Sometimes there has been skepticism about giving people cash as a form of charity because they're worried that the money won't be well spent. (They'll spend it on drugs or alcohol or whatever.) More evidence to settle that question is useful.
If we've moved beyond that to worrying about what happens at scale, that's progress.
Studies like this do not settle that issue for me.
This study is based solely on what the participants claim they spend money on. It's a core principle of the study that the money is "no strings attached". That makes it useless as an actual study, IMO.
Without a more comprehensive study of the budgets of people before and after, the idea that the money won't be spent well is a fair argument.
All money is fungible. That's the point of UBI: let individuals decide for themselves what the best use of it is, instead of having the state decide for them.
Different people have different wants and needs. Would you consider toys for children "spent well"? What about a netflix subscription? What if that netflix subscription gives the kids something to do while Mom goes to school? What about a babysitter, so parents can go out and feel human for once? What about a framed picture of a relative that just passed away?
Improving financial literacy is a vital and often under-discussed component of successful UBI programs. I think it's crucially important we make programs explaining banking, savings, etc available (and maybe even required!) as part of UBI programs. These are absolutely necessary to give people the financial fundamentals they need to survive in a world that doesn't care enough about them to teach it effectively, if at all, in public schools.
But if you're insisting on evaluating the success of UBI experiments based on what the recipients spend money on, instead of how it affects their quality of life and/or their financial trajectory... then you're completely missing the point of UBI.
> Different people have different wants and needs. Would you consider toys for children "spent well"? What about a netflix subscription? What if that netflix subscription gives the kids something to do while Mom goes to school? What about a babysitter, so parents can go out and feel human for once? What about a framed picture of a relative that just passed away
All of those are good examples of money well spent, or at least fairly well spent.
Bad examples would be things like drugs, alcohol, prostitutes, gambling, car/truck modifications, dirt bikes, ATVs, pornography, guns, etc.
That's what people are concerned about, not photographs of your dead grandma.
guns tend to have an amazing return on investment. Every time a gun law passes, my buddy's gun collection goes up in value.
But to be more serious. I hadn't really thought about it before, but the majority things in your list, while often considered trashy in american culture, all tend to have the potential to have big negative externalities. This could end up being a real problem for things like UBI. As an economist, I have some pretty severe reservations about UBI mostly at a meta level regarding unavoidable inflationary pressures that may all but negate the value of an UBI. But it could end up being even worse than I imagine if an UBI ends up flooding neighborhoods with an excess of high negative externality goods and services.
Still, I've heard good things about the effects of direct cash transfers in very poor regions. They seem to be no more destructive than, say, giving cattle, while having lower overhead so more of the wealth is transferred. I understand much of the money ends up going towards things that more money conscious people might considered wasteful, but many indicators suggest there's still a general life improvement for those who receive the cash, even if the effects may be short lived. So I'm a little open minded about the concept in general.
How many dirt bikes do you think someone is buying? Is your concern that after being on UBI for a year someone will have 12 dirt bikes and a starving child?
If 99 people don’t buy drugs, and 1 person does, is the system a failure?
I'm just giving legitimate examples of wasteful things that people spend money on, because the person I was responding to seemed to have trouble coming up with good ones.
Just like the examples you're giving me- 12 dirt bikes? That's obviously a ridiculous proposition. So is only 1 out of 99 using that money to buy drugs- a much larger percentage of our population than that partakes. Using stupid examples like that doesn't persuade anybody that Americans are mostly financially responsible.
I'm trying to find the pattern in your bad examples. It's not morality, they're all luxuries? Would a gaming computer be bad?
UBI should incentivise other income and would still be available even to the wealthy. Some of the extra will go to industriousness, some will go to frivolousness, but would we expect anything different from general economic prosperity? I guess we need to find a control group that gets more money on their own?
You have to understand that you need to sell UBI to America. It will never be implemented unless you can convince the tax paying populous that it will be "good", for some definition of "good". With taglines like that, you are making ubi less and less desirable for most people.
Many if those things have negative externalities. More guns, more violence. More prostitution, more human trafficking and other abuse (same for pornography). more illicit drugs, more trips to the emergency room and more deaths, etc.
It seems to me that all your examples involve people with less chances in life.
However, the primary drive for criminality and prostitution is poverty. Less poverty means the supply of dealers, prostitutes shrinks, with rising demand prices will shoot up.
More guns, more violence by a smaller group, thus easier to the police. More prostitution by a smaller group, thus driving prices up which allows an easier escape. More human trafficking, why? This is hardly a side-job. Do you mean an increased immigration?
That wasn't the question. GP points out that that is completely obvious. Nobody would doubt that free money would make you happy without considering the economic issues of scaling the program.
The issue is "are the recipients spending the money well"? Are they saving, and using the money to advance themselves, and budgeting? Or is it all going to "waste" and doing nothing productive?
> The issue is "are the recipients spending the money well"? Are they saving, and using the money to advance themselves, and budgeting? Or is it all going to "waste" and doing nothing productive?
Even just spending it on better food, better clothes, or going to the movies is spending it well. It's UBI, intended to be used as a tool to put a floor on standard of living, not a scholarship or a 401k match.
Why would you target productivity over quality of life? We're already more productive than at any point in human history. The productivity is why we can optimize for quality of life, not a justification for attempting to squeeze even more productivity out of citizens.
Sorry if I was unclear, I meant is the money being used productively (paying off debts, investing, buying products in bulk, etc).
> Why would you target productivity over quality of life?
I'm not sure that I do that, but the general public absolutely will. The taxpaying public will absolutely not tolerate a UBI that just funnels money into drug cartels, etc. You need to show that the UBI is useful or helpful somehow, not just that it makes people happy.
Takes time to win hearts and minds, and for the electorate to shift on issues [1]. No different than when Social Security and Medicare were radical ideas. Yang wasn't wrong, he was just early. Direct cash transfers have been shown to improve quality of life and pull people out of poverty. [2]
Spain got something close [3] (but not exactly UBI) recently. I would not be surprised to see this trend continue, either voluntarily or because nation states exhaust all other options.
Actually a portion of spending by participants in this study is tracked via pre-paid debit cards.
To quote from the article: "Data show that since the pandemic started, food spending by SEED recipients increased nearly 25% over the monthly average. In March, it accounted for 46.5% of spending the researchers were able to track using prepaid debit cards"
Its more about whether UBI leads to productivity or not. If someone is going to drink 6 beers and do lines of coke all day, but they create goods and services, they are more useful than someone who is drug/alcohol free who watches Netflix all day.
My fear is that true UBI will create a giant section of the population whose sole purpose is to consume food/water/utilities and create meaningless art, music, babies, etc. which raises questions about what our purpose in the universe is.
"I must study politics and war that my sons may have liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain."
> My fear is that true UBI will create a giant section of the population whose sole purpose is to consume food/water/utilities and create meaningless art, music, babies, etc. which raises questions about what our purpose in the universe is.
What they consume is culture, culture has a price tag, and the most sought-after culture is the most expensive.[1]
I'm sure UBI will change marginal spending behaviors. The question is by how much. I doubt it would change spending habits so much that civilization collapses, but even if it would some evidence of that effect would be captured by studies researching more boring marginal effects.
[1] Including the culture of non-consumerism, which uncoincidentally is conspicuously favored by the elite and wealthy.
If we've moved beyond that to worrying about what happens at scale, that's progress.