During Brexit, people in job-starved areas of UK were reported as resentful for receiving handouts. They wanted gainful employment and their dignity back. You could have corporations foot the bill for basic income and people with certain values would still not want it. The image of being a breadwinner is so deeply instilled in some people that for them not being that, triggers mid-life-crisis: a depression, sense of meaningless existence, addiction, etc. Employment's bigger role is not just to provide income, but to keep people's minds busy and balance dopamine and add more meaning in their life. We have to provide solutions for all of the pieces of the puzzle if we want rapid automation.
Creating jobs is one thing, but creating meaningful jobs is something completely different.
In communistic days in eastern europe, everyone was employed, but most people had a lousy job, that involved very little effort.
The first time i came to the US, i got the same feeling, lots of meaningless jobs (lift boy, parking lot attendant, grocery store bag filler) that i didn't see in the Netherlands.
Are these meaningless jobs really better than universal basic income?
At least with UBI people can decide for themselves how they create a meaningful daily activity.
Street promoters make me sad. If they can find no job they better stay at home and learn something new, but they have no time for it, so they are stuck doing useless, maybe even harmful, work.
> Street promoters make me sad. If they can find no job they better stay at home and learn something new, but they have no time for it, so they are stuck doing useless, maybe even harmful, work.
If these people really have such a large earning potential if they were just learning something new, why not let coworkers get together and finance a fund: The worker (let's call him John Doe) will get his existing income for, say, 2 years, financed by the coworkers together. John Doe on the other hand is of course obligated to learn something new (what exactly is agreed upon beforehand). After these two years for the next, say, five years John Doe has to donate, say, 40% of his gross income back to the coworkers who financed him this opportunity.
Both sides should be willing to agree on such a deal: John Doe gets his opportunity to learn new things and (hopefully) get a much better job afterwards and his coworkers will (hopefully) get a lot more money back than they originally invested.
These contracts are really hard to enforce, and is essentially selling equity in yourself. If you sell 100% of your own equity, that'd be pretty much slavery right? Some people (maybe justifiably) feel very uncomfortable with the idea of selling their own future equity. For one thing, it reduces the incentives for someone to work hard.
Yale did something like this in the 70s and finally killed it because of issues with how it was structured. Also it felt really unfair to high wage earners that they were sometimes paying multiples of what their tuition originally was.
> For one thing, it reduces the incentives for someone to work hard.
If you work harder, you will still have more money - that's what % is about.
> Some people (maybe justifiably) feel very uncomfortable with the idea of selling their own future equity.
If they have a problem with that, then they should negate something like "40% for every gross dollar over 1000 per month". You are
> Also it felt really unfair to high wage earners that they were sometimes paying multiples of what their tuition originally was.
That's why I wrote "coworkers", so that it is not a "poor workers against big bank" scheme but "poor workers invest in one of their peer" - this is a lot more at eye level. If the coworkers agree to less - fine. If you are more on the social side: Why not simply invest the, say, 40% into financing the education of the next "poor worker"?
People in other societies do this all the time -- entire families in China, for example, will pay in invest in others' education or pay for them to emigrate to the US, with the understanding that if the person succeeds they will bring over other family members or send back money.
But do coworkers really know and trust each other so well to do this without enforcement mechanisms? Lawyers are extremely expensive, so while you theoretically have recourse to the law, in practice even drafting an airtight contract can easily cost tens of thousands of dollars.
Again there's two problems: cultural (I think to most Americans it's a blow to pride admitting they need help from others), and also enforcing 'percentage of paycheck' contracts is difficult. Just see how much trouble people have enforcing alimony or child support payments, even when the case is 100% legally clear.
> People in other societies do this all the time -- entire families in China, for example, will pay in invest in others' education or pay for them to emigrate to the US, with the understanding that if the person succeeds they will bring over other family members or send back money.
Indeed I had this in the back of my mind when I suggested my idea.
> enforcing 'percentage of paycheck' contracts is difficult. Just see how much trouble people have enforcing alimony or child support payments, even when the case is 100% legally clear.
Alimony and child support payments are forced upon them from above - this is nothing that anybody would willingly agree to if he/she could choose freely. On the other hand: Getting financed to learn something new is something people would willingly agree to. And if after that they earn more than before even after "donating" the 40%, they are still better off than before.
You need a really big group of people to make that happen, because there will be failure cases at every stage of the process. In fact, you might even need an entire country to buy in.
Which is basically a description of what happens when countries provide free uni education...
* Student loan is "poor student vs. large bank". My suggestion is "peers finance peer".
* Student loan have to be paid back completely (with interest, of course). In my suggestion you pay back a defined percentage of the gross income for a defined number of years. So the risk that the person will only get a badly paying job is not on the person that is financed, but on the financers. This in particular means that the person taking the "loan" will avoids the risk that he will need many more years than originally anticipated to pay back the "loan".
I've met someone who spun a sign for a living... he was a huge stoner... I love weed, but he clearly smoked too much of it while his brain was still developing and he could barely hold a conversation... Now... maybe he was self-medicating or whatever... but the point was he failed out of high school, failed out of a few jobs... and then ended up spinning a sign because he really had no meaningful skill to contribute to society. (And I think he failed at showing up to work so he lost that job eventually...)
I suspect most people who are in really shit jobs are there because they have issues... they can't show up on time, they don't follow employment rules, or they have something just wrong with them (they are sex-offenders, or have untreated behavioral issues or whatever)... not the sort of people who should be empowered to just sit around. I will go so far as to say nobody who really has potential ends up spinning a sign for very long... they use the job to cover their rent, and they find a way to get a better job.
Anyway I don't want to come off as against a UBI, I but I've never met someone who benefited by sitting around doing nothing. I think it's bad for people to be lazy -- like fundamentally brain-rotting to sit around being idle. I like the idea of a UBI that's tied to doing something... anything... getting outside and picking up trash in the road ditches even... or getting vocational training (which we should find a way to make free)... or getting mental health treatment... Prove you have a regular paycheck, or prove you are clocking in 30 hours at some "just move your body" type of approved activity every week to qualify.
At any given time, some fraction of people are going to be burnouts. That's just a fact. I think they still deserve a baseline of wellbeing, without judgment. If they use it to better themselves, great. If not, oh well. But we spend so much time and effort trying to pick the winners rather than simply giving people a minimal foundation.
For those of us with work ethic (the vast majority of everyone, to varying extents), our extra effort will be rewarded by the market, if we do something that other people find valuable, or intrinsically, if we're just doing what we love.
I think UBI have a hard time gaining traction in the US. You're asking me to pay higher taxes to have an outcome where someone can actually do less than they currently do to contribute to society.
UBI is a very interesting concept, but in order to sell it you'd have to have a phased approach... one of the phases I think would have to include some sort of checks and balances.
While we are making recommendations about what people with issues should be doing with themselves, let me add, on the other end of the spectrum - overconfident, mindlessly ambitious characters in society, should be sent off to explore the deep sea, climb mountains etc. So that whatever random goal they are chasing has minimal impact on society at large.
Those things weren't created primarily to give people work, they were created to fulfill demand for electricity and transportation, respectively.
If no one needs to commute to work in Manhattan, then there is no need for a Lincoln Tunnel. If no one has business meetings or disposable income for leisure travel, then LAX and LaGuardia would be idiotic.
We do see this kind of stuff - huge infrastructure projects with no users - in China.
>Those things weren't created primarily to give people work
They absolutely were.
They were created under the auspices of the Public Works Administration (originally Federal Emergency Administration of Public Works) - part of the 1933 New Deal:
"Functions: Administered a comprehensive public works program to promote and stabilize employment."
>If no one needs to commute to work in Manhattan, then there is no need for a Lincoln Tunnel. If no one has business meetings or disposable income for leisure travel, then LAX and LaGuardia would be idiotic.
That does not change the fact that these infrastructure works were created primarily to give the unemployed jobs and wouldn't have existed without it.
>We do see this kind of stuff - huge infrastructure projects with no users - in China.
Some of the infrastructure is like that but most has enough users to justify its existence. Their infrastructure-building binge isn't crazy. Our intentional lack of infrastructural improvement (which is entirely about artificially throttling employment and wage growth) is crazy.
Examples of work more for work's sake might be landscaping or cleaning up streets. There are loads of rest areas or urban median strips/verges that look really awful worldwide. We could easily give people some responsibility for maintaining those.
That's not really a fair response to the parent's comment, but I suppose the parent's comment was entirely charitable to the proposed hypothetical either.
A more rigorous question with which to start (though maybe a bit leading...) would be:
Would you rather pay qualified labor force participants to do labor/construction/civil engineering, or would you rather pay the same number of qualified participants to start high growth technology companies?
The nice thing about this question is that it lends itself to empiricism - we can figure out the most rational answer by looking at the ratio of successes to failures in each category of achievement. To put it very precisely: at what percentage of successes out of total attempts are we willing to choose to fund extremely rare but huge successes that employ a lot of people over very consistent but modest successes that employ only the workers and a smaller ongoing number in the long term?
I haven't actually done the math, but my intuition (which could be wrong!) is that it makes more sense to pay for people to e.g. fix America's insanely expensive and inefficient transportation system than to pay for them to sit in a garage and try to "innovate." Then again, you could argue that America's transportation projects are inefficient and expensive because they support an elaborate jobs program already :)
> That's not really a fair response to the parent's comment, but I suppose the parent's comment was entirely charitable to the proposed hypothetical either.
That was the point.
> Would you rather pay qualified labor force participants to do labor/construction/civil engineering, or would you rather pay the same number of qualified participants to start high growth technology companies?
To which the answer is almost certainly, both. Because we need roads and infrastructure, but we also need a safety net, and they are not the same thing.
> I haven't actually done the math, but my intuition (which could be wrong!) is that it makes more sense to pay for people to e.g. fix America's insanely expensive and inefficient transportation system than to pay for them to sit in a garage and try to "innovate."
Literally starting a multibillion dollar company is obviously not the one most people are going to do. But a UBI also lets you quit your terrible job and still pay rent while attending community college, so you can get a better job tomorrow. Or use the safety net go to a new place where you're more likely to find better employment opportunities. Or start a normal small business that nobody ever expects to be Apple or Walmart but after a couple years will be able to pay you a middle class wage.
And the best part is that you have self-interested people figuring it out for themselves.
How do you guarantee a non-terrible job to people with minimal skills?
And how do you finance it? With a UBI you don't have to pay as much because people can supplement it with an actual job even if pays less than current minimum wage, and everyone who works is offsetting part or all of their own cost by paying taxes. 100% of people can collect the UBI because most of them will still be working and paying taxes, and if they don't it's only because the amount is too high.
What if 85% of people choose the "basic job", and the only way to change that is to either make the "basic job" degrading or have it pay less than a living wage?
>How do you guarantee a non-terrible job to people with minimal skills?
Don't overwork them, don't be unreasonable towards them, don't disrespect them and pay them a living wage to do some sort of meaningful work (e.g. care work).
This isn't that hard. The US has done it before.
>And how do you finance it?
There's a hundred different ways.
>With a UBI you don't have to pay as much
You have to pay more because it goes to everybody instead of just the unemployed and you don't get anything in return for that money.
>What if 85% of people choose the "basic job"
That's kind of like asking "what if programmers all gave up their jobs at once to become cleaners?".
> the only way to change that is to either make the "basic job" degrading
A "basic job" can establish a floor on job quality and wages. Private employers will respond to this market force by paying more and treating people better and they will complain bitterly about it.
I'd be happy enough if there were no apple. Overpriced crap, reality distortion field and an egomaniac running a wage fixing cartel operating the whole thing. No thanks.
I'll take some high speed rail though, please. Perhaps 100,000 new affordable apartments in New York and San Francisco too. Unless you think that there's no need and people wouldn't want them?
It's not actually possible to solve it the other way anyway. It's not 1929 anymore. Modern construction jobs require trained workers with trade licenses who demand middle class salaries and benefits. That is a lot more expensive per-person than a UBI.
So if you have a legitimate project like that, go hire some of those people and do the work. But what about everybody else?
If you mean UBI and a job guarantee, I suppose not, however it's going to cause inflation to spike pretty high.
>It's not 1929 anymore
It actually kind of is. Wages have stagnated, the wealth of the 1% has ballooned, infrastructure is crumbling and the far right is on the rise.
>Modern construction jobs require trained workers with trade licenses who demand middle class salaries and benefits. That is a lot more expensive per-person than a UBI.
Just guaranteeing paid work to the ~30% unemployed is far cheaper than giving a stipend to every person in the United States.
Even if you include the cost of materials it's not going to come close.
> If you mean UBI and a job guarantee, I suppose not, however it's going to cause inflation to spike pretty high.
Not a job guarantee, just normal government spending on infrastructure projects, as compared with the underinvestment we've seen over the past decades.
> It actually kind of is. Wages have stagnated, the wealth of the 1% has ballooned, infrastructure is crumbling and the far right is on the rise.
What I mean is we're no longer willing to put unskilled workers in dangerous jobs with no training and stand by while they get killed or kill other people because they don't know what they're doing or they lack the disposition to work safely with industrial equipment.
> Just guaranteeing paid work to the ~30% unemployed is far cheaper than giving a stipend to every person in the United States.
Only if you count the taxes someone "pays" but immediately gets back as a UBI as "costing money". If you use the same accounting that gets used for means-tested programs, the "cost" of a UBI turns negative for everyone making a below average income and costs about the same as existing means-tested programs for people with above average incomes (depending obviously on the amount of the UBI).
Gates and Zuckerberg were literally going to Harvard on trust fund money, no effort at all was required of them, butthey had the privilege of resourceful parents with high expectations. If we replace resourceful parents with high expectations by a resourceful society with high expectations, the children that have shitty parents wont have a choice but to do better, that's what happened for my father.
Yes, but it depends on how people see or interpret their jobs. If you really see meaning in bagging someone's groceries, then it's valuable. If you see meaning in giving people the stop/go signal at a garage in Japan, then it's meaningful.
If one goes to Japan, one might think one sees a number of geriatrics doing needless or meaningless jobs --on the other hand, if you look carefully, for many of these people that simple job gives them meaning in life. They actually take pride in doing their job dutifully and faithfully with pride --things someone from the US would scoff at or think ridiculous. So, it just requires a re-framing.
"In the workplace, almost everyone had a job. Wages,however, lagged far behind those in the Western democracies. A common joke was, "They pretend to pay us, and we pretend to work." But rents, goods, and services were far cheaper than in the West."
>Wages,however, lagged far behind those in the Western democracies.
Eastern Communist states were essentially reduced to rubble after WW2. This did make building to the same economic level as an entirely untouched America, or even West Germany (which was deluged with aid and given preferential trading terms), something of a challenge.
You are implying that this was dictated by political rather than economical reasons, but that may be not entirely correct.
> we pretend to work
This is true - for some workers. Thing is, the Western society in not and has never been different in this regard. And, some of the "job creation" policies could exacerbate the problem even more.
Common knowledge, see earlier link, some googling will easily give you more info.
Lots of older people in Easter Europe think communistic days were better and wish they could go back: state provided housing, education, healthcare and a job. Not great, but basic (as in basic income).
You don't have to "believe it". Just buy and read a few historical accounts, and/or biographies of people that lived through those regimes.
In wasn't that a job in "communistic days" was different from a modern job, it was that in those days productivity wasn't that high anyway neither was purchasing power, so there was little use for jobs to make things or offer services that people couldn't afford.
All the same, everybody was supposed to automatically have a job, hence the creation of tons of mostly idle bureaucratic job positions.
At the heart of the communist was the belief that the entire country with all its people can be managed and orchestrated. This translates to a very static universe, where you are born, given an assignment and are suppose to stay in the same place until you die or the state changes their mind. Everything was a number in a spreadsheet, how many doctors given are will have, how much bread you need to bake and how much toilet paper shoul be produced. The last one turned out to be the symbol of communism failure, they did some math and decided X amount of toilet paper should be produced, but sadly people wanted more. Huge shortfall of toilet paper began and it started being a valued asset. Such over-planned world doesn't really work well with human ambitions, it doesn't really matter if you job is meaningful or not, having very little choice will likely cause stress and make you unhappy. To make things worse promotion was only possible if you were a party member and was seen as valuable and loyal. The whole thing was more than just automatically giving people jobs, it's been about total control, job creation was one of the tools. I don't think it's easy to directly compare it with UBI if someone wants to make such analogy. UBI doesn't restrict you the same way, it might even be seen as opposite - liberating people from being forced into low paid jobs where you generate very little value and it's hard to progress your skills and income.
Because the state created (and paid for) jobs to make sure everyone's nominally employed. It was essentially a form of UBI, although there were different levels and amounts for different people.
I think that's one of the biggest open questions with UBI. What percent of people would use UBI to do productive or self-improving works vs those that solely play video games, watch TV, and feel like life is meaningless? I think psychologically, people need something to do with themselves. However, a counter argument is that many of the people that UBI may benefit the most might have jobs that they loathe.
I'd love to see a review of the impact of work and UBI on human psychological well-being. This is definitely not one-to-one, but it would be interesting to study people that inherited fortunes so they would never need to work. How many chose a life of leisure? For those that did, what is their mental health like? That population is much more privileged and probably better educated than the average citizen that would get UBI, but I think it might give some clues.
I believe basic human nature includes curiosity. Living in a society means one will naturally seek the appreciation, acceptance and respect of their peers.
I think these alone will eventually lead most people to contribute something useful to our world one way or another.
Mentally and/or physically exhausted after a long day of performing a meaningless job, or unable to get one and living off welfare, despised by the rest of society, no wonder one tries to escape reality by playing video games or watching tv excessively. Actually, escaping into 'work' is no more healthy.
But when everyone enjoys the security of having their basic physiological needs satisfied by default and not knowing what the hell you're supposed to do is a feeling widely shared and accepted by society, the situation is completely different. It's an enormous community building force.
Additionally, we could build or designate community places and workshops where people get together to converse, build, play, create, cooperate to further help everyone find a direction, or find themselves.
>I believe basic human nature includes curiosity. Living in a society means one will naturally seek the appreciation, acceptance and respect of their peers. I think these alone will eventually lead most people to contribute something useful to our world one way or another.
As someone living in a small third world welfare state, I can't help but laugh at the naiveté that can lead someone to believe something like that.
In here, and I don't believe the rest of the world can be that much different, the overwhelming majority of people with their basic needs covered by the state dedicate themselves to a routine of TV, social media and other social rituals of all kinds, all devoid of intellectual pursuit. The few who do look into self-improvement are the same ones that have done it regardless of the economic condition of the lower class of their time; most of this very small minority managing to make it into the middle or upper class with or without welfare checks.
>In here, and I don't believe the rest of the world can be that much different, the overwhelming majority of people with their basic needs covered by the state dedicate themselves to a routine of TV, social media and other social rituals of all kinds, all devoid of intellectual pursuit.
So what? Why is the purpose of other people's lives to serve your idea of nobility?
Wow. That's a huge straw man if ever I've seen one.
I will entertain you, however:
We aren't talking about anyone's "life purpose", whatever the hell that means.
We are talking about having the state (and for a quick reminder, that means citizens producing value, not a magical entity that pulls money with value out of hat) fund people with no desire to create value. Not just people going through a rough time, not people unable to give back, but people who will take, yet willingly not give back. They're free to do live their lives as they see fit within the law, but no one can expect for the rest of society to fund their chosen lifestyle.
If you feel like they deserve income, you can gather like-minded people and open a charity that does just that.
EDIT: Those chiming in with a downvote, I'd appreciate if you explain where I'm so wrong.
Well, I didn't downvote you, but I do feel like your comment ignores the elephant in the room. Your model ("takers rob makers with state") implicitly assumes something like a Labor Theory of Value, in which "value creation" always and only requires that a human being perform painful, undesirable labor. Within that model, the 20th century gave us all sorts of debates regarding job guarantees, job-creation programs by the government for stimulus, privatization, socialization, et cetera.
The whole point of proposing UBI, however, is that we now (almost) universally agree that the LTV is just plain false, and much "value creation" actually involves machines doing the work. We believe that if we impose work requirements by force on humans by depriving them of machines of their own, forcing them to compete with machines to survive, there will be immense human suffering for completely arbitrary reasons.
UBI is thus the moderate proposal to deal with the issue. The radical proposal is to give everyone whole or partial ownership of enough machines to supply for themselves, perhaps through some collective-ownership arrangement like a cooperative, commons trust, or the state.
"The few who do look into self-improvement are the same ones that have done it regardless of the economic condition of the lower class of their time..."
Citation needed. Otherwise, it's not even anecdata. If your perspective from "...a small third world welfare state..." is to be informative, please expand and explain.
While it's no comprehensive study, it is very much anecdata, for it's how my parents, parts of my family and plenty of people I know have managed to climb out of poverty of all degrees before there was a welfare system. Hunger and work did not deter them. The word "mutante" (mutant) is often used to describe this kind of people, for how they decide to break the norm despite the environment.
Growing up in a poor/lower middle-class neighborhood I haven't seen this change for the better with the welfare system. But I have seen people quitting their jobs to qualify for welfare.
As I mentioned in another comment, I'm not opposed to a well-designed social safety net for those who can't get back into the workforce nor train themselves to do so, but rest assured, UBI or anything that allows people who are perfectly capable of working, the possibility to leech off the welfare system (read: their fellow citizens) permanently without giving back, is nothing short of a disgrace for society.
Are you suggesting the majority of those people are completely, utterly useless?
Useful contributions don't necessarily have to be intellectual. They may be able and happy to provide art, joyful company, social skills, physical assistance (eg. getting groceries, moving equipment) or other support to those in need.
That moves the goalposts. Sure, I can't think of a human being that can be categorized as completely useless, that doesn't mean that an UBI program is sustainable for society just because "no one is absolutely, completely useless".
In fact there is no shortage of individuals who, despite being outside of the category of "useless" by technicalities, dedicate their state-funded free time in making society worse.
A couple examples just from my last 2-day visit to a relative in a neighborhood with a high number of welfare recipients: People with houses crumbling down, but with huge sound systems running at full volume at any time of day or night; or those in the same conditions getting stolen motorcycles (buying with taxpayer money from thieves or stealing themselves) and racing in the streets or parading around with their silencers removed.
Doesn't stop there either, when our welfare system was first established, there were plenty of cases of people quitting a productive job to slob around. What for many in first world countries sound like "conservative scaremongering" is reality for us.
Mind you, despite all this I'm not against having a social safety net (albeit the one we have I believe to be an absolute disaster), but UBI is a terrible option that cannot work outside of carefully selected groups of people.
Those may be the very same people who play music, build stages or give water to overly wasted kids at summer festivals. Or they might fix your motorbike better and cheaper than your local mechanic if you asked them to.
Or they might not. Either way, I wouldn't consider them any more harmful to society than those probably millions of people working very hard to shove ads into peoples faces ever more efficiently, or those bankers and accountants looking for loopholes to effectively steal from others. Or corrupt politicians whose only concern is filling their pockets. Or I could name a bunch of other mostly useless leech industries.
My point is, I think you are judging these people from a faulty perspective very much ingrained into our society, where one's usefulness to humanity is primarily judged based on how much money they can get their hands on either by stealing from others or selling their freedom to someone willing to pay for it, regardless of what value they actually contribute (if anything) as long as it's considered legal and they do so as part of the so called "workforce".
UBI would fundamentally change that by allowing people to spend time doing things they consider useful, rather than working for whatever gets food on the table, however useless it may actually be. Of course, for that to work, people need to be open to other people's ideas of useful and the currently dominant view of measuring usefulness in GDP or whatever may become obsolete.
Interesting. As someone who has never been there, I always had a positive impression of Uruguay, and have even remarked on HN that I'd like to live there for a while. What I've read about Uruguay has all been very positive and by many indicators it seems prosperous in comparison to other countries in the region. What's your impression of the country as a whole?
We've enjoyed great global PR, that's for sure. A good bunch of it undeserved.
There was a huge uproar about us legalizing pot. While you can now grow your own cannabis, the most important part: legal sale, is yet to be finalized despite plans starting 5 years ago without power changing hands.
There was another huge PR boost with the story about "Uruguay's poor president José Mujica". His administration ended as one of the worst ever experienced in the country's republican (as in Republic, not the US party) history. Corruption hit new peaks with public enterprise bleeding money into party officials' pockets left and right, something we're still paying via "tarifazos" (annual increases in costs of public infrastructure such as electricity, fuel and telecommunications despite their production costs going down).
Reality is that moving here can be suicide for many, as we're one of the most expensive countries to live in of Latin America (and the world) when you account for salaries. We have a growing culture of crime with a government that's disinterested in fixing it, and often tries to downplay it. Import tariffs are insane (usually 150%+ over retail price), and while citizens can make a few international orders under 200 USD without being taxed (used to be 5, then 4, now they just changed it to 3), it helps little and I expect they will scrap them altogether next year.
And oh my god the bureaucracy. It's the only thing more central to the Uruguayan identity than mate and football. The past couple of leftist administrations and this current one has been all about e-government, yet most interactions with the government will be in a crowded office after waiting an hour waiting for your number to come up on the screen. The little web infrastructure we have is inconsistent across public enterprises, is ridiculously insecure (national ISP, Antel, has a max password length of 8 alphanumeric characters; all sites are made in hacked together PHP and/or ASP.NET by FullStackOverflow programmers and one determined black hat could probably stop the country for a while in a boring weekend) and despite the government's interest in tracking all financial transactions, they're in no rush to implement online payment.
My SO starts studying engineering this year, and with me being a software developer (meaning remote is an option and there's offerings everywhere), our hope is that either a miracle happens or we fuck right off after she gets her diploma. We have a deeply ingrained cultural and political problem that will not allow the country to get out of this hole. But then again, Donald Trump is the leader of the free world; it's fair to expect the unexpectable when it comes to political change.
There was a job guarantee program instituted in Argentina (called plan jefes e jefas - meaning head of household). The jobs were typically care-style jobs (looking after elderly, etc.). The government then tried to shift the women into a sort of UBI (called Plan Familias) by offering more money than under Jefes
Unsurprisingly the majority of women took the money. Perhaps more surprisingly (to advocates of basic income, anyway), they took the money and continued to do the jobs "for free".
When I was made unemployed, it was the lack of money that made me feel undignified. I couldn't feed my kids and had to as for handouts.
UBI would have been amazing. I would have spent the money on food, shelter and heating. I would have spent the time writing software and trying to start a company.
This is a persistent and pernicious misconception. UBI is intended to increase people's autonomy, but manly by eliminating the poverty trap. Too many people live off benefits they would lose if they took a low paying no job, so are better off or only marginally worse off not working. UBI takes that problem away to that everyone would always be substantially better off working. It would act as a major subsidy for low paying jobs by ensuring even quite low pay would represent a major improvement in marginal income, thus making it cheaper to hire unskilled labour and increasing the number and variety of jobs. It's not intended that a significant number of people would only rely on their UBI.
In the UK the poverty trap is very real. A young person with a family in social housing and on benefits has to jump right up to something like average income to be better off. The penalty for getting a job is colossal. UBI would mean that if they could get work for even 4 hours a week it would represent an improvement to their income. It is an incentive to work
This was in the context of talking about people playing WoW all day every day. That's not the sort of lifestyle UBI is intended to enable or encourage.
and vehicles were never intended to enable or encourage teenagers joy riding or drunk drivers, but NO ONE is going to seriously argue we should get rid of vehicles as a result.
It matters because of the potential impact on society? Part of the promise of UBI that proponents often talk about is unleashing more human potential that's currently stuck in some corporate grind.
And while playing WoW all day isn't exactly the worst thing, I could see issues if that turns into people getting depressed. MMO addiction isn't really healthy.
> And while [sitting in an office] all day isn't exactly the worst thing, I could see issues if that turns into people getting depressed. [Office work] isn't really healthy.
> And while [bagging groceries] all day isn't exactly the worst thing, I could see issues if that turns into people getting depressed. [Menial labor] isn't really healthy.
> And while [driving an truck / bus / uber] all day isn't exactly the worst thing, I could see issues if that turns into people getting depressed. [Sitting all day] isn't really healthy.
UBI at least gives people options. If someone is happy playing WoW all day, and society doesn't really need them anyway... I see no harm in that. At least they have the option to quit playing and do something else. People doing menial labor often don't.
I'm worried about the inter-generational effect of UBI. What happens to the kids in a family who plays WoW all day? What if neighbourhoods become segregated between workers and non-workers? How are kids going to learn to develop marketable skills and basic work ethic?
Because, if it turns out that most people are just fine with fucking off all day and living off their UBI check then UBI is unworkable (pardon the pun).
The cycle would go something like this:
* UBI checks start getting sent out
* Large droves of people quit the shitty jobs
* Due to reduced labor supply, cost of producing goods rises
* The increased cost of living means that now we need to send out even bigger UBI checks (i.e. raise taxes)
This feedback loop continues until even the most motivated individual cannot rationally continue to pay into the system.
Straw man. No data to support that; just a scare story. How about: cost of goods continues to drop as automation continues to expand explosively (as it has in the last 10 years). Standard of living rises steadily as the workforce decreases.
What's the difference in the two scenarios? Data. Which we don't have. So certainly a UBI should be carefully introduced to keep the economy stable.
This is why we need more experiments like the one in Finland. It would be irresponsible to implement a UBI until we know which of these two scenarios is most likely. Although, I suspect the reality will fall somewhere between the two.
There's not any data to support it because there's no data around a nationwide, long-term UBI, period. All we have are little experiments where people know it could end at any time.
Qualify that enough, you can make the point. But UBI has been around long enough to collect data (pensions, Alaska, experiments). What people 'know' has no place in economics. We can measure - did prices rise in those places? No? Yes? How much?
Oh yeah! I long for times when 100% of society can play WoW all day long and Blizzards alone will foot the bill for all of us :) Ultimate economic perpetum-mobile with an Orcs race in it! :-)
So the more controversial question here is if we should do it anyway even if it turns out to be a net loss because.. we can.
Then the more dystropian view would be how else are we gonna keep the plebs under control if we think the unemployed will be the majority in the future?
Just pointing out there's a couple of different angles on this not just the net gain one.
I doubt this will be read as I've taken too long in replying. But does it matter? If only 1% get to create new and interesting projects, then that is 1% more than at the moment.
> However, a counter argument is that many of the people that UBI may benefit the most might have jobs that they loathe.
That's not really a counterargument. Suppose you have a job you hate and suddenly you have a UBI. Quit immediately and go find a job you love -- even if the pay is crap, add the UBI to it and it's as good what you had before. Meanwhile the horrible degrading McJob nobody actually wants can either be replaced by a machine or will have to have sufficiently better pay or working conditions to get anyone to do it.
A basic income distributed to everyone wouldn't carry the same stigma as "handouts." Those people wouldn't stop wanting jobs, I agree. They're not going to be satisfied to just be on the dole, and net taxpayer status will probably matter a lot to them. But the basic income would provide them with a fundamental level of security and mobility. It would keep money pumping steadily into the local economy. Small-time entrepreneurs would be able to take small-time risks; small corner-store businesses would be able to prosper. A worker would be able risk leaving a job, and training for a new one; they won't get stuck filling half of their potential just to keep their children in clothing. A more flexible workforce should lower a barrier to new investment in the region. Mobility for the higher achievers would mean more opportunity for those who just want to come in, punch the clock, check out and have a beer.
And when they voiced anger about the government accepting immigrants when there already wasn't enough work to go around they got called racist.
I think UBI's effect on immigration is an interesting topic and one I don't see discussed in most articles. What does it mean to be a citizen of a country when, statistically speaking, you're a drain on the economy? How does immigration fit into that model? In my mind UBI doesn't require changing how we view work, it requires changing how we view citizenship and statecraft.
I think your explanation on the racist name calling shows why this is such a difficult topic.
There is a incorrect assumption that people often make, without malice, about economics being a zero sum game. It really is not, almost by definition.
The more people in an area, usually the more opportunity people have for employment over a long time period, and the higher the economic output.
Also, there is a difference between refugees (i.e. people who might otherwise die) and economic immigrants. It's hard to fault someone for their perception that other people might take their jobs, correct or not. It is easier to fault someone for taking the same stance when the alternative for the immigrants is potentially far more catastrophic. Especially when the arguments are more about culture and race than employment.
> taking the same stance when the alternative for the immigrants is potentially far more catastrophic
refugees also tend to be better off economically in coming to the US. There are a lot of people in the world that can be saved from death by granting them asylum, but who don't get it. To what extent can, and should, the US help the world outside its borders?
This is one of the main theories as to why Trump was successful in the US. The US economy can't properly support it's workforce fully. The Democrats offered social safety net. The Republicans offered tax cuts and deregulation to the business owners. Neither solved the underlying problem that the US economy can't properly support the workforce.
People want an honest day's pay for an honest day's work as they have for millennia. Pride in honest, good work is important to the vast majority of people, especially in the US.
I just simply dont agree. I'd be perfectly happy to do what I pleased everyday if I could. I'm not a huge fan of having to meet deadlines or any of the many little tasks that come with having to work. I think it's truly strange that people are afraid of not having work because it means they will be listless.
I don't know about the UK, but in the US, you effectively have a choice between getting welfare and working. So people have the option to take some low-paying job, but they don't do it because then they lose welfare benefits that pay almost as much, sometimes subsidizing childcare etc. so it's an unemployment trap. UBI is much saner because you get it in addition to any income you earn from working, so you can go ahead and take that low-paying job as well.
I think you know, but just to clarify for others: it is easily possible in the US to be in a situation where increasing the number of hours you work or accepting a job that pays more will paradoxically reduce your income:
Personally I could get behind the "lower federal minimum wages regulations" if it were met with a "but increase a EITC to help tweak the income of those who need help".
this is the key point, getting a benefit, you are restricted in what you can do and you get problems as soon as you earn any extra money.... getting a UBI, which everyone gets, is different, you are free to do as much extra as you like. There are no requirements to show you are looking for work, meeting with welfare agencies etc etc. Benefits have a large negative stigma. People try to earn extra all hush hush / secret with large negative consequences if caught.
However, UBI does have some challenges. Current benefit systems try to adapt to each individuals situations, UBI is blind to individual circumstances.
Seriously now: if they have money, it's up to them to find a meaning of life. Not having to work, doesn't mean you shouldn't work. You can help with old people, or educate the youth. You can work on some very non-profitable, but good and meaningful agricultural thing. You can fix your city. You can clean the street. You can work on open source software. You can build furniture.
Giving money just to the poor is stigmatizing, and very bad for mental health as you pointed out. A universal measure would be very different tho.
What could be less dignified than working a job you are empirically inferior for because you got your competition banned?
That doing automatable busywork by hand is somehow more dignified than receiving handouts is an absurd idea (it's just as much a handout, only in this case you have to jump through hoops for it).
That others people should be required to do automatable busywork to receive their handouts is a cruel and borderline evil idea.
Maybe in future there can be some gamification of the whole thing, led by the government for the "common good" (although I wouldn't hold my breath). But I think giving meaning to people's life is a task beyond a government. Experience in Communist countries shows government should be kept as far away as possible from such tasks.
> They wanted gainful employment and their dignity back.
That is in fact what a basic income allows, because it allows you to eliminate the minimum wage. Then anyone who wants a job can have it, because they are allowed to accept the wages employers are actually willing to pay, and in combination with the basic income still have enough to live.
I would agree with you if the perception that UBI is equivalent of handouts, which UBI specifically isnt.
Think of it like this, if every citizen is getting money regardless of their employment status and that this is essentially a perk of being a citizen and paying your taxes, the negative stigma would not be there per se.
Eventually , people will start seeing this as an additional benefits similar to healthcare being provided by state.
One of the crucial points while introducing UBI would be education both of the populace being helped and the populace at large since you may not be able to introduce it through out the country at one go.
It's really a need to feel useful. If we permit politicians to conflate a specific manifestation of that need as being a want for gainful employment, we will end up with protectionism. We will see laws prohibiting certain kinds of automation. And we will see a fight between different classes as one class feels entitled to work, and another class feels entitled to save money on labor.
UBI combined with single payer health care and a removal of the minimum wage addresses this problem. It's called "basic" for a reason; the idea is that people will continue to supplement it with work that they find enriching and rewarding.
Whole new sorts of currently "worthless" work become possible when not shackled by a minimum wage.
A UBI does not prevent anyone from getting work. It actually makes it easier to get work if you want to, because you don't have to compete against as many applicants because some of them would rather stay home and take care of their kids, or woodwork.
Basic income could help get rid of people sitting around unemployed. Instead of small amounts of earned income being effective taxed at near 100% by loss of benefits they might be able to keep it all making low paying work worth doing.
Which is great for UBI as the social contract makes explicit that everyone is a beneficiary of it. The people who need it then will have both their dignity and the will to make more of themselves.
You have hearsay about one person, and generalize that across 1) an entire race and 2) all of America.
Downvoting you isn't even about political correctness for me. It's that your group size is too small to lead to any sort of substantive discussion.
There are a lot of people that abuse these systems, and a lot of honest people that don't. Maybe you should find some real data before jumping to conclusions?
>If implemented, it will surely be a disaster in America (DOA - Dead on Arrival), considering how well African Americans have worked and abused the Food Stamps system.
Oh, couldn't be bothered to read the number breakdown AND racist to boot.
What do you know about "how well African Americans have worked and abused the Food Stamps system" apart from what some biased media tell you and/or a few anecdotal stories?
Generalizing second-hand anecdotes from somebody who obviously has an axe to grind into racist fantasies is not a very good way to determine "the ground reality."
If I had basic income, I would go back to study, get a PhD in Computer Science Majoring in AI/Machine learning and then I would try to do something meaningful with it. I am tired of doing pseudo-intellectual software 'engineering' tasks - I would like to use my intellect to tackle difficult problems instead of trivial problems like building UI components and managing databases. Unfortunately, I can't afford to go to back to uni right now.
I think that there are a lot of people in my position who are desperate for basic income. From a societal point of view, innovation would move quicker if people had more time to invest in themselves.
Unfortunately for me, right now, I just have two options if I want to buy myself some time to study:
- Hope that one of the startups I work/worked for gets a big exit and that I can cash in and fund my studies.
- Wait for retirement age before going back to uni (and hope that my brain still works OK at that age).
The fact that someone is paying you to do these jobs shows that the things you do do have a lot value to someone (your boss, the company's customers etc.). So your existing job is far from being meaningless.
Instead of crying for a UBI you should better cry for people not to buy software that does "trivial stuff". If people were willing to spend a lot of money on software that does highly not-trivial stuff, there probably were a large demand for people that are able and willing to work on such things.
Markets are a democracy - everybody votes with his wallet.
This is a homo economicus fantasy. It is entirely possible for the employee to see how irrational, socially useless, or a net negative their job is, while not in a position to change it.
I think the argument for UBI would say that OP is better served not working in that position, because it's not what he wants to do. The employer, would then hire somebody else who actually wanted to do that work (I actually don't mind designing UI sometimes).
Or failing that, would have to raise compensation until they got somebody who agreed to do the work.
It seems that under the UBI system, the labor pool is more efficient. By taking away the basic requirement of needing to work, you introduce a more fair supply-and-demand free-market labor force. Currently this is tipped far in the favor of employers because employees' livelihood is at stake, and this asymmetric power dynamic suppresses wages.
If me and my colleagues were better educated and less stressed on average, we would introduce fewer bugs into the system and we would waste less time debugging issues that should never have existed in the first place. I guess I believe that education has a really good ROI.
> I guess I believe that education has a really good ROI.
Did you do a back of the napkin estimate for this? You also have to include the tuition fees and the opportunity cost of (probably) not working while you study on the debit side (thus no, i.e. lost, income). On the credit side the increased productivity/better job etc. Have you computed how many years it will take to reduce the computed debt (including opportunity cost)? I have not computed it, but I'd assume that it would take a hellish lot of time to even break even.
No, this is not what you "should better" do, largely because your approach is so demonstrably inefficient when applied to multiple problems. After all, what you propose is a a particular solution to a particular problem. UBI is a general solution to a vast number of particular problem.
So, I have a couple of questions here -- one for UBI and one for you.
1. You're hoping for UBI so that you can quit the work force and get a PhD, so you're going to (at least temporarily) cease to input money into the system, and start to take money from the system. That seems like effectively twice the cost. Where does that money come from, if you and other people have that same idea? This is the part of UBI I'm struggling to comprehend. There's the idea that you will come out of school "more valuable," but that's speculative vs your current position which is actively adding value (albeit less than what you feel you're worth).
2. Why do you need UBI in order to do this? Are you making no money beyond the absolute minimum you need to live with your current job? Couldn't you potentially save some away and then do the "nights and weekends" sort of school that some people do? To your very last point, you mention having to hope for one of your startups goes big, but could you take a more "steady" / traditional job and make a decent amount of money that way?
Unpopular opinion: this strikes me as exactly a case against UBI. You're taking an active, and perhaps more importantly, tax-contributing member of society, and incentivizing them to stop being one. "Innovation would move quicker" is a great idea, but I don't think it's all that much of a guarantee. It seems likely to me that it would continue near the same pace. But, that's also just speculation / without citation.
How many people in your position would make a similar decision? Do you expect the tuition rates and housing rents in the college town of your choice to go up or down? What happens once the education system and landlors absorb and accommodate the influx of revenue?
Or maybe more people would leave their jobs and go to teach? Maybe the local community college would have higher qualified ex industry teachers and it would spread the students around other towns?
That very well may happen, and many retirees on Social Security do return to teaching, many consider it a way to "give back".
Considering the Social Security program has been around since 1935, it's probably safe to say that existence of such people for 80+ years did not lead to a decline in college costs.
> many retirees on Social Security do return to teaching, many consider it a way to "give back".
Just my five cents: If they recorded their lectures and put them on YouTube (or a similar site) much more people could profit from their teaching - thus they would give back to many more people.
If there is a larger supply of well-qualified people who want to teach, the wages for teaching will go further down (supply and demand). I have a little doubt that this is an intended consequence.
+1 to wolfgke. With BI costs for such mundane work would increase as less people would be inclined to do it. As a result more of such work still remaining in the states would move overseas to the countries with no basic income. That leads to a whole bunch of negative consequences.
PhD programs typically pay 20-30k a year, and you can get close to doubling that by taking summer internships. That's at or above a lot of basic income proposals, especially because many top CS universities are located in places with very low CoL.
So if it's just lack of basic income that's preventing you from going for a CS PhD, you should apply for programs next year (unfortunately you just missed the typical application deadlines...)
I would say similar, which is why at one point I actually sent in PhD applications. PhDs in computer science usually come with a stipend and a tuition exemption. Why do you need to wait until retirement?
The UBI the article suggests is $12K per year. Do you think that would be sufficient to pursue your alternative? Couldn't you save up the equivalent amount and do that on your own?
Due to a Basic Income you're already admiting that you would want to drop out of the higher income bracket, and fall to where the BI it would benefit you more.
A few things about that:
1. You never said anything about BI handling out of work situations.
----
I think what would incentivize you to accomplish this would be:
1. Setup financial goals that would support you during this time. (Think FIRE) To me it sounds like your finances aren't in order to do this.
2. Step away from that over-ambitious goal of PhD. Go for a masters. It's only 2 years. PhDs aren't as great as the school sells them. (They're in the market to convince you to do that)
3. Try to elevate yourself by practicing for grad school by doing online classes in the evening.
Almost everyone here seems to be discussing the economic challenges of UBI, but so far I haven't seen much mention of the political challenges. UBI is a completely unworkable concept in the U.S.A and likely many European countries as well. American citizens will be literally shooting eachother in the streets before they accept such a massive wealth redistribution mechanism, and that resistance will be mostly made up of the masses that could benefit from it, to say nothing of the powerful that will leverage the full extent of their influence to prevent their gains from being redistributed.
I've heard convincing arguments[1] from economists that we should convert our existing "safety net" and "welfare" programs to simple UBI (aka BIG).
The argument tends to circle around the fact that the existing programs dis-incentivize getting off disability or Section 8 because the recipient is penalized in a step-function way (as soon as they get a job, they may become ineligible or could be charged with a crime). A well crafted UBI such that it's an income tax rebate (not to be confused with tax credits or tax deductions) to replace the many smaller safety-net / welfare programs eliminates the disincentive for people to get off these specialized programs that already exists.
While I don't think Americans are well informed enough to make a rational decision (and will likely be swayed by emotion), I think there are reasonable arguments for UBI / BIG.
I worry that you just made it even more politically untenable.
"You are taking away my retirement I earned and giving it to everyone?"
"Don't touch my medicaid!"
"They are trying to kill the soup kitchens; look at these children we feed."
Or whatever. There is such aggressive fighting for scraps that no one wants to make a big-picture shift that might have unknown societal repercussions.
This is the biggest challenge to UBI becoming a serious mainstream topic in the United States IMHO. It takes me hours of conversation explaining UBI to any of my southern/conservative family members to get to a point where they at least acknowledge that it isn't just a fancy word for socialism... and even then they still don't like it.
Granted, I'm their left coast liberal silicon valley nephew so they aren't really interested in anything I have to say anyway.. but maybe thats the point. To a lot of Americans it just sounds like free liberal hand outs, no matter how much data/math/science/economics go into it.
Hopefully smarter people than I can figure out how to message UBI to that part of America.
I haven't listened to this episode yet, but it's worth noting that Milton Friedman was advocating for this very position in the 1960s. Here's the relevant clip from Free to Choose:
It's useful to think of what sort of institutions are required for social stability before you need them. It's semi-likely that Americans will be shooting each other in the streets anyway, and so when they get tired of it and are ready to say "Never again...let's fix the root problem so we never get to this point again", there are options whose consequences have been explored.
Recall the history of labor unions in the U.S. The AFL-CIO was formed in 1886. The 1890s and early 1900s featured strikes where there actually was shooting in the streets, widespread rioting, bomb-throwing anarchists, and general pubic and social unrest. It took 2 world wars and a great depression before the U.S. got to the "golden age" of labor union capitalism that certain people want to recreate today.
If you don't test out possible solutions on a small scale before the old social order disintegrates, you get things like the Communist Bloc, where revolutionaries overthrow the old system, but then install a new system that sounds good in theory but really doesn't work in practice.
Eve if the American people were willing to accept UBI, it still wouldn't work the way proponents hope it will.
Let's assume for the sake of argument that the US Congress actually passed a UBI bill that was simple, elegant, and did not have a bunch of complicated amendments tacked onto it. Let's say they passed a bill stipulating that every person in the United States would get a check from the government every month, and that every check would be for the same amount. Let's also assume that the bill replaces every other welfare program with UBI, like the libertarian proponents of UBI hope will happen.
Even if that happened (and it certainly would not), it would only be a matter of time before it gets messed up. There are a lot of reasons the current system is the way it is. There are many reasons the voters would want some people to get more money than others under UBI, and many of them would be convincing. For example, should single mothers get more UBI money? What about cutting benefits for convicted felons? What about more UBI money for people in high-cost-of-living cities like New York and San Francisco? What about more UBI money as a form of affirmative action for certain racial groups? People will vote for some of those changes.
We would therefore end up re-creating a lot of our current welfare programs within UBI, for the same reasons we created those programs in the first place. Tyler Cowen has written more persuasively on this topic here: http://marginalrevolution.com/marginalrevolution/2013/11/wha...
UBI proponents have a few questions to answer: how can we afford it, how will it work, and how can they prevent it from being turned back into our current welfare programs under a different name? And how can they prevent the voters from simply voting to give themselves more money, thereby bankrupting the government?
Yes, far less able. Most voters aren't on welfare, and they aren't interested in increasing welfare payments. If every voter got money from the government, things would be very different.
I really hate to get into a debate about semantics, but that is not what "able" means. =)
I think I understand your position better now, though. It's not so much about whether voters can vote themselves more money - it's about whether they have the incentive to. I don't agree, because I think shared interest in the stability of the system would be a strong opposing force, but I can see where you're coming from.
It's all about the packaging. Politicians are masters of selling any X positioned in a way masses accept it, most popular wrappers make use of keywords like "tax break", "children" or "patriot". The primary obstacle against UBI is that it removes the powerful mechanism of wealth extraction lobbyists frequently use: the tax breaks.
For example, say you're healthcare lobbyist and you want to boost your business selling drug X, but patients who need X cannot afford the amount you want to charge. What do you do? Lower the price? No, you will lobby for making expenses on X tax-deductible. If you succeed, you will be forcefully taking money from people who don't need X, giving them to a person who needs X, who has no choice but give it to you. This has happened with healthcare, education, housing, etc. (and nobody is shooting anyone on the streets)
UBI removes the need for tax breaks, reducing lobbyists' ability to direct consumer spending, and that's why it won't be implemented any time soon.
Americans do not trust that the government has their best interests in mind, ergo Americans do not want to have their money taken away from them to pay for government programs.
And, as evidenced by the actions of our Republican and Democratic party legislators, by the NSA and FBI ... the US government does not have my best interests in mind.
The government doesn't have a single mind. Every agency has different goals and motivations. Sometimes they are even contradictory. We can choose where we want more government involvement and where we don't.
A government, while being a necessity, is not to be trusted. The Founding Fathers understood that, and they made it clear to others. A government is a mechanism that is prone to deterioration over time, and it takes a substantial effort to keep it in a shape in which it protects people's interests rather than its own.
Also, from the historical prospective, governments are the ones who are responsible for most killings of people on a large scale. How, then, can an intelligent person trust a government?
> How, then, can an intelligent person trust a government?
Because that's just the better option. Somebody is always going to gather a lot of power with a big organization.
The choice you get is between an organization whose purpose is to serve the masses (democratic goverment) and organizations whose purpose is to serve very elites (corporations, organized crime).
Regarding your specific point regarding killing people: I think you are oversimplifying here. With the opium wars and the subsequent flooding of china with opium, British trading companies probably already firmly hold the record for killing people on a large scale. For more recent examples, I would point towards the commercial part of the US Industrial-Military complex.
But yes, the government is then frequently instrumentalized to do the actual killing. I would assume this to become harder the stronger and more democratic a government is.
Yes, these systems that are mismanaged by bureaucrats & politics. It's not like our water is safe & people who wish to manage water on their own property are prosecuted by the state.
Off-topic, but Americans literally are shooting each other in the streets. More americans have died in gun homicides than died in all wars since, and including WW2. Include suicides, and gun violence exceeds all US war deaths ever.
Along the same lines I don't see people considering the new power base this would provide the people who controlled it. Do you really think it would stay simple with no requirements or controls and corresponding government agencies to oversee it. That agency will be scary.
UBI is talked about, but is probably a long way off. But it's important to get the conversation started. We already have massive wealth redistribution in the U.S., in the form of Social Security, Medicare, Medicaid, etc., which make up 70% of the federal budget. UBI isn't about spending more but spending differently.
Capitalism is going away, no matter what, once we have massive unemployment due to automation.
You think people are just going to accept starvation? Shit will get real, real fast.
And most people aren't as articulate or reasonable as the people on this site.
There will be massive violence.
A better way to look at UBI is that it's not about giving poor people money.
Its about keeping the fabric of society together and preventing revolutions.
Alternatively the government tells the robots to lock up the poor rioters, so the rich can keep spending their money in peace. There will be violence on both sides. Still this is all hypothetical, all we did was make some neural nets be able to classify some images, there is still a ridiculous amount of work to do.
Capitalism is surprisingly adept at evolving. I don't think it's "going away, no matter what". I'm also skeptical of the "automation apocalypse" that everyone is talking about. MY predicition is there is going to be a massive shift in blue collar work such that basic programming will become a trade to deal with the exponentially growing software maintenance problems.
> Capitalism is going away, no matter what, once we have massive unemployment due to automation. You think people are just going to accept starvation?
Let's for the sake of the argument assume this is true. But if people really believe this - why don't they stop producing kids (and advocate other people to do so, too)? I find it really crueling to produce children that will have such a useless and crueling life.
"Capitalism is going away, no matter what, once we have massive unemployment due to automation"
No.
1)
The Industrial Revolution saw a considerably greater degree of automation than we are seeing now.
'Single Engines' replaced dozens of workers, some cases 100's.
Think 'weaving machine' vs. 'individual weavers'.
The 'automation' we have today is mostly 'soft' - do you think MS Word actually replaced 'Secretaries'? Or was it a confluence of things, including the fact that we now have 'Executive Assistants' which do much more than Secretaries ever did.
And what happened during the Industrial Revolution? Wages rose! Unemployment never really went down.
You know all those 'servants' in 'Downton Abbey' - the ultimately left to get higher paying jobs.
I should add - this had also a lot to do with the labour movement.
2)
The major source of 'job loss' in Industrialized countries is not 'automation' - it's 'outsourcing' to India and China.
'Automation' has been going on in a very aggressive way for over 200 years - and yet we still have fairly low levels of unemployment.
Entire new sectors have developed: entertainment, professions, services. There were 5 channels in 1950 and now 500. There weren't many pro athletes in the 1900's - now their are tons - and massive industries around them. We didn't really provide much in terms of healthcare in 1900 - now maybe 20% of the economy is healthcare. Very few used to go to University, let alone finish highschool - now education is a massive industry.
There is always 'work' that can be done so long as we can improve each others lives.
So - the question of 'UBI' comes down to how we decided to spread the surpluses. Do we give some surpluses to those who are not directly contributing?
Hint: we already do. Especially in socialized countries - we give massive subsidies to non-working people: healthcare, parks, security, all sorts of other services. Power subsidies (electricity is subsidized here in Quebec). We just don't give them spending money.
I think UBI is an interesting idea, but a dangerous one as well.
I live in Montreal, many of the people in my neighbourhood are 'artists' - photographers, actors - but really they all work full time in services.
You can get a 1/2 decent, small but respectable flat around here for $400 a month - and I don't mean grungy. It's entirely possible to live decently off $1K a month (remember healthcare is already paid for by other members of society).
I feel that with UBI - my neighbourhood would fall flat - because everyone would quit their service jobs (or work a lot less) - because they only need UBI + a little bit of extra cash - i.e. '1 day work weeks' - I think would be the preferred mode of existence for vast numbers of the young people around here. They would live a 'very low materialism' style of living, and be happy with it.
I think a 'means tested' form of UBI (not really 'Universal' ...) instead of welfare would be better.
In America - a better idea than UBI might simply be to make sure that everyone has access to healthcare, in a slightly-more-socialized way. I don't mean 'single payer' - but something. Having better healthcare for everyone would put people on a much more equal/fair footing - AND probably be good for the economy directly/indirectly. Solve that problem and you're already a huge step forward in trying to provide for better social outcomes.
So what would happen if all the artists quit their coffee shop jobs?
1) coffee shop pay would go up in the short term. Perhaps some artists would come back for $20 an hour. Perhaps some stay at home moms would start working as the pay could justify childcare.
2) some coffee shops would turn into robot booths. Put in money get out coffee. There is very little technical need for humans in a coffee shop. Maybe 1 person to keep people behaving well and prevent someone from pooping on the table. 0 reason a human needs to pour coffee in a cup or wash dishes or sweep the floor.
Seems not a bad outcome. I doubt that many people find meaning in pouring coffee. I think it would be a net gain to all.
I feel that with UBI - my neighbourhood would fall flat - because everyone would quit their service jobs (or work a lot less)
Could you explain why you mean by "fall flat"? Do you mean that the businesses that currently employ the service workers would close because they would be unable to find anyone to work for them? It seems likely that they'd need to increase the wages paid for unrewarding positions, but that this might be offset by the greater number of locals who can afford to patronize them.
I live in Montreal, many of the people in my neighbourhood are 'artists' - photographers, actors - but really they all work full time in services.
'1 day work weeks' - I think would be the preferred mode of existence for vast numbers of the young people around here.
Presumably when you say "1 day work week", you do not include the time spent working on the projects personally important to these people? I view it as a strong positive that more young people would have more time to pursue their artistic interests, and presume they would do so. There may be negatives that should be carefully considered, but don't you see this as something we should strive for?
They would live a 'very low materialism' style of living, and be happy with it.
So more art gets created, the lifestyle is less materialic, and people are overall happier? And you are arguing against this idea? Would I be right to guess that you are not currently working a poorly paid job you hate in the service industry while trying to find time to pursue the art you love? I don't mean that last question as an actual attack, but I do wonder if your self-interest might be different than that of the majority of your neighbors.
"Could you explain why you mean by "fall flat"? Do you mean that the businesses that currently employ the service workers would close because they would be unable to find anyone to work for them? It seems likely that they'd need to increase the wages paid for unrewarding positions,"
No.
Coffee Shops etc. already run on pretty low margins -> they'd be out of business. Any business wherein labour is a significant input cost and where wages are low enough that people would quite - would shut down - and that's a lot of businesses.
"So more art gets created, the lifestyle is less materialic "
That's a choice we can make today - we don't need massive government intervention to make that decision for us.
It also means a significantly reduced output:
The value of the 'art' getting created is significantly lower than the 'service' they provide making coffee - or else that art would be getting created.
It's easy to prove: if their are were 'worth something' to you and I, we'd be buying it. We're not. But we will however hire them to make coffee for us.
"Would I be right to guess that you are not currently working a poorly paid job you hate in the service industry while trying to find time to pursue the art you love? I don't mean that last question as an actual attack, but I do wonder if your self-interest might be different than that of the majority of your neighbors."
I don't care what my neighbours 'aspirations' are.
It is not their right to take my money to pursue their aspirations.
If they want to make art that nobody wants to buy, that's fine by me, but I should not have to pay for their rent so they can do that.
They can serve coffee, get a better job, make better art that people want to buy - it's entirely their choice, they are entirely capable.
They can have whatever lifestyle they want to build for themselves.
If they are handicapped, or ill, that's another story, but otherwise, their life is their job, not mine.
Coffee Shops etc. already run on pretty low margins -> they'd be out of business.
Possibly, assuming nothing else changes, and they can't raise their prices or automate so as to require less labor. But others are claiming that the problem with UBI is that all the prices would go up, presumably including those at the coffee shop. And if everyone in the neighborhood had another $1000 per month to spend, don't you think that at least some of the coffee shops would see increased business?
The value of the 'art' getting created is significantly lower than the 'service' they provide making coffee - or else that art would be getting created.
Maybe, but this bothers me in two ways.
First, it assumes only those with the surplus money to buy art are allowed to determine the value of art to society, and that those will the inability to pay for art have no say. Isn't it fair to allow these non-rich art lovers to democratically vote for policies that result in more art?
Second, it implies that the value of art can be completely judged by its market value of at the time it was created. The more creative geniuses we have serving coffee to rich folk, the fewer works of art we'll have in the future. Obviously most artists aren't geniuses, but I think this tradeoff at least merits some consideration.
if their are were 'worth something' to you and I, we'd be buying it. We're not. But we will however hire them to make coffee for us.
There is lots of art I appreciate and would like to encourage, but I don't have money to support it. I've never felt comfortable paying someone to make me hot beverages --- I'd much prefer self-service and greater automation.
I don't care what my neighbours 'aspirations' are.
Perhaps that's the big difference in our views. I care tremendously about whether those sharing my society feel they are living fulfilling lives. UBI might not be the best way to accomplish this, but I guess I hadn't considered that you might not consider this to be a benefit.
Although basic income is obviously a well-worn topic, this article seems a bit more substantive than average. So we'll try downweighting this thread less than we usually do for well-worn topics.
It's good to hear confirmation that you're doing this sort of thing. May I suggest surfacing this drag coefficient to the UI, so that people know what you've done?
It looks pretty sleazy when a young thread with high engagement (comments and upvotes) nonetheless slides to the second page.
That's just how HN works. Story rank is determined not only by upvotes and submission time, but by numerous other factors including active moderation. We're unlikely to publish all that because doing so would increase two bad things: attempts to game the site, and meta nitpicking. Those are bad in their own right and eat up the resources we have for making HN better, so it's in the community interest to minimize them.
The approach we've taken re transparency on HN is not to make all the data public but rather to answer users' questions about how the site works or what's going on in specific cases. That seems to be the optimum.
Funny how all the proponents of a Universal 'Basic' Income aren't proposing instead to make every 'Basic' item 'Free'.
After all, if you believe their rhetoric, giving someone $500/mo should be the same as giving them free bread, eggs, milk, some clothes and some movie tickets.
I wonder why... Maybe, the reality is that over time our 'Basic' needs increase. In certain parts of the world shoes are still considered a luxury whereas in others, Nikes and Adidas are considered 'basic'. 50 years ago car ownership was a luxury even in most 'developed' nations, as were televisions. Now they're considered 'Basic'.
The reality is, the people touting UBI as a way forward suffer from having a thoroughly static and isolated view of the world. They fail to see that value creation is what's important, and drives society to further itself. As value creation goes up, the definition of 'basic' increases with it. I'm not for a minute advocating that the current system is anywhere near perfect - the wealthiest in our population are questionable value creators while at the same time there are value creators scraping by in the world so the way we reward people needs a rethink.
I don't profess to know how to solve the poverty crisis and I very much want it to be solved as a citizen of the world. What I do know is that the only way to do it will involve reforming education so that future generations are inspired to advance humankind and create value in the process.
>Funny how all the proponents of a Universal 'Basic' Income aren't proposing instead to make every 'Basic' item 'Free'.
>After all, if you believe their rhetoric, giving someone $500/mo should be the same as giving them free bread, eggs, milk, some clothes and some movie tickets.
It's not "funny", it's the core part of basic income that separates it from state-run socialism. Not making a determination about what is or isn't basic is one of the key points. You give a person their $500 each month and let them determine what it should be spent on. What is basic for one person may not be for another.
Go back to 1950s USA where average annual salary was just over $3000 - if I told you back then I'd give you $500 a month - almost twice the average salary where do you think we'd all be now? Would we be even here?
Now take your $500 a month and project forward another 50-60 years. What do you think it'll buy you then and why?
By picking a monetary amount - be it $50, $500 or $1000 it IS absolutely making a determination about what's basic. And its doing it based on the living standards and cost of living of today. That's a large part of why its so flawed.
It seems to me it'd have to be specified as a formula based on the "poverty threshold" and "inflation." I really can't imagine just throwing out a number and expecting it to be unchanged for decades.
The precise amount will not be enshrined in the constitution. It will be most likely adjusted periodically to ensure subsistence without removing the motivation to work.
We do need a better way to measure value people create. For example, many geniuses (inventors, thinkers, etc) who do not have business skills live poor while creating more value than many CEOs that can manage, negotiate, raise funds, have connections, etc.
Business people do create value too by connecting people, making things happen, etc., but often their value output is overrated.
Many actors and musicians and sport peopl are overrated too vs doctors who save lives. They worth a lot only because of economy of scale. Everyone knows them and they monetize their followers.
In some way it is a fair world, because we all put in nearly about the same conditions. Well, except our place of birth and genetics, which we have no choice over. But everything else is up to us, which kind of makes it fair because we compete in the same conditions. However, maybe it is a time for a new system. Why not?
As far as the education, the nature will do its miracle. New generations will change everything, they will know what to do because they born in new world.
Everything will work out on its own as it should. It is happening.
You are conflating fairness vs. justice. The world is far from fair -- genetics, place of birth, medical conditions, accidents, etc will always exist like you mention.
The moral/civil question is what is the role of government in an unfair world?
Most governments opt to head down the justice route predominately (e.g. the US's Justice System holding 1/3 of our government powers) while creating a myriad of "fairness" regulations (e.g. welfare programs). The ultimate problem with this approach is people will rarely agree on what is fair. There is no set definition and wants/desires change over time -- even needs do to (like needing a cell phone now vs 20 years ago). This ever evolving definition of fairness is what ensures this debate will rage on indefinitely.
There's an entire philosophy based on the work of John Rawls [0] that codifies the conflation of these ideas [1]. It's not at all a simple matter to strive for justice in an unfair world. Some libertarian folks elsewhere in this discussion have brought up the idea that taxes are theft. On the opposite end of that spectrum, I've heard it argued that property rights are a form of violence. What does it mean for the rights of an individual if, in a hypothetical future, all arable land is owned, fenced off, tended by drones, and guarded with extreme prejudice? A Mad Max-style dystopia sprinkled with little walled gardens.
I watched a documentary about the ICRC. They asked sellers to come to a village somewhere in Congo and gave the villagers coupons so that they could buy what they needed the most and exchanged the coupons for money. They created something like a temporary UBI for a village and a market for different needs. A family bought mattresses, another family corrugated sheets, another clothes, and so on.
If you give people basic items for free this will go bad. You know the horror stories in development aid how people sell away the stuff they got for free.
A friend of mine works in welfare (a state worker) and has told me most people there don't really need anything. They simply take whatever they can, and they sell or trade what they don't need.
And what's even worse: many people turn violent if you don't give them whatever they ask for. So they had to put policemen there all day because they had hit the state workers many times.
You know, I'm a socialist, but these kinds of stories really make me turn libertarian there for a moment.
I'm wondering what effect good virtual reality with a Metaverse as described in Snowcrash and Ready Player One will have on society.
There is a potential that a large percentage of people will be happy with their virtual life even if they are poor in real life (as soon as the virtual reality is good enough to spend pretty much all of your time there).
“How we live is so different from how we ought to live that he who studies what ought to be done rather than what is done will learn the way to his downfall rather than to his preservation.”
― Niccolò Machiavelli 1469 - 1527
Even if UBI was proven to be a net gain to society, implementation is highly unlikely.
This is less about technology/economics and more about human nature, which has not changed much over the last 500 years.
> human nature, which has not changed much over the last 500 years
Let's be clear that "human nature" is relatively stable, but the "cultures" that sit atop are much more capricious-- slowly changing in different ways to fit the same human desires.
That's right. People can't stand the idea of freeloaders that don't have to do anything and get everything for free, while we are working hard to pay for their stuff. Even if this hardly happens, the thought alone scares and angers the hell out of most people.
I think a basic income is a dangerous and bad idea.
If we expect the wealthy class to give their money to the masses to fund their survival, the masses would become functionally dependent on that transfer continuing. At which point the wealthy class would have incredible power over the masses.
Asking for a basic income is like asking to go to prison for the free food. It is not a good idea to become dependent on others with such different interests.
Instead, I advocate the development of open source automation solutions that provide everything necessary for human survival. Open source machines can be manufactured by any corporation and purchased by groups who would then own the means of their own survival.
A basic income becomes a source of leverage for moneyed interests to get their way. But if we all own the machines that support our survival, we can choose for ourselves when we work and when we study to better ourselves.
Disagree. I've tried some really bad ideas that rightfully died very quickly. The world doesn't need more junk that no one needs or wants, whether that be plastic or digital.
Automation will not reduce overall jobs same way industrialization did not do that. Automation will create more jobs in services instead. Basic income is crazy socialist dream that was tested in communism already and it failed.
Basic income is very different than traditional communism in that it keeps with the basic capitalist infrastructure.
In fact, basic income is much more capitalistic than existing social safety net systems because it maintains the assumption that if disadvantaged people are actors in the market, that the overall system will be more efficient than specific government-specified handouts.
Really the question underlying basic income and safety nets in general is to what extent every citizen in a modern society should have access to goods, regardless of their contribution. Once society has decided how much access such citizens should have, welfare vs basic income becomes a question of efficiency and optimization as opposed to ideology.
As for automation not reducing overall jobs--as someone who works in automation I don't see how it will magically create more service jobs. There are few jobs today that employ large numbers of people that are not in danger of being replaced by automation--and the whole point of automation and efficiency is to minimize the number of people required to maintain the system. I do think service jobs become the way people become gainfully employed in an automation world, but that society will need to expand its definition of what is a job worthy of recompense--for example someone could decide to become an artist, and actually have that be a renumerative profession.
>Really the question underlying basic income and safety nets in general is to what extent every citizen in a modern society should have access to goods, regardless of their contribution
Absolutely this. And if we're honest with ourselves - if someone will die for want of something relatively cheap that the state can easily provide (like food, water, shelter, or antibiotics), can you really justify condemning them to death because they can't afford it? Sure, you want to encourage people to contribute to society, but do you really want that encouragement to be the threat of annihilation?
You assume that robots/algorithms will never be as good at some jobs as a worker with median abilities. This is a very strong (and likely wrong in the long term) assumption to make.
At least I doubt it will happen in this millennium. We have much more real problems today. The world is in a bad place and instead of trying to save resources, make it a better place for our kids, we focus on providing more social benefits. I have been living with people with difficult financial situation for a while and the last thing they needed was handouts. They wanted jobs, work, way to interact with people and learn new things. Not free money.
Aaah, yes, automating the job of 2000 workers on a car construction line will certainly be replaced by 2000 service jobs. And those jobs will not be requiring higher education that these workers don't have, right.
Also, basic income is a concept coming straight from liberalism. The comparison to communism isn't even remotely accurate.
It was same with industrialisation. All the crying that factories will destroy economies and cause massive unemployment which didn't do. It did a lot of good instead.
Well, there was basic income in some communist countries and it failed on a social level.
Communism is the government telling you what your job is and giving you a minimal amount of resources and prohibiting you from earning a single extra dollar, and your choices are either take it or escape to West Germany.
A basic income is the government unconditionally giving you enough money that you don't starve. Then if you want to e.g. own a car or send your kids to college or live in a city, you have to go out and get a job, which you can do however you like.
Not really. That was replacing human workers with new machines. New factories were needed to build those new machines. New supply chains were needed to supply those factories. New materials were being used in manufacturing.
Replacing those human workers required so many new things that it created a vast number of new job, much more than were lost.
Now we are tending to replace human works with old machines. Take a self-driving truck. That's just a normal truck (an old machine), with some computers (old machines) added, some motors (old machines) added to actuate the controls, and some sensors (old machines) added to provide input to the software.
Note that not many new physical things are required for self-driving trucks. The novelty is in the combination, and in custom software and some custom electronics. Custom software and electronics do not generate many jobs--it takes the same number of programmers and electrical engineers regardless of whether you are making one truck or a billion trucks. For the non-new physical things needed, like motors to move controls, orders go up at motor factories and maybe they have to add a shift and so that creates some jobs. But the motor factory is likely highly automated, and so adding a shift just represents a handful of jobs.
When I was 3 years old, my dad bought a brand new house in a brand new suburb. It was 3 bedrooms, 1.5 baths, etc. For its era, it was a very solidly middle class or upper middle class house and he had 3/4 of the price of the house in the bank. The house cost $16k. He had $12k in the bank. It was a LOT of money when I was 3 years old. It is not a lot of money today.
A $1000/month sounds like a lot now. But the minute you issue UBI, it will spur inflation and the value of that $1000 will immediately be less than it is now. This is a problem faced by every single welfare or aid program the world over: It takes no time for whatever figures you came up with to be out of date and for your program to not be accomplishing its intended goals.
I have written about this before (for example: http://micheleincalifornia.blogspot.com/2015/09/it-was-obsol...) and I expect to write about this more. The UBI is a bad solution to the problem. We have faced this problem before in the form of the Industrial Revolution and we invented the 40 hour work week. It helped distribute work more fairly. We need similar solutions today. Turning most people into sheeple and charity cases merely because they are not rich is a terrible, terrible idea.
I think most proponents of UBI agree that the value should be tied to inflation, updated on a regular schedule (I advocate monthly). This would guarantee that UBI doesn't go "out of date".
I'm adding to the the discussion cause we have very smart people here with very good assessments on what the implications are for basic income. I had to chime in to clear some of the speculation on the arguments brought forward. I'm not for or against basic income at the moment but I want to make sure we are all on the same page on what inflation is and the basics of economics.
Inflation is simply the influx of money that causes the "value" of ALL goods/services to increase. This is due to the increase of the money supply which decreases the value of the currency. I emphasize that it is the value of ALL goods/services not just one or a large number of sectors.
When we see prices rise up in goods and services in one area it isn't inflation because it is in one area of the economy.
Another misunderstood axiom of economics is that a market is based on finite resources. If goods in one area of the market increase then somewhere else across the economy the value of goods and services decrease.
Now the misinterpretation of inflation and price hikes happen due to one variable, time. The time it takes for price hikes in one area to affect another is what gives the perception of inflation. But when the value of groceries significantly increases then I assure you people are going to eat out less. It just takes time for the sectors to affect on one another.
This article seems really out of touch, and anybody mentioning the 'UBI' experiment in Manitoba Canada as a success or in a positive light I can hardly trust about the experiments I haven't read about. When we Canadians did an experiment it failed!
As a payor of six digits of taxes, this sounds expensive and likely to be taken advantage of by the lazy.
When I grew up my basic income was something called "wages," for which I worked to earn.
Someone has to fund shit like this. Handouts do not promote self help, but the opposite: dependence on the government. Is that something to be proud about?
I find this attitude dismissive. It's easy for those of us who are very successful financially to internalize an attitude that we got wealth because we deserve it, because we tried hard. It's nice to believe the things which allow us to pat ourselves on the back and not need to be bothered with anything like "research" or "trying it out."
My interpretation of that episode was that the guest was largely _for_ UBI, so long as it replaced many of the current safety net / welfare programs (it is simpler to administer, doesn't require large bureaucracies to verify eligibility, and doesn't dis-incentivize people from getting a job and working their way up as do disability, unemployment insurance, section 8, food stamps, etc).
My interpretation was that the host wasn't sold on the idea nor on the low estimated tax increases required to fund a UBI (IIRC the guest stated 3-10% increases in income taxes and the host speculated more like 20+%).
>>>It would not be new money, just money shifted from one location to another. This means that the value of each dollar has not changed. The dollar itself has only changed hands.*
There is no sure fire way to reduce the value of a dollar then to redistribute it to people that didn't work for it. The fact that you have to work for the dollar is the thing that gives the dollar value.
Money can be thought of as a claim check on labor. You work doing something valuable and get money. You spend some and save some. What you have saved/invested and not spent and passed on to someone else still has value.
In the snowboarder's case, someone worked for that money and gifted it to them. Totally consistent if you don't overly focus on the "YOU have to work for it" but rather "SOMEONE has to work for it"
> There is no sure fire way to reduce the value of a dollar then to redistribute it to people that didn't work for it. The fact that you have to work for the dollar is the thing that gives the dollar value.
Citation needed. The value of the dollar is actually determined by:
See Laffer curve. Redistribution will make people work less (i.e. less total output), so assuming the money supply doesn't change, inflation will occur.
The Laffer curve deals with output from labor. When you tax someone you reduce the money they get per unit work, i.e. their wage. If the wage is too low they might not find it worth doing the work. If I'm a paid shill/some job and I'm taxed 99%, I might stop shilling because the effort outweighs my salary.
Regarding automation, see the lump of labour fallacy. Humans will just switch to tasks that aren't automated (this has always been happening and it's happening now). If humans are not needed at all, then we've reached utopia/post-scarcity society.
Humans don't work less because of the hedonistic treadmill. For example, most HNers have enough food and other things to survive which might be considered paradise by people 500 years ago (famines were common back then). Historically, poverty often meant death from starvation.
Our standards of living have been constantly going up, so even though there are productivity gains we end up working more. Of course, that's a voluntary choice so I don't see anything wrong with that.
In a post-scarcity society food/etc is very cheap and thus even poor people can afford sufficient food even if they don't work much (this is already true for developed countries).
Even a small amount of charity would provide anybody who can't work at all with sufficient food. Just like how today data storage in hard drives is dirt cheap; and we can provide billions of bytes of storage at nominal cost.
Looking at current society, starvation and mass famines have decreased greatly. Malnutrition is the next concern.
So, in some sense we may have reached post-scarcity for food for a large portion of human population. But there is still scarcity for quality and healthy food, such as fruits and vegetables.
Im confused by your claim "There is no sure fire way to reduce the value of a dollar..."
The dollar has lost 97% of its value since the federal reserve was created. To me, having a federal reserve is a sure fire way to reduce the value of a dollar.
I would rather work today for pre-1965 quarters made of silver than a dollar today. The pre-1965 quarter will buy a gallon of gas. The dollar today will require three to buy that same gallon. Proof is in the pudding as they say. The currency is the problem.
I particularly like the way they don't put an earnings scale on the second graph to show that it implies everyone earning more than about $40k per year has less money than before.
Now try telling someone on $50k in the Bay Area that their net tax increase is mostly going to go to people not receiving any welfare at the moment, most probably because they don't actually need the money enough to even think of registering as looking for work...
I'm a big fan of Thomas Piketty's idea of a progressive global tax on wealth.
I think that the root cause of a lot of the financial stress that many people are feeling right now is the result of having too many people leeching off of passive income from their investments/wealth (derived from work they did 30 years ago) and not actually contributing anything new to society.
These wealthy people have become parasites.
Right now, if I build an office building and I rent it out to people; assuming that I manage to stay afloat during the first few years, the passive income that I will later generate from that investment will probably keep coming in for the rest of my life... Even worse than that; when I die, my children would be able to keep getting the free passive income; they could just sit there and consume stuff (make others work for them) without working themselves; without contributing anything new to society.
There is a point when you have to stop paying these passive earners. We're already doing it when it comes to patents/copyrights (In many countries, copyrights expire after 70 years or so... Patents generally expire sooner than that) - We need to either extend this notion of 'expiry' to ALL property rights OR at the very least tax that wealth. Why should regular property be treated any differently than intellectual property?
Right now, what we have is crony capitalism. If we wanted to have proper capitalism; companies like Ford, GM, Toyota... would all have to pay royalties to the descendants of the people who invented the wheel and also to all the descendants of the people who discovered iron ore, etc... That would be fair - Actually, doing this would probably have the same effect as passive income since probably every human has at least one person in their ancestry who made a major contribution to mankind (why don't they get royalties for that?).
When you put it into context, the rules of our current flavor of capitalism just seem ridiculously arbitrary.
I think that a progressive global tax on wealth combined with basic income would be a perfect way to average out the unfairness of the system without damaging the capitalist incentive structure.
What you've described is close to Georgism, which holds that people should only be able to own wealth they produce themselves by their own labor, and that wealth from 'rent seeking' (land rents, natural resources, natural monopolies) should belong to everyone.
I have such trouble with basic income discussions because it is such an ill-defined term it is basically meaningless. Like here in the US, UBI with social-security/medicare is a massively different thing than UBI instead of social-security/medicare. So massively different that it's just two completely different subjects, arguments, things.
They should just be named differently so we know what we're talking about - otherwise you have people agreeing they love it when the actually massively disagree, or other people saying they hate it on grounds other than what was suggested.
Country A has pure UBI. Country B has "almost UBI" where, in order to receive payments, the person must have documented proof of 3 hours per week of at least one of: volunteer work, education as a student, or teaching a class. In this scenario, I would expect country B's economy to dominate country A's economy because in order to get your check you have to work with other people (volunteer), make yourself better (student), or make others better (teach).
bad idea. totally unworkable. this will create a class of dependent poor people. It will also create a working class who slaves away to provide for those who refuse to work.
I'm glad basic income is getting a lot of discussion, but it's important to realize we are still pretty early in the process of automation taking over more jobs than people can innovate. Technology has been making entire industries/classes of workers obsolete for centuries, and the economy has always adjusted.
In this next push, it looks like it will be different because AI/machine labor is so 'general,' but in reality, the pressure it will first exert on physical labor sectors will create more opportunity for a human economy based on social value and services (i.e. waiters in nice restaurants, artists, musicians, writers, inventors, chiropractors, etc.), as well as those requiring a combination of intelligence/education/creativity, like most of HN. There will likely be an increased prevalence of security guards, managers, and techs overseeing machines, and it will force people to take on skills (which they are fully capable of) that do not involve pure manual labor/doing what they're told. And of course, it's a longer time frame between 'pretty general' physical automation and 'sentient super-intelligence' replacing scientists, engineers, business leaders, and of course, the politicians who will never let themselves be replaced.
But when we do start to have the impetus for a basic income, say ten years from now, let's make sure it starts off basic, because there will always be jobs of some sort that you can get to supplement your income, and they will probably be increasingly social in value. Not enough to rent out a nice one bedroom apartment in Manhattan, but enough to get by if you're willing to go without nice amenities, get roommates and not live in an expensive downtown area. Until virtually every job can be automated and we are all servants to a mechanical society, there needs to be incentive/reward to working.
Merely a way to control people. It's dishonest to pretend that it's for everyone, the first thing that will happen if you wrong the power structure is it will withdraw funding.
Not that I am particularly worried, this will never happen in the United States. China on the other hand, I bet they would love to tie this to their human scoring system.
"...if you wrong the power structure is it will withdraw funding."
I have the same fear, that this would be a tool used to encourage conformance. If not initially, then in time. Even in the US (but as you say, we're not likely to adopt basic income in the US.)
One would hope, however, that this would become a basic right, and not one that can be revoked for any reason whatsoever, even criminal convictions (perhaps especially criminal convictions.)
Would not the equal protection clause of the 14th amendment apply here? UBI, once granted to all, could not be taken away from individuals or groups in the way you are suggesting.
It seems to me that basic income could make me either (1) fall victim to depression, addiction, or some other mental disorder, or
(2) find a hard problem to work on which keeps me occupied and satisfied for a lifetime.
Or an easy problem. Or any problem. Or social work. Or volunteer-ism. Or cycling. Or wandering the streets of your city. Honestly the work based culture has dulled the creativity people to such an extent that they can't think of anything outside of work. Or maybe human males are wired for this sort of thing. I dunno.
The reason people become drug addicts or alcoholics is that it's painful to be outside of the social culture. And work is the social culture of our time. It's the only thing that makes people feel relevant. We need to invent alternative forms of feeling relevant.
By 'hard' problem I mean that it has depth, not that it's unpleasant. A stream of easy problems could work but it's less reliable because when there's a dry spell then outcome (1) will be scratching at the door.
"We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard" -- JFK
I wonder what effect an enacted basic income in the USA would have on immigration. UBI is going to be life or death in a vastly automated world, so we mind as well figure out how to solve the side issues of implementation.
> The Cloward–Piven strategy is a political strategy outlined in 1966 by American sociologists and political activists Richard Cloward and Frances Fox Piven that called for overloading the U.S. public welfare system in order to precipitate a crisis that would lead to a replacement of the welfare system with a national system of "a guaranteed annual income and thus an end to poverty".
UBI is inefficient--taxing someone and then giving them money. NIT (negative income tax) makes more sense and can actually have the same effect as UBI depending on the slabs.
Those are good points, but there are ways to fix that.
There's no reason why NIT needs to involve large amounts of paperwork. NIT only involves income, so a person simply needs to give their income (unlike taxes, which are much more complicated).
The NIT would presumably have a minimum amount given even if you earn 0$. That amount can be given to everybody can't do the paperwork. Then, the amount remaining above that can be distributed as a NIT.
Basically, give UBI to people who can't do the paperwork to cover them. The rest can use NIT.
The time lag is not a necessary property of the tax system. The NIT can be done on a monthly basis.
Anyways, this is just an implementation issue. Either way they both redistribute money.
You never know, UBI may turn out to be a good thing: it may result in creating a healthy shortage of the workforce, which may lead to a more efficient economy overall.
Politically, you would have to need guarantees against double dipping (constitutional amendment outlawing all other forms of distribution - welfare, food stamps). That's the problem with all the ideas like this...maybe they would be better, but you have to get from here to there. The transitions are almost always untenable and more complex than imagined (see healthcare)
One thing I haven't seen discussed. Would we need some sort of population control with UBI? Even if robots produce all basic necessities for human life, the earth cannot sustain unrestricted population growth, which is a possibility.
I don't know it's true, but I've heard of stories in Brazil where women in certain towns have many kids so they can collect additional welfare benefits for each kid.
That's a research project, not a sustainable program. The putative benefits of UBI would only apply if it successfully takes the place of the "safety net" of programs already enacted.
It's a cool idea but the problem is that people that sell goods will raise their prices knowing that everyone has more disposable income.
So the cost of life will raise and the people will have the same relative expenses (practically as poor) but without any fallback system this time around.
So unless UBI is coupled with strict pricing regulations, it's a scam.
How do the people who support this scheme plan to get around Say's Law? All of the wealth that this "income" can demand still has to be produced by someone. Is this just going to be open theft of wealth with printed money or open theft of wealth to be distributed as money somehow?
Lots of conversation here but we already know how to deal with this; let's run a test and see what happens. Just like they are doing in Utrecht in the Netherlands.
UBI is attempting to cloak itself in free market rhetoric, but it's bullshit.
Yes it may "incentivize" some individuals to work, but only by disincentivizing others. It takes money from top wealth producers, discouraging their labor, and gives it to people who aren't producing as much wealth, effectively subsidizing unproductive work. This will make everyone poorer in the long run.
The struggling artist meme is an appeal to emotion. The struggling artists and entrepreneurs are struggling for a reason -- the market does not want their goods or services! They should fail as quickly as possible, not continue to drag on producing things people don't want.
I'll concede that the welfare state has perverse incentives which trap people in poverty, but there are better ways to address it other than doubling down on the mother of all wealth redistribution schemes.
I think that's unlikely, though it depends on a lot of factors (UBI is a pretty general concept, and the specific implementation and numbers matter). It may reduce aggregate GDP, but that's not the same as making everyone poorer, since distribution matters when determining that. If, to take an exaggerated example, the top 10% of earners have their income multiplied by 10x and everyone else's goes down by 5%, "everyone has gotten richer" according to some kind of aggregate metric, but in reality 90% of actual people have gotten poorer. Most economists no longer believe that these kinds of situations are automatically self-correcting through "trickle-down economics", in which just getting out of the way of wealth-creation at the top inevitably lifts all boats.
> Most economists no longer believe that these kinds of situations are automatically self-correcting through "trickle-down economics", in which just getting out of the way of wealth-creation at the top inevitably lifts all boats.
I'm not trying to be argumentative, but did many economists ever take this idea seriously? I always thought trickle-down economics was just political rhetoric.
I make well above the basic income, so I presume most UBIs would be a net cost to me.
However, I cannot imagine that a UBI-related tax would in any way disincentivize me from working, especially if it's applied across incomes.
In fact, even for someone like me, I think the UBI would provide just a bit more emotional security -- knowledge that if a job or investment risk I took didn't pay out, there would still be food and housing for my family.
Going from anecdotes, it is at least as easy to imagine a future in which better art and writing are created than can be created now as lifestyle security is extended to more creative people.
Your comment makes an excellent point. If our economy really was organized around incentivizing production, there are many things we could do to that end. In addition to a 100% inheritance tax, we could also surely implement policies that discouraged most types of rent-seeking and the passive growth of wealth that has allowed the richest in our country to become even richer without having to produce anything.
Except that an inheritance tax creates a large disincentive for people with children to create wealth, when passing that wealth on to their progeny is their motivation for creating it.
Like being an absentee landlord. If owning and renting out property you do not live at and are only collecting passive income from was made illegal, way more people would be able to afford housing and it would solve a lot of equality issues. The whole practice is literal rent-seeking and only concentrates capital in the hands of a small minority.
Presumably the 100% inheritance tax includes all assets including property. This is a recipe for violent revolution with a dystopian outcome as history tells us.
... which also disincentivizes work more than UBI, because why work a low-wage job for that minimum income when you can get it for nothing instead? whereas with UBI it's always in addition.
I would have to see something backing that up since unpaid internships would not be just the province of the well off and employers would have some incentive to raise wages where I don't think UBI would do that. You also assume for every $ I get from work would be deducted from my payment which isn't true for a lot of negative income tax schemes.
Interesting, you are saying getting money from doing nothing disincentivizes. You mean like through any multiplicative process like investing and interest bearing processes? So you only support additive income? I'm with you! let's get rid of multiplicative income and we solve the wealth distribution problem. You can only make 14 thousand times the average man if you work 14 thousand times harder.
What are the better ways to address the perverse incentives that trap people in poverty?
Also, do you think the current distribution of incomes is proportional to how much wealth is produced? Does an executive who makes a hundred times as much as a skilled worker work a hundred times harder, or produce a hundred times as much value for people, in some measurable way?
I am not sure if basic income works. But I am certain that assuming everyone is lazy and won't want to work if they don't strictly need to for survival is not how people work. Market-oriented thinking seems to assume this. But I think that most people want to have a purposeful life and achieve things.
I do expect it will influence the number of bullshit jobs that exist to keep people at work. And it might influence the lowest income and most mechanical types of work. Which is fine if we can automate and mechanize those. But I don't expect a lot of effect on more intellectual work.
> the market does not want their goods or services! They should fail as quickly as possible, not continue to drag on producing things people don't want.
>>>Basic income guarantees you a monthly starting salary above the poverty line for the rest of your life
If the poverty line stayed constant, basic income is a no-brainer. But basic income makes the cost of goods rise. Demand for goods increases, but supply diminishes. Nobody will do the crap jobs without higher pay, raising the price of everything. Basic income is impossible.
Citation needed. Demand for some goods will possibly decrease: like payday loans or bankruptcy law. Demand for luxury goods won't change at all: yachts, private jets. But even the demand for Big Macs probably won't change all that much. Apply the same exercise to a bunch of other sundry cases: buying a house, life-saving medication, buying a smartphone. You will quickly realize that you cannot categorically state that "demand for goods increases". And more precisely, it is almost impossible to demonstrate that demand will increase the same amount for all kinds of goods. You really need to investigate how much demand will increase for each particular kind of good.
> Supply diminishes.
Citation needed. One thing for which supply will likely diminish: consumer debt assets. Since presumably the introduction of basic income will lead to a decrease in consumer debt. But "goods" in general? What basis do you have for saying this?
> Nobody will do the crap jobs without higher pay, raising the price of everything.
Citation needed. Business owners are very interested in replacing crap jobs with automation. Also, in general, the crappiest jobs today are done by illegal immigrants, who presumably wouldn't be receiving basic income in the future.
More people buying stuff increases demand - econ 101. If more people aren't buying stuff, why bother giving them the money? Of course prices will rise.
The only way this isn't equivalent to the government printing money is the money comes out some rich people/company's savings accounts where it wasn't being spent anyway.
It seems like you read neither my post nor the article itself. The article was proposing redistribution of income, so it's definitely NOT equivalent to the government printing money. And in my post, I listed several cases of stuff people will buy less of and other stuff people will not buy more of in a basic income society.
I'm not sure if you're purposefully ignoring the main issues with UBI, but in case you're not: the most important stuff (things like food, rent, clothing, energy, medicine, basic services) will have more demand (from all the people who can't afford these right now), and less supply (because a lot of these are done with low-paid labour - definitely clothing, food and basic services, along with things like garbage collection and construction). This will completely change how the society works.
So if the supply of low paid labor drops, and the demand rises, the value of low paid labor increases. The reason those jobs have been filled with low paid labor is the workers had no other choice.
In this situation they'd end up well rewarded for their work, and those workers with more spending power has traditionally been great for the economy.
Lot's of things have completely changed how society works, why shouldn't society change?
... but are still getting those things through means-tested programs, for the most part. The UBI doesn't mean more people get fed; it means fewer strings attached to where they choose to live and what food they choose to eat and whether they can get a side job to supplement (google "welfare cliff".)
Yes, the price of yachts won't increase, but who cares?
Do a simple thought experiment. Imagine there are 1 million poor. They, and everyone else, receive $12K per year. The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation. That's $12 Billion more now competing for a fixed amount of goods. What would any company/retailer/landlord do if they immediately sold out of everything they had? They'd raise prices until supply and demand were in equilibrium again. And thus the very things the poor need are the things the prices will increase the most, by virtue of them competing to purchase those items.
I'm not saying it's fair or right. But it is reality.
You didn't read the article. The only people who receive net $12k per year are those who have zero income. Everyone else receives net <$12k per year, because some of their income is taxed in order to finance basic income.
> The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation.
Incorrect. Who are you to dictate to people how to spend that money? "All" is not the amount they will spend, and "basic needs" is not the only thing they will spend it on. They will save some of it. And they will spend some (maybe close to all) of that money on paying off debt. There is $747 billion in credit card debt, $1.14 trillion in auto loans, and $1.28 trillion in student loads. And some of it will go to everything else: alcohol, video games, travel, etc.
And by the way, how many Big Macs do you think people want to buy? How many houses do you think they want to buy? How many trips do you think they want to take?
> That's $12 Billion more now competing for a fixed amount of goods.
Definitely not $12 Billion, as I have demonstrated above. And there is no such thing as a "fixed amount of goods" in economics.
Of course prices will change. But they will change in healthy ways. The idea that there's some sort of feedback loop present here that causes basic income to cancel out its own effects is completely unfounded.
You said we are going to give $12 billion to the poor
There is $747 billion of credit card debt in the United States. Much of that comes from lending in the past to the poor to finance their basic needs.
$747 billion > $12 billion
It is possible that all of 1 year's basic income entirely goes toward paying off credit card debt. In this scenario:
1) The poor receive a much needed benefit from basic income: they get to pay off their credit card bills.
2) There is no change in demand on basic goods whatsoever.
3) This significant paying down of debt leads to consumer interest rates going down, which further helps the poor.
So here is one scenario that is a counterexample to your claim that this can "any other change hurts the poor". This is an example which helps the poor.
You are forgetting that people have the freedom to do what they want with their money. When prices go up for one thing, they spend their money in other ways.
Healthy ways for prices to change:
1) The price change is stable, rather than runaway. It happens once, and that's it, but we continue to pay basic income year after year. This is expected, if we keep the money supply fixed.
2) The price change eventually leads to an increase in wages for the poor, which have been stagnant for decades.
Paying off debt is good. Once it's paid off, that money will probably go to goods and services (if you say the poor will save it instead, they weren't that poor to begin with).
So your scenario of paying off debt for one year just pushes the inevitable out one year.
And that one time price change will cancel out the benefit of the UBI. It has to, otherwise companies are not getting the most profit they can (they won't do that), or we magically have unending goods and services. Supply and demand can't be overcome in a market economy of scare resources.
Raising the minimum wage eventually has a similar effect. Ask yourself why a loaf of bread isn't $0.05 any more (it surely was sometime in the past 200 years). The obvious answer is inflation. But why? Why did prices increase over time? What economic pressure caused that?
> So your scenario of paying off debt for one year just pushes the inevitable out one year.
There is enough debt out there that the poor can spend many years paying it off.
> Raising the minimum wage eventually has a similar effect. Ask yourself why a loaf of bread isn't $0.05 any more (it surely was sometime in the past 200 years). The obvious answer is inflation. But why? Why did prices increase over time? What economic pressure caused that?
Milton Friedman and Anna Schwartz wrote A Monetary History of the United States, 1867-1960, where they made the claim "inflation is always and everywhere a monetary phenomenon" [1] Thus, the reason why a loaf of bread isn't $0.05 anymore is because of the expansion of money supply, not because of raising minimum wage. The article suggests financing basic income through tax revenues -- and even doing so without raising the deficit. It is not suggesting expanding money supply. Milton Friedman himself even supported the kind of basic income described in the article, which he called a "negative income tax" [2]
Yes but that's irrelevant. What will really happen is, as I said earlier, a combination of saving/investing, spending, and paying off debt. (Obviously, what else can you do with money?) Spending on basic needs is not the only option. They are not forced to do so. And don't underestimate just how much debt the American poor have, and how much they can benefit from relieving their debt.
Sorry. I must have mis-understood your argument about why prices would change. I thought you were positing that the recipients might spend all the UBI on retiring credit card debt, causing prices to not change. I thought that to be exceptionally unlikely.
Upon re-reading, I still read your words that way.
I was just giving one scenario, though unlikely, in which consumer spending does not increase whatsoever. It is likely that a large fraction, maybe even a majority, of basic income would go to paying off debt rather than consumer spending.
Given that there is such a huge amount of personal debt out there, the poor have the freedom to allocate their basic income between spending and paying off debt for many years. And when prices go up for certain things, they might reallocate their income to other things.
Let's assume that basic income will cause net income to go up for the poor (otherwise, what's the point?) But let's also assume that prices on certain goods will go up (a totally reasonable assumption).
Then let's measure wealth in terms of "Big Macs". As in, how many Big Macs can you buy in one year? If basic income causes this number to go up for you... then you've benefitted from basic income, regardless of how much the price of a Big Mac increased.
If your income goes from zero to non-zero... you definitely benefit. Because with zero income, you can buy zero Big Macs. But with non-zero income, you can buy non-zero Big Macs... no matter how much the price of a Big Mac goes up. And the number of Big Macs you can buy will be greater than one... Big Macs won't cost $12,000 in this scenario. That would be ridiculous.
So we can use this as a framework to analyze how basic income impacts society. Then it is obvious that basic income benefits the poorest in society. But you are right, it may harm some people. However, it requires a much more rigorous analysis than you are providing.
With that thinking, the government should just turn on the printing presses and hand money out. People who had zero now have non-zero. Surely Big Macs can't go to $12,000, right?
You haven't read the article. Printing presses are not in consideration here. The whole point was that basic income is redistributive: basic income is financed by income tax.
I wasn't saying the article said printing presses would be used. But taking money that wasn't being spent (all that money corporations and the rich have stowed away) and giving it to people that will spend it is equivalent - lots of money that's not in circulation entering circulation. You end up with more money in circulation either way, with the ramifications that come with it (inflation).
I too think your economic arguments are pretty far off from a likely scenario, so I'll try to say a little bit in counter.
In your example, $12bn goes to people who are 'poor'. You imagine all of this will be spent on scarce consumer resources and housing, creating increasing cost for those items.
You make a number of assumptions that have to be teased out before we can know how likely that scenario is:
1. Poor people will just spend any additional income.
2. Poor people will not have housing mobility and therefore be subject to rising prices for housing.
3. Consumer goods are scarce and supply will not increase based on increased demand.
1. has shown to be (surprisingly?) untrue in basic income trials so far. Read about India's Basic Income experiments at resources like this: http://www.salon.com/2015/01/25/sponsored_by_my_husband_why_... It turns out poor people use income security to accrue useful economic assets that have sustained financial benefits. Food security also improves. In addition, research into economic security shows that money worries vastly lower IQ (google for Sendhil Mullainathan and Eldar Shafir to learn more). So the data we have so far is pretty uniformly the opposite of your narrative here.
2. This to me seems pretty obviously false, or at least likely to at most be a small impact net of the money. Poorer families must choose between job proximity, communities, schools, all kinds of things, often with less than one month of safety money. Mobility is extraordinarily low in these circumstances. Guaranteed payments will vastly increase mobility for this community, allowing them to purchase property in economically appealing areas while expanding the number of jobs they take. This will at most redistribute people. Perhaps slumlords will raise rents immediately, but they will find two things: tenants who stay can pay, lowering their own costs, and tenants who don't like prices will move much more quickly. Liquidity in markets is good for efficiency. I don't think you can tell a compelling story about harm to poor renters with UBI here, it's just not sound reasoning.
3. This seems like a very silly assertion to make. Automated factories and low-labor-cost factories around the world would cheerfully sell 5x the consumer goods they manufacture now, and prices will decrease as demand increases. Perhaps the increased demand for factory workers would drive some additional jobs. But, a) I'm not sure what scarce resource you imagine will drive inflationary costs, and b) the India research shows spending goes into a pretty diverse basket of things, education, food security, investment and housing among others.
Try this experiment: imagine we gave everyone a UBI of $1 Billion per year. Sure, it's rediculous, but think of the ramifications (changes in prices in particular). If you could chart how much you give everyone (from 0 to $1 billion) vs the amount prices would change, you'd have some continuous upward movement. Maybe linear, maybe not. The point is giving everyone $1 billion obviously will increase prices. But there isn't some point along that line where it suddenly jumps. It's not like giving everyone $35K per year has no impact, but $35,100 does. It all has an impact, scaled by the amount given.
Again, I think you're assuming that at the far left of that 'linear' chart people spend solely on scarce goods. Research shows that isn't so. I think the actual chart would look like a tiny price bump which went mostly flat until some critical amount, well over $12k a year, was reached, at which point we'd see something like what you're describing.
True. So where do all of these new businesses get their employees? They'll have to compete for them by raising wages (which would be good). Except people have somewhat less incentive to work now that they're getting some free money, so the wages have to be raised even more to get them to work. That translates directly into higher prices.
Each individual piece of UBI sounds good. But when the whole system gets put together, it doesn't balance out. It can't.
Sure - if you assume these goods have a fixed quantity. For example, I'm willing to bet McDonald's is capable of making many, many, many more big macs than they currently do.
They've simply pegged their supply chain to the amount of demand they currently see while minimizing costs and trying to optimize profit.
Almost all industries get significant savings the larger they scale. There's very real reason to think many industries would get cheaper if they were suddenly trying to produce a multiple of the same product.
We are taking about "basic" needs here. All your argument then must imply that UBI or NOT UBI, "basic needs" must be denied to part of the population or else they get too expensive.
And as almost all will agree, that's not only logically wrong, it's also morally wrong.
Everybody understands that UBI is a solution to meeting "basic" needs, the contentious part is the "universal".
I don't need basic income. If I received free money that I don't need, I might decide to double my cheese consumption. If many people like me do this, then the price of cheese will go up, hurting poor people.
What is the difference between money "you don't need" and money you do need? If, instead of receiving basic income, you received a pay raise, is that money you do or don't need?
Money "you don't need" is an economic absurdity.
The only people who double their cheese consumption are people who really like cheese. And if basic income helps you and others truly express their passion for cheese, more power to you. Poor people will eat something else.
What's the difference, from an economic standpoint? The original poster is saying that some people want cheese and other people need cheese, therefore the people who need cheese will not get what they don't need?
There's something absurd in this argument. No one's going to double their cheese consumption, just because they got money "they don't need", and no one is going to starve because the price of cheese went up.
But also, whatever problem we think we are debating here, it exists with or without basic income.
To clarify my point (although from what you wrote I think you got it right):
The argument that "basic needs" prices will rise (which was what my OP gave) because of UBI must be false, since being "basic needs", they already must be provided to anyone anyway.
In any case, even if a big part of the population didn't had access to "basic needs" the argument would be that: "we can't allow them to have those basic needs or else their price will increase to the rest of us". Than that, is morally wrong.
I hope now it is totally clear what I meant above.
If I had a magic wand and could give everyone everything, I'd do it.
But my wishes don't overcome basic supply and demand. Unless there's a lot more goods suddenly being produced, prices will rise if more people want them and can pay for them, which will tend to cancel the benefits of UBI.
> Demand for luxury goods won't change at all: yachts, private jets.
Are you sure about that? Who will be bearing the tax burden to pay for UBI? Are not those the people who are currently buying yachts and private jets?
Business jet usage may decline as well as a substantial part of that usage is to generate income and growth for their businesses. With higher taxes, there is less incentive to risk money to grow your business further, putting negative pressure on business aviation.
It is unlikely that the kind of income tax increase suggested in the article will have a material impact on the extremely wealthy.
But that's beside the point. I was trying to answer the claim that "demand for goods will only go up" with examples of goods where demand stays the same or goes down. So whether demand for luxury goods stays the same or goes down, you are only reinforcing my point.
The resources that are being spent on luxury goods will be converted to resources spent on food.
That's called economics 101. Supply and demand. If you take money away from rich people, they will have less money to spend on rich people things, and the world will produce less of those things.
What about machines doing most of the jobs so there are only a few jobs left? The value the machines generate would be enough to generate the basic income. Why is it impossible?
It's difficult with a free market. If income goes up for everyone, people can spend more on basic necessities. Robot owners will make prices higher to maximize profit.
A few solutions:
1)Have the government set prices for basic necessities.
2)The government owns companies that produce basic necessities.
3)Replace capitalism.
Capitalism is going away, no matter what, once we have massive unemployment due to automation.
You think people are just going to accept starvation? Shit will get real, real fast.
And most people aren't as articulate or reasonable as the people on this site.
There will be massive violence.
A better way to look at UBI is that it's not about giving poor people money. Its about keeping the fabric of society together and preventing revolutions once automation hits fully.
If we are literally at 100% robot labor, a basic income could be a resource dividend. Basically, the argument for really strong property rights is that it encourages utilization of resources (and thus makes them broadly available to the economy).
With 100% robot labor, utilization of a resource is purely a political decision. The idea that we should give outsize rewards to historical incumbents for their historical incumbency becomes sort of silly.
But those increasing prices for robot labor are (partially) fed into the basic income, so UBI receivers will have more to spend.
There is a cycle and how quickly it cycles will be determined by how quick the various parts move.
Not all robot owners will increase their prices just as fast and people will not buy from the overtly expensive sellers.
Similar to the economic cycle we already have.
I certainly don't have an economics degree though.
When robots can produce most of the necessary life goods (food, energy, clothing and other manufacturing, medicine), one of the following will happen: (1) robots will be more expensive than humans, and nothing will change (unlikely), (2) there will be a monopoly on robot labour, resulting in an increase of inequality and eventually war (semi-likely), (3) there will be a competition on robot labour, resulting in a sharp fall of prices for basic goods (likely), (4) governments buying (some) robot labour and offering the goods to citizens for free (likely).
(3) and (4) would be nice, but (2) can happen with an oligopoly as well as with a monopoly. Working machines are already owned or controlled by a small number of companies.
Machines cost money to develop and buy. They will only replace a class of worker/task once the value exists.
It's very expensive to develop a machine that can replace sewing workers (DARPA is working on one because the US military has a need for it). It hasn't yet created any value because fabric is ridiculously complicated for robots but comparatively very easy for humans to manipulate). So far, the sewing robot is neither very useful nor very valuable (since it is still orders of magnitudes more expensive than fabric workers).
If low-paying work is less desirable than it is now, companies will have to deal with the game theory reactions of how consumers react to there being a shortage of fast food workers, bus boys, valets, etc. There is a certain amount of slack that consumers will absorb, either in resources (time, money, effort) expended. IKEA makes you bus your own tables like a cafeteria. I imagine if bus boys and fast food workers suddenly became more rare / expensive, companies would ask their customers to inconvenience themselves to maintain their profit margins / economic viability.
I think that is what they meant. When machines make all things so that they are basically free, then it might work. Until then, doing UBI would cause supply shortages and higher prices.
So, I, programmer, will be forced to work 12 hours per day to keep robots firmware up to date, while everybody else will enjoy free ride? Sorry, it will not work: I will chose free ride too.
Why not just decrease number of working hours to say 2 per day, but for everybody, instead?
> Sorry, it will not work: I will chose free ride too.
Maybe you would, but I think most people would rather have a job and be fabulously wealthy relative to those surviving on UBI alone. See: all the people who work 60h a week in SF making $200k instead of chilling at a bank working 35h for $80k.
Politics will tell people that they will raise basic income to win election. To raise income, they will raise taxes, so I will work 80h for $20K instead of $200K.
It's not a joke: post-USSR countries already have exactly this problem.
Alternatively - under UBI - you may decide to work 6 hours per day, and enjoy the earned income in addition to the regular Basic Income payment, all the while knowing that you can leave (or switch employer) any time without fear of destitution.
You would still face the same issue since, you make more money you may have a nicer apartment or house. You would then still be trapped in that job to maintain your chosen lifestyle.
Yes but that is entirely your choice. If you want the freedom to leave a job on a whim then you likely are not going to be spending money on a home that is too expensive to live in without working.
Taxes will eat that income with easy: 50% tax on firm, 50% tax on worker before salary, 30% tax on worker after salary, 18% tax into basic income fund, 20% VAT, and hundreds of other, smaller taxes.
Many civilized countries have some form of basic income, but not directly. As soon as we are supporting people, rent, food, we are providing some sort of basic income. An income that is probably to low, which they can get away with because it's not expressed in €.
I dont commute to work in the morning, I work from home :). To address what I think is your point there is a difference between a road I pay taxes for and use/can as compared to giving money to an individual that you gain nothing from.
Also to me its not about taxes etc, its about the shift it would bring and the ramifications of having the government issue such a huge amount of money.
The government already issues this amount of money. It's just inefficiently distributed through individual and corporate welfare subsidies. A UBI would replace nearly all of that.
If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up spending that $1k on either housing, bills or food.
So you will still need a job if you want all three of those things, not sit around and contemplate what you should do with your life.
It's sort of like how the ACA raised the overall price of insurance.
Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
> If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up spending that $1k on either housing, bills or food.
They don't get $1000/month for "basic needs", they get $1000/month for whatever they want. It's completely unconditional.
Which means people wouldn't go out and buy twice as much food as they currently eat because they suddenly have a pile of money that can only be used for buying food. Unless they are currently starving, which hardly anyone in the US is, they would buy the same amount of food that they do now and there would be no inflation in the price of food.
And anything with the effect of increasing nominal housing prices without reducing the ability of people to buy housing is excellent because it allows you to increase the housing stock without reducing nominal housing prices and causing existing homeowners to go underwater on their mortgages. In other words you can build more housing to cancel out the effect without NIMBYs fighting you and thus allow more people to own homes.
> It's sort of like how the ACA raised the overall price of insurance.
The primary driver of increasing insurance premiums wasn't the subsidy, it was the requirement that insurance companies take people with preexisting conditions. Suddenly a million sick people are making insurance claims who previously had no insurance, what did you think was going to happen to premiums?
> Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
Only if you want them to pretend to look for a job and never find one. And you want to create a poverty trap because actually taking a job doesn't actually increase the amount of money in their pocket because the government withdraws an equivalent amount of benefits.
> is excellent because it allows you to increase the housing stock without reducing nominal housing prices and causing existing homeowners to go underwater on their mortgages
So is inflation, and the real estate markets are usually the first to adjust.
Your view of housing is this commodity that's in low supply only because we don't have enough manpower to build more. In reality anyone with a knack for cheap housing can become a proud homeowner in Detroit, Baltimore, rural parts of Mississippi or Kansas relatively on the cheap. Kansas will even throw in some free land grants, so a homeowner and a landowner, living the dream.
People don't want just any cheap housing. They want proximity to their work, in a good school district for their kids, with quick access to transportation, cool restaurants and coffee shops within walking distance. The supply of those will still be constrained.
> People don't want just any cheap housing. They want proximity to their work, in a good school district for their kids, with quick access to transportation, cool restaurants and coffee shops within walking distance. The supply of those will still be constrained.
The supply of those is artificially constrained. There is no practical limit to housing density when you can build vertically.
The problem is you have people who just took out a $1,000,000 mortgage and would sooner murder you with an axe than see the value fall to $600,000 because the local housing supply increased. But if you have something to exert upward pressure on nominal housing prices then you can build new housing stock and have nominal prices stay the same. Inflation and inflation-like effects are great for this because it means nominal housing prices stay the same while real housing prices fall, which is the only real way for more people to own a home.
> There is no practical limit to housing density when you can build vertically.
Why not? Higher structures require deeper and more complex foundations, more reinforced concrete and steel, extra precautions for strong winds and earthquakes. Setting up proper elevator systems, plumbing, air venting, noise isolation, electrical wiring and natural gas hookups is also subject to more restrictive building code (and for a good reason). This is before we get into the costs of underground/overground parking, which has additional weight and reinforcement requirements of its own.
And even when you follow everything to the book, you might still mess up, i.e. Millenium Tower in San Francisco.
You can buy a house on the prairie or a mobile home on the cheap, but except for major real estate downturns you rarely see a high-rise condo on the cheap. Even when it is (Miami circa 2008) the price often comes with exorbitant HOA fee to keep the amenities running.
> Higher structures require deeper and more complex foundations, more reinforced concrete and steel, extra precautions for strong winds and earthquakes. Setting up proper elevator systems, plumbing, air venting, noise isolation, electrical wiring and natural gas hookups is also subject to more restrictive building code (and for a good reason). This is before we get into the costs of underground/overground parking, which has additional weight and reinforcement requirements of its own.
None of which is insurmountable, as evidenced by the fact that such buildings actually exist. Now compare the rent in a high rise in Chicago with the same style of building in San Francisco or NYC. The cost difference isn't because of the cost of the building.
We can take turns naming even more expensive high rises, but the goal is to show that increase in high rises leads to drastic overall decrease in cost of living. Manhattan, in theory, should be dirt cheap as far as $/sq.ft. due to massive supply, and it's not. Neither is Singapore or Shanghai. There's a natural price floor for such buildings, and it's not yet competitive with pricing on cheaper options, such as suburban detached, suburban attached or mobile homes.
Pending a discovery of cheaper construction materials or methods we probably won't see massively cheaper high rises.
> Manhattan, in theory, should be dirt cheap as far as $/sq.ft. due to massive supply, and it's not.
Because it's supply and demand. The demand is very high in Manhattan. What we would expect is that anywhere there is such high demand that the price is higher than the construction cost, there would be new construction (increase in supply) until prices fall to meet the construction cost. In other words the cost of an apartment in any city should have the same floor (unless every inch of the city is already covered in high rises) because new apartments would be built until the rent falls below the construction cost of building more apartments.
But we don't see that because of zoning regulations that prohibit it. (And in part because of property taxes that discourage construction; land value tax is better in cities.)
> But we don't see that because of zoning regulations that prohibit it.
Are you sure that's the one and only answer? There are some cities with very lax zoning regulations, Dallas or Houston come to mind. And yet we don't see a massive migration from suburbs to the high rises. Are there any cities that could serve as examples to support your theory? It's not like residential high-rises are a recent phenomenon.
You'd have to do a bit more explanation on property taxes - governments stand to collect more property taxes per sq.ft. of land used from high rises than from detached single-family, so a municipality is generally interested in cramming more units into a land lot, not less. How do property taxes discourage construction?
> There are some cities with very lax zoning regulations, Dallas or Houston come to mind. And yet we don't see a massive migration from suburbs to the high rises.
Have you actually compared rents in cities like Houston to the same sized apartments in cities with more restrictive zoning? They're lower in Houston.
The reason people don't live in high rises in Texas cities is that they're so sprawled they don't need vertical construction. San Francisco has almost five times the population density of Houston even though Houston has almost three times as many people.
> How do property taxes discourage construction?
They discourage the property owners. If you own a ten story building on a lot zoned for twenty, adding the extra ten floors looks a lot more attractive before you subtract out the additional property taxes you'll owe forever if you do it.
This is a compounding problem because the property taxes are based on the property value but the property value is based on scarcity, so if housing units become scarce then property values (and thus property taxes) go up and you have to charge higher rents to justify new construction. Which allows rents to go even higher because there is less new construction which further increases property taxes and requires even higher rents to justify new construction and so on
> If you own a ten story building on a lot zoned for twenty, adding the extra ten floors looks a lot more attractive before you subtract out the additional property taxes you'll owe forever if you do it.
By that logic one should bulldoze the existing 10-story building and stick to owning dirt lots, realizing enormous property tax savings along the way.
The reason you don't see entire cities converted into dirt lots is that in reality things don't work that way.
The developer that builds condos doesn't really have an opinion on property taxes because paying those will be up to condo owners. The developer that builds apartment towers intended for rent doesn't care because the rental operator will take over, and the assessment of a rental property is a function of existing cashflows and comparables, subject to change when assessed at too high of a value.
> property values (and thus property taxes) go up and you have to charge higher rents to justify new construction
In reality large-scale commercial build-outs do not depend on financing from existing renters. A property operator (the principal) typically contributes some cash but also brings in a variety of outside investors. The rest of the sum is raised via fixed-interest debt and is one of the largest areas of US commercial banking. As a rental property reaches stabilization point, the principal conducts another round of outside investments, this time in somewhat worse investor terms, as the property is de-risked and has relatively stable cash flows. The money is used to pay down the commercial loan to a reasonable LTV.
When the plans for a new project show up on the horizon, the fundraising cycle begins again, with principal contributing some "skin in the game", outside investors participating in the first round, and numbers from existing properties being used in a presentation deck sent to the bank in order to secure a new commercial loan.
If everybody financed by raising rents on existing renters, than apartments by some aggressively growing operators (let's say Avalon Bay) would be extremely expensive, while exact same apartments owned by conservatively stable operators (let's say Essex Property Trust) would be extremely cheap. We do not see that imbalance in the marketplace.
> By that logic one should bulldoze the existing 10-story building and stick to owning dirt lots, realizing enormous property tax savings along the way.
It's not that rent < property tax, it's that new construction cost < net present value of future rent < new construction cost + net present value of additional property tax.
> The developer that builds condos doesn't really have an opinion on property taxes because paying those will be up to condo owners.
Net present value of expected future property tax comes out of what the buyer will pay the builder for the condo, and the builder doesn't build the condo when the price he can sell it for falls below the construction cost.
> In reality large-scale commercial build-outs do not depend on financing from existing renters.
How you finance construction has nothing to do with it.
> Suddenly a million sick people are making insurance claims who previously had no insurance, what did you think was going to happen to premiums?
This is what I mean.
From a business point of view, suddenly everyone has an extra $1000.
They were buying stuff from you until now, there's no reason not to try to drive the price up to see how much more you can charge now.
If enough businesses will do that, it will reach a critical mass where the ones charging old prices are the idiots left behind.
So if literally everyone has an extra $1000, nobody has an extra $1000.
A bit different with insurance, since the government forced insurance companies to accept all these people, so they increased prices. I'll ignore the fact that they were still making enough profit to just accept the losses, because people are greedy and they will always want all the profit they can get.
> From a business point of view, suddenly everyone has an extra $1000.
It's not "suddenly everyone has an extra $1000", it's "suddenly the average person with insurance is sicker". It's like what happens if you want to buy fire insurance in an area with a higher incidence of wildfires. The reason insurance costs more there isn't inflation.
> They were buying stuff from you until now, there's no reason not to try to drive the price up to see how much more you can charge now.
Except that you have competitors who are happy to take all your business by selling at the existing price which is already profitable.
> So if literally everyone has an extra $1000, nobody has an extra $1000.
If literally everyone has an extra $1000 then you must have printed the money, which isn't what anyone is proposing.
And even then is still not true, because printing $1000 for each person is still wealth redistribution from creditors to debtors.
So I get where you're going with this, but the businesses are still competing with one another in a free market.
So yes, you're right that if all the avocado farmers in California decided to engage in price fixing because they know that more money exists and that they can get it, they probably can. But it presupposes highly monopolistic behavior that doesn't seem very likely to work for most markets. Especially if it's easy to become an entrepreneur.
The business, after all, makes a profit as long as their price is above their cost. So unless their costs go up, competition keeps prices down.
Now, I think you're half right -- prices will go up, but it's not because of gouging by middlemen or traditional inflation. It will be because as people drop out of the labor market, the really undesirable jobs will become more costly to fill.
But that strikes me as a much more fair free market than what we have now. Yes, you will have to pay more to have your garbage picked up in front of your house. Why? Because as it turns out, you would much rather be doing whatever you do than deal with a thousand people's garbage. Maybe they should be getting paid more than you, in a voluntary free market.
So I imagine it will be sort-of inflation, but almost better described as a rebalancing of the economy. Jobs that humans can do much more easily than robots will get higher salaries. Jobs that are enjoyable get lower salaries. Overall, salary spread across jobs becomes much smaller.
But I don't think it's necessarily likely to be some kind of overall inflation, it's a redistribution of wealth accomplished by simultaneous direct transfer of wealth through the UBI, in addition to a redistribution of power accomplished by allowing "Nothing" to be an option that employers have to compete against.
> But it presupposes highly monopolistic behavior that doesn't seem very likely to work for most markets.
Higher education costs expanded to absorb the extra money from the student loans thrown at them, healthcare costs increased as more consumers started competing for a fixed supply of appointment slots, hospital beds and medical services.
> Higher education costs expanded to absorb the extra money from the student loans thrown at them
That's because they're catastrophically stupid industry-specific interest rate subsidies. A dollar for tuition is then less expensive than a dollar for anything else, so everyone conspires to buy things with the cheap government money that isn't available when used for anything else. And that process is highly inefficient because it's basically a huge implicit fraud scheme to redirect subsidized student loan money to things that aren't strictly education, which no one can admit to out loud or explicitly negotiate for because it's illegal to use the money for that. Then it's, look how expensive "education" has become!
A UBI doesn't do that because it doesn't restrict what you can use the money for.
> healthcare costs increased as more consumers started competing for a fixed supply of appointment slots, hospital beds and medical services.
In part this is the same thing (here is a huge pile of money that you can only use for healthcare, now everyone go swamp the doctor's office at the same time). And the rest of it is temporary because no one knew the law was coming ahead of time so now we need some time to increase the supply of healthcare providers.
> because it's basically a huge implicit fraud scheme to redirect subsidized student loan money to things that aren't strictly education, which no one can admit to out loud or explicitly negotiate for
I agree, but how does showing up with a wad of cash instead of a check from a student loan agency increase your negotiating power? Large number of international students today (Chinese and Saudi until recently) paid cash and yet had little say on football teams, new administrative buildings or spending in general. The university system just goes out and borrows whatever it feels like, the debt service is added to expenses.
UBI also removes the advantage of centralized negotiating power that's beneficial in industries like healthcare. With Medicare or a private insurance company the $500 list price for doctor's exam can be negotiated down to $99. With UBI it's the consumer against doctor's office, whch historically did not play out well due to massive information disadvantage.
> I agree, but how does showing up with a wad of cash instead of a check from a student loan agency increase your negotiating power?
Because cash you can spend somewhere else.
Suppose you like football. If the money is "student loans" then you can spend it by attending a school with a big fancy college football stadium and subsidized tickets for students. If the the money is cash then you can use it to go to that school instead of a less expensive one with no football stadium, or you can go to the less expensive school and use the money to buy NFL season tickets.
So when the money is student loans, people have only the first option and all the schools have to build big fancy football stadiums to attract students. But you can't do that on a per-student basis. And you can't directly buy college football tickets with student loan money but you can launder it through administration to subsidize them. So everybody who attends that school ends up paying for football even if all they really wanted was an education, and then people have to consider the quality of the school's football team when choosing schools instead of only the quality of their professors. It would have been better to have just let the students who like football use the money to buy NFL tickets.
And so on for twelve other categories of student loan money laundering colleges have to engage in to attract students.
> UBI also removes the advantage of centralized negotiating power that's beneficial in industries like healthcare. With Medicare or a private insurance company the $500 list price for doctor's exam can be negotiated down to $99.
There is no reason you can't use your UBI money to buy private insurance.
And the only reason the list price for those things is $500 is that everybody knows the scam. The buyer for the insurance company wants to look like a great negotiator to his boss, so the doctor's office claims everything costs five times as much as they actually want and the buyer gets to look like a big hero for whacking it down so much.
And in general insurance makes things cost more for the same reason colleges with fancy football stadiums are more expensive. People don't ask whether something is worth the cost when they're spending somebody else's money. If you're paying out of your own pocket, you ask if knowing the result of some test is really worth $1200 of your money. If the insurance company is paying for it, you run all the tests whether you need them or not.
About health costs, things will become more expensive if every person has to negotiate for themselves. People who have a medical problem, want the problem fixed. They don't have the time or ability to find a good alternative. An insurance or government is in a much better position, because they have the time and expertise to shop for an alternative beforehand and make it an all or nothing proposition for the producer.
You're making the argument for medical licensing, not the argument for single payer. People don't know which doctors are quacks so the government has to step in. But money is a different question -- if we required doctors to provide prospective patients with a standardized price schedule it would be trivial for patients to see which doctor charges $100 and which charges $200.
If you have government or insurance pay for everything (and then pay everyone the same amount) the buyer still doesn't know which doctor provides the best care, but now doctors have the incentive to provide no more than the bare minimum care because they aren't allowed to charge any more for better quality/convenience/atmosphere for the same procedure.
For example, let's say someone starts with 0$, and is given 1k$.
Is this person better off than they were before? Yes! Their wealth has increased by infinity. It does not matter if inflation was 100%, because 100% is less than infinity.
Also, you can get rid of inflation, by taking the money way from someone else. You aren't adding money to the system. You are redistributing it.
Long term this may indeed happen but in the short term, it seems unlikely. Like with school vouchers, if I ran a private for-profit school and knew my students suddenly had an extra $X,000 to spend on tuition, my short term move would understandably be to raise tuition at least some percentage of that amount. If the market responds in a couple of years by forcing me to dial it back, so be it, but in the meantime I've made more money without having to provide more services.
In this context "long term" is the time it takes for the market to respond by building more schools or housing or whatever, which generally takes a low single digit number of years (like one). To which the response then becomes, so what?
And that's assuming your argument is true, which in general it isn't. If you raise prices then some of your customers will go elsewhere. That's why sellers don't raise prices already. If you raise prices and your competitors don't, even if your customers have extra money, people can still count and a dollar is still a dollar. The profit-maximizing strategy isn't to raise prices, it's to expand capacity as quickly as possible (which in many cases is immediate) so that you can make your existing profit across more customers who can now afford your product, without losing them to competitors with lower prices.
It feels ambitious to suppose an equilibrium state for schooling to be met within a year. I'd buy two or three.
Is it the case that existing private schools have much excess capacity? Frequently the argument for private schools is smaller class sizes; a rapid influx of new students without new, excellent teachers defeats the purpose. Presumably new classrooms would need to be constructed and so on.
If you receive a $5,000 voucher and your private school jacks up tuition by let's say $1,000, it is unlikely many parents are going to disrupt their routines and children's routines to reclaim that amount, especially since they are feeling relief from a net $4K tuition break. Tuition has effectively decreased, so why rock the boat?
Suppose you're right and a $5000 voucher will cause a $1000 increase in tuition for three years, after which new schools will open and the competition causes tuition to fall again.
So as a parent, for the first three years I'm up net $4000/year and $1000/year is going to build new school capacity to meet increased demand, and thereafter I get the whole $5000/year. Am I supposed to be unhappy about this?
You are basically saying that what happens in the short term is not relevant, but as taxpayers, a lot of people will be upset by profiteering in the manner I described, even if it is only for 1-3 years.
Or from another angle- what will prevent an ever increasing amount of tuition such as happened with the higher education system? "We need to raise the voucher to $10,000 now…"
It's not really profiteering. Expanding capacity costs money. That's where the money is going.
And what you're getting at is one of the reasons that a UBI is better than vouchers.
Suppose you create a $5000 education voucher and there was previously a school with a tuition of $4000. That is now over; they might as well charge $5000. And if there is a higher quality school charging $10,000 and people whine that the voucher doesn't cover it and have the value of the voucher increased, now every school will charge $10,000, because that is the only way to get the whole voucher and there is no reason not to.
But suppose you replace that with $10,000/year in cash like a UBI. Can all schools now raise tuition to the entire amount? Obviously not, because all else equal people will still prefer the $7500/year school so they can spend the remaining $2500 on whatever they want.
UBI still will have some short term profiteering effects. A slum lord who knows his tenants are uniformly $1K/mo richer is going to raise the rent short term. You seem to be assuming everyone is automatically acting in their long term best interest. "Oh neat, I'm going to raise the rent $500 and plow it into new apartments and renovations so five years from now I'm still competitive!" Vs. "I'm going to raise it $500 and buy a BMW!" I just don't see it not happening. I agree that long term it will hash out.
There is always going to be that one guy who responds to any change by going on a bender and smashing his own property. Tomorrow they won't be competitive. That sounds like self-correction.
1) Americans currently consume (not necessarily eat) 3800 kcals/day of food without basic income. Are you saying that basic income will make that number go up?
2) The American housing market is very messed up and far from a free market, so any prediction up or down is very difficult. I predict that Basic Income will cause a bunch of people to move from high cost cities like NYC & SF into low cost areas so that they can live comfortably on the basic income. So there will be pressures both up and down on prices. But point #1 still stands. Right now most Americans already have a place to live, and basic income isn't going to cause people to go out and buy a second house so the effects are only going to be at the margin.
3) According to most economists, inflation is always a monetary phenomenon. If you print money to pay for UBI, inflation will go up. If you take from the rich to give to the poor, inflation will stay constant.
I don't understand this reasoning. Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life. If (2) is true and we introduce UBI, then there will be more demand for the basic necessities of life (coming from all the people who were unable to afford them before), which will in itself result in inflation (which, btw, doesn't measure the total supply of money, but overweights the basic necessities of life and underweights e.g. the stock market). If you combine that with the decreased motivation of people to work (resulting in lower supply), the resulting inflation will be massive.
> Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life.
We have discovered the source of the misunderstanding.
(2) was true, which means we need a UBI or welfare and we already have welfare, so (1) is now also true.
What we are discussing is replacing welfare with a UBI, which increases the incentive to find work over welfare because unlike welfare you don't lose the UBI when you get a job.
> So you're saying that everyone who's promoting UBI is actually just doing it to incentivise poor people to work?
What I'm saying is that is a primary difference between a UBI and the status quo. Giving money (or less efficient money-equivalent things) to poor people is not, because we already do that.
Prove that it will be "massive". How much? The numbers are important here. I am willing to accept that some prices will go up. But I don't think it's "massive" and some are claiming that there's runaway inflation in this scenario. There isn't.
We've also had a deflationary enviroment for quite some time. We need inflation.
Except when they're caught short during a natural disaster, Walmart is not supply-constrained. If they sell more they'll order more and factories will make more. The problem is (3) people don't always have the money to buy, which limits the size of that market.
Inflation happens when the market can't adjust fast enough or they hit real supply constraints (such as real estate in big cities).
This is not the way supply and demand work. If there is a short-term spike in demand, there is a temporary increase in price, which creates profits for suppliers. Increased profits draw more supply. In the medium to long run, price is driven to marginal cost (plus a market return on assets employed), and excess profit is eliminated (again, "excess" meaning that beyond market rates of risk adjusted asset returns).
The idea that food prices would dramatically increase is kind of strange, because it requires that we have no way to increase supply of food production, despite our demonstrable history of doing exactly that through productivity increases. We had less farmland in 2012 than ten years prior, but the value of output doubled during the same time, so supply is in no way constrained.
> 1) Americans currently consume (not necessarily eat) 3800 kcals/day of food without basic income. Are you saying that basic income will make that number go up?
I think they were referring to the cost of food, not the calories.
A UBI would end up selectively helping those who need it and not putting money in the pocket of those who don't (in general). The UBI would have to be paid by taxes -- more than $1000 per month would come from those who are well off and less than $1000 per month would come from those in need.
Your theory that the cost of food would go up if people had more money is out of whack.
For most people that $1000 is taken away by taxation and UBI is income neutral for them.
>Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
No, it's not. If you don't believe me read what Milton Friedman wrote about subject. Friedman suggested UBI or negative income tax because they would not distort markets the way welfare programs do.
Social welfare programs create incentive traps where people have marginal effective tax rates as high as 80-90%. You work and your welfare drops accordingly. Here in Finland marginal effective tax rate in some cases is higher than 100%.
Because this will give income to people who don't have amount of money right now. They will also come in market to buy things. So total number of people buying stuff will increase.
I have the theory that if you give money to everybody, prices will go up because sellers will figure they can increase the price of everything without it negatively affecting sales, since every buyer simply has more money to spare, no excuses.
> I have the theory that if you give money to everybody, prices would go up because sellers will figure they can increase the price of everything without it negatively affecting sales, since every buyer simply has more money to spare, no excuses.
That's how monopoly markets work. But if you're a grocery store and you realize everybody now has $4 more in their pockets, you can't start charging $5 for an apple when the store across the street is still charging $1.
You'll definitely start charging $2, otherwise you would not have stayed in business for long.
If you keep the same price, but everyone is charging 4x as much, you are losing, because everyone else needs 4x less customers to make the same profit as you, not to mention the work involved.
You would not have been in a position to earn any of the money you have without public infrastructure paid for by taxes. Maybe you would have been successful under an anarchy, but I doubt that is the case for the majority of HN'ers, and my best guess is that your ideological position would crumble pretty quickly if you were forced to live in the world which you ostensibly desire. Fortunately for everyone I can't see that happening without massive death and destruction.
Right -- so those 7 states listed in the article have alternative forms of tax (corporate income tax, oil-production taxes, etc.). Are you opposed solely to personal income taxes (while still supporting alternative forms of tax), or are you opposed to all taxation?
Personal income tax only. In general, I believe individuals are the best deciders on how to spend their money, but I do not deny that gov has a responsibility to defend life, liberty and property. If it can't do that with the voluntary support of it's citizens (aka owners) then it deserves to be replaced. Fortunately we have a pretty awesome system to do exactly that.
I was too glib (wrong) in my second response to the assertion that my statement implies all social policies are theft.
I see; fair enough :). I'm not personally opposed to personal income tax, but I'm from a country that leans a little more to the left overall and the benefits of my taxation are evident. It's also less vexing; the tax comes directly out of my paycheque -- I never see that money. My understanding is that in the USA, one has to annually perform a federal tax return?
I'm not exactly pro-income tax either, but (governed effectively!) personal income tax has always seemed to me like a least-worst solution to funding a government and a country's public infrastructure. It's not great, but it provides the least opportunity for mass rorting (although that no longer seems to be true, the more I think on it). I could be convinced that other solutions work :).
Thanks :) Yes, every year we are expected to fill out a bunch of paperwork (generally between 1 and 100 pages) and hand it in by a certain date "or else". The bureaucracy that interprets this paperwork (imho) is a total waste of money (on the personal income tax side), and the time_cost*every_taxpayer is absurd.
For most people, their employer took out (in excess) taxes all year and sent them in, so they get a refund (after the paperwork ritual) on the loan they made to the gov with 0% interest.
I'm not a fan on taxes on things you own because it means you don't _really_ own them. For example a person who owns a piece of property but can not pay the property tax. It gets taken from them by force if necessary, hence they never really owned it. At the very least we should carve out an exemption for property you live on. Transaction taxes don't have that problem.
It's not necessarily for propaganda purposes, but I agree that this is a highly nonstandard terminology and it's not obvious to me that it improves anyone's ability to communicate.
You know we had hospitals, housing assistance and food assistance before the personal income tax right? A personal income tax is just one way we fund gov services, there are plenty of other options that don't require a gun to the head.
Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state level personal income tax.
You say taxation is theft. Anarchists say that the fact that you have any property that can be taxed is theft. This is a matter of opinion, not an indisputable fact.
Thank you. If my seizing my neighbor's extra car because I do not have one is theft, it is still theft if I convince a majority to pass a law take it for me. And it is enforced with the threat of (or actual) violence against my neighbor, if my neighbor refuses.
Negative. Theft is a crime. Crime is defined by the criminal law. If you choose to have your own personal criminal law, so that you can call whatever you like theft, that's up to you, but if you're going to do that with language, you can claim anything is anything.
Okay, we disagree. (*edit: we disagree about taxes being theft). But that is what I enjoy about communicating with other intelligent people, we can discuss ideas and not have to agree.
Much of this is intertwined in Libertarianism, Austrian Economics, and even Minarchy/Anarchy.
I obey the laws of the jurisdiction that I reside in, but that does not mean that I am not trying to actively change those laws for what I perceive as "the better"...
I search for as close an approximation to "the best way" as I can, understanding that humans are fallible by nature.
For entertainment, I am re-reading the book A Lodging of Wayfaring Men, a fictional book by Paul Rosenberg. While it is in severe need of editing (self-published?) I find it entertaining enough to re-read to get excited/stimulated about the possibilities of correcting systems that I consider to be operating very inefficiently, or flat out wrong.
Theft is a crime committed by another citizen. Redistribution of wealth is a "social program" committed by the State. See, with language, you can justify anything. One can make anything legal or illegal. It all depends on which Entity is saying those words. That's the nature of political power...
"A traitor is everyone who does not agree with me."
---George III of the United Kingdom
Such a statement is only meaningful if the rules and systems that distribute wealth are sufficiently orderly and broadly considered fair. In a system considered to be significantly arbitrary or rigged, the whole concept of ownership is seriously weakened.
UBI is not adding money to the system. No new dollars would be printed. So there would be little to no effect on inflation. It's moving around existing money via taxation and redistribution.
Under this scheme there wouldn't be any incentive for a business to raise their prices. Imagine that UBI is implemented and imagine it's effects on a business in a mid-sized city, say a restaurant. The business now has an additional 50,000 potential customers, people who can afford to eat out more often due to UBI.
How should the restaurant owner react? He can raise his prices. But that exposes him to competitors who keep their prices the same. He can lower his prices. In which case he will earn less money per plate, but he now has a pool of 50,000 new customers to draw on, so he can make more money on volume. A good restaurateur would lower his prices proactively and try capture a large chunk of this new, larger market of customers.
The point is it's easy to see how UBI could cause prices to go down, and not just up. It's simplistic and misleading to assert that all businesses will start price gouging in response to a UBI. Populations are more complicated that this, and markets are dynamic.
Nobody is denying anybody anything. Everyone is free to work, and compensation for your work fulfills your basic needs. A better system for human society has yet to be invented.
Who is "we"? Who is "all"? Does this include migrants and undocumented aliens who do the dangerous jobs for low pay with no labor protections or civil rights? Or would they be excluded from the basic income? If they are excluded, and have no rights, but continue to perform the dirty jobs while the rest of "us" relax and benefit from their labor, how is that different from the system of chattel plantation slavery?
Slavery involves no pay and being unable to leave under threat of violence. Undocumented workers are paid and are free to leave. Indeed, many people are actively asking them to leave.
I take your point, but it's not slavery. A basic income isn't meant to preclude anyone from working. If it existed and undocumented workers were removed, those jobs would have to pay a wage sufficient to entice someone who doesn't need them for survival, or we'd have to go without those services.
According to very quick Web searches, $1000 is about 80% of the median personal income in the usa. I calculated the same rate for India and it comes to ₹2751 per month based on a median income of $616 per annum.
If I were to get ₹2751 extra every month, it wouldn't make a difference for me at all. In fact, my monthly expenses are 10x this amount and I'm only spending less than 50% of my income.
So this measure surely isn't meant to have any effect on people like me. I would imagine it's a similar calculation for most people on this website. For this reason alone, we are very badly positioned to react in an emotional manner. The only decisions that should be taken should be taken on the basis of trials and hard statistics. Otherwise the "free money for slackers" sentiment is too strong when it may not be the truth.
Problem #1: Minimum wage locks some people out of the workforce. If you aren't disabled, but your skills don't rise the value of 2x of the minimum wage (wage + payroll taxes + benefits), then you are locked out of finding any legal work. If you start to raise the minimum wage much higher than it already is, you will start to make some forms or work and some industries economically unfeasible.
Problem #2: Disability most definitely does not "work great". If you take disability, you can be charged with a felony for every seeking work again. It is a side-track to poverty for the remainder of your life, despite the fact that you may be re-employable at some time in the future (possibly due to innovations in technology or changes in the workforce). Additionally, despite the name of the program, not everyone who accepts "disability" (SSDI) is incapable of working. After trade deals like NAFTA, there is a structural change in some industries and regions that qualifies workers in that industry (usually ones where the trade deal is expected to offshore jobs) for "disability" even though their body and mind are perfectly capable of working again. It would be better to give them a UBI-like program which doesn't dis-incentivize them to permanently leave the workforce.
We have safety nets like "Section 8" (housing vouchers), "Food stamps" (grocery vouchers), unemployment insurance (UBI-like fixed payments), but each of these is a step function. As soon as you get a job that pays above the cut-off range, you lose the benefits and can have a net loss in purchasing power. A UBI to replace these programs is superior because there would no longer be a penalty for finding a job or making above the cut-off.
Or even better, make the minimum wage $150/hour. Why not?
Or maybe you are suggesting that it should be lowered? (It's already above the poverty line for an individual in the US.)
It would work for a certain period of time until inflation catches up.
You could keep raising the basic income to keep pace, but it would require raising it more every time and sooner than the last time (exponential). Inflation can be quite damaging because not everything inflates at the same rate. For example salaries are pretty slow to inflate compared to the prices for things like gas or food. This is why a mason could afford to buy a car outright on their salary in the 1950s but almost everyone needs an auto loan to buy a car today.
You could try to stop inflation using price controls but this almost always leads to supply shortages. For an example look at rent ceilings in NYC, or the way grocery stores functioned in eastern bloc socialist countries. They had plenty of cash and prices were very cheap but there was nothing on the shelves to buy.
tl;dr Basic income would just create a new $0 mark.
My hunch is that costs of services will increase while consumables remain flat. Australia has a complex minimum wage system, but 20 AUD is typical and on the order of 15 USD. The result is that services such house cleaners, laundromats and car detailing are order 3 times expensive as in the US, however produce and imported goods (Australia continues to systematically kill off its domestic manufacturing capability) are more or less comparable with US prices.
Maybe its just a SV thing, but having my (share) house maintained by an army of Latinos for a fraction of my income makes me feel incredibly uneasy. The other one that gets me are the car washes along El Camino where white people drink coffee as their cars are tended to by Latinos.
Basic income will kill businesses that rely on cheap labour, as suddenly incremental incentive to work will be minimal at $9/hour (why work only to double my anual income?). To restore the incentive wages will also need to rise, and the net result will be more expensive services accessed by a smaller percentage of the highest earners.
I think that depends on how unpleasant the job is. Doubling your income sounds pretty good, actually.
On the margin, basic income gives people a bit more freedom to make their own choices. I think the price for services in Silicon Valley would go up, but I suspect more because people can take basic income with them when moving somewhere cheaper. With the extra money, low wage/low cost places are likely to become more popular.
While I don't disagree that inflation would affect the purchasing power of a UBI, I think you discount the fact that a fairly significant percentage of the US is already on some form of safety net or welfare program.
Whether it be "food stamps" (vouchers for food, reimbursed as governments like a UBI), SSDI disability (fixed payments due to work disability or structural changes in an industry), unemployment insurance payments (temporary fixed payments), Social Security (long-term fixed payments), Section 8 housing (vouchers for housing), etc, there are plenty of examples where the issues you raise are already affecting the recipients. I've heard anecdotally that many doctors have ceased accepting MedicAid (suggesting that medical inflation has already outpaced the government's ability to reimburse).
I think your argument should focus more on why the UBI is not any better than the morass of existing programs, some of which have disincentives for people getting off of the program. I'm not yet convinced is is either better or worse, but I don't think inflation is a deal-killer for UBI because it's already an existing issue in currently running programs.
Inflation comes from too much money chasing too few goods. How it works is different in each market. Real estate in big cities is supply-constrained but many other goods and services aren't, given time to adjust.
In particular, there's little reason to believe that basic income would be bad for Walmart. They'd sell more and their workers would be better off.
There's no reason for price controls and they wouldn't help.
There will be many effects (some positive, some negative) but I think you need to use your imagination more, and don't assume that what we have today is somehow natural.
On the margin this is increased freedom, security, and buying power for people at the bottom. How they would use it is hard to predict, but I think we can look at retirees to get some idea about which areas of the country become more popular.
New money would most definitely have to be introduced. In the US we introduce new money into the system every year by having a fed govt budget deficit.
This isn't a necessary condition, it's just the easier route to take politically, and if there is one thing we can agree upon, its that our new administration doesn't give a damn about criticism, so we at least stand a chance with such a proposal.
This will never happen in the US. You will have to move out of the country to a different country that institutes a UBI if you are looking for something like this (which I think is a good idea)
