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This seems very different from basic income discussed today. What they essentially describe is an expanded need-based assistance program. US provides a tax credit for very low income that essentially results in negative tax.

The Swiss referendum called for unconditional payment. To me, the unconditional nature is the preserving factor that incentivizes people to earn more, while knowing they are protected. A needs based system results in fear of losing what little you have. Low income housing in extremely desirable areas works in similar manner and traps people, instead of incentivizing them to seek higher paid employment because that higher pay will make them not qualified for the subsidy, yet not able to afford the area.

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Right, I personally find it exhausting how this experiment keeps getting raised up as the gold standard for basic income policy. Mincome is a terrible data point for basic income advocates.

> A needs based system results in fear of losing what little you have. Low income housing in extremely desirable areas works in similar manner and traps people, instead of incentivizing them to seek higher paid employment because that higher pay will make them not qualified for the subsidy, yet not able to afford the area.

Ding ding ding! Mincome is not much different than a restructured welfare program, not a basic income program. At best it's a Partial Basic Income scheme, which is more or less what we have as welfare/benefits today.

Basic Income programs guarantee a minimum standard of living, which Mincome did not. Mincome guaranteed a below poverty level standard of living, which then required people to continue working. It's just like getting a few dollars per hour raise. If this happened for everybody in the economy, it'd just be called inflation and standards of living would remain about the same after adjustment.

To put Mincome into perspective, the amount it paid is about what you get from Social Security (in the U.S.) without retirement savings or investment plans. Ask any retired person living on a fixed income of solely Social Security income how they get on.

Island economics are poor predictors for global economic effects. And any workable UBI scheme has to assume two things:

1) Most of the workforce would drop out and enjoy the minimal, but completely free standard of living it affords them.

2) Labor (which provides the input capital for the UBI scheme) thus becomes punitive. Each person working is supporting multiple people who aren't. Rational actors won't do that (exacerbating #1 above), so to get anybody working, there has to be a forcing mechanism to get them into the labor pool.

Your first assumption is a needlessly pessimistic view of the quality/quantity of intrinsic motivation in most people. By the same token something like "most people would drop out and enjoy the freedom of pursuing their passions, working on what they enjoy and spurring smaller scale local economies etc" might be equally naively optimistic, but I don't think the truth is at either extreme.

Is intrinsic motivation something everyone is born with? Or does it need to be learned and reinforced with positive outcomes?

One potential problem is that people may never really develop an intrinsic motivation to work if they aren't given a push early on. Basic Income may eliminate that first push, which I think is crucial.

Let's say you are 16. If you get a job, the expectations are low and your needs are low, so you take the first thing to come along. That puts you in a mild discomfort that encourages you to seek better opportunities as they come along, and you are likely to develop a strong intrinsically a motivated work ethic.

With Basic Income, your needs are already met, so it's easy to rationalize it away and just say you'll get a job after you graduate from college. By then, the expectations are much higher and your needs are much higher, so you hold out for a better job that may never come because you have no experience. So, you just stay in your comfort zone forever.

>Is intrinsic motivation something everyone is born with? Or does it need to be learned and reinforced with positive outcomes?

Um... If it needs to be reinforced, then it is extrinsic motivation. That's pretty much the definition of 'extrinsic'.

>people may never really develop an intrinsic motivation to work

What is 'work?' Aren't most people happy to sit around socializing? Aren't people happy to sit around posting their thoughts on online forums? Why isn't this work? It produces value.

>So, you just stay in your comfort zone forever.

I guess suffering is what makes life great, then? What is the goal here, if not to let people be comfortable forever? What is the point of having a discussion when you throw out the basic premise?

I could make a very strong argument that regularly beating one's children is the best way to raise them, and rationalize all day long with statistics and claims about how reward and punishment are obvious common-sense drives for human behavior. But at the end of the day, it's those beaten children who make the world a worse place, so what good does it really do? If the goal is to have a world where children aren't being beaten, then surely beating children is not a reliable way to achieve that.

So what is the problem your argument is trying to solve?

Exactly, this conversation is about extrinsic factors. It's a widely held belief that experiences of financial need drive some people to succeed financially. In my view, this is a personal question for every individual and not that useful of a generalization.

I've been struggling with this question myself in terms of how do I pass my drive on to my future kids. A good deal of my drive comes from the experience of growing up in a collapsing country (90s Russia), but I can't really tell what part of it is the fear of not having enough again and which part of the drive is because I love what I do (and given the option to re-do my career, I'd still take the same profession in a heartbeat). The idealist in me wants to think that love for my work is greater, but the realist thinks it's at best equal parts...

With BI, fear won't be as much of a driver, but we are still not talking about "a Ferrari in every garage" kind of BI. It's human nature to always want more. I trust that this nature will prove the "kick".

This is a little rambly, but...

The fact that it wasn't unqualified is hugely important.

I think you're not too far off in knock-on effects if we implement too high a basic income, and for the record I think the Swiss proposal runs significant risk of being too high (although I welcome the experiment). I think, however, that a basic income should be enough to live, but not enough to live comfortably without savings, another source of income, or cooperation.

One thing to bear in mind, regarding poverty levels, is that there's a tremendous difference between having $X while working 60 hours a week, and having $X while putting that same effort into living better.

> I think, however, that a basic income should be enough to live, but not enough to live comfortably without savings, another source of income, or cooperation.

So here's the heart of the BI argument:

Define "comfortably"

Why is your definition correct?

> without savings

Why bother? I'm already earning a living doing nothing?

I don't need to save anything, more money will come. I don't need to worry about retirement, more money will come when I'm too old to work.

I'm going to just throw this out there, I'm guessing if I'm getting UBI I'm probably getting free healthcare. So I don't need to save for that.

Outside of a grand assumption that UBI will somehow propel everybody to the top of Maslow's Hierarchy and enough people will just somehow "self actualize" (despite all evidence to the contrary) and continue to work and support all the lazy layabouts living off the dole, what exactly is the reason I or anybody receiving the UBI would bother working?

What you wrote here sounds like you skimmed my post for things to argue with, rather than actually reading my post. It's far enough off point I'm not going to bother responding to it. I know you can do better - I've seen it.

I'm supposing you're taking umbrage at my ignoring your point about conditional vs. unconditional BI?

Not at all.

What set me off the most is "But why bother [saving]?" The entire point of the passage from which you drew the reference to saving to recommend keeping the BI low enough to preserve enough of a benefit from working or having saved. Obviously, people would bother if they want that benefit in the future without working, and if people choose not to save that doesn't actually undermine anything I said.

I'm sorry, I'm having a brain fart, are you saying that people would save as a mechanism to ensure the BI stay low?

I'm not sure people in aggregate think that abstractly. Though I will say there's lots of evidence that people's personal microeconomic decisions are impacted by macroeconomic conditions so...

That's still not what I'm trying to say, no... Look at how I referenced saving. I said that BI should stay low, and that a comfortable life should be derived from "BI plus something" - with drawing down savings being one possibility. What motivates working people to save, in that context, is the hope of maintaining a higher standard of living in the future when they work less (or on something unpaid) or in the face of adversity. We probably shouldn't expect people receiving only the BI to be saving much - I don't know how that factors into the broader scheme of things, but it doesn't seem to have much impact on anything I was talking about.

In terms of a mechanism (beyond advocacy) for keeping BI sufficiently low: I'd propose (tentatively) pegging inflation adjustment to targeted inflation rather than actual inflation. If the BI is high enough that more people stop working than we can afford, wages and prices will rise and the real BI will fall.

Sorry, didn't mean to be extraordinarily dense.

I think the counter argument is the present state of things. It's not too terribly hard to do small things, none of which are secret, to improve your value and demand higher pay: go to school, get certifications, build up experience, ask for more money, better financial management, etc.

Yet still most people in low-end jobs don't do these things. Anecdotally, I have very frustrating conversations with my own family members and several close friends, who never made it out of being poor, and simply refuse to follow advice on how to improve their lot, then endlessly call me up to complain about how they don't have money. A few of them have even had extraordinary opportunities come up to go to school for free or otherwise improve their situation and simply choose not to do it.

When I think of poor outcomes from BI schemes, I think of my family and friends, who simply would stop working, but wouldn't put their time to other productive or value growing opportunities. Or would continue working as is, but BI would simply be an inflation driver and would result in less effective income from their labor.

I think we probably need to start talking about actual numbers. Over time and on much reflection, I've come to believe (with low to middling confidence) that the optimal value presently falls somewhere between $6k and $15k/yr. In that range, I expect more people to stop working second jobs or overtime than to stop working at all.

"It's not too terribly hard to do small things, none of which are secret, to improve your value and demand higher pay: go to school, get certifications, build up experience, ask for more money, better financial management, etc."

It's harder when you're drained from working and stressed from tight budgets.

I certainly don't pretend that everyone will always make the best decisions, but BI at a sensible level makes it easier not harder.

There's no empirical evidence I know of that suggests that a decent but minimal income stops people working. Certain demographics work like this, often in a limited way. But it's by no means a given across working populations as a whole.

That's pretty much the point of basic income. It isn't just about eliminating obvious avoidable and medieval horrors like poverty - it's about restructuring the job market so workers can provide a useful contribution they have some passion for, instead of being forced into drudge work that doesn't pay their bills or provide for retirement, never mind provide them with an outlet for their passion.

The conservative belief that if you don't aggressively the poor for their poverty they won't work[1], is an outrageous relic of the middle ages and has no place in the 21st century.

[1} Hardly hyperbole by the way, as the UK's Tories have proved again over their most recent term.

I don't know that we disagree, depending on how you're using "but minimal". My recollection is that in the case of Mincome specifically, you did see a reduction of hours worked amongst working mothers, and I expect this would generalize to "people with better things to do" - which is not a bad thing.

"if you don't aggressively the poor for their poverty"

I think you left out a word. Am I right in assuming "punish"?

The sad situation is that most American's don't have nearly enough saved for retirement and most never will. That's why social security actually exists and it's not that great for those that end-up depending solely on that type of income. Essentially, we already have the situation you described without any of the other benefits BI would bring. Here's another HuffPo article that has some very disturbing figures on this: http://www.huffingtonpost.com/2014/10/27/die-than-retire-poo....

If the given individual is ok with the standard of living BI offers, there is no need to do extra work. That's kind of the point. On the flip side, if the person wants more luxuries or spending power, he or she will stay in the workforce, either working part-time or full-time.

The amount of work and effort a person will need to exert will depend on how much better than the base he or she wants to live. BI will undoubtedly result in some inflation, but if managed properly, will prevent poverty as we know it today. Of course poverty in US today is nothing like poverty in the middle ages Europe, so one day people will look at living on BI alone as living in poverty. It's all in degrees of better or worse.

The benefit of BI is that people no longer live in fear of their world collapsing completely if they lose their employment. Today in US, for most people if you lose employment you also lose healthcare. Obamacare is still not there to truly act as a safety net. (Speaking from family member experience.) With BI, the unemployment rate becomes a lot less important, because so long as the capital streams are flowing and proper taxation is in place, consumption won't collapse beyond the minimum level afforded by BI.

In the end, I still believe people will continue to work regardless of BI. Some will drop-out, but enough will stay. It's about empowering personal choice.

What you and every other BI advocate simply ignores (I don't even know why I'm wasting my breath on this) is that people who remain in the labor pool will not necessarily realize benefits from staying in the pool. Increasingly, they will be supporting more and more people who choose not to join the pool. The percentage of money they earn that they actually get to keep will grow less and less because more of it is going out to pay for people who aren't working. Eventually, a rational actor in the labor pool will ask themselves, "why bother?", and will drop out as well. It's a vicious cycle, not a virtuous one.

A working person in a universal BI scheme is not earning BI + a normal job earnings, they're earning BI + job earning - cost to provide BI for non-productive people.

It's that simple and BI advocacy circles continue to refuse to produce an economic model that even acknowledges this simple truism let alone demonstrates how efficient the remaining workers need to be to both cover their increasingly non-working fellows and gain any benefits worth working for.

More likely, and what usually happens in schemes where earned labor value earned is separated from labor input is that laborers become disincentivized. People who wish to work would simply stop working in the formal economy and maximize value capture by working in an underground economy. This creates a negative feedback cycle as fewer and fewer people take part in the formal economy (where the government can capture and redistribute their production to people who aren't).

This rapidly bankrupts the scheme and turns labor into a punitive action by the state. "We need workers producing capturable value, therefore you must work" and the point of BI is quickly lost.

BI advocates are unable to demonstrate why this isn't simply true and why every single time labor is disentangled from incentives the system goes bankrupt except with the vaguest possible handwaivy nonsense and pronouncements that it simply won't happen under their particular version of the scheme because of no particular reasons at all except for wishes and dreams.

And then Mincome is usually brought up somewhere.

BI models must account for labor drop-out, must account for how this disincentives the remaining labor pool and reduces value capture within the labor pool. "Empowering personal choice" is not a valid model.

"Some will drop-out, but enough will stay." is not a model. How many, what percent? Why that percent? What's the impact of various drop-out rates on various actor models? How much does production need to increase on the remaining labor pool to maintain equilibrium? Is that achievable? What happens to purchasing power when most products become effectively free? What about maintaining growth at x,y and z percentages? If new money supply is introduced to compensate, what impact does this have on inflation? What's the delta from the best-case model to the worst-case? How are both of those extreme models justified by observed and predicted actor behavior? What compensation levers does the government have to incentivize labor participation? What's the degree of input in each and the known and/or expected outcomes? How does each lever's outputs change the previous questions output?

I've never even seen so much as an Excel spreadsheet that models the simplest question I've put here. What happens when drop-out is 5%, 10%, 20%, 50%, 70%? Is the proposed BI scheme sustainable? Why or why not? What happens in an unsustainable system? Can unsustainable systems be "fixed" and brought back into sustainability? By what means? What happens if there's not full local/national/regional/global participation? How does the scheme compensate for imperfect participation? Has this compensation plan been modeled and tested under previously identified circumstances? If the system becomes unsustainable, what does failure look like? Can hard failures be corrected? How do we adjust to bring unskilled out-of-labor-pool people back into the labor pool in the event of a lack of sustainment and eventual failure?

The modeling isn't hard, it's just tedious and it has to be done or BI will continue to be the butt of economic jokes. BI needs a body of real thought behind it, not hand-waivy well wishing. It needs a cumulative and unimpeachable story to show that it really is a better idea than the ideas we're working off of now. But BI doesn't offer any of that. It offers wishes and naive hopeful dreams of a global population suddenly achieving self-actualization all at once. It's a nice picture, but anybody can write any sort of Utopian fantasy fiction that makes any sort of crazy idea sound workable.

Here's one: - We all need underwear

- Let's all make underwear

- I've solved supply-demand issues, monetary imbalance, underwear shortages and brought about a golden utopia for all time.

The numbers must work out. Math cannot be fudged by our personal feelings. I've seen HVAC system with better planning documents than any BI scheme.

It's absolutely exhausting to keep explaining this. https://news.ycombinator.com/item?id=8794247

Write an essay about it. You seem to understand it well enough to explain, and care enough to keep explaining in spite of how exhausting it is. You practically wrote half of the essay with that comment alone.

Sort out all arguments against BI to focus the discussion and you could be onto something.

'Increasingly, they will be supporting more and more people who choose not to join the pool. The percentage of money they earn that they actually get to keep will grow less and less because more of it is going out to pay for people who aren't working. Eventually, a rational actor in the labor pool will ask themselves, "why bother?", and will drop out as well. It's a vicious cycle, not a virtuous one.'

There are two things this misses:

1) Some of the funding for BI may come from taxation of land or capital (in the economic factors of production sense), not just labor.

2) Inflation. As people leave the labor pool, it gets more expensive to make things. As the dollar buys less, the basic income buys less, and there is more pressure for people to get working again.

"Inflation adjusted BI drawn exclusively from tax on labor" seems to be what you've considered, but it also seems to be a particularly difficult position in the space of possible policies.

I attempted it once, more as a lead in to a monte carlo tutorial than anything else. The results were not particularly favorable to a BI.

https://www.chrisstucchio.com/blog/2013/basic_income_vs_basi...

https://news.ycombinator.com/item?id=6725096

The response from most of the BI supporters was approximately what you'd expect.

If you count lost benefits, the working poor can have marginal tax rates in some instances over 100%.

http://www.cnn.com/2013/02/08/opinion/mccaffery-marginal-tax...

One potential side effect of a minimum income is to make the U.S. (or any country implementing it), even more immigrant hostile. These programs usually only consider the effects in a vacuum, not with respect to much larger population that wants to get in. Either immigration needs to be restricted, or you have a "lower" non citizen class that doesn't get these benefits from the beginning (ironically perpetuating more inequality). Milton Friedman discussed this fundamental contention between welfare and free immigration, and it's coveted a little here: http://m.youtube.com/watch?v=3eyJIbSgdSE .

The idea of unconditional payment is interesting, and I'm almost on board, but...

1. Is it tax free? If not then it's not equal right?

2. How do you avoid it simply translating into inflation / lower dollar?

3. Does it save money elsewhere to pay for itself, or are taxes increased?

Most suggestions involve increased taxes.

Yes, although generally up to at least mid middle class, the basic income would offset the increased taxes, so you would end up with at least as much take-home. High-income earners would most likely end up paying more though. (I would argue that the societal benefits would be well worth it.)

Some money would be saved by eliminating the current welfare system and replacing it with UBI.

Regarding 1, I'm not 100% clear on what you mean.

Typically the money would not itself be taxed. It would offset taxes and, for those making enough money, could take the form of a tax credit.

Hopefully that covers your question.

Your point about housing is spot-on.

I'm not sure I understand how an unconditional payment achieves any more desirable objectives than an EITC-style negative income tax. Under a negative income tax, a marginal increase in income still results in a marginal increase in take home pay; you can't get penalized by earning more, so the policy preserves the incentive for people to earn more. To me, this seems preferable to an unconditional payment because you're focusing all of the dispersed money on people who need it.

Or, to speak about economic efficiency: you are focusing money on people who will spend it. Doesn't do a lot of good to sit in a rich person's bank account, but if you get the money moving, that's job creation at it's most basic.

Money does not sit in a bank account, it gets loaned out to others and spent.

That's why banks offer "free checking" and other incentives to give them money.

you're wrong. rich people are assholes who swim in vaults of money like Scrooge McDuck. poor people are kind and noble and deserve everything they want because they want it.

or so I'm gathering from all the class warfare stories today. not sure why that's happening though.

I know. It's such a trial being rich. I wish it was somehow possible for someone wealthy to find their way into poverty, so they could enjoy the social prestige and admiration that is the birthright of the poor.

Thank God there are noble folk - like your good self - who will stand up for the interests of those who need it least!

Not only that, but 10x or more money is loaned out or invested than is actually in the accounts. That's why we have financial crises.

An unconditional basic income funded by income taxation amounts to the same thing as a negative income tax (i.e., an income tax system with the possibility of negative taxation). The two are precisely equivalent.