Why Should We Support the Idea of an Unconditional Basic Income?

Partly this has been because I did some traveling (a lot of traveling; fulltime for four years, in a motorhome). I spent a lot of time in places that aren't Silicon Valley or other thriving metropolis. Detroit, Slab City, New Orleans, a variety of rural places. There are people who have been completely pushed out of the legitimate economy or merely scrape by at the very bottom, for a variety of reasons. And, it's not a small number of people. It is huge swaths of the population (as much as 39%, based on the poverty line, but more or less, depending on how you define it). That's not sustainable, ethical, or efficient.

The CEO to worker pay gap has also contributed to my changing view on this. When a full-time (or part-time who holds another job) Walmart worker doesn't earn enough to rent a tiny apartment and pay for basic expenses, while the CEO makes orders of magnitude more, it becomes apparent there needs to be other ways to push the income down. If corporations won't behave ethically by choice, there needs to be outside pressure. Increasing efficiency and increasing revenue has not resulted in improved quality of life for workers; and that is mostly reflected across the board. It is not merely egregious examples like Walmart. Even many "good" companies have horrible pay gaps and little loyalty to their employees (while expecting loyalty and dedication in return).

And, that doesn't really even begin to address the changing nature of work. Many skilled work roles, those jobs that the American middle class was built on, have disappeared from the US economy in my lifetime, and this hasn't been reflected in a subsequent increase in pay or benefits for lower-skilled labor jobs that replaced them (and some of those jobs were not replaced...they just don't exist anymore). All while real estate prices and rents have gone through the roof. So, again, large swaths of the population, the kind of people who could have been middle class home owners in previous generations with reasonable retirement savings, are now renters who live paycheck to paycheck, or worse, live on credit. There's certainly room to talk about why the real estate market is as lopsided as it is. And, there may be room to talk about increasing skills in people who currently work low-skill jobs (though, evidence indicates there are many categories of job that are simply not going to exist in the future). Again, it's not sustainable, ethical, or efficient to have so many people living in poverty.

Finally, we already spend a couple trillion dollars on welfare programs. The increased cost for extending that type of benefit to everyone, while removing the bureaucracy of maintaining the existing programs (eligibility compliance and case workers, etc.), is actually not as dramatic as it first seems.

Based on my experience in the last year working on healthcare.gov etc., I think it's become increasingly clear that the implementation of well-meaning policies intended to separate the deserving from the undeserving ends up adding an incredible amount of complexity and overhead, along with unintentional side effects, edge cases, and bad incentives.

That said, there's no way politically a basic income is going to fly in the US anytime soon. So since this is HN... is there any way to get to an MVP without having a sovereign state to experiment with? Or is this solely in the realm of public policy?

(I asked this a while back on another BI thread, trying again)

This article touches those things, which is refreshing compared to most things written about BI, but I would still like to see a real study.

At the moment lots of western countries, spend billions on welfare entitlement, and billions more administering a complex system, so that politicans can change particular benefits to win votes from certian groups of voters.

Under this system, all benefits are replaced with a single, universal level, so politicans can give rises either to everyone, or no one. (The only additional benefits should be for those with serve disabilities).

You also lose the withdrawal issues of going from out of work, to in work, you can get rid of things like minimum wages, as their not needed any more, and you can support a more flexible labour market.

Politicans cannot fight over, how particular benefits can change, say increase pensions, but cut unemployment.

If you also merge this into the tax system, with a flat tax as a negative income tax, it is even more efficient.

And eventually you also get what alot of people on the right want - a smaller, more efficient goverment, while doing what alot of people on the left want.

To me there are only two real risks. First the idea that this will lead more people to stop working instead of less, which would be counterproductive. And I find it worrying that the counter-argument is "people are working too hard anyway". It is impossible to guess what would happen but as all former communist countries know, it is not fun to have grand economic ideas experimented on a live population.

The second risk is that this could work in a closed society like Japan. But most western countries have mass immigration and such a system wouldn't survive very long the abuse it would inevitably trigger in an open society.

First, I don't believe the idea of human rights allows a state to tell people where they are allowed or forbidden to live.

Secondly, I don't believe immigration controls are ultimately feasible. In the US this is obvious in the big population of illegal immigrants, other countries are also discovering that they can't really stop people from entering and that hunting down and deporting hundreds of thousands of people is harder than it looks.

Thirdly, I don't believe a society can save money by withholding social welfare to someone who lives among them. The cost in health care, crime, and lost potential may very well outpace the savings.

I also believe a UBI would force countries to try and tighten their immigration controls. The problem is not so much that the immigrants wouldn't ultimately benefit that society, but the upfront payments and increased financial risks are just scary as hell.

Though not sure if people would support that, once they saw the bill for their land. Changing status quo is hard.

Though I would suggest that universal free healthcare is some form of basic income. Maybe let's do it first?

Another less hardcore version is to expand http://en.wikipedia.org/wiki/Earned_income_tax_credit

E.g. Tax rate is negative on initial amount. E.g. You earn $2k and get additional $200 tax refund.

But let's simulate how it would look in the real world. I think mindless consumerism would go way up, especially in the lower classes. Advertising in all media would simply encourage this. The well-off would buy stock in Walmart and low end electronics makers with their extra income, thus capturing the income of the less savvy. Without local manufacturing, much of the distributed income would go to China. Paternalism and its religious affiliates would rise up again to capture the income of the not-yet-emancipated (by that I mean women and children). With perceived abundance and linear income, the birth rate would rise.

So I think we need to solve some of these issues first. Education should be the beneficiary for the first trillion in new taxes. Hopefully that could mitigate the consumerism and prompt more entrepreneurialism, as well as reduce the paternalism and birth rate. As mentioned, doing universal health care right would amount to the same thing as a universal income as well (more security, less worry, more productivity). So I wonder if those two aren't bigger priorities.

Basic income will make less poor but more slaves. Slaves that will be dependent on those (I assume it's the state) who define the exact amount of that uncondional income. Since a huge part of the population will be out of the "producer", thus the producer will have more power.

What must be done instead is to make sure power doesn't get concentrated. But this means less efficiency : one big optimised company is surely more efficient that ten smaller ones. With less power, the workforce can still negociate, the workforce can still share the remaining work, those who have no job still have a chance to get one if they want/need to. With basic income, there's no need to do that anymore...

So I don't like that basic income.

For example, there's a lot of unemployment in my country. People gets some allowance to live. The problem is that the lack of work is not acknowledged => those people are stigmatized. Anyway, they do get an allowance, kind of your basic income. The problem is that because of the unemployment, the employer are in a very strong position to pay people less (since many do want/need a job). So work valuation diminishes...

Competition is the problem, if companies would compete less, then basic income could work. There would be more space for choice : do I work or not ? can I share my work ?

Basic income means : let's detach ourselves from the consequences of competition.

1) Frugal. 2) Responsible.

I just don't have that much faith in (roughly) half the population. What happens when people have too many kids and are still too impoverished? Is there going to be a "reasonable limit" to the number of kids you can have? Women could have as many as 20 kids or more. Is that really going to work? What happens when they are drug addicts (or worse free-to-play video games addicts) who cannot control their spending?

For me personally I love the idea of UBI, but I just don't think that it can work on a practical level. The examples that explain how to generate the required money to pay for it don't seem very feasible to me. You cannot add VAT. That is borderline "perpetual motion machine" logic right there. At the most basic level you will just have to tax the wealthy more one way or another. That is it. The only option. The question is: are they ok with that?

Having said that, last week I read through an analysis piece -- 6-8 page pdf -- that I found on a financial site. I found out some interesting things that supporters don't emphasize.

The problem, as I understand it, is that UBI is fine in theory and as a high-level idea. Once you start actually thinking about applying it? The words could mean dang near anything. Is it across the board? Are there exceptions? Would you use a reverse income tax, direct payments, or other mechanism to deliver it? What sorts of incentives does it provide to the working poor? If you really wanted to eventually replace hourly occupation, wouldn't it make more sense to begin providing it to those who have worked their entire lives? Begin direct payments to retirees and then slowly decrease the retirement age as the years pass?

Those are just questions I made up after reading the article. Apologies if I botched it. But I was impressed with the fact that there is a ginormous gap between the slogan of UBI and whatever it actually might end up becoming. A big enough gap that politicians could say they support it and actually give you pretty much anything. There's also not a huge amount of real-world data here.

So my position is "cautiously optimistic". Let's do some limited experiments with this to see how the real-world politics play out and what the difference between the PR package and the actual deliverable is. In the U.S., the states have traditionally been the "laboratories of democracy", but if folks don't like that, there has to be other ways to do a bunch of limited trials.

What I am not in support of is some huge national movement built around a slogan where I'm forced to make a yes-no decision for the rest of the citizenry. Here's hoping it doesn't play out like that.

The whole whole idea is stupid.

IN FIAT MONEY SYSTEMS (USD, CAD, JPY, AUD, CHF, etc.) FEDERAL DEBT IS PUBLIC INCOME. FEDERAL SURPLUS IS PUBLIC DEBT.

- the System (corporations / politicians) will never allow it

- we're on a planet with limited resources and all economic theories fail to acknowledge that

It is good that we start to discuss such ideas.

This is the core of this issue: unconditional basic income is a very expensive kind of transfer. Even the vast bureaucracy required to ensure money goes to those who need it in a regular welfare state is a lot less expensive than a basic income reform.

So they produced bread, but then there were shortages? This doesn't make sense.

There is something that we could call "The Central-Planner's Dilemma".

People need shoes. Hence, there are people who will be looking to get into the business of supplying shoes. If you find a way to get shoes, and then sell them for more than it cost you, you can buy nice things and that impresses the ladies. You get entire firms dedicated to small problems like shoes for kids, business shoes, variations that suit people with wide feet. Market economies are like the mold on your bathroom ceiling - they just happen.

In Russia, the government went to great lengths to stifle that dynamic. They said: all people will need shoes, so the government will supply shoes to meet their need. Everyone will work together to give the government all the resources to do this. If you try divert resources from our project by getting into the shoe business, we'll shoot you.

So it's a new game. Now if you want to get the ladies, you need to become the resource allocation guy.

But let's assume that you are the planner, and that your motives are pure. You're a really good guy, and you do this for the sheer love of people having shoes. Here's the Dilemma: how do you convert the need of the people to the reality of the goods you're getting to them. This is crazy difficult.

To start with, how do you get signal about what the people need? This is hard. You could have a shot at it, by judging birth rates in regions, and getting height variation. You could send out teams to measure foot dimensions and then run statistical variance on sizes.

Then you'd needs to communicate that intent to the factories. And then the factories need to execute at producing the things that they should be producing. And then you need to somehow get the goods from the different factories through to the correct regions.

You're doing all this through a fog of politics, because jobs in resource-allocation are the only game in town, and everyone wants a piece of it.

The Alan Greenspan biography includes a neat section where he got to meet /the/ Russian central planner after the thaw. As in - the guy who sits in the room and decides how many shoes to produce. He describes a complicated mechanisms he set up to plan things. It's a good read.

That's a pretty steep price tag for a thousand dollars a month.