A universal income is not such a silly idea

Just look at how college costs magically rise to the availability of loans and grants. What do you think is going to happen to food and rent prices once those supply chains figure out there is much more profit to be made?

The Walton family alone has more wealth then the lower 42% rest of the USA. What do you think is going to happen when they know all their customers have a certain base income - you think prices are going to stay where they are?

So you will just make the wealthy more wealthy.

Presumably there would need to be major changes to income tax brackets (especially for the lower income tiers) & dismantling of various existing welfare programs in order to fund a basic income. I think Friedman included public services like schools, public transport, health services, etc in his definition of welfare. I doubt Europeans would go this far.

Then we can discuss the more speculative parts like who will be more or less incentivized to work.

Is there something like that on the internet?

At least with the basic income, there is never an incentive to not work. It makes it possible to not work, but it doesn't incentivize it. The current welfare systems make it such that if you start working you lose the welfare. If you don't have the skills to make significantly above the welfare level, you are actively incentivized to not work.

For those suggesting we'd have massive inflation making this completely worthless, I think you underestimate the level of money we currently give away. While there would be some inflation, we already give huge amounts of money in the form of welfare, food stamps, social security, etc. A basic income would replace all of those things.

That's something a person that didn't experience communism would say.

Communists would never allow a person to just stay idle doing nothing if you don't have a job you would be sent to forced labor camps where people are needed.

Ask any Romania born before 1989 if you don't believe me.

This means it's a horrific mess. For years it was not possible to know how much housing benefit you would get before you moved into a property. While I think there are flaws with the free market I can see that crippling it doesn't help at all.

It's really hard to work out if you're getting the correct benefits, or if you're getting too many. (We have a tax credit system. The credits lag real world payment information, and many people get caught with having to repay tax credits.)

There are other flaws. Someone getting voluntary work (improving their chances of getting full time paid employment) is penalised. Someone with MH illness who gets voluntary work as a step back into society gets penalised.

So, the different government departments have been streamlined a bit. The different benefits are being changed, and signals are being sent about acceptable use of the system.

I got a letter, to my name and address, with all my relevant information. It had a phone number. I called the number. They asked me security information, and confirmed my name and address. They sent me a form. I had to fill out the form and return it. That form is an assessment for an interview. I'll attend an interview, which is given by a doctor. That doctor doesn't do any diagnosis, they have a rigid check list which they assess the patient against. ("Can you walk 10 metres unaided?" "Can you stand for ten minutes without pain?"). The form is scored and sent to a decision maker. That is then returned to a bureaucrat, who awards one benefit, or another, or none.

The checklist is flawed - turn up with a dirty t-shirt because you're a lazy slob? You score points. Turn up with an ironed shirt and tie because your crippling OCD and anxiety won't allow you to leave the house otherwise? You lose points.

All of this bureaucracy is very expensive. The system is open to abuse from multiple parties - criminal gangs using dead people's names to claim benefits; people over claiming, or claiming while working, or claiming for something they're not eligible for.

Sweeping away all of this and replacing it with a relatively simple "Does this person exist? Are the eligible for the universal income?" would save so much money, and time, and stress. It would free people to do voluntary work, or small informal projects.

Then we just need a bonfire of the tax / duties system, and get something sane there.

http://www.theguardian.com/world/2013/nov/01/razor-wire-divi...

http://www.spiegel.de/international/europe/asylum-policy-and...

This is a bit of a tangent, but since this is tech oriented community I think it's relevant. It's highly likely that one day strong AI will be able to run the entire world economy, and humans will not longer have to work, nor will they be needed. At that point humans will need basic income to survive. In this scenario, the whole concept of "the economy" will have been stretched and squeezed into something entirely unrecognizable, so the problem of basic income being a drag on the economy will be irrelevant.

We are getting closer and closer to this point every year. Just look at employment figures. Computers are replacing humans in the workforce, and they will continue to do so at a rapid pace.

Basic income will be useful and needed, it's just a matter of time.

Would the national unconditional basic income render the national minimum wage effectively 0 (or much lower than it currently is)?

For example, corporations could be taxed more heavily if they could offer their lowest paid positions a wage of £2 per hour. This extra taxation would then help fund a national basic wage (equivalent to say £5) which would leave a low-skilled worker earning £7 (roughly what they were before). I had assumed that any such 'basic income' scheme would be so prohibitively expensive as to require such drastic means, just to find the money, however I haven't seen any such changes mentioned in many of the articles discussing the relative merits of the Swiss proposal.

As an aside - for those saying: "What if people don't spend the money responsibly?" - Isn't that, somewhat idealistically, a large part of the point of the scheme?

The scheme would encourage responsibility, rather than treating people like children? Yes things like addiction (to Gambling, Drugs etc...) throws a spanner in the works of this - but charities and support groups exist to tackle this kind of issue already - they could continue to do so, with one critical difference. Charities could do a lot more with less if their workers were earning a basic income from elsewhere, and could afford to give their time for less ££.

The interesting thing is that with a generous universal income and a fairly high rate of tax (e.g. 45%) you would naturally get a really quite progressive tax and benefit system without the complexity of many thresholds that currently exist. It actually makes the idea of a 'flat tax' actually work and not be ridiculously unfair.

It would also enable people not to be employed and to work on projects that they are passionate about whether start-ups, internships, forming pop bands, writing, caring for children or parents but enable people to choose to earn additional money. Unpleasant jobs should command increasing premiums as more people have the choice not to do them open to them but interesting flexible jobs may not need as high wages as current minimum wages (which I could imagine being abolished for recipients of universal income).

Of course some would sit around all day doing nothing but I suspect that not many would do this long term and it may be better that they can declare it as an active choice rather than be bullied into interviews and appearances at job centres.

There would be complicating factors such whether/when immigrants were entitled to the universal income and if not a minimum wage may be required to protect them from exploitation.

1. Premise: "Basic income of X units of money is sent to everyone in population".

2. Basic income comes from where? Either from taxes, or from printed money. Either way, purchasing power is being taken from some people in proportion to their savings/income.

3. There's always a difference in income and amount of savings. If everyone was making the same amount of money, doing "basic income" wouldn't change much (except feed some bureaucrats in the process).

4. Therefore, some people will be taxed less than "basic income" they receive. And some people will be taxed more that the income they receive.

5. Therefore, some people do not really receive any extra income. They are getting deprived of a portion of their purchasing power instead.

6. Therefore promoting it as "everyone gets it, no strings attached" is a total lie.

If they said "we want to take from some people and give to others" it would be honest and true. But it doesn't sound as fair as "everyone gets", isn't it?

Note: I'm not debating taxation itself. Even if you think it's okay to tax and redistribute wealth, the description of this law is a total lie.

EDIT: I guess downvoting folks are too busy redistributing people's wealth to point out a logical flaw in my comment.

It increases the opportunity cost of getting a job, vs being an entrepreneur. Perhaps we will see a generation of new entrepreneurs that otherwise would never have taken that leap; Which in turn might be great for the overall economy

I'm not sure what the optimal tax schedule (pre-tax vs post-tax and welfare) should look like, but my intuition is that a high effective marginal tax rate for people on welfare is not bad, as the disincentive to work that it produces affects fewer people, than if we had a flat tax (e.g. VAT) plus basic income.

The disincentive to work produced by a higher effective marginal tax rate is also offset by the fact that welfare isn't a lot of money, and the longer you are on welfare the stricter enforcement becomes.

I also don't see the moral reason for a true basic income, except perhaps for men, who should be compensated for the possibility of being conscripted.

In the current system, you can go stay at home and get income support, which should provide you with the basics i.e. a home, food, electricity etc. If you would like more than this, you can go and get a job and hopefully earn more (have a better lifestyle) than staying at home not working.

[Note the 'should' and 'hopefully' - This system may not always work, but when it doesn't it's generally a fault with wages paid not being sufficient rather than the benefits system being broken]

This therefore means there is an incentive to go work. There is also control, to make sure the money the unemployed person is getting is mostly spent on the basics (such as housing, rather than say drugs).

The problem with suddenly giving everyone a minimum amount of money, is that due to everyone now 'at least' having that amount of money at hand, this becomes the new 'bottom' of the market. If I get a job, I earn money on top of this basic amount, which means I can afford nice things and the person unemployed still can't afford anything.

To clarify, this works similar to pricing of items in different markets. A beer in the UK is ~£3.50 (£5 in London), a beer in Vietnam is about 14 pence. Both costs are fairly relative to what they would have to pay their work force to produce the item (plus cover costs and make a profit) and what the local market can afford to pay.

If let's hypothetically say, you gave everyone in Vietnam this basic wage, the cost of beer would not remain at 14 pence. The first reason is because the work force would find their existing pay negligible compared to the basic pay (so wages would have to rise to be incentive to work on top of basic pay) which would in turn cause cost of manufacturing to rise, but also the market would realise with this extra money available - the price could be set higher and would rise accordingly.

Now back in the UK if this was to occur, you would have slight price rises due to these factors which would in affect move the poverty line up higher, which would mean the people at the bottom are still poor relatively.

What's worse is that assuming the people who are unemployed are given the choice on how that money is spent, they may in fact not spend the money sensibly (i.e. on their housing) and end up homeless instead.

The final problem with this model is that the cost of living and economic output is not evenly distributed throughout a country. £1750 a month in northern England may give you a fantastic lifestyle, where as in London you'd barely cover your rent. (What happens to the unemployed in London in a fixed give everyone a basic income situation? They have to leave London and move where they can afford, which then makes it potentially harder to find a job and splits the country into two halves, the elite / the poor).

Structural lifetime unemployment is going to be the cause of future civil instability, and governments will use UI as a way to calm and control social order.

I've long thought that a guaranteed income is an idea worth trying. But it did occur to me recently that such an amount would let you live like a king in many developing countries. Is there anything in the proposal to stop people from simply moving abroad?

More generally, how should a well designed universal income proposal treat travel/living abroad? If you cut off payments for those that are no longer residents, you suddenly provide a huge disincentive for travel. If you keep them, you encourage mass emigration.

After all, there's no truth in "having" to work. I think there should be the freedom to choose if you'd like to work or not.

I've always pondered why people think you "need" to work. You "need" a job.

I like working, and have a job, but I know many people are fine getting by, and it stresses them out for having to work everyday, which I think is perfectly fine.

So incentive becomes less interesting. Demand, supply, innovation still count. But getting people to pound the streets and dig ditches en-masse is not important any more.

So a basic income makes employment not the goal. Its useful innovation and adaptation to changing conditions that matters.

This will have a large economic effect unless it is done slowly, but if it is done slowly, both programs will have to exist at once without paying too much to the same person. This will require the basic income agency to have the same kind of bureaucracy as the other agencies or else have no oversight. In the first phase of the transition, at least, it would cost much more.

The agency would need to maintain some bureaucracy to guard against fraud since obtaining benefits would never require a visit to an office or proof of some activity. It would be easy for someone to claim extra people without oversight.

It's basically the same as a minimum hourly wage that keeps going up to follow the inflation, it's always a catch up game and organization fighting for minimum hourly wage always say it's insufficient.

Maybe an economic alumni could enlighten me?

Can the people proposing a basic income please demonstrate how much they want to give and how much that costs? Then point out how they would fit it into the existing budget?

Also, please explain why prices would not react to a basic income? If $40,000 represents the price of doing nothing, other prices will change to respond to real not nominal costs. It doesn't seem like people proposing the basic income understand how prices are formed.

But nowhere in this thread is there a bare mention of how the economic system has been perverted by incentives that only the truly wealthy and elite have access too (ie. LIBOR, etc.) when there is no BI and capital has complete control over the laborer.

A true BI system would not be inflationary and would do a great deal to increasing the general welfare of the populace. We shouldn't demand that people be slaves to the engines of production. A BI at moderate level would alleviate poverty and also in some ways be very good for capital as well. It would increase the velocity of money and increase consumption in the economy (remember that poorer people spend more of their money as a %age than the truly wealthy)

A lot of you are programmers, at least some of you can run simulations. Stop arguing with words, and instead concentrate on developing models. In other words, start contributing to the science or stop arguing from ignorance.

There are people like that but they make up such a small portion of the population considered, "poor," that it's insulting everyone in a very large demographic. I'd wager that the effects of these people who do use their BI for drugs and recreation will be statistically insignificant.

Whereas a BI would provide a lot of mobility and improve the bargaining power of the lower classes if I understand BI. It seems to me that would have far-reaching benefits for the economy at large -- even for high-income earners.

In other words, the universal income idea simply increases the cost of living by the same factor of the increased income. Perhaps it takes a year or two, so the poor benefit during that time, but in the end all it does is destroy the currency and suppress economic growth.

"There is no such thing as a free lunch"

Point being, there's always some trade off. All universal income does is push the cost of lunch onto the wealthy even more.

While the Reuter's article doesn't mention that as a prerequisite for income benefits, one can reasonably infer that they're not gonna start handing out money to anyone who wanders in.

Contrast that with the US, where you get healthcare and free public education just for making it across the border from Mexico.

I also don't like this idea because it increases personal dependence on the state. If the goal is to make people independent and self-confident, how does this help (on the whole, excluding edge cases)? And as the top commenter said, I think this will move the goal posts and surely cause inflation. I also think this will enable some peoples' destructive habits (how does the song go? "It's the first of the month... Get up, wake up!").

We're all part of this giant machine of modernity. If everyone can feel the benefits of it, and I mean everyone on the whole planet, then we can start to really feel good about what we're building and how we're gonna compromise all of our own individual pursuits and dreams with all of those people around us.

The truth of the matter is that we've all been in this big global machine the whole time. Cultural interchange on a global scale is nothing new, only the speed at which it happens is changing. Pretending that the resources gathered through the skills of just one man somehow doesn't affect the rest of humanity is very short sighted, especially in our modern world.

The ability to extract and accumulate resources is amplified loudly by the existing machinery. Facebook is just an aberrate growth on the top of a very large system that is fueled by the blood, sweat and tears of billions of people living now and extending back in time to the dawn of recorded history.

This has been known to the modern world for some time. We've built systems that we call social democracy, liberalism, communism and fascism with a lot of these tenants in mind. And we argue about the merits of each, and the merits of other systems, and we pontificate about the expected outcomes of imaginary systems or invent new versions of incomplete readings of the past, and we get lost in an endless maze of rhetoric.

There is danger merely in the act of having faith in manmade systems like politics, economics and technotronics. There isn't a point to nor a way to quantify and classify everything under the sun. We can't ever know how these things will work out.

We need to make sure that our faith is actually in the people around us. We need to have faith that the vast majority of people have a good heart and able hands, and they also have just as big of an itch to create, discover, and explore the world. We need to carry that understanding with us everyday and in all walks of our lives and stop pretending like "playing the game" is in any way nobel or worthy of anything other than meaningless excess.

And yeah, Silicon Valley and the cracker jack crew of Hacker News users, I'm talking right to you.

Our best option is to spend less, shrink the state and get rid of income tax, especially on those say, living under this proposed living wage.

No. This would never work. This kind of universal support system depends on a core of altruism. I don't think anyone will try to make the argument that America's core is altruistic.

Different implications based on the two different scenarios.

PS: Studied and study economics.

This is why (fiscally-liberal-supported) universal healthcare (and subsequently why Obamacare has flunked so far, because they wanted to promise universal healthcare and had to settle for a crappy healthcare marketplace that only a layer and more red tape to add to the overhead and cost of providing healthcase) and (fiscally-conservative-supported) fair tax initiatives would not work in the U.S.; because much of the economy, social norms, etc. are based upon it NOT being set up that way.

Status-quo is the best fiscal option.

And to everyone complaining that universal income would add to inflation, I'd like to add that I hope you are also not a fan of quantitative easing that we've done that will royally screw the U.S. in the future. We are now in "heavy experimental mode where we don't know what will happen", according to Ivy league experts on economic matters.

Ever heard of inflation? If you give basic income to everyone what happens to the prices of everything? So the ROI on this is extremely limited and the price inflation will kill any benefit.

But still for some people rising prices with real unemployment at 15% is a good thing!

Universal no-income.

Instead of making costs higher by distributing money and thus making it less effective, distribute no money, lower costs and allow people to live more comfortably.