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You are leaving out a couple of details. First, there is already unemployment, so there are already people not filling jobs. Second, this is a redistribution of tax money, so society is not getting poorer that way. As for people not filling jobs, there would be new pressures on corporations that needed workers, McDonald's could continue to pay minimum wage (assuming it wasn't abolished) for people that cannot live on $10k, and startups could pay substantially less, as could not for profits or other organizations that had missions more aligned with people's worldview of themselves. New jobs might become possible that are not today. Who knows. The point is you cannot say the outcome of changing one variable while holding all others constant, because they are not constant. Also, your counter suggestion is based on the assumption that the government can redistribute jobs instead of tax money, it cannot.

Yeah, my gut feeling is that this sort of social safety net will allow more people to take on risky projects that have low probability of success but big potential payoff. This seems likely to be a net win for society even if most people don't try this and most of those that do fail.

Re: job redistribution.

What about the New Deal's CCC?

> "Second, this is a redistribution of tax money, so society is not getting poorer that way"

Unless it turns out to be more efficient than the social welfare programs it would replace, it would be a redistribution of additional tax money that would have to be collected. If you define "poorer" as "less output collectively produced" then the parent's point about the concavity of utility would hold and imply that society as a whole would indeed become poorer.

All this is based on a simplified model of things, but that's what most of economics is.

The biggest gains to be had in my opinion would be due to difficult-to-quantify human effects related to people having to spend less time worrying about making ends meet and being able to think and plan more than a few weeks ahead.

First, there is already unemployment, so there are already people not filling jobs.

If you believe the Keynesians or the Monetarists, it's because they refuse to work at a lower nominal wage than before. Unemployment/welfare/etc makes this an appealing prospect, and Basic Income only makes the problem worse.

* Also, your counter suggestion is based on the assumption that the government can redistribute jobs instead of tax money*

I didn't propose redistributing jobs. I suggest using people on the Basic Job for all low skill government labor, and creating additional (make-work if necessary) jobs if necessary. Make every park sparkling clean, no litter on any road ever, etc.

FDR got creative when he did this and we got a lot of great infrastructure out of it.

> If you believe the Keynesians or the Monetarists, it's because they refuse to work at a lower nominal wage than before. Unemployment/welfare/etc makes this an appealing prospect, and Basic Income only makes the problem worse.

How? One of the problems with qualification-based benefit programs is that they reduce the marginal benefit of work (both unemployment and welfare benefits go down with work, which reduces the marginal benefit of any given nominal wage level, which makes people more likely to seek to avoid work at any given nominal wage level -- which also makes the benefit programs more expensive to administer, since they then need mechanism to try to catch people avoiding work to maintain the benefits.)

If you have unconditional basic income, you assure that work always has a higher marginal benefit for the same nominal wage than it would have in a traditional system of means-tested benefits, which reduces the incidence of people rejecting work at any given nominal wage.

I was wrong, and you are correct. Replacing unemployment with a basic income could go either way, depending on the marginal taxation rates of reducing benefits and the rates of diminishing marginal utility.

However, a Basic Job guarantee can only go one way. You never get to avoid the disutility of labor (X in my formulation).

But I'll dispute one point: you assure that work always has a higher marginal benefit

BI assures that work has a higher marginal income. It does not assure that work has a higher marginal utility, which is what matters.

If you believe the Keynesians or the Monetarists, it's because they refuse to work at a lower nominal wage than before. Unemployment/welfare/etc makes this an appealing prospect, and Basic Income only makes the problem worse.

Sorry, how is that? Under the current scheme, if I increase my wages (from $0 to $10k or from $8k to $14k or whatever), I lose my benefits. Under Basic Income, I do not lose my benefits; I only gain by increasing my wages.

The current policy of means-tested welfare is just a complex combination of minimum income and high (sometimes >100%) marginal tax rates for the poor. The proposal to get rid of these programs and replace them with a more simple system of basic income is just a proposal to lower the marginal tax rates for the poor, so that they are no longer the highest.

The policy of a guaranteed job achieves the same goals, without the incentives for idleness.

Society also benefits, since it gains some productive labor from the workers. Rather than paying $7/hour of Basic Income and getting $0 in value in return, society might pay $7/hour of Basic Job and get $4 of litter removed from parks in return.

> The policy of a guaranteed job achieves the same goals

It doesn't acheive the goal of reducing administrative overhead, since actually creating jobs has considerable administrative overhead.

It also doesn't achieve the goal of increasing labor mobility and facilitating experimental, entrepreneurial endeavours.

In fact, it doesn't do much of what Basic Income does.

Reducing administrative overhead specifically is pointless. It's looking at one part of the cost while ignoring everything else.

The relevant question is costs - benefits.

The cost of Basic Income is $20k x # of adults + overhead. The cost of Basic Jobs is $20k x # of adults willing to work who can't find work + overhead - value of labor provided.

I'll make up some USA-centric numbers to illustrate the calculation.

Suppose overhead for BI is $50/year and overhead for BJ is $5000/year. Suppose further that there are 250M adults, 50M of which are willing to work but can't find work. (The remaining 200M will keep their current job.)

Cost of BI is $5 trillion, cost of BJ is $1.25 trillion. This assumes that the Basic Jobs provide no value whatsoever and Basic Income provides no disincentive to labor whatsoever.

If you disagree, please cook up your own numbers and show me how this could be wrong. I'm just curious to see any mathematical model where BI makes sense - I haven't been able to come up with one myself.

Sure. I don't think we actually disagree about this. I just wanted to point out that the status quo has this problem of incentivizing idleness to a greater degree than the proposed Basic Income.

edit: Additionally, I think it would be harder to implement a Basic Job program well. Compared to Basic Income, we'll lose some amount of physical mobility and some amount of value from enterprises that take a long time to bear fruit. The Basic Job program will have to be pretty well managed to provide enough value to compensate.

This is a very reductionist view of worth. Your model implicitly values people's non-working time at zero, which is true as far as GDP is concerned, but is pretty clearly false as far as how actual human beings chose to live. If fewer people are doing nails or cleaning other people's houses, then those people must be doing something else. Maybe they're working a job which is less economically productive, but which they enjoy more. Maybe they're not working and they're spending more time with their grand-kids. In either case, it's a real improvement in their quality of life. If your model doesn't incorporate personal preferences not related to the purchasing capacity of your paycheck, then that's a flaw in the model, in my opinion.

Another factor people take into account when deciding whether to take a job is what the effect is on their total benefits. Higher taxes for instance decrease the amount of benefit in taking a job (relative to the value to your employer of you having taken that job). But taxes aren't the only thing that decreases the benefit of taking a job, there is also the potential loss of other benefits.

When we have "means tested" programs (i.e., anything for "the poor" or "the unemployed") then the marginal benefit of a job (or doing more work) U(base or base job income + new job income) - U(base or base job income). When you factor in needs-based benefits U() can be a very peculiar function, and the marginal benefit can be small relative to the new job income, or even negative.

If we take the social safety net as a given, then we shouldn't abstract away the existence of that net. A basic income has the potential to remove the need for more sophisticated implementations of the safety net, ones that can lead to poor U() functions.

In fact I think that the bottom of the concave U() function cannot work as in theory, because of what is considered socially acceptable. Your first $1000 in income is very valuable because you are living in terrible deprivation. But some people are not able to make that income, no matter the utility. It may be job availability, it may be a disability, or an injury, or addiction to drugs, a criminal history. It could be a parent that has succumbed to any of these. It's hard to enumerate or easily define what any of these are, so to some degree we are willing to offer help simply because someone is experiencing deprivation.

Which is to say, the part of the U() curve that a basic income chops off is already really messed up.

>you can alleviate these negative effects by replacing a basic income guarantee with a basic job guarantee

Since a lot of industrialized countries have had high unemployment for years, if not decades, that seems like an impossible idea. It might even be worse because if you send the unemployed to clean parks and plant trees, you effectively destroy a labor market for gardeners.

I don't know if a "Mincome" would work but if you want to guarantee everyone a job, you need some pretty clever ideas how to create those jobs - preferably without negative side-effects on existing low-wage markets.

The basic job doesn't need to be economically valuable; it can literally be make-work, and is there to correct the incentives, not to (say) clean the parks.

These are human beings we're talking about, with ideas and dreams and goals. I find the idea of wasting their lives with 'make-work' morally reprehensible. We should be trying to free them up to focus on their dreams and big ideas, not throwing away their potential uselessly.

I'm not sure what this has to do with my point. I was responding to a comment that worried that "basic job" programs would sabotage labor markets, and merely observed that problem had a simple solution.

I understood what you were saying. My point is that the "simple solution" you propose is not really a solution at all. If that's the best solution we have for implementing a "basic job guarantee", then such a thing is unworkable.

This is a Dickensian nightmare that kind of reminds me of the workhouse of old. Only problem is we don't need oakum today.

The need for people to live on state-issued subsistence wages seems like the nightmare to me.

"With a basic income, people take a job if U(job income + basic income) - U(basic income) > X."

Which is the beauty of a basic income -- it means that employers no longer need to merely outcompete destitution, but instead offer a compelling reason for people to come work for them. Unpleasant but vital jobs would become better compensated, while there would be strong pressure to eliminate useless make-work jobs.

The world economy has not been suffering a labor shortage for a very long time. Basic income allows a lot of menial labor to be automated without destroying lives, and in the long term will redirect that output to creative and skilled labor, thus enriching society on more than one level.

It's all true, but in practice, in the US, and I strongly suspect in Switzerland as well, there are all kinds of means-tested transfers, such as unemployment support, so the first equation is actually U(job income) - X > U(unemployment support) which (unlike the concavity issue) is a first-order effect, and keeps millions of people from working. I very much suspect that replacing that with basic income is going to bring more people into the workplace, not the other way around -- as long as the basic income is kept reasonably small.

Now, keeping it small is another matter.

One of the arguments for wealth redistribution is that rich people tend more to spend money internationally on luxuries, while poor people tend to spend money in their local communities on essentials.

It's possible that under this system the Swiss will gain more employment because their people will be spending more on goods that proportionately employ other Swiss people in the value chain.

It's the reverse argument to the Trickle-down idea, I think.

I think that there are assumptions made by your argument that sound reasonable on the face of it but that don't actually match reality. Not just yours but pretty much every economic argument that I've heard that takes this "forces of nature" form.