They literally don't have to. The only outcome is less profit. You'll find a tenant eventually, at any price. Getting tenants in rooms a few months earlier at the cost of lower rent means you make less money, and are less competitive as a business.
Fixing the housing shortage is a central tenet of progressive policies (regardless of whether or not they may ever actually accomplish this).
The current problems have tended to arise when desirable work is geographically limited which then leads to a much larger housing shortage in those areas despite the presence of sufficient housing across a broader territory.
Yes, bad places at bad times.
Can you name good ones?
When NYC had a housing surplus in the late 1970s, many people considered it to be a bad place. But even as they did so, a new generation of artists were moving into it. So was it a bad place at a bad time? Or a good place at a good time?
When Seattle had a housing surplus in the late 1970s ("Will the last person to leave Seattle please turn out the lights?" said the billboard in I5), many people considered it to be a bad place. But that was actually the beginning of a slow and steady population growth that now sees it as an incredibly desirable and expensive place to live.
Clearly, there are plenty of people for whom both cities were, at those times, "bad". But equally clearly, there are lots of other people for whom the very same places were, to some degree, just what they were looking for.
And these effects occur on even smaller scales. The neighborhood in London where I was born was basically a slumlords dream in the 1960s. Tons of empty housing, all very cheap (so cheap that my grandparents could afford a large home there). By the late 80s, it had become incredibly desirable and rather expensive. You can say "it was a bad place at a bad time in the 60s", but a bunch of people considered that an ideal place to be.
If we had completely equal distribution of financial resources, this sort of thing might be less of a factor. But as long as there are people looking for "value" and others looking for "luxury", the good/bad distinction doesn't really describe the world very usefully.
Artists don’t move into neighborhoods because they’re cool, they move in because they’re cheap. They’re cheap because, by definition, people don’t want to live there.
> Why don't landlords undercut one another? They literally don't have to. The only outcome is less profit. You'll find a tenant eventually, at any price.
is very obviously not true, otherwise prices right now would be effectively infinite. Why are prices for an apartment in SF only 3k/mo instead of 30k? Surely under your reasoning a landlord could just wait and get a tenant at any price they set?
The answer is always supply and demand. As long as the supply is constrained or demand goes up faster the price will rise. But UBI doesn't change that math at all. (I say this as someone not actually a fan of UBI)
No, because local wages cannot sustain those prices
If local wages could sustain those prices, then yes all rents would rise to that new higher local income level
That is (quite self-evidently) prices are so phenomenally high in ultra high-income areas like SF
Every single landlord is setting prices by the same metric: what can the people who would live here be able to afford? Competition between landlords is almost nil, which is why you find almost no "deals" anywhere. The market is totally efficient. Everyone agrees on how to set prices: by local wages.
In fact, collusion with the likes of yeildstar is the name of the game. Everyone is setting prices based on what the algorithm tells them to set prices and they all benefit from that uprise in prices because there's basically no competition decreasing the price.
There's also been a steady consolidation of ownership of rental units which also artificially increases prices.
There's a reason nowhere in the country at this point has affordable housing.
Most people like to live in the nicest place they can afford. This is a force pulling prices upward when many people with excess cash are competing for a limited supply of homes. Its why you'll pay more for the same size property in a wealthy neighborhood.
> Why are prices for an apartment in SF only 3k/mo instead of 30k?
Because some people in SF can only afford 3K/month. But if you added 3k/month to literally everyone's income, that number would increase.
(In case you're wondering why the many people with more than 3k/month don't crowd those people out: the wealthy depend on those 3k/month people for labor. At least for now.)
That's fine. Not everyone has to move. As long as the marginal city dweller would rather have cheaper housing than "buzzing restaurants and art galleries", there will be downward pressure on housing prices.
Sure a few folks will drop out of the highly competitive professional job market to go homestead somewhere. They will be a rounding error, since they have already expressed revealed preference that "bare minimum lifestyle" is not enough. Someone capable of holding down a $350k/yr white collar job is already qualified to go make $70k/yr remotely in some random city anywhere in the US they want to live but they choose not to.
As we've seen with COVID remote work, the desirable "cheap" places to live will very rapidly have price appreciation because they are starting from such a low floor to begin with.
A $300/mo increase in some 30,000 population city in the midwest is a lot more material to the market than a $300/mo decrease for a $3k/mo apartment in a top 10 city core.
It also ignores the folks who want to live in the superstar cities but cannot currently afford to. If UBI is high enough to really matter, there will simply be a reshuffling. I'd expect upper-end to perhaps go down (largely due to increased taxes and thus less disposable income for the high earning group), but the lower-end to be raised eating up basically all the UBI surplus.
Also this totally ignores the third and fourth (and more!) order effects. If people are less incentivized to work, and work carries a much higher tax load (as it must for UBI to be worth even considering) - pay for high-end jobs must increase since working is going to have less net-benefit for an individual who now has a choice to totally drop out of the workforce and have others pay for everything. Who knows? Maybe prices actually increase in those superstar cities as they become even more winner-take-all environments?
However, people actually move toward higher COL areas as their income permits them to.
If more income meant people moved away from high COL areas, cities wouldn't exist. We'd have a flat distribution of people across approximately all land with ultra-low COL and ultra-low productivity everywhere.
In general I agree with your view though that UBI could be captured by landlords, and that landlords are a special case. So let's introduce special laws for that along with UBI. Problem solved.
Alternatively though, if that turns out to be too complicated with too many side effects, I think there is a good chance that UBI leads to people being able to spread out more evenly, away from expensive and dense cities. You tried to make an argument why this will not happen, but as explained, your argument is not conclusive.
I am considering legislation for the next fiscal year.
I have come to learn that 100% of private landlords have increased their rents by the full amount of the UBI we introduced last year.
I ban private rentals and/or private ownership of homes and/or introduce strict rent control policies (depending on precisely how progressive we're feeling this year).
Congrats, mission accomplished.
You're now talking about UBI, plus rent controls, plus state-built housing.
All to make UBI actually do anything at all other than enrich existing landlords.
Why don't we just skip the UBI and the rent controls and instead just have the state build housing?
It benefits landlords.
I don't know enough about economics these days to know if anyone who knows a lot about thus stuff thinks this is true, but it seems on the face of it to be absurd, since it would mean that pay raises are substantially diminished by rents paid for anything where demand is not elastic. I mean, I'm not insisting that cannot possibly be true, but it seems unlikely ...
The relevance of this is amplified by the fact that land is a required input for all forms of production. People and machines must exist in space, and therefore demand land.
This does not apply to any other asset that we care about.
The housing:land demand ratio is also not fixed, due to multi-level dwellings (hence, for example, Singapore or Hong Kong), or increased density (e.g. ADUs or smaller lots).
I just don't see why you see UBI only affecting owners of a nearly-inelastic resource (land) rather than everything else too (even if to a lesser degree) ?
So same mechanism applies to land, except then there’s no way to spur additional production of land, so the price just goes up.
Re density etc: correct, which is why I’m not arguing this benefits homeowners or building owners, except to the degree they are also landowners. A building owner who does not own the land underneath his building would not benefit much, the person who he pays land rent to will capture nearly all of the upside.
UBI is a bad idea.
State-built housing is not necessarily a bad idea.
You can just do the latter and skip the former.
I do see what you mean, I think, now that I’m rereading and contemplating. A monthly stipend probably does more to raise prices than anything useful, unless you also pair it with regulation to stop the wealthy and powerful from taking it all for themselves. And at that point you could have just done those regulations without UBI. Hmm.
Do you think a few lump sum payments over a citizens lifetime would have the same effect? Maybe some large sum paid when you reach age of majority and then again at retirement?
Yes largely correct, but more specifically than "wealthy and powerful," I am referring directly to the landed class, wealthy or not. This type of infusion will ultimately be baked into the cost of land, which will propagate up to rent, then up to wages, then up to goods. The gains will accrue almost entirely to the landed class in the form of higher land rents with no symmetrical increase in costs because land itself does not incur costs.
> Do you think a few lump sum payments over a citizens lifetime would have the same effect? Maybe some large sum paid when you reach age of majority and then again at retirement?
It wouldn't have the same effect but it'd have an analogous effect in the localized markets in which those subsidies are applied. For example, you'd expect the price of land (and so rent → wages → goods) to increase where retiring people congregate. But it'd be less harmful to the exact degree that the subsidy itself is less broadly "helpful."
Rent control is already a thing, and typically good short term but bad long term: renters don't move out because they can't get such low rent elsewhere, and landlords can't afford repairs so things are left broken. It's a great way to create slums over a few generations.
Why, instead of centralised planned economy that failed ans killed millions people many times in history, not just lowering taxes and let people to decide how spend their capital individually? Game theory applied on UBI sounds really like an ugly idea.
As for tools that make citizens obey, the government already has the best one: a monopoly on the legitimate use of violence. Everything else is child’s play compared to that.
Prices in Vienna are so much more affordable than in comparable European cities - Munich, Hamburg, Berlin to speak of Germany, not to say Madrid, Paris, Barcelone, Milano.
Correct it wouldn't stop landlords from continuing to earn from their properties but it would destroy the incentive to produce additional housing, so nobody wins.
Sometimes (more rarely than people think) a single entity plays both roles, but it's impossible to reason about this space if you conflate the two
Yes, developers build homes to make money. This is how approximately 100% of the housing supply in the US was created.
I know a lot of landlords think they are a persecuted class that is providing a necessary service - but that largely isn't true.
Broadly you can imagine two scenarios for simplicity sake.
1) Housing supply is abundant. Landlords have to compete on service superior maintenance, better units, better locations, etc.). Renting a home behaves like any other service industry that we come to know and love.
2) Housing supply is constrained. The situation plaguing much of the modern world. Land is limited. Landlords earn a higher IRR from jacking rents than they do from buying additional units. The landlords profit from control of the access to a scare resource rather than from providing anything of value.
Plainly: rent-seeking is evil.
You should take some time to understand this extremely basic distinction before forming such strong conclusions.
> I am setting prices for renewal.
Landlords do not really set prices arbitrarily, especially not in HCOL areas where most of the cost is land rent. The rent is set by the market, and if there's a new UBI only a negligible fraction of it will go towards rent. Rents might even decrease since any given UBI amount will go a lot further in a lower-COL area, which incents people to move out (reversing gentrification dynamics) and creates future opportunities for job creation in these economically depressed areas where such opportunities are most clearly needed.
Rents are set by local wages (via mechanism of land rents)
> Rents might even decrease since any given UBI amount will go a lot further in a lower-COL area, which incents people to move out (reversing gentrification dynamics)
Can you identify any historical analogy to this claim?
History shows — across the board — people move toward higher COL areas as their ability to pay for COL grows.
Why would this be different?
It's difficult because the main driver is clearly towards increased urbanization, driven by the high productivity of urban jobs. But if you're planning to live mostly on your UBI and work less if at all, you won't care as much about that. There were several "back to the land" movements in the history of modern developed countries, and the early stages of succesful gentrification - often involving comparatively marginalized folks and highly mobile groups, such as artists and youths - demonstrate a similar dynamic that can ultimately lead to the flourishing of new urban areas as the stages of gentrification progress.
But this isn't all that related to the productivity dividend. That's more natural by setting banks to have a full reserve requirement. At that point new innovations would yield deflation, which would be harmful. The Fed would then have to step up and be the creator and distributor of new money. That money would then be the UBI, distributed equally to all.
I have no faith in Musk's vision of an abundance utopia for many reasons, but I suspect a lot of people would still want to do the job of being a human therapist or hair stylist even if they technically didn't need to for money.
They may want to work less than 40 hours a week, but most people do have an inate need to feel like their life has some sort of productive value beyond just base level existing.
1. The right-wing UBI is a tool to dismantle the social safety net. The idea of the likes of Milton Friedman is to replace all social safety programs with UBI. This doesn't make sense because, for example, being disabled in today's society makes everything more expensive; and
2. Left-wing UBI would seek to have everyone share in the wealth they create by supplementing social safety programs with UBI. UBI becomes a form of super-progressive taxation because it can be viewed as negative taxation.
As for your inflation comment, you have a point, to which I'll say: UBI alone isn't sufficient. You need economic reform and planning on top of that.
A good example is the US military. If you live off-base you get a housing allowance (ie BAH). Now around military bases, in the US and overseas, all the landlords know this so you'll find that weirdly all the houses to rent cost pretty much what BAH is.
So a more equitable economic system, including UBI, needs social housing. That is, the government needs to be a significant supplier of quality, affordable housing so landlords (private and insitutional) can't artificially drive up prices, as is the case now. A prime example is Vienna [1]. Housing simply can't be a speculative asset in a healthy economy.
If you wnat to see what an equitable planned economy looks like, look at China.
In such a system you get your base UBI tax credit which pushes your tax burden into the negative. Additional UBI-elligible tax credits can push that tax burden even further negative. You can file the paperwork to adjust this at any point in the year and if it's for the current year the tax credit is prorated relative to the date of the next disbursement date (and the full amount for the next year).
Then your UBI disbursement updates and you get it. It works the same way as updating your W-4 tax withholding for a standard W-2 position.
At the end of the year of course your taxes all need to zero out still and if not you either get a bill or a refund.
And this also moves all of the social safety program fraud prevention together into the same system within your tax agency (IRS for the US, or state/local agency, or whatever else).
So instead of a bunch of different agencies and systems for avoiding and finding fraud it all rolls together into the responsibility of the IRS tax assessors, auditors, and the IRS Criminal Investigation unit. And while the rich hate the IRS and common media frames them as incompetent, the people at the IRS are in general extremely competent and more than willing to help and accommodate your average person (less so for the rich who get caught systematically trying to defraud the IRS).
Supply and demand will work better, lowering prices.
As for inflation, a lot depends on how gradually it's adopted. As we saw in the pandemic, supply chains need time to adjust and bad things happen after sudden changes.
I tend to think a job guarantee would work better than UBI: have the government provide a job to anyone who can't find one somewhere else, something like what was done in the 1930's in the US. Come up with a list of things needed (can you think of anything that needs fixing?), and pay people a living wage and benefits to take care of those things. Call it 'Universal Basic Work.'
Beyond spending government money to take care of the country and beyond providing those hired with enough to take take of themselves, it'd force private employers to pay and provide benefits at least as well as the government UBW jobs if they want to hire employees.
I further imagine that a person making enough to get by would be less prone to being hopeless and frustrated, supporting social cohesion. And that there's a dignity in that both for the individual and the community they are a part of.
The societal deal with the private sector is that it employs everybody at a rate that allows an individual to live in return for the chance to make a profit. A job guarantee ensures that the private sector overall cannot shirk that responsibility.
If the private sector does its job, nobody will be employed on a job guarantee.
The result is political pressure to remove the state pension or increase the age at which it is received.
If UBI worked as you suggest then the resulting increase in productivity would drive the state pension age down not up.
The evidence is against you. Giving people money reduces productivity and makes it more difficult for firms to get the labour they require, and at huge cost to the state that uses up the finite taxation space there is available.
Sixty five year olds qualifying for a pension is worlds away from twenty year olds looking to learn or start a business.
1. The idea behind UBI is that it is near-zero effort, the cost to operate UBI should be minimal. UBW cannot be low overhead I suppose. 2. What motivation do I have to do the work if I can’t get fired?
It’s up to you if you take up the state’s offer or not.
The UBI removes the motivation to work and turns everything into volunteering. The result is a rise in the “reservation wage gap” - the amount the private sector has to pay to get people to work for them.
The reservation wage gap with a job guarantee is near zero - which is more economically efficient.
Additionally the job guarantee acts as a powerful spend side automatic stabiliser that is temporal and spatially efficient - which removes the need to manipulate the base interest rate allowing it to return to its natural rate of zero. This allows permanent cheaper mortgages and business loans.
I mean, people who will create negative utility in a workplace or cost more in supervision expense than you get from them as output.
They create hazards for others by being drunk or on drugs on the job, or by harassing or bullying others, injuring themselves or others, causing personality conflicts or dramas due to trauma or unresolved mental health issues etc. I don't mean this as a value judgment, it's just like some people really aren't in a place in life where they can function well in work settings.
I'm not sure how you "guarantee" something that is dependent on complex situational decisions.
The conversion of those hours into labour services is why the private sector is allowed to profit. If they want “better quality hours” then they have to bid up the price of those hours.
That should be market determined, rather than being administratively set as the gap between unemployment benefit and the minimum wage. You’ll be surprised how well the private sector can use hours once they see people doing the basics of turning up on time and doing something.
When we sentence offenders to “community service” we give them a job as rehabilitation, along with all the support mechanisms to straighten out lives. If we can do that for offenders, we can do that for everybody.
There would be overhead in asking people to do something (UBW) rather than simply offering money (UBI). It strikes me that the benefits of being able to limit unemployment directly rather than indirectly, of being able to direct community work that supports all of us, of more people being able to pay their bills instead of wondering how to do so, and of putting a floor under private sector wages and benefits is worth the overhead involved.
I'd note that UBI also requires administrative effort and expense.
> What motivation do I have to do the work if I can’t get fired?
As the other poster described, you've still got to work to get paid. It's a job, not just a paycheck. Another poster described the problems with hiring people who are not able to work. UBW shouldn't replace mental health facilities or jails... although I suspect that it'd reduce the number of people who need either of those facilities. I'd say that both of these types of problems are relatively small compared to the population and to the benefits that a UBW program would provide. Pilot UBW programs might help assess the validity of the above theories.
~20 years ago, when UBI was a popular idea in my country, it was understood as a technical fix to the welfare and tax systems. It was supposed to simplify the systems and make them easier to understand. It was supposed to fix the perverse incentives people with low wages face, such as the extremely high (often >80%) effective marginal tax rates. It was supposed to automatically give people the benefits they are entitled to, without having to deal with the punitive bureaucracy. It was supposed to help people who fall between the categories in the existing welfare system. And so on.
And it was supposed to be funded by making it an accounting technicality, at least for the most part. Most basic welfare benefits, tax credits, and tax deductions would go away. Progressive taxation would go away. Standard deduction would either go away or become substantially smaller. And the highest income tax bracket would start at 0.
Suppose you have a tax system with progressive tax brackets and then a needs-based welfare system with benefits phase outs. It turns out, those two things (progressive rate structure and benefits phase outs) basically cancel each other out -- lower income people are supposed to pay lower marginal tax rates but if you're paying a 10% marginal tax rate and then have a 25% benefits phase out rate, that's the same as paying a 35% marginal tax rate. Worse, the benefits phase outs for different benefits often overlap, with the result that lower income people are often paying higher marginal tax rates than wealthy people, and there are some cases when their marginal rates even exceed 100% of marginal income.
So you have two unnecessarily complicated systems that mostly exist to cancel each other out, and to the extent that they don't they're doing something you don't actually want (excessively high marginal rates on poor people). It's better to just get rid of both -- no phase outs is the "universal" part of the UBI, and then you combine that with a uniform marginal tax rate for everyone.
You're basically getting rid of the progressive rate structure so you can lower the marginal tax rates on poor people to the ones being paid by rich people, and if that seems counterintuitive it's because the status quo is very stupid.
Lowered marginal tax rates. Raising the marginal rates on the lowest earners is raising the effective rates on the lower middle class. That they don't get anything is essentially the purpose of your proposal.
> and high growth because you don't need to 'soak' higher-earning folks, who only pay moderately progressive rates.
But did you actually have to do that? Having the lowest marginal rates be in the middle is pretty expensive because it's also lowering the effective rate on everyone above them, or at best is just balancing out having the highest rates at the bottom. It seems like you're trying to increase the amount of the UBI while making sure the extra money comes from the middle rather than the top. Having approximately the top half (50% of the population) pay so that the second quartile (25% of the population) can get ~half the UBI instead of none both doesn't seem like a bad thing and doesn't seem like it would cost them that much rate-wise because it's a 2:1 population ratio and they they have a higher per capita base to apply the rate to.
And having the highest rates at the bottom is pretty bad incentive-wise.
> or pushes the break-even point way too high
What's the problem with the break-even point being somewhere around the middle? The people only slightly below that aren't getting a large subsidy, they're just not getting literally zero.
Meanwhile the amount of "well I didn't make that much money because I had half of it paid to my kid" marginal rate arbitrage you're reintroducing is large.
Those are just clawback rates. The lower middle class don't need UBI in order to pay for the necessities of life, and most UBI proposals don't expect them to be net recipients, any more than they'd be net recipients of current welfare.
> it's also lowering the effective rate on everyone above them
That's balanced by the gradual progressivity of tax rates on upper-middle incomes.
> while making sure the extra money comes from the middle rather than the top
The low rates for the lower-middle class are actually ensuring the exact opposite of that claim. The upper incomes are the source for the bulk of income redistribution in the usual optimal system as it comes out of these analyses; they just don't face prohibitive rates.
> And having the highest rates at the bottom is pretty bad incentive-wise.
It's the opposite. The bottom clawback rates apply to a smaller part of the population, that can escape them simply by earning more than the UBI breakeven point. Meanwhile the high rates there help make the whole tax schedule sustainable. It may be a counterintuitive point but it's confirmed by rigorous, automated analysis.
> marginal rate arbitrage you're reintroducing is large
The most likely response is not necessarily arbitrage, it might just be earning enough that you start paying low marginal rates after the UBI is clawed back.
That's not true. One of the issues any serious UBI proposal needs to face are the increasing demands of the labor market. A couple of generations ago, there were still plenty of opportunities for people who had little to offer beyond a pair of hands and some work ethic. Today not so much.
The bottom end of the labor market consists of a nontrivial number of people who are not productive enough to earn a living wage. But there are still societal benefits from having them work for living, instead of being passive welfare recipients or turning to crime. To make that happen, even a low wage should increase the net income significantly above UBI.
The premise of them receiving it isn't so they can buy corn, it's so they can save up a down payment on a house or have enough savings that if their car breaks down they're not completely screwed. They're supposed to get the money.
> That's balanced by the gradual progressivity of tax rates on upper-middle incomes.
That's not balancing it, it's further exacerbating it. You then have the upper middle class paying less than the full marginal rate, along with everyone above them for that part of their income range.
> The low rates for the lower-middle class are actually ensuring the exact opposite of that claim.
I feel like this is still confusing effective rates with marginal rates.
Suppose you have a 50% marginal rate up to $30,000 in income and then a 5% marginal rate up to $60,000. Alice makes $32,000/year. In this system her effective tax rate is ~47%. By contrast, Bob makes $60,000 and has an effective tax rate of 27.5%. Moreover, between the two of them they have $92k in total income of which the government gets $31600, ~34%. Why would we want Alice to have to pay ~47% instead of ~34% so that Bob, who makes almost twice as much, can pay 27.5% instead of ~34%?
Adding the UBI would lower both effective rates and result in a progressive rate curve, but why would we want to add "progressive" rates that make the system less progressive?
> The upper incomes are the source for the bulk of income redistribution in the usual optimal system as it comes out of these analyses; they just don't face prohibitive rates.
But why would you need prohibitive rates at all?
US GDP is ~$31T with a population of ~340M. To give a $12,000 UBI to every single person would be ~$4T, i.e. 12.9% of GDP, implying that's the uniform marginal tax rate you would need to collect the money. That's assuming the tax is applied uniformly (and applies to corporations as well as individuals etc.), and maybe you want to exempt non-profits from the tax or something, but as a ballpark estimate that's the number and it's not crazy high. Especially when it's a universal transfer payment and the majority of people are just getting most or all of it back immediately.
> The bottom clawback rates apply to a smaller part of the population, that can escape them simply by earning more than the UBI breakeven point.
That's not how that works. If you had a 50% marginal rate up to $30,000 and you're deciding whether to take a $32,000 job or not work, you're only getting $16,900 to put in your pocket from taking that job. Being "out of the clawback range" doesn't stop the majority of the pay from still being in it. And, of course, there are jobs that don't even pay that much, or some people might want to work part time and you're essentially screwing them for not making enough money.
> Meanwhile the high rates there help make the whole tax schedule sustainable. It may be a counterintuitive point but it's confirmed by rigorous, automated analysis.
Why do we need automated analysis to do arithmetic? You can avoid a huge increase in the rate on lower income people with a much smaller increase in a universal rate because the former only applies to a small proportion of total income and the latter applies to all of it.
> The most likely response is not necessarily arbitrage, it might just be earning enough that you start paying low marginal rates after the UBI is clawed back.
As soon as you have non-uniform marginal rates, arbitrage is going to happen. We don't have to speculate here because we currently have non-uniform marginal rates and it's extremely common. Family members in a lower tax bracket get added to the payroll to soak up taxable income at the lower rate.
We're talking about the lower middle class, they can sustain themselves by working, essentially by definition. They can get the money (compared to the status quo) - by working, because they'll be paying negligible overall rates on their own earnings as soon as the UBI is fully clawed back. Redistribution (UBI) is costly (being funded by high rates on the higher incomes, that deter them from earning more), so in most practical proposals it is largely limited to those who really are unable (or perhaps unwilling, but in a near-optimal system such 'unwillingness' is most often explained by practical inability) to earn enough for a tolerable life. Giving any part of the middle class a net-UBI only to claw it back with high rates (as it must be at some point in the tax schedule) wouldn't leave them any better off in practice and it would set up pathological anti-work incentives. It's a pretty clear non-starter.
> You then have the upper middle class paying less than the full marginal rate
If you're talking about effective rates being less than marginal rates, that's just inherent to any progressive taxation. There is in fact a strange theoretical result that the very top earner should ultimately be facing a zero marginal rate on their very last dollar of income since any non-zero rate on that "top" level is pure overhead, but of course that's a bit of a curiosity and hard to apply in practice, except maybe as a broad caution against the common idea of levying punitive rates on the very highest incomes. Progressive taxation at the high end is still the practical optimum.
> I feel like this is still confusing effective rates with marginal rates.
I feel like you're disregarding the fact that the high-rates at the bottom are purely UBI-clawback rates; in fact, $30,000 per year seems quite infeasible as a UBI range, so ISTM that you're inadvertently getting the wrong idea entirely about what the system might imply!
Then why does the existing system provide all manner of healthcare subsidies, student loan subsidies, etc. with phase outs extending well into that income range? The ACA subsidy for a family of four isn't fully phased out until $132k.
> Redistribution (UBI) is costly (being funded by high rates on the higher incomes, that deter them from earning more)
Aggressive claw backs are more costly because they require much higher marginal rates on lower income people and it's high marginal rates that provide the disincentive to work. Even before considering the argument that people being paid low hourly rates are easier to deter to begin with, because paying someone else to do something for you in order to free up time to work for money instead of doing it yourself is more costly to someone who gets a lower hourly wage.
> Giving any part of the middle class a net-UBI only to claw it back with high rates (as it must be at some point in the tax schedule) wouldn't leave them any better off in practice and it would set up pathological anti-work incentives.
Have you done the math on this one? The bottom 50% of people have <15% of total personal income. You get less money by increasing their pre-UBI effective rate by 50% than by increasing the universal effective rate by 7.5%, while providing them with a massive disincentive to work.
> If you're talking about effective rates being less than marginal rates, that's just inherent to any progressive taxation.
No, we need to distinguish two things here. One is the incremental effective rate for taking a job, i.e. if the employer pays $X to employ you, what total percent of X goes to the government? This is the thing that matters when choosing whether to take the job (incentive to work). You want this number to be uniform because any decrease in one place requires an increase for someone else and you lose jobs whenever you cause the rate to exceed the surplus derived from the job, so combinations of high and low rates are less efficient than uniformly medium ones. You especially don't want it to be higher for lower income people, because then the increase on them is disproportionately large.
The other is the effective rate net of unconditional benefits. When you get benefit (i.e. UBI) regardless of whether you take the job then that's included here but not there.
You get the same effect as a progressive rate structure in the second sense with a flat rate plus a UBI, because everyone pays the same marginal rate and therefore the same effective rate in the first sense, but someone who makes $54,000, pays a third of it in tax but receives a $12,000 UBI is on net paying $4000, i.e. 7.5% rather than 33% of $54k, whereas someone who makes a billion dollars is still paying a third and receiving the UBI, but $12,000 is a trivial percentage of a billion so their effective rate is still ~33%.
> There is in fact a strange theoretical result that the very top earner should ultimately be facing a zero marginal rate on their very last dollar of income since any non-zero rate on that "top" level is pure overhead
This theory assumes that the primary decision here is whether to work an additional hour, but the primary decision is actually which job to take, if any. You might make three times as much if you become a doctor, but then you give up 8 years of earnings to go to school and exit that with six figures in student debt. If you're deciding when to retire, or whether to enter the workforce but then have to pay much of your earnings in childcare and commuting expenses, you're either keeping/taking the job or you're not. The "incremental" rate when making the decision applies to the majority of or entirety of the compensation, not just the last dollar.
And notice that you can simultaneously screw this up on both ends. If you put oppressively high rates at the low end, even if that only lowers the high end rates by a minor amount, it just became relatively a lot more attractive to make three times as much money. Then you get elite overproduction and cost disease because you're screwing the janitors and service workers so hard on the tax rate. Some of them fall out of the workforce, others turn to diploma mills and employers have trouble hiring in that income range for necessary jobs and then have to raise prices on everyone. It's the same terrible thing the existing system does and what we should be trying to prevent.
> I feel like you're disregarding the fact that the high-rates at the bottom are purely UBI-clawback rates
There aren't supposed to be clawback rates. That's the entire point -- to get rid of the punitively high work-disincentivizing marginal rates for lower income people present in the existing system.
> in fact, $30,000 per year seems quite infeasible as a UBI range
That number is lower than the existing income level where people pay zero/negative federal income taxes net of benefits.
What is the effective marginal tax rate in the UBI-clawback range, including any housing / healthcare / childcare / whatever benefits lost due to income? And what is the minimum hourly net income that would encourage someone with guaranteed basic income to take a job instead of staying at home? With those two numbers, you can calculate an effective minimum wage, below which it would be practically impossible to hire anyone.
The answer to the first question varies from person to person, and from job to job since some of them are less desirable to do independent of what they pay, which means the threshold in the second question doesn't actually exist. There may be 100 people willing to work a specific job for $X/year but not 1000 people, etc.
You do know that the I in UBI stands for Universal, don't you?
What the people in your country were talking about is a Guaranteed Minimum Income. Related but different
> Progressive taxation would go away.
There should be very aggressive progressive taxation. When you've absorbed a lot we should encourage you to stop hoarding and get a life.
Maybe do a license for a fund for a specific purpose. Then you can continue playing the game but the fund may only be spend on [say] high speed rail.
It seems fun to leave all the money in the companies and require them to explain to a committee what they are going to do with it. If apple says they are going to make phones the size of the fund begs to question why they are not already spending it on making phones?
The monetary side of the economy deals with money volumes orders of magnitude larger than the real side, and reacts to change also orders of magnitude faster. Because of that, inflation is almost always completely determined by monetary policy. A real shock that can out-impact monetary policy looks like the end of the world.
That's very dismissive. Since you know so much, why don't you try to reject it?
Saying that the total money supply is the cause of inflation is a very simplified view. There are currently trillions of dollars in M2 doing nothing except sitting in wealthy people's bank accounts and investments as generational wealth. That does not raise the prices of anything until it is being spent.
I don't know what relation you see between that and UBI.
The money doesn't come from nowhere. It's a transfer payment. People who make a below average amount of money pay less in tax than they receive, people who make an above average amount still receive the UBI but then the UBI is less than the amount of taxes they pay.
The result is not that "everyone has $x more disposable income per year" -- it's $0 on average, because lower income people have a little more and higher income people have a little less.
Notice that the existing welfare system already does this, but in the process creates a bunch of perverse incentives and income cliffs (you lose your benefits if you take a job or work more hours), leading to de facto marginal tax rates that are often >50% on lower income people when you account for benefits phase outs and in some cases they're >100%, i.e. if you make more money you make less money.
> Landlords and grocery stores and everyone else would raise prices because they know people can afford it.
That isn't how competitive markets work. If people had more money and a grocery store tried to raise prices, people would go across the street to the other grocery store.
It only works like that for products with fixed supply, i.e. things you can't make more of if the demand for them increases, because then if people have more money they have to outbid each other instead of sellers just producing more of what people are buying. This is one of the reasons zoning density restrictions screw people so hard -- land has fixed supply but housing doesn't, because you can build more than one housing unit on a piece of land. Unless the government bans that and mandates one unit per plot. Then people have to outbid each other. But your problem then is that, not people having more money. Notice that the same thing happens there if people get more money for any reason, e.g. more people go to college or the economy improves. It's a major problem that needs to be fixed regardless of what you use for transfer payments or if you do them at all.
> Who decides who gets to buy the best properties on Earth if money is no longer a factor?
The premise of that has always been pretty ridiculous. You can reduce the scarcity of some resource by making it more abundant, and that's generally a good thing. Good luck removing all scarcity from all resources. That's not a real thing.
The goal of a UBI is to make sure people get their essentials to live. Right now, people get those essentials, one way or another (otherwise, they'd be dead; and to the extent people starve to death in the developed world, it's issues of distribution, not production or money). This makes the UBI an accounting trick: there's no actual goods not being produced that need to be produced, and it is just shifting costs from welfare, charity, family and friends, etc to the UBI program. This is not inflationary and frees up human effort to focus on higher needs than scraping together a basket of things merely to live.
A lot of the time, though, people also want some non-essential but still pretty important things covered, which is a bit trickier. In this case, there is the potential for more money to be chasing a fixed supply of goods. This will drive inflation in the short term. However, in the longer term, capital will be redeployed to capture that increased demand (while being deployed away from the desires of those taxed to fund the UBI).
This all assumes that the UBI is revenue neutral; if not, yeah, we will get a lot of inflation.
To the parent comment’s point, if UBI is evenly distributed across everyone (“Universal”) and exists as liquid spending power (“Income”), there’s no way that doesn’t result in a rate of inflation that perfectly counteracts the existence of UBI.
Prices are only low when the seller wants to scale/reach more buyers. If low/no income buyers disappear, why would prices stay low? If there were an infinite number of high income buyers, cheap products wouldn’t even exist in a freely capitalistic system. Instead we have a limited number of buyers in a wide range of income levels, which drives a wide range of prices and sellers competing at every price point.
It feels like the laws of physics, once you cut off one side of the scale it will fling in the other direction. I also hate everything I just said, I would love to exist in a world that wasn’t subject to these forces. Just seems impossible in a freely capitalistic system.
That is, to be clear, a much lower floor than what many people mean by "essential," which has undergone a kind of concept creep in modern discussion that, depending on the person, might be a cell phone, to an education at a private university, to owning a condo in San Francisco. My essential here means enough to afford enough caloric and nutrient intake to maintain a livable body mass; a couple sets of plain tee shirts and jeans; and a minimal shared living space in a low cost of living area. That's quite below what the US considers the current poverty line and a quite bleak existence (and most people would wonder what's even the point of it).
Income beyond that would drive inflation, at least in the short term.
You mean as opposed to very few people?
I'm told that if one is very curious about the topic one should not start by asking questions but read the 100+ years of the same questions being asked and answered again and again. I cant say I've followed the advice but it sounds very sensible.
Unfortunately, with regulatory capture at near 100 percent and electoral capture almost as bad, there is no incentive structure with sufficient influence to make it happen. Wealth will continue to be funneled to the top, and taxation schemes that act as a de-facto sales tax create incentives that favor even more centralized systems.
But wouldn’t it be great?
An interesting aspect is that I am constantly observing innovators with significant technical and technological skills that are employed in fields outside of their expertise as a “temporary “ measure that often becomes permanent if they get further encumbered, simply because they can keel out an existence while trying to build the next cool thing. So we are wasting probably trillions of GDP in talent because people need to go work in a labor job to support their wife and child instead of continuing his very promising project in training data for humanoid robots, which could easily net 100m+ in the next decade. (Actual example. I offered him $1000 a month to keep on it, but he unfortunately needs more to survive and he has eaten through his savings over the past two years of working on it.)
Ah the “I am sure we can all agree … that I’m right” argument.
In actuality, there are plenty of very good arguments against unions. That you don’t like them changes nothing
But I do think in the special case of self maintaining, self manufacturing, intelligent servitors, I think the only way we can hope to sustain an economy of any kind would be to redistribute the output of those machines significantly, or we would end up with a concentration of power around capital that utterly eliminates the economy as we presently understand it.
As for moot, I mean that in this case, you aren’t taking anyone’s work to benefit others, so the usual arguments of socialism or wealth redistribution don’t have the same basis in injustice. Ultimately, the production of pure automation springs directly from the resources of the earth, and the earth is everyones, so it makes sense to redistribute the production to a significant extent.
As for false, I mean that the “no one will do anything” and other claims about UBI destroying productivity have all been refuted in study after study, and in the societies that already practice UBI. In this way, UBI is very distinct from needs based welfare, which is often imagined to incentivize low production, since low productivity is actually a requirement to qualify.
Ubi causing runaway inflation is another example of a thoroughly refuted claim that is easily given the lie by looking at extant UBI systems.
UBI seems to work best when it significantly removes or even eliminates stressors of survival (basic housing and food, medical care) while leaving lots of room to aspire to greater success. Throw away the stick, but leave the carrot.
It’s basically mirroring what behaviorists find time after time, that positive reinforcement is more effective than negative reinforcement. Also, it makes people more willing to take risks like starting a business, getting an education, or having a family. All of which are positives for developed nations.
> But I do think in the special case of self maintaining, self manufacturing, intelligent servitors, I think the only way we can hope to sustain an economy of any kind would be to redistribute the output of those machines significantly, or we would end up with a concentration of power around capital that utterly eliminates the economy as we presently understand it.
That would definitely be true in the case of self maintaining, self manufacturing, intelligent servitors who can do everything. I'm not sure we would get that, even as the end state. (We're probably at about the end state of "electricity can do everything", and yet there's still large amounts of manual labor. It can't do everything.)
> Ultimately, the production of pure automation springs directly from the resources of the earth, and the earth is everyones, so it makes sense to redistribute the production to a significant extent.
Unfortunately, under current law, the earth is not everyones. Real estate and mineral rights are pretty well entrenched. (For that matter, so are national governments. Given that resources are not evenly distributed, that matters.)
So getting to your philosophical starting point would require a massive transformation of existing human society. (Of course, robots doing everything might have that effect...)
> Ubi causing runaway inflation is another example of a thoroughly refuted claim that is easily given the lie by looking at extant UBI systems.
What are your examples of "extant UBI systems"? And to what degree are they true UBI?
I think we will see enough of “everything” to invalidate the current paradigm of economic function. Something like 80 percent of all activity that does not involve high-touch customer interaction where people will prefer the more personal feeling of another human over the superior technical performance of a robot.
>Unfortunately, under current law, the earth is not everyone’s. Real estate and mineral rights are pretty well entrenched.
This is true, but we also tax those holdings in acknowledgement of their communal nature. Ideally, ownership would revert to the best steward, but we all know how that works out in practice lol. The status quo is only possible because the state retains a monopoly of coercive force. If the economic model is undermined, this monopoly is among the first of casualties. So while I don’t disagree completely, I’d have to say that we end up in a sort of race condition problem if the state hesitates too long to assert communal right to autonomous production.
> What are your examples of "extant UBI systems"? And to what degree are they true UBI?
Unfortunately all “UBI” experiments or implementations are limited in scope, because there is always a time or geographical limit to their application. So “true” UBI, which would largely eliminate the leverage that increased local wealth would have against market forces, has never been tried. As a result, existing trials have possibly been contaminated because the gradient at the edge is a problem.
Additionally, UBI in our context would be applied in an economic desert scenario, which means that wealth would not be increasing in the mean.
As for examples, there have been a few, but I’m on the can staring at my phone and I’m way too lazy to go back and try to search up the several examples of UBI experiments, so I’ll just leave you with the one I’m most familiar with because I lived there; Alaska’s permanent fund dividend. At 1-2k per year per human, it is a pretty big infusion for many families. Once again I’m too lazy to dig right now, but there has been many investigations of it’s effects on the economy, and the net result was that prices went -down- dramatically in response to dividends in an effort to capture market share. I would not expect to see this effect though, in the scenario we are exploring - once again it’s a gradient effect, I believe.
> massive transformation of existing human society.
something like a 3rd industrial revolution? As someone who is innovating in the developing technology in the sector, I believe that we are in for a much more sudden and extreme shift than both of the previous Industrial revolutions combined, compressed into a couple of decades. The first two spanned about 120 years of disruptive change between the two of them.
What are the falsehoods in complaints against police unions?
The core premise of a union is that you have solidarity primarily across unions which is actually how you get collective-bargaining at larger scales
Police unions in New York regularly join hands with other public-sector unions.
NYPD regularly arrests peaceful protestors and striking workers
https://x.com/SBWorkersUnited/status/1996650716686176576
ACAB
I thought it was because they couldn't strike because they were "essential"?
For an extremely salient example, the purpose of coal miners' unions is to serve coal miners. The interests of coal miners don't necessarily align with everyone else's interests, and if the the interests of their union did, it would be a bad union.
If police are racist, police unions are either racist or not representative. The purpose of unions isn't to serve the purposes of upper middle-class liberal arts majors. You don't steer workers through their union, that's evil. If you want coal miners to prioritize the climate, or police to prioritize civil rights, you have to do it the traditional way - by convincing them. You might have to convince them to quit.
The idea that the police don't deserve a union because police unions would support your enemy is repulsive. Change the laws, maybe you wouldn't have to hire scum to enforce them.
What about California teachers’ unions? European notaries?
No True Scotsman. All unions are unimpeachable. Because those that aren’t aren’t real unions.
I get the sense that you feel strongly about this subject, but it would do you some good to read the messages you're replying to, as not doing so makes you sound pretty foolish
(Am I allowed to be a little ideological when we are facing the potential extinction of humanity?)
No, they are not. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
Changing the table stakes is what needs to happen: see https://en.wikipedia.org/wiki/Mondragon_Corporation for a counter example.
Unions just create an us vs them mentality. The fact that the NUMMI plant ( https://en.wikipedia.org/wiki/NUMMI ) was not reproducible is a pretty strong indicator of that.
But, I will say, often, unions are very positive things. Other times, basically evil. So, I think unions are a mixed bag. But the threat of potential unionization is almost a universal good, so it’s a right worth exercising once in a while.
The only way? Like a silver bullet? Like that thing that the common idiom says doesn't exist?
I haven't thought this through, but I don't see how you could have UBI without universal healthcare. If the point of UBI is to ensure the most basic necessities are covered, and "basic necessities" includes healthcare, and healthcare is the Luigi-inducing travesty it is in the US right now, how is it UBI without universal healthcare?
The alternative is that UBI is high enough to cover healthcare, which is extremely (maybe unfeasibly so) expensive and creates all kinds of other incentives for abuse. Or we fix the systemic, profit motive-driven problems in the current system by nationalizing healthcare.
Yes, nationalized healthcare is also problematic, but I think UBI will indirectly alleviate a lot of the systemic problems there as well.
In my mind, only community ownership of the means of production can truly achieve what we desire. Of course with all distant goals, it is hard to see how we get there. And to be clear I do not mean state ownership.
But I am curious, on my basic point of elite capture of the state, does that make sense?
I am struck that TFA’s title says UBI is “the only way to share”, amusing to me since literally directly sharing is another way. I understand we all have spooky ideas of what that means, but think for example of the concept of library economies. You borrow what you need, but you don’t own it nor have the right to destroy it. We share.
It makes no assumption about an elite ownership class at all. It merely assumes profits, and rearranges how those profits are distributed (away from shareholders, towards labor). There is no need for community ownership of the means of production (though that might have some different benefits, along with some different disadvantages).
You need high marginal (or maybe not even marginal) corporate taxes and a committment to the concept of UBI. Who owns the companies, from the perspective of UBI, is immaterial.
Community ownership does not share the productivity in sector A with workers in sector B. UBI does.
Also, you haven't really answered the point. You may be able to get this established. But how do you keep it established? How do you keep the elite ownership class from dismantling it? (Based on historically observed behavior, the default assumption is that they will try.) If you don't have a plan that accounts for that, you don't really have a workable plan.
But saying that the existence of an elite class implies regulatory capture is a step beyond that.
Regulatory capture is absolutely a problem. While one could advocate for eliminating the elite class (e.g. wealth taxes, confiscation, execution ... as you wish), I'd probably go for tightly controlled political donations & spending, combined with a strong anti-corruption culture (which has been severely damaged by, ahem, recent administrations).
(a) sufficient political donations/bribes to get lawmakers to draft suitable language themselves (or via their staff)
(b) a combination of political donations and a worldview on the part of lawmakers in which it is "just normal" for those affected by regulations to draft them, such that you yourself are able to draft the legislation.
There are levels of government where neither of these require incredible levels of wealth, I suspect.
Both could be stopped by limiting political donations and a political culture in which "the chemical industry writes its own rules" is self-evidently corrupt and/or non-sensical.
Whether any of these require incredible levels of wealth or not is moot, I think. The reason for that is that it only matters when 'lesser levels of wealth' come up against 'greater levels of wealth' and the latter will always win that confrontation.
The more I think about UBI though the more I come to the sad conclusion that you can't eliminate money. We can't just give everyone everything they could want for free; I don't think the planet can sustain everyone living like elon musk. So there has to be some forcing factor, some hand on top of the cookie jar that tells your monkey brain that just wants to be high, fat, and orgasming all day that it needs to endure a delayed reward or face some physical exertion to keep the party going. And for better or worse, that forcing factor is by making you have to do something to get credits, that you return for your portion of the produced abundance. This mechanism is able to tolerate the fact that someone might work on efforts not directly tied to any one thing and reap a generalized benefit from all the diversity of that which is produced. Whatever comes next, has to get through that hurdle and the more I think about money the more I find reasons why it is actually a great tool for this sort of distribution of resources and incentivizing labor.
I guess the challenge is that there is a lot of lopsided compensation, where people like say elon musk are paid handsomely even though there is realistically only so much a single human can do. When Elon musk does something that say moves billions in real world dollars on his decision, again this isn't because he is a unique superhuman, just that we have set up power on this planet such where one single person can make a decision to move billions in real world dollars, and if it wasn't musk it would have been someone else in that seat because the seat exists at all. So much power shouldn't be accumulated in one position, because again, we aren't superhumans.
https://www.digitalistpapers.com/vol2/autorthompson#:~:text=...
E.g. the first x kWh electric you use, or the first X litres of water, or the first x GB of data you use is entirely free, for everyone (where X is some reasonable number that someone could just conceivably survive on). Then as you use more and more the prices start to gradually increase across a series of bands so that the heaviest users are subsidising those using the least.
It would promote efficiency, would be progressive, and would allow people to live without quite so much "bill fear" for essential utilities.
Plus it is not literally putting money in people's hands which is often unpopular with some demographic groups. People would still need to work but there would be some element of safety net.
I'd be really opposed to this. It'd only be ok if we nationalized the industries where we set these rules and rates. Otherwise, this ends up being a simple handout to private industries.
For example, let's say we say x liters of water. Well who's deciding how much x liters cost? If it's a private company and the government is guaranteeing it, you can bet water (which is relatively cheap where I live) will end up being the most expensive resource imaginable. And that may actually be true depending on the location, but it'd also be true in non-desert areas with plenty of water.
We've effectively had that here with the ACA, where the government has decided that it will cover the first $800 or so dollars of your health insurance. What happened? Magically, the cost of health insurance increased by $800. Private industries aren't stupid, they'll always charge the maximum price the market will bear. And when we start talking about captured industries like data provider, power provider, or your water provider... well that's where we can trust private industry the least as they literally have the public over a barrel. Utility boards are an OK solution, but the better solution is to turn these into public institutes instead of private ones.
I don’t think that’s an accurate description of ACA [1], it didn’t lead to a dollar to dollar increase in premiums (share a citation if otherwise), and it’s a bit misleading to say it led to an increase in premiums because plans pre-ACA were effectively inaccessible to and lacking in benefits for impoverished people or people with pre-existing conditions.
[1] Here’s a brief description of ACA from Wikipedia:
> The act largely retained the existing structure of Medicare, Medicaid, and the employer market, but individual markets were radically overhauled.[1][11] Insurers were made to accept all applicants without charging based on pre-existing conditions or demographic status (except age). To combat the resultant adverse selection, the act mandated that individuals buy insurance (or pay a monetary penalty) and that insurers cover a list of "essential health benefits". Young people were allowed to stay on their parents' insurance plans until they were 26 years old.
Since the 2022 covid bill which significantly increased the subsidization of premiums, health insurers have found various reasons to increase their premiums by inflation beating numbers.
That's obviously a "the market will bear it" situation.
The ACA was a big bill that did a lot. I'm not talking about all of it, but rather the premium subsidization along with the covid premium increase which both expired in 2026.
Look, the premiums expiring was bad. IDK if that was clear from my earlier comment. But there's a fundamentally unaddressed issue with insurers in general where they charge not based on competition or the cost of service, but based on what consumers can bear. Profit incentives for healthcare in the US are completely misaligned with providing good general healthcare. The ACA premiums are a bandaid over an artery laceration. Better than nothing, but that thing is going to very quickly start bleeding through. You can keep slapping on band-aides, but ultimately you'll be looking at more damage if you don't just address the issue.
[1] https://www.healthsystemtracker.org/brief/an-early-look-at-w...
A better yet more difficult model is universal basic resources (food stamp to exchange for packages, social housing, etc.). People can work X hours on these social projects after reviewing some training (e.g. training of plumbing to maintain the social housing apartments). This also gives them some meaning in life. Of course this will degrade in the future if there is no ownership of the state by the people, but I think it’s going to last longer.
Source? A $20k UBI wouldn’t likely secularly increase food costs on a per-calorie basis. Those folks are already eating. There will just be supply-chain friction as the system adjusts to their newly-expressable preferences.
For example, how about supermarkets increasing prices? We already saw that happening for a few years since the COVID. And how about landlords increasing rents?
[1] https://www.npr.org/2019/07/03/738569508/university-of-alask...
I would prefer it illegal for the wealthy to possess an excessive amount of assets. If your assets became more valuable than the limit, the asset share would automatically rebalance toward other employees and owners in the organization who are below the asset ownership limit.
You don't even really need UBI if healthcare, housing, food, and education are considered basic human rights that are included and free of cost at point of usage.
I say that we need to realize that by the same token(s) that AI reduces the need for labor, it also reduces the need for capital. A single motivated, disciplined individual can now do, using AI and public elastic clouds, what used to require an entire team. So companies can decimate teams, but companies are largely a source of capital. If you don't need so many people, you don't that much capital either! You could potentially parlay an insight or domain expertise into a viable business. Your moat could be the obscurity of your niche, or relationships, or IP (yes, patents. Suck it up and use every leverage you can.)
Easier said than done, of course. This essentially means everyone becomes an entrepreneur. Most people are not cut out for that because (besides hard-to-acquire domain expertise) that requires being immersed in an ocean of uncertainty at all times. None of our education systems prepare people for that, or for what is coming.
I expect a time of disruption, but we need to realize that AI not only a tool for the Capital class. It's a tool for us too, if only we can adapt.
UBI is not possible until robots and AI take over most jobs (but then we risk that one day the AI decides to just get rid of "those useless humans")
UBI is just a band-aid on not taxing the rich, though.
Cheap rental properties. Basic phone plans. Cheap food. The poor buy vastly more ramen noodles than the rich.
They buy at most one.
> basic phone plans
They buy at most one.
> Cheap food, ramen noodles.
Humans have fixed calorie needs and even the very obese spend maybe 10x the norm, nothing more.
Compare that to the prospect of someone buying MULTIPLE properties, possibly multiple properties that are 10x more expensive the norm, the price disparity between a regular car and multiple supercars, the price disparity between owning a boat and/or yacht vs...not owning a boat.
You make it revenue neutral for the average tacpayer. If you want UBI to be $1000/month, you increase the average tax by $1000. The average taxpayer still benefit because even though they don't get more money, they have a safety net.
People making less than average get more UBI than the tax increase, and those making more pay more.
Most people get more money because the median income us a lot lower than the average.
Housing prices should go down. Housing is expensive in places with jobs and cheap in places without jobs. UBI gives people the freedom to move from the former to the latter.
Healthcare is screwed up, UBI or no.
The real solution is to regulate the industry and break up monopolies. UBI is the modern equivalent of Walmart workers on Medicaid and food stamps. It’s raiding public funds for private profit.
At a time 99.9% worked in agriculture and agriculture was and still is complete bullshit. You can just mix plants and leave them alone. Just visit the garden if you want something to eat. Do a bit of modest pruning. Rabbits and other creatures will eat everything if you don't eat them. Just like with agriculture the rabbits will upscale their population to match whatever food is available.
I'm simplifying of course. The point being, 3% now works in agriculture. We know how to make durable houses, durable clothing, durable everything-you-need's stop listening to your wife (lol), all you need is a roof, bed, cloths, food, a good book and some time to think about what the hell we are doing.
Everything else is certainly nice to have but it should not be part of this topic.
One of my funny hypothetical: Say we rip all the roads out of the city and fill her up with chickens. Then, in stead of driving to your job you pick eggs and catch a chicken. Then, after 10 minutes your job is done for the day. If people don't like eggs or chicken that's fine, we can feed them to the chickens, or the delicious maggots that grow on them. I mean proverbial of course, no way you need to explain how it works to the chicken, it will do all that for free on factory settings.
I'm sure this is all very hard to understand, it might not make any sense to you. Then think of the UBI as the ultimate crypto currency. You take a unit of humans, a unit of time, multiply the two and hand the coins to the human. You get nice linear expansion and nice coin distribution. You only need proof of humans and proof of time. The white paper will be very short and (sadly) lack all the interesting math.
Won't any BUI proponent explain simply HOW (realistically) can it happen?
* progressive taxation
* wealth tax
* government training workers, procuring supplies, and investing in advances
...but they're all gone now, so let's get going on this stuff.
It's not just about giving people money (though we absolutely should), it's also about ensuring wealth pumps can't just vacuum up that money into the hands of the already wealthy - like the stimulus checks did during COVID, like tax subsidies for healthcare do, like tax breaks for employer-provided benefits contribute to.
It's reforming housing from investment asset into human right. It's detaching healthcare from employment as much as it's about negotiating with pharmaceutical companies on pricing and creating more public healthcare rather than outsource to private firms. It's rent controls on older housing stock to incentivize growing revenue through volume (more housing) instead of scarcity like we have now. It's levying taxes on higher-priced rentals and luxury housing stock to force investing in more affordable supplies. It's penalizing for-profit employers whose staff disproportionately rely on government subsidies to make ends meet, and taxing the shareholders for supporting such bad governance.
It's taxing wealth and assets properly, rather than capping rate increases to keep people in homes (and thus drive up values). It's cities who reward businesses whose staff take public transit and taxing those who rely on private vehicles. Lifting property tax caps so that taxation rates float with the market, and accepting that this will mean some folks will see foreclosures and others will see valuations plummet as the market corrects itself. Incentivizing longer leases from landlords by tying property tax increases to lease renewals (yearly renewals mean yearly appraisals), to encourage more community and investing in buildings.
It's expanding SNAP to everyone by default on raw foods only, and expanding access to cooking and nutrition courses so every adult can eat healthy meals. It's shrinking the work week to create more jobs, capping overtime instead of merely 1.5xing it, and raising minimum wages. It's also taxing the absolute shit out of executive compensation, especially on equities and securities. It's barring share buybacks other than those amounts that would give the company 51% control over its outstanding shares (or more), and replacing Capital Gains with Income Taxes. It's closing loopholes and shrinking the tax codes.
It's so much more than "UBI and we're fine". There is no silver bullet. Nothing is an "easy fix", and no single fix will make a meaningful impact on the whole. It's nothing short of a coordinated rejection of the status quo in favor of a more equitable future that balances the need for innovation and growth with the needs of the masses for basic sustenance, shelter, healthcare, education, and safety. It's a cessation of promoting business over all, and a return to balancing business with community, with family, with individuality.
It's a lot of fucking work, and anyone lounging in here nitpicking UBI specifically without considering the whole of the problem shows they're simply not ready to deal with problems of this scale.
I’m not sure this is the case. Especially since people did form social hierarchies and did own propety in communist/socialist regimes of the Eastern block.
One might argue that UBI is incompatible with human nature, because most humans require a sense of worth, which paid work provides (to most). Take away the motivation, will the self-worthiness remain? (especially when thinking about _most_ people, not the struggling artists who wished they could pursue art without the burden of bills).
I’m not sure about this at all. I just think drawing the parallels and discussing communism failure modes is interesting for the discussion of UBI.