One of the first pieces of advice I had when my company landed its investment was to pay ourselves a decent (not extravagant) wage so that my time went on worrying about the company rather than how I was going to afford to do things in my personal life. The same is true for employees - if they're paid a good living they will spend more time on thinking about problems in their job instead.
If a government were to do that for everyone it seems pretty obvious that society will be better off - people will spend their time working on things to improve everyone's life rather than worrying about how to afford their rent.
I would wager there will be people who will take advantage of the system and use it as a opportunity to not work and laze around all day however those people will be the one who are not particularly productive in their work anyway.
They might find something else to do they might not but that's OK it is an acceptable loss.
On the other end companies which used to take advantage of the job market and the fact that everybody needs a job to survive will have a hard time to find employees since now people can afford to be selective.
When survival is off the table nothing is more important than enjoying your job since you spend a great deal of the day doing it.
Another possibility is part-time work being more sought after since some people may want to work but wouldn't like to spend 8 hours every day doing it.
Overall i believe it will have a positive effect on society if you don't get hung up on the fact that some people will take advantage of it which most politicians tend to do even with the benefit system in the UK.
I imagine partitioning living NEEDS [housing, food, transportation] as an area of the economy with its own money/token/basic-income-credits system separate from the WANT economy of everything else.
Maybe, but there's strong evidence (from the field of macroeconomics) that allowing people to just receive money (rather than payments in kind) makes them even better off. Although you may fret about people using the money for bad things, in reality mostly they don't, but they are better at allocating resources than a central planner. Think of it this way, to the citizen who actually wants to be better off, would you rather be able to cut your spending in order to make a smart investment or not be able to do so?
They can also better fit their own needs. Maybe a smaller worse shelter wouldn't be an issue for them, but they would much prefer to have warmer clothing (smaller and warmer in comparison to peers in the same location). Maybe they forgo milk to buy even more lentils.
The problem is the intractable dispute about what things should go into which category. Empirically, there has been a strong historical tendency to move things into the "NEED" category that were traditionally in the "WANT" category.
For example, indoor plumbing was considered a grossly extravagant luxury for almost all of human history. Within the last hundred years, the richer societies have made laws (building codes) that have switched it to a "NEED". The same thing happend with indoor heating systems.
As for food, most medieval European peasants considered themselves lucky if they got a bowl of thin gruel every day. Asian peasants thought they were lucky to get a bowl of rice. Many didn't get anything on many days. Now in the US the government is talking about "food deserts" and shifting many previously "luxury" fresh nutritious foods into the "NEED" category.
>For example, indoor plumbing was considered a grossly extravagant luxury for almost all of human history. Within the last hundred years, the richer societies have made laws (building codes) that have switched it to a "NEED". The same thing happend with indoor heating systems.
Yes, we rather do like preventing dysentery, bubonic plague, and flu epidemics. Public health is indeed a necessity rather than a luxury.
This is precisely my point. For almost all of human history, public health was indeed a luxury rather than a necessity. In many parts of the world, it still is today.
The details of a specific proposal are not relevant. No matter what specific items you choose for these categories, eventually people will want things you say are "extravagant luxuries" and call them "needs".
Progress will always shift things from "WANT" to "NEED".
If you want to play that game living past your 30's is a "WANT" rather than a "NEED". You probably won't find many people who think this particular "WANT" isn't a "NEED".
"Progress" is a nebulous and heavily opinion-based concept. It is not a well defined factual, monotonic process whereby society invariably moves from "bad old ways" to "better new ways".
This is not a game, and I'm not arguing the merits of any specific proposals. It's an empirical analysis of what has actually happened in world history.
Things you think are "needs" today were considered extravagant luxuries for almost all of history, and many of the things you personally view as luxuries will be called "needs" by others. Thus, the parent comment's plan to divide the economy into "wants" and "needs" is not tractable, since these categories are both shifting through time and also heavily disputed from one person to the next at any given point in time.
I am not arguing in favor of this arrangement. I'm pointing out that that's simply the way it actually is, regardless of our personal preferences or judgements of the situation.
What if items from the WANT category are moved to the NEED category when either 1 of 2 things are met. It's empirically shown to improve the health of the owners. Or it's possible to create the item for everyone on earth, meaning we have the resources/manufacturing without harming the biosphere.
With these 2 rules we should see a steady increase in QoL for everyone.
The main problem with the whole idea is that it is inevitable that an exchange rate will be set and they will be traded. What does a NEED collector do with the collected NEED currency?
I've thought about this, too but I can't figure out how you'd prevent those tokens from being bartered for more traditional currency outside of the necessary conversion by landlords and grocers and other providers.
With ubiquitous computing now available to everyone we might be able to fully track that sub set of transactions with 'currency with state and history' as opposed to traditional 'dumb dollars' but I think it would be a hard problem getting it to play nice with the traditional currency economy.
It won't. The more industrious will barter at a gain while others will barter at a loss. Consider food stamps. Some will trade them $2 of stamps for $1 of cash. But others will buy food, cook and then sell the food, bringing in $2 dollars of cash for $1 of stamps.
Food stamps are a decent example. It's not perfect yes, but it basically becomes undesirable to trade the cash of the WANT economy for the goods of the NEEDs economy.
Is physical intimacy (no, this doesn't mean sex, though that is one form) a want or a need? Consider the mortality rate of infants who receive no physical touch but have all their classical needs met compared to infants who are held and cared for.
Thanks. I need to read this when I have the time -- my initial reaction (from skimming) is that it keeps insisting that increasing money supply does not cause inflation because of the Fed pumping money into the economy, and giving it to investors who are not spending it.
Giving it to the poor, who have a higher marginal utility for their dollars, should cause more inflation than giving it to the rich. Again, from skimming, they seem to mention the idea of it being more useful for the poor, but dance around actually addressing it directly.
Inflation doesn't necessarily follow. If everyone was given a 10% raise then you would get inflation, but a fixed distribution results in a very different effect. One possibility is that people would purchase roughly the same amount with the lower classes having free time to educate themselves rather than working minimum wage jobs. I mean, I can't imagine somebody throwing their lives away just to buy another loaf of bread or bottle of milk every week.
What incentive do they have to educate themselves? After all they currently had an incentive to educate themselves during their period of compulsory education yet still ended up working in a minimum wage job they value so little they'd quit if they were given a minimum wage.
You don't see masses of low waged workers in countries with maximum working hours (and thus some leisure time) educating themselves.
The modern economy is hit driven. 1 J. K. Rowling pays for a lot of not J.K. Rowlings.
Individual's fortunes look a whole lot like a random walk. Some people, get over their crack addiction and become writers for the new york times, some people get over their wall street addiction and become crack smokers. It's tough to say where a particular person will be in 20 years. Before you start listing off titans of silicon valley, i'd like to point at all the super rich Vanderbilts running around.
It's up to us as a civilization to decide how low to make the floor. any benefit will have fraud. Straight up anarchy, you keep what you kill sounds rough. If that's your plan, i'm going to get together with my friends and stop you. Nobody works ever, also sounds dumb. I'm going to get together with some other friends and stop that too.
So, we pick a spot somewhere between the two extremes. Historically, value was created by people. More and more, value is created by machines. Cab drivers, sports writers and port masters are all on the way out.
I'm not at all sure how civilization works when only the top 10% or 1% of people are actually capable of being useful to the economy, regardless of level of training.
Very wonderfully put, this is the basic premise in which I see no other way than a form of basic income for developed nations in the future. The interesting question is one of timeframe and methods.
Free education via internet + age/experience + potential for income at a level significantly about basic income.
I don't think comparing how a 15 year old treated mandatory education and how a 25 might treat the opportunity to educate themselves to better their lives is very fair.
I'd assume the maximum working hours in those countries are above 0. When you have to take an hour long bus each way from an exhausting minimum wage job there's not a lot of time to make significant progress in education.
You seem to assume that every school gives an equally good education and accommodates all students' individual strengths and difficulties perfectly.
In some parts of the world, like the US, better school districts are correlated to areas with higher property tax revenue.
You don't mention the fact it's completely unworkable mathematically. In the UK I believe it'd cost £240 billion a year. Where the hell would anyone be able to find that money from? (Tackling tax avoidance from Starbucks isn't a credible answer).
Just to put it in context, that's twice the entire NHS's budget, or 5 times our defence spending.
To put it further into context £240 billion is slightly less than what the UK government spends on pensions and welfare. Since basic income would replace much of the need for pensions and welfare, it might just end up more or less balancing out.
Note that this £240 billion will have the overheads of running the welfare system built into it too. So the actual pension checks are only a percentage of that figure, with a basic income that's not means tested the government has far less overhead.
We wouldn't need money for most benefits any more (pensions, income support, etc) so that's about £120bn of the £240bn found immediately. You mention the NHS - we'd be able to spend a lot less on that if people didn't have poverty-induced health problems, so there's another £35bn (assuming a 30% reduction of the £110bn). It's not unreasonable to assume that the difference of £85bn would essentially pay for itself by increasing the tax revenue from people spending their basic income. over time the country's GDP and tax revenue would increase due to people being better off (they go hand-in-hand).
> It's not unreasonable to assume that the difference of £85bn would essentially pay for itself by increasing the tax revenue from people spending their basic income.
If the idea is to give everybody money so that you can tax it more, you're engaging in economic waste. Without being able to increase productivity in other areas to cover the lost value, you will, hopefully slowly, but eventually trend towards zero, and a failure of the system overall.
Encouraging economic productivity in an environment in which nobody has to be productive may or may not be possible, I honestly haven't any idea, but its certainty doesn't seem terribly obvious to me.
It's also worth remembering that at the moment everyone in the UK gets a tax free allowance of £10,600 and an NI free allowance of about £8000 (in 2015/16). The basic income is expected to replace that as well, which means if everyone continues to earn the same amounts that's an extra £2000 per person earning more than £10k (roughly, assuming it's now taxed at 20% in the first tax bracket). NI would be less, and is probably more complex as employers pay some of that, but just assuming that only the employees contributions are now paid on what was previously NI free you're still looking at another £1k each. It's not much individually, but when you take out the costs of administering all of that it'll add up.
Why would poverty related health problems disappear unless the basic income is significantly higher than the current unemployment or disability benefits as you're saying those are being replaced.
A basic income doesn't remove the potential for poverty.
Yeah I'm sure you could find that missing £85bn down the back of a sofa in whitehall.
Sorry, but the whole idea is laughable. Not to mention the fact that it's another incentive to have more children and bigger families because the state will give you more money.
My inner pessimist is expecting to see a "there was this Daily Mail article one time".
Everywhere I look, I see the opposite. Families with a comfortable amount of disposable income have the 2.4 kids, but those in poverty (and particularly the working poor) have 3, or upwards. Anecdotal, but I'm yet to see evidence to the contrary
is it a smooth relationship, or is it more of a step function with 1 steps?
I always suspected that the reality was more like "people who are able to afford children and able to make long-term plans tend to have only as many children as they want, when they feel they are ready, but people who aren't able to afford children or who don't make long-term plans will tend to take a more devil-may-care attitude towards procreation."
From what I heard, in very poor countries children are often treated as investment. A child can start paying itself off by working as soon as even 5 years after being born. As a parent, you want someone to take care of you when you're old, and given high children mortality, you're better off making more of them in hope at least one survives to adulthood. Basically, those people are too poor to afford not having many children.
This is rapidly becoming ancient history. There's a wonderful youtube video showing all the countries on earth, moving on a multimensional chart by infant mortality and standard of living. The origin is ideal. All countries but 1 or two have shot like arrows toward the origin over the last century.
Across countries this is a very noisy cloud of points where, if you go out and calculate a regression it's pointing down. Like every other social variable.
Since population explosion has felt out of fashion, there's a long time that I didn't see such plot. But what I've seen has a much clearer tendency than most social correlations people use at real decisions. It's about as clear as most correlations of quality of life with GDP.
Ok, I think I should have written "international scale", I apologize for the confusion.
I don't know of any study on national level, i.e. of families in a single country. The only thing I know of are anecdotes and stories about very poor families having 5+ children.
Basically if you have two groups of American born, collage educated men, with of the same age then income positively correlates with number of children. But, if you compare collage dropouts vs. people that have PHD's then the PHD population makes more money and has fewer kids. So, education is a huge confounding factor.
We went from 14 being a reasonable age to start a family to 24 or even 34 being the 'reasonable age' that's a huge impact. But, ‘wealth’ as an independent factor aka adjusted for age, education, country etc becomes a positive factor.
PS: Historically, starvation also limited family size.
Checking the latest figures for 2016: 155B for pensions and welfare 56B. I assume the point is to replace both of those completely with the basic income so the net cost is not 240B, it is 29B. Not cheap, but not pie in the sky either. Sell a bank or two :)
£240 billion / 64.1 million people in the UK = £3,744/year (assuming no government overhead).
Seems low. That works out to be £312/mo/person. That certainly wouldn't seem to replace many costs (especially pensions and the like).
Let's say you wanted it to be £500/mo/person. That'd run you £384.6 billion/year. Add in, say, 5% overhead and you're at £403 billion/year. Where does that money come from? If you stick with the idea that the income is universal, you're dishing out £6,000/person/year, waiting a year, then taking it right back via taxes. Which seems incredibly wasteful, and might drive up that 5% overhead number.
You also have to factor in the fact that for most government welfare-type agencies a large portion of their budgets are spent running the bureaucracy, rather than going out to the people. Universal Basic Income greatly reduces the overhead costs. So £1 of Basic Income doesn't replace £1 of a current welfare program; it replaces £2 or £3 of the current program.
Put another way, if the current welfare spending is £120 billion/year, the recipients are only getting £40-£60 billion/year. So that's all of the Basic Income you need to replace the welfare spending, leaving you with a £60-£80 billion/year surplus.
Obviously, the actual amounts depend on the detailed overhead costs for each agency that would be replaced by a UBI program. But I'd be willing to bet on anywhere from 20% to 60% savings for each agency. UBI can be highly automated; with electronic payments and ties to a tax database, it can be as little as a smallish office of administrators and DevOps, and a server farm.
Eh, government bureaucracies in first-world aren't as inefficient as some people make a living claiming. In the US, administrative expenses for Social Security run less than 1% of the budget. Medicaid and Medicare run with similar margins. Compare this to private-sector insurance in the US, where 80-85% "medical loss ratios" (ie, the fraction of premiums paid out for medical care, as opposed to the fraction kept for administration, advertising, and profits) are common; even in the good old days (before the excesses of modern executive compensation, profits, and advertising) MLR peaked at around 95%.
The simple fact is that many social welfare programs are just expensive, because there are a lot of people being helped and the quantity of money you need to spend to make any difference is just adds up.
Bear in mind that "administrative expenses" can mean one thing to ordinary people, and something quite different to a government-sponsored accountant.
When Medicare/Medicaid pays $150 for the same type of crutch that sells in a local pharmacy for $15, that difference does not go into "administrative expenses". I might prefer the expense of a human employee driving to Walgreens, buying a crutch off the shelf, and delivering it by hand to the patient that needs it, rather than paying a hospital that big markup just because that's the most they can charge without the benefits management program automatically denying the expense. Because even if it costs $135 in labor and transportation for a human to do all that, the mere possibility that might happen would discourage the hospital from charging significantly more than the pharmacy across the street for exactly the same item, or from charging different prices to different people based on their insurance plans.
It would even work to just give the patient $150 in cash, and tell them to buy a crutch with it and keep the change. Or carve one out of a tree branch and keep all of it. If they end up not having a crutch, it won't be because they couldn't afford it.
You can't rely on a bureaucracy's reports on itself to reveal the inefficiencies of that bureaucracy. There is just too much political pressure to cook the books.
What distinguishes normal accountants from these apparently corrupt "government-sponsored accountants" who "cook the books"? Do they have pointy ears or forked tongues?
Your basic math is assuming the money is distributed to everyone. Wouldn't it make more sense to only give it to adults? That knocks out probably about 25% of the population so you're looking at 48 million. That gets us to £5000/year. Of course the article mentions differences between what single people get and what couples/families get which would also bring down the numbers.
The reason for that is to cover the cost of raising kids (in my extremely basic example). If the idea is to replace things like welfare, food stamps or whichever programs cover the cost of raising children, I think it's easiest to assume that everybody gets the same dollar amount (the de-facto average amount). There's a lot of ways to try to dice up the numbers (family size, married/unmarried, etc), but I think as a basic example, the numbers are fairly solid.
I did a back of the envelope calculation on this last year (so using 2013 figures) which I've pasted below. It works out not too bad; it's certainly within the realm of reason. I think it would probably be better to start it very low, around £20 a week, and slowly scale it up and let it replace welfare payments gradually.
If you think my figures are significantly out, I'd appreciate any corrections.
[There were requests for "back of a napkin" calculations, so I've done some for the UK. To convert to USD, just add 50%, as a rough measure.]
Firstly, I prefer to refer to this as a "Citizen's Dividend" rather than a "Basic Income", as I know for a fact that anyone on a low income would prefer to get a guaranteed £20 a week extra rather than hear a politician say, "We can't afford to pay £75 pounds a week to everyone, so we're doing nothing." Tell me if I'm wrong. But "Basic Income" if the preferred name, so I'll refer to it as that from now on.
The UK government spends £732 billion. If we subtract £222 billion for Social Protection (we're replacing all of it with our BI), we get £510 billion required. If we add up all government income except Income Tax - Business Rates, Excise, etc - we get £481 billion.
That leaves us a shortfall of £29 billion. For the sake of simplicity, I'm going to assume that reductions in crime, the increase in VAT revenue, better health, etc are going to cover that. Let's call it close enough for government work. At the end of the day, we currently borrow £84 billion anyway, so at worst I've slashed the deficit!
Income Tax brings in £167 billion. UK population I'm going to take at 60 million. So, as a starting point, that gives us a BI of £2,783 annually, or £54 ($80) a week. Well, that's not a bad start! Let's consider what it means for actual people. Thus far:
Who loves me:
- Right-wingers. I've eliminated (or vastly reduced) the deficit, effectively increased the income tax allowance by £2,783 and given them this amount in cash, while reducing welfare payments to lazy, single-mother immigrants. I should be head of the Conservative party.
- Most people on Job Seekers Allowance (unemployment benefit). While I've cut the amount they actually get, I've also cut out all the paperwork, visits to the job centre, taking money off them if they happen to earn something that week, etc etc. Money without the hassle.
- Low wage workers. This is a big boost above Working Tax Credit and is hassle free (you don't lose it by earning more). It also allows some degree of security in the event of losing their job.
Who hates me:
- Left-wingers. While I've helped some low paid workers, I've also slashed benefits, there's no housing support...in short I've cut welfare while giving more money to wealthy people. I should be head of the Conservative party.
- People who're claiming several benefits. People who're on sickness benefit. Basically, all the folk who've had their income reduced below a living wage.
- Pensioners. The state pension has been cut significantly (and illegally).
Ok, I think I need to balance it a bit more. I'm going to reduce the Income Tax allowance from £10,000 (current) to £6,000. This should balance out at the end. I'm going to assume this increases income tax revenue by 25% (I've no idea if this is remotely close. If anyone can be bothered finding out, please let me know). More controversially, I'm also going to increase income tax by 25%, so the basic rate is now 25% rather than 20%.
That should give me a total revenue increase of 50% from Income Tax which gives me a BI of £4,175 annually or £80 ($120) per week.
There is a problem: we've neglected the people who require more than that either because they're owed it (e.g pensioners) or because they have extra requirements (e.g. orphaned children), so having increased the BI up to £80, I'm now going to cut it again down to £60 a week. This will cover pensioners, people claiming benefits which are currently in excess of £60 and support for vulnerable children (note that children also receive the BI, so 'child benefit' has seen a massive boost from the regular £20 per week maximum).
I'm assuming that 20% of people fall into one of the above categories, so cutting £20 off the BI gives us £160 a week to help these people. This is more than the current basic state pension (£113.10/week) so that's a fairly big increase. I don't want to complicate the calculations any further, so the small number of people who require more than this will have to be paid out of the £50 billion we haven't borrowed.
That's us at £60 per week basic income and up to £160 per week for pensioners and vulnerable people.
And I think I'll leave it there. We might still need to borrow (or cut spending elsewhere) to make up other shortfalls, but as long as these borrowings total less than £50 billion we still come out ahead. It might be more natural to cut the payment to £50 for everyone in order to free up some cash for other payments. In the real world, you wouldn't exclusively reserve Income Tax to one specific spending area anyway, but it makes things simple enough to get a rough measure.
Do a thought experiment. Imagine that the entire UK were walled in by an impenetrable barrier enclosing the country out to the boundary of its exclusive economic zone, and every record and memory of ownership were wiped away, such that no one could be entirely certain who owned what. Stimpson J. Cat pushed the History Eraser Button.
On the morning following the event, some boffins assemble and work out an emergency plan for re-establishing a workable economy, on the assumption that one existed before everyone forgot what it was.
Now, with no memory of the past, does the UK have the land, labor, and capital to completely provide for the needs of its people? If that costs £X per year, can the people of the UK produce £X of economic output per year, and with the correct proportions of goods and services?
(For your reference, the UK represents approximately 4% of the global economy.)
I reached my own conclusion as a result. It is completely workable mathematically. It just doesn't work within the existing legal tradition. That's the one that respects property and contracts--the one we all like because it's what we rely on to assure ourselves that the car we drove to work will still be there when we knock off for the day, and the house we go back to won't be full of grubby squatters when we get there.
But as much as we like it, those with more wealth, who lack the will or the imagination to spend what they earn--to keep the production-consumption economy circulating efficiently--like it more. It keeps the grubby middle class from building ugly-but-productive anthills and beehives within sight of their beautiful-but-inefficient homes, yachts, and luxury resorts. And that is what stops the socialist schemes to erase poverty--we just don't have the stones to commit armed robbery to do it. The middle class largely pays for itself, and no more, so the only available source for the necessary resources to haul the lower classes out of poverty is the rich, including the synthetic rich people better known as corporations.
So you swallow your lofty free-market, shalt-not-steal ideals, abandon your pipe dreams of one day being in the upper class, and you tax the rich at near-extortionate rates. Naturally, they would want to flee such a tax regime. Let them. Just stop them from taking the productive capital with them as they go.
It might work out like France. It might work out like Venezuela. It might work out like the USSR. But if it doesn't work out, it won't be because it is a mathematical impossibility. It will just be because someone made a wrong assumption in one of the thousands of possible places to make a mistake when trying to re-engineer an entire national economy.
"If a government were to do that for everyone it seems pretty obvious that society will be better off - people will spend their time working on things to improve everyone's life rather than worrying about how to afford their rent."
Looking at populations of people who have gone from being very poor to being very rich overnight does not support that statement. Most of the time the money is more of a curse than anything else. I believe the same goes for people who go from very poor to receiving an annuity from things like legal settlements, but I am only guessing at that.
(I'm not arguing against it, I think it's an experiment worth having)
I think there is are a few hidden premises here that need to be called out: the premise that having more money is better for everybody than having less, the premise that not struggling at all in life -- whether for personal goals or paying the rent -- is better than struggling, the premise that everybody will respond in a positive way to the same external stimulus, and so on.
I find many of these premises dubious, but I cannot deny the fact that I personally feel better the more folks in the world that go to bed without being hungry or sick. The trick is separating my personal desire to feel good from what actually may be happening with various policies I would support. That's why we need more data here. It's very easy to grandstand something like this either way. There's a lot of smoke but very little light.
>I think there is are a few hidden premises here that need to be called out
That's what the experiment is for.
But let me put this bug in your ear:
Most economic models are based on the premise that people can walk away from a potential transaction with no losses. That when people trade value, each party leaves the table with more value than they brought to it but if they leave they are no worse off. That's a large part of the brilliance of the free market -- value is continually created.
However, this breaks down when one party loses value if they walk away, negative utility, especially if the other party knows it. And it is especially troublesome when that negative utility is expandable e.g. when the alternative is pain or death -- things people will generally pay whatever they can to avoid. That's why strong arming is not considered good economic policy. It can lead to net destruction of value. In some cases this can be ignored because the value created for one party more than makes up for the value destroyed for the other party but, in general, it is more than possible that the net effect is negative.
With the poor they might not be threatened directly but the consequences of not, say, selling their time for less than it is actually worth can be just as bad as if someone was robbing them.
We're not talking about making people rich, we are talking about removing desperation and avoidance of death and pain as a motivating factor.
The most galling implicit premise of all is that every proposal for basic income I've ever seen accepts that BI isn't practically feasible with open borders, and therefore nothing changes at all for the class of people who work the longest hours in the worst conditions
(indeed their wage slavery becomes even more essential to ensuring future riders of the purple wage can still buy consumer goods)
An argument for implementing BI in the foreseeable future isn't really a "nobody should be forced to work" argument, as desirable as that might ultimately be. An argument for implementing BI in ones own developed country in the near term is a "nobody with the right passport should be forced to look for work" argument. I think social security - essentially insuring people from a risk of unemployment caused at least in part by policies enacted by an elected government - is a good idea, but I categorically don't agree that my fellow Brits should have an automatic right to receive more than the world average purchasing power adjusted income without even thinking about doing anything for it.
Your countrymen don't have to think about doing anything for it because their forebears and ancestors already thought about it, and already took the necessary steps so that later generations wouldn't have to.
They may have done it mainly for the benefit of their own heirs and successors, but now that it's done, it's done. All those improvements multiply, and Brits get more because it takes less individual effort to produce the same amount in the heavily-improved UK than in a country where improvements are more easily destroyed or converted. So anyone willing to obey British law, participate in the British economy (accept and spend pounds), respect British infrastructure, and assimilate into British culture should get more than the rest of the world, because those are the practices that allow Britain to be more productive than the world median.
A hedgerow along a country lane does not grow that way naturally. It takes an effort to force it. But once established, it just needs a regular trim and an occasional re-laying to keep the livestock out of the road. You just don't need to pull a new barbed wire fence in front of a blackthorn hedge, so why would anyone complain that no one is doing it?
The resources of the country are preferentially distributed to its own citizens because one country lacks the sovereign authority to force any other country to change its culture and institutions to be more productive. If those other countries wanted to be as prosperous as Britain, they could fork the British system, or selectively merge changes from it into their own repositories. See also: USA, Canada, Australia, New Zealand.
So those people aren't exactly thoughtlessly doing nothing. They are being British, as hard as they possibly can. And that allows the UK to have nice things like the NHS. In contrast, Americans, in being as American as possible, can only manage a hybrid public-private healthcare monstrosity that no one can examine too closely or for too long, because most of our psychiatric hospitals are cleverly disguised as prisons.
In light of that, there's really only one essential element that needs to go along with open borders. Assimilate the immigrants.
Arguing for suppressing the Western working classes on the basis that this will somehow help the working classes in the developing world doesn't make any sense. Labor is labor, around the world. You strengthen the working class in one place, and you've strengthened it everywhere. Pay a basic income in the West, and consumer spending can rise, aiding a rise in demand, leading to a tighter hiring market for developing-world employers who make the stuff, making labor actions for shorter hours and higher wages more successful.
Seriously, you consider me to be "arguing for suppressing the Western working classes" because I suggested that any right to earn more than the average global labour income even after cost-of-living adjustments probably ought to be incumbent upon them to actually doing some work? That's got to be the most intellectually dishonest characterisation of my arguments I've seen on HN.
Labour isn't labour when it's sitting with its feet up enjoying the privileges of accident of birth, and any benefits from their additional consumption that might trickle down to the developing world poor can easily be cancelled out if unconditional redistribution happens to have side effects on the Western economies in question. Not to mention the likelihood of barriers to entering Western countries getting a lot higher...
>Looking at populations of people who have gone from being very poor to being very rich overnight does not support that statement..
That isn't a remotely analogous situation. This is people not being able to afford food, suddenly being able to afford food. Being suddenly very rich brings with it opportunities and responsibilities that simply being fed do not.
Looking at populations of people who have gone from being very poor to being very rich overnight does not support that statement. Most of the time the money is more of a curse than anything else. I believe the same goes for people who go from very poor to receiving an annuity from things like legal settlements, but I am only guessing at that
That's a bad comparison, there have been studies that show a small no-strings-attached monthly allowance made people's lives easier and overall better. They did not spend the money on crap like most lottery winners do.
I assume the reason is that those people realize they're still poor, but got a bit of help. Lottery winners get more money than they can handle, start assuming they're rich and that messes up their spending habits.
I never understood, why this is a problem. We live in a society of abundance. Tying coverage of living expenses to work done, just leads to people doing pointless work. This is at least the reality in Germany: There aren't enough jobs for everyone, people live under the illusion that it is wrong to just subsidize people living, thus the government rather subsidizes jobs, that are not profitable to be done by people (my mother crimped cables from home for a living, something that can be done by a machine for a fraction of the price in orders of magnitude less time).
Apart from that, it is called "basic income", not "luxurious income". Ask these people if they still wouldn't work if the alternative is not being able to afford a smartphone, Game console, plasma TV or car.
I've had dreams of doing this to an In-n-Out location. Every one I've been to has had all the employees doing every job like a scatterbrained beehive, and it takes 15-20 minutes to get your food.
But those people will always be a net negative for society, basic income or not. Empowering those who would make a positive difference if they had enough time/money sounds like a good idea to me.
I think those who are against a basic wage feel the current net negative portion of society would be a greater net negative because not only would they be receiving a wage, but they'd spend it on crap and society would still have to take care of them (hospital bills, food, etc).
After swinging your hammer several times you hit the nail on the head with the final word.
We should have land value tax which will eliminate land hoarding, reduce rents and replace income tax. More incentive to work, less incentive to speculate.
You'll never get this in the UK/US as the last thing the elite want is a level playing field where you get to keep most of what you contribute.
If the net result is lower cost than funding existing forms of welfare and ends up improving other areas of the city, would you care as much about the voluntary nature of it?
What round of investment was that? And yes that is sound; in later rounds even a number which makes you never (at least the coming 10 years) having to worry about money so you can focus on your company 100%. If you do not do that you will not be able concentrate even when something trivial like having too little money for your family occurs for some reason. Which is bad for investors and everyone else involved in the company.
As discussed above, funding for UBI can be mostly reassigned from existing welfare & pension budgets.
Demand for basic food and shelter is more or less a constant (unless you can argue otherwise), regardless of people's income, so as I see, prices for non-luxurious items could stay about the same under UBI.
It's a simplistic overview and there are tons of important factors e.g. farming subsidies or migrations, but in general UBI makes a lot of sense.
I don't see that demand for property/shelter is constant because people can and do buy it as investment. My assumption would be that rental prices would rise to the point where BI barely covers shelter and the money is effectively transferred via rental to "investors".
How? Competition would increase and prices would come down. We are currently fighting to avoid deflation anyways and all indicators point towards this continuing. If anything UBI will stop people hoarding cash as is happening now and re-introduce some cash-flow into the macro economy. A little inflation is healthy.
For basic goods there would be more demand (people who can't afford even basics would enter the market making the total market larger) in turn making it more attractive to compete there. People always go where there is opportunity.
We are also on a long term trend of prices coming down in any case.
This is not how economics works. There are supply curves and there are demand curves, then there is the quantity supplied and quantity demanded. If the demand for a product shifts up (increases) due to basic income, then the quantity demanded increases. Then inventories of that product decrease, indicating that the firms could start producing more and still be able to sell it. They do this, but there costs go up, since each unit that they produce now costs them more on average. [assuming they are producing with increasing marginal costs, which is generally true]
Up to a certain point, yes. But, in the short term, firms must increase their production by, say, hiring more workers. They might now have a less optimal worker/capital ratio which would increase their per unit costs. In the long run, their costs are flatter but still could eventually increase with quantity, imagine they're using all the resources locally available and have to start importing from somewhere else, that's going to increase costs.
Everything will be automated. Cost per unit will be down. In an open competitive market without monopolies or price fixing cartels the price for high demand cheap basics gets driven down due to increased competition. For cheap basic good the main competitive strategy is to be cheaper than your rivals. It's the classic race to the bottom like we are seeing with low end electronics. The more the system fully automates and becomes hyper efficient the closer we move towards zero marginal cost.
How did you come to that conclusion? We can easily increase production to meet demand. In fact supply is a largely solved problem. The new problem is lack of demand.
Depends on how elastic the demand for the good is. Not everything can handle a large price hike like that. McDonald's, for instance, wouldn't be able to jack up their prices a whole lot, because then people simply wouldn't go there.
A company will hire and keep only those who are able and willing to worry about company's issues. For such employees it makes sense to pay them decent wage so they are free to worry about company. How should government fire citizen who are not performing well?
If a government were to do that for everyone it seems
pretty obvious that society will be better off - people
will spend their time working on things to improve
everyone's life rather than worrying about how to afford
their rent
The incredulity of this is plainly galling.
How does one draw a broad conclusion like that?
Plenty of European examples abound where despite generous - some would argue very generous - state dispensed benefits certain sections of the society just do not respond positively in measures of improvement of their own station in life much less "working on things to improve everyone's else (lives)".
A good - and I admit quite controversial - account of this kind of malaise is recounted in the British Channel 4 documentary, Benefits Street [1] [2]
The huge 'problem' with most European benefit systems that I am aware of that as soon as you take the money, your time is no longer your own. You cannot go to to school or take courses, start a company, do odd freelance work, do certain types of charity work, travel freely or a whole host of other potentially self improving things, without losing your benefits. Living on benefits is also living in constant fear that your benefits can be removed at any time for any (or no) reason. Remove all those barriers and requirements and remove the need to keep jumping through time consuming and seemingly arbitrary hoops to get your money and perhaps people will react differently.
Personally I come down on the skeptical side of the fence, but would really love to be proven wrong.
Also Benefit Street is not a documentary interested in facts, but reality TV at its finest, interested in entertaining, and should be judged as such.
GP post was specifically about those lazy benefits claimants who don't study or do voluntary work to improve their chance of getting back to work.
Parent post correctly points out that many of those claimants were prohibited - under threat of criminal prosecution - from doing those things while claiming some benefit.
Often benefits put you in a situation where it makes no economical sense to pursue a job. I have a friend who lost her mother and had a pension that would be taken away if she got employed, but the pension itself was much bigger than she could ever dream of earning at that time (hell, it was bigger than I was earning in my first two programming jobs). So there's your incentive to go and get employed.
Or another example; until not so long ago, my mother (single parent) got social benefits that would disappear if my own personal income would exceed a particular (not very big) amount, and this would turn into a problem with paying rent and feeding her and my siblings. She also spent some time unemployed after a company she worked in went bust (the original owner died, and his son mismanaged it into the ground), because all jobs available for her wouldn't even pay enough to cover the lost benefits.
Basically, living at the lower end of income spectrum is incredibly hard, and you end up doing a lot of weird calculations. When working hard for 8+ hours a day pays you less than not working at all (and caring about your kids instead), suddenly this "laziness" becomes a perfectly rational choice.
Quite. I wouldn't call people "lazy" if they've fallen in a benefit trap. The benefits have been created with good intentions, but they have paved a road.
Clearly you didn't. Though wozniacki's message was phrased a in bit more nuanced way as well:
certain sections of the society just do not respond positively in measures of improvement of their own station in life -- I think we cannot escape the fact that this is true. Even in the wealthiest welfare states, there is poverty and unhappiness, but mostly it's not because of lack of (monetary) benefits, or access to education etc.
At least in my country (Finland), the development has been from state assistance (for instance, a tired single parent gets someone to help him/her a couple of times per week and do a bit of looking after the whole situation) to monetary payments (they get 123 € per week, which is taken away if they go to work, and they have freedom to decide what to do). And I must admit that when I was younger, I tended to be very liberal/libertarian (in the American sense) and say just giving people money and freedom is what we should do, but now I think it was a mistake. In the short term, people do hate waking up and going to work every day, even if in the long term they will live better lives if they do so.
True, but with a job, at least you're producing something. Well, there are also bullshit jobs, but I'd like to believe that most jobs still provide some kind of value in some way. The hoop jumping for the unemployed is just plain value destroying. If they could get an education or do charity work, they'd at least be doing something useful. I'd rather pay my taxes for that.
> Plenty of European examples abound where despite generous - some would argue very generous - state dispensed benefits certain sections of the society just do not respond positively in measures of improvement of their own station in life much less "working on things to improve everyone's else (lives)".
For many years people on English out of work benefits were not allowed to do voluntary work or be a student - those were things that would have stopped the benefits.
This carried over to some of the disability benefits. If you did voluntary work to prepare you to get back into full time work your benefits would be stopped.
Citing benefits street, and calling it a documentary, is an odd choice. Do you think that programme has any credibility?
Channel 4 is a "public service" channel only in the sense that it was one of the first four channels to come into existence at a time when the quid pro quo for having a broadcast licence was that challenging, worthy, high-quality programmes were broadcast.
Today, Channel 4 is still technically a PSB, but it's not and has never been "non-commercial" - it shows adverts and makes profits just like any other commercial channel.
Calling "Benefits Street" a documentary would be like saying that Jersey Shore or The Osbournes was a documentary. It's not.
The term "documentary" covers a broad range of material. There are in-depth explorations of fact or investigative reporting at one end; and populist fly on the wall fluff at the other end. Benefits Street is definitely on the fluffier end. There was little attempt to explain how benefits work; what the rules are or how they're applied to most people.
The OFCOM investigation is, I think, evidence that the programme was low quality, and focused on sensationalism rather than accuracy. (Although they didn't uphold any of the complaints).
Channel Four is publically owned but is not non-commercial -- it has to mostly fund itself; it carries ads and sells its programmes.
You're woefully misinformed about exactly how generous benefits in the UK are. People who do manage to live off benefits here can't expect a quality of life that even begins to approach comfortable.
You shouldn't let some opportunistic reality TV show be the basis for your world views.
You shouldn't let some opportunistic reality TV show be
the basis for your world views.
Well if Western societies didn't function in a miasma of political correctness highly sensitive to even the least prickly of criticisms perhaps Channel 4 or any other outlet for that matter wouldn't have seen a need to reach for an alarmist tone in the way they fashioned their programming in matters such as this, that one could argue have influenced the most recent UK national parliamentary election.
The opinion polls suggested quite the opposite outcome [1] which goes to prove that many of the voters were quite concerned about the issues such as these and general direction in which UK as a sovereign nation was headed, but rather stopped short of voicing them openly, lest they be branded prejudicial or worse.
[1] Election 2015: How the opinion polls got it wrong
Poorly applied benefits do. If at any point, you lose $2 of benefits by earning $1 more, you are encouraged to not work harder. Of course there is a cap, such as if you earn $5,000 more you'll only lose $4,000, but people don't have the option to increase by $5,000 at a time and are stuck where working harder only earns you enough to cost even more in benefits than you earn, thus discouraging working harder.
I don't think what you're referencing works as a good counterexample. Currently benefits only goes to those who needs it or seeks it. It says little about how the people who don't need it, or wouldn't seek welfare payments they don't need, will behave.
I think public welfare systems has a tendency to make "leechers" more visible. They leech on the government rather than family and they probably tend to collect in specific areas, but I'm not convinced it makes the problem worse.
Although I think basic income would work, I agree that he was exaggerating when he wrote that it "seems pretty obvious". There are some evidence that it would be beneficial, and there's also some pretty straight-forward arguments for why it would be good on a national scale (less bureaucracy). But we won't know until we try. I think more experiments are in order (1: removing restrictions and terms of welfare payments to see if that leads to more undesirable behavior. 2: giving basic income to a whole town with correspondingly realistic taxes to see if working people's behavior changes)
People starting companies are driven, determined people who want to create things.
The vast majority of people are not. You're vastly over-estimating the general population. The majority are lazy, and if given money, will sit watching reality TV and stuffing their face with ice cream. (Step outside the startup bubble for a while). Most people are also selfish. The idea that they'll all start doing things to benefit others is a bit far fetched.
Communism (Which is what this is), has failed. Why this generation seems determined to try it again is beyond me.
This is about stealing money from the successful, and giving it to everyone, regardless of merit. It's a fantastic way to reward failure and penalise success, and society will suffer because of it. The numbers are also staggering - it just doesn't work mathematically unless you can magic up billions from somewhere each year.
Also be under no illusion - if a basic income was implemented, the chances are (Assuming you're better off than the average person) you would have to reduce your quality of life substantially to pay for it.
> Communism (Which is what this is), has failed. Why this generation seems determined to try it again is beyond me.
A bit of a stretch there and i should know i was born in a communist country. The reason Communism has failed is because of the lack of checks and balances on power compounded with corruption not because of concepts like this.
> This is about stealing money from the successful, and giving it to everyone, regardless of merit.
Be realistic most rich people are not rich because they are extraordinarily successful it's because they are born rich and there's entire companies with the sole goal of taking advantage of the system (in some cases doing morally wrong things that are technically legal) in order to make rich people get richer. Over the past 5 - 10 years the middle class has been getting poorer while the rich have been getting richer even with the economy collapsing. If you start off rich a lot of doors that are closed for regular people are wide open to you so you don't have to be successful just don't be a fool.
I see basic income as more of a equalizer so people who can't afford billion dollar companies and robotics to replace the workers get to eat as well.
The real reason Communism couldn't succeed (not necessarily the reason it failed) is because none of the countries trying it were or are advanced capitalistic economies before the revolution. Imagine a transition into communism in a less-scarcity scenario, where robots generate so much material wealth as to provide it to everyone, and no one HAS to work, and technology married to political science in turn allows more distributed forms of governance by the people for the people. Once you have that, and of course less bigots running the roost, you have a shot, as a society, to completely do away with 'marginalization', since every city and every community will be self-contained and no one will have to do commutes to serve a master.
Communism, for all I know, is the alternative to Totalitarism (be it from American corporate overlords or from so called extreme "left") in a future where jobs are no longer to be found lying around. It probably won't be called communism, though. China or Germany (and other smaller european countries) may have a shot, but the US seems destined to be ruled by corporate emperors.
> because none of the countries trying it were or are advanced capitalistic economies before the revolution
revolution was the least common way to turn communist. Far more common was "forced by nearby communist country"
Also for example Czechoslovakia was advanced capitalist country. It's often overlooked - it was very industrialized country, with long capitalistic traditions, and democracy before WW2. It also went through war relatively unscratched. In 1950 it had GDP per capita roughly equal to Italy and Ireland, 50% higher than Spain.
> Imagine a transition into communism in a less-scarcity scenario
From the POV of medieval people We're already in a less-scarcity scenario. We just don't like to share, as a species. I highly doubt technology will change that.
> From the POV of medieval people We're already in a less-scarcity scenario. We just don't like to share, as a species. I highly doubt technology will change that.
It seems to me that technology will force that change on us. In a world when a robot can do every job you can, only faster and better, and doesn't eat, sleep or complain, there's little use for you and me. So either we get rid of the whole concept of jobs or starve (or stop the progress, but good luck with that, the very system that threatens to destroy us is the one that's driving progress).
Did it have sufficient over-production that redistribution would remove "common wants" for everyone?
As early as 1845, Marx set that out as a central criteria that would have to be met before a socialist revolution would have any hope of succeeding.
> We just don't like to share, as a species.
And in fact, this is a central aspect of Marx' argument for socialist revolutions: We don't like sharing, and so for the vast majority of workers, the only way of getting a reasonable share is to join up and force the upper classes to surrender their wealth.
Marxism is basically founded on two ideas: 1) Capitalism will eventually make production efficient enough to produce substantial surpluses. 2) Workers will only get "their" share by cooperating to fight the ruling classes, and if they don't they will eventually get marginalised as capitalist competition starts driving down employment and/or incomes.
Nothing assumes people wanting to share. On the contrary, the Marxist focus on revolution is basically based on the idea that there's no chance you'll get wealthy ruling classes to voluntarily give up their wealth.
It assumes once workers won the surpluses won't decrease.
This turned out to be false assumption, because people don't like to share, so they don't work as well if they only get part of the fruits of their work, as they would if they got most of the fruits of their work for themselves.
From what I learned, Communism has this successful capitalism as an assumption, as starting condition. They tried to speed up the process (with bloodshed), so it's no surprise it didn't work, just like you wouldn't expect a baby born 5 months premature to survive. It's not developed enough.
No doubt. Had companies in general not taken advantage of employees nobody would even be considering this option. This is what you get when companies look at the bare minimum they can pay somebody for the work they want.
> communist country. The reason Communism has failed is
> because of the lack of checks and balances on power
> compounded with corruption not because of concepts like
Socialism did not fail because of corruption - capitalism has this too. Socialism failed because of its inability to put pricing on a product due to lack of a market place.
On the other hand, Socialism had tremendous growth. Hitler (another socialist) said, "The Soviet Union is a rotten house - kick in the front door and the whole house will collapse". This was true in the WWI but in WWII the Soviet Union was a different country, they probably had a higher GDP than Germany. Why? Because Stalin achieved growth rates that may have dwarfed China (controversial, but he may have achieved up to 500% Growth in 13 years based on some estimates).
So socialism failed, back to capitalism. Yes, capitalism survived. But how much longer?
>The vast majority of people are not. You're vastly over-estimating the general population. The majority are lazy, and if given money, will sit watching reality TV and stuffing their face with ice cream.
I've always felt that this argument against basic minimum income said more about the arguer than society at large. In my experience, everyone has a personal project that gets sidelined for their work.
No it isn't. That isn't their personal project. That's all they have the choice of doing. Most people do those things because they're tired after working hard all day for a wage that doesn't give them enough money to do anything but sit in front of the television. If people had the opportunity to work a bit less in their job so they could do something worthwhile and fulfilling in their spare time, most people would take that choice.
Just look at people who inherit or win large sums of money - a few of them end up just enjoying themselves, but most use the money to follow a cause that they think is something worthwhile. There's no reason to believe the same wouldn't be true (on a smaller scale) for a minimum income.
Exactly this. After 8h+ of work for little pay, 2h of commute, doing dishes, dinner and cleaning up, you'll have little energy to do anything creative and constructive. Grabbing a beer and turning on TV is a way to relax before turning in and beginning another day of work. I don't know of a person who doesn't have dreams, hobbies, things to do and create. Many just put it off until they can buy a house, until they can have children, until they can give children education, until they retire...
I think it's even more than necessarily being tired: people who struggle to get by are in a constant state of alert and stress that precludes developing their creative dreams (they will have them, but can't advance on them). When you're stressed you'll turn to addictions to relieve yourself: chocolate, TV, MJ, and some will even become workaholics through some basal twisted work ethic.
That's true, and I know this from first-hand experience. Having an unstable financial situation, constant worrying about how to support 4 people and pay off debts pretty much shuts down your ability to do anything creative. It didn't stop me from having ideas, it didn't even stop me from starting to work on them - but it always stopped me from advancing on them - either because lack of money for required components, or being too stressed out worrying to focus on doing the theoretical/software work. So in the end I ended up opting for watching stuff and reading books as a way to tune down before another day of struggle.
And yes, I am a programmer. You can end up in shit as one too. I made some bad work choices before and ended up pretty much not being paid for half a year.
I think especially because us programmers can get high salaries early on, divorced from both having to save and from the experience of handling money well, we can fall hard. I also speak from personal experience :)/:(
Basically, the argument is that "poor people do stupid stuff" because their "intelligence bandwidth" is being sucked up by worry about where to find the next meal/rental payment/etc. leaving no brainpower for what we well-off and spoilt folk would call "constructive pursuits".
> Just look at people who inherit or win large sums of money - a few of them end up just enjoying themselves, but most use the money to follow a cause that they think is something worthwhile.
Can you link to the source you're talking about? I'd like to know more about what you're referring to.
The studies about people that win money that I've seen paint a different picture: 75% lose it all within 5 years by not spending wisely. It's the same with professional sports players and it's gotten so bad, they have started getting them mandatory professional money managers. I believe there is a Netflix documentary about it called "broke".
People that inherit money also end up losing their money at crazy rates unless they already had good money management skills/work for a living/were taught these skills by their parents.
I don't see how this would be any different with a basic income. Not to mention the inflation caused by it. For starters, all businesses will have their prices raised automatically to pay for the new taxes imposed on them.
In the very beginning, it might be okay in terms of economics. However, as the years go on, more and more people will start relying on this basic income and we will have entire generations of people depending on it to live.
Costs will only increase and there will be less people actually contributing to the tax base, so the only way to continue to pay for it is tax increases on the middle class and everyone else making a living. It's basically just another wealth transfer scheme to people that never earned it.
The sad fact is that the vast majority of people never really appreciate things they haven't earned and although a basic income sounds nice in theory, it's a flawed idea that is doomed to fail.
With all due respect, I think you're really confusing two arguments here; that of wealth distribution and the concept of basic income.
The idea of a basic income does not imply a transfer of wealth from the middle class to the poor or indeed anyone. You could set up a basic income system tomorrow in your country of choice and set the level of basic income and tax levels so that everyone, at least in the beginning, was receiving the same amount of cash they were before.
One advantage of the idea is that the poor would be more likely to find work because the marginal reward is so much better, leading to more wealth overall and sharing out the tax burden more. At least in theory.
"With all due respect, I think you're really confusing two arguments here; that of wealth distribution and the concept of basic income."
With all due respect, you are only thinking about basic income at step 1. I laid out what will happen at step 10..which is essentially a wealth distribution system.
"You could set up a basic income system tomorrow in your country of choice and set the level of basic income and tax levels so that everyone, at least in the beginning, was receiving the same amount of cash they were before."
Where do you think the money comes from to support a basic income? Who do you think pays for it?
"One advantage of the idea is that the poor would be more likely to find work because the marginal reward is so much better"
How so? Many poor people will be content with not finding work and just living on basic income. Minimum wage will also need to be well above what they are getting from the government, further contributing to inflation.
"leading to more wealth overall and sharing out the tax burden more. At least in theory."
You are only looking at it from one very small part of it.
> In the very beginning, it might be okay in terms of economics. However, as the years go on, more and more people will start relying on this basic income and we will have entire generations of people depending on it to live.
The problem here is the rate of job automation vs. job creation right now. There's a lot of indicators suggesting we're reaching - or have reached - the tipping point here. We need a strategy for giving people breathing space to adapt to job destruction. That might be a basic income, or a government backed re-training program perhaps. But the latter supposes that there are enough jobs to go for when they re-train. And the one big growth area, IT, is really limited to those with some some degree of innate talent. Think about all those truckers and taxi drivers who are going to see their jobs eliminated by maybe 2030.
I think you should come out of your elitism bubble and actually interact with some "dumb" people (dumb according to you, you sound like a 1930 eugenics propagator with how you treat IQ).
You'll find that there are a lot of people with drive but lack of opportunities there, just like there are a lot of lazy smart people.
Just provide any reasonable explanation for your claim. I can't imagine any. IQ is a metric that works like this: you do a test on a population, then take the median result and call it IQ 100. If suddenly God Himself put intelligence-enhancing drugs in the rainwater, making everyone smarter than Solomon, you'd still have half of the population below IQ 100.
I know one single person like that. Wanting this is very rare and is a symptom of mental illness. Most people want to be proud of something. Granted, MacDonald's will have problems finding workers, but is that so bad?
Living in Norway it is perfectly possible to slack off on the taxpayers' bill if you want to, but society doesn't collapse. People would rather avoid the low status associated with living on the dole than avoid work.
Norway is extremely different than for example US. With all due respect, I'm sorry, I can't see Norwegians happily supporting social programs if they are mostly designed to help immigrants. US is immigration based. What about Norway consisting in 15-20% of Blacks, than the other 80% coming from all over the world. I believe that about 75% of all Americans are immigrants, their children, or their grandchildren. Would you not mind supporting Latinos, Blacks, Poles, Russians, Germans, Brits, Indians, Pakistanis, and whoever else is there in this pot?
I think in Norway it would end up with much worse results than in the US. I think Norwegians in this case would vote for some kind of nazi stuff. It's enough for you to have a few immigrants here and there to become extreme right.
So, please don't compare and don't think you are any better. You are not.
I don't think the point was saying that Norway is better than the US. The point was saying that in Norway, it's already possible to live with tax payers money, but most people choose to work. So based on the assumption that US people are as good as Norwegians, most US people would still choose to work even if they didn't have to.
> It's enough for you to have a few immigrants here and there to become extreme right.
If you refer to the current government, consider that the junior partner in the current government that is considered "extreme right" by Norwegian standards would mostly be Democrats by US standards. E.g. a substantial proportion of them are in favour of continuing most of a welfare system that would get even many Democrats in hysterics over socialism.
By Norwegian standards, the majority of the US Congress is "extreme right" and threatening "US conditions" is a well established way of scaring people.
...in which we learn the real reason you're against UBI—dirty immigrants.
I really fail to see how this can be anything other than an argument for more fair/equal wealth distribution in the world. If most countries had similar schemes, then why would the "good for nothing immigrants" go to supposedly scrounge in the US?
Yeah, at that rate, I'd only be very slightly worse off than I am now. Maybe I'd lose... $10k-$20k to Horrifying Socialism. But hey, I could restart my life from a capital base of $51k.
That's a lie and you know it. Isn't the refrain parroted here all the time something about bootstrapping your own company? Self funding and all that? While a couple people like you might throw a tantrum and decide not to participate, I imagine there would be 5x that many in poorer places in the world who would be able to more than make up for it and start amazing companies.
No it's not. That's what they do to try and escape the stress from having a shitty job. Which they have to do in order to have a roof over their heads.
Human nature is people wanting to reap rewards for their work (that includes having private property). UBI doesn't take away that.
Speaking of "removing all incentives to do something useful in the long term", this is what capitalism does today. There aren't many businesses or even people caring about long-term in their lives, because you have to pay your rent next month, you have to be competitive today, you have to reach your company's quarterly goals, etc. Competition makes things inherently short-term. UBI is a way to remove some of the pressure from general population, so you'd have an option to say "fuck it, I'm gonna do something for long-term payoff" and not starve in the process.
> Human nature is people wanting to reap rewards for their work (that includes having private property). UBI doesn't take away that.
How are you going to pay for UBI? With taxes. If you already receive a tax free UBI, this means the percentage of taxes on your extra income will drastically increase (with factors, not percentages). This means that when you work for someone else (sell your time/products), only a tiny percentage will go into your pocket.
If daycare of your child costs $500, and your full-time job gets you $500, how many people in this situation will drop their job and become a stay at home parents?
Good point! More stay at home parents is another benefit of BI that I haven't even thought of yet. I get more sold on this idea the more I read about it.
Who is going to pick up the trash, bake bread, repair your car, build your house, build streets, build cars on an assembly line? Less and less people. And less people producing, means less people consuming. Your BI won't be able to support you for very long because prices will increase (less supply). It won't take long before your economy is screwed.
I thought BI was mainly a response to the question "What will we do when most menial jobs are automated with better AI?". Tech that could pick up trash, bake bread, repair your car (If owning a car even makes since at that point in the future).. etc. Honestly its all speculation right now. I think its cool that they are doing this experiment right now, but they may be jumping the gun. However, I also think its jumping the gun to assume it will never work.
Yes indeed you are correct, I forgot about that. But in such a case I think it's still a good idea to own plenty of those robots or be able to do something that a robot can't :).
There is a huge difference between everyone gets exactly the same regardless of merit* (communism) and everyone gets a guaranteed income on which you can just barely make a living (basic income).
The second doesn't disincentivize working, as you still get increased rewards if you work or work harder.
* Unless you are in a position of power of course, then you deserve more.
> There is a huge difference between everyone gets exactly the same regardless of merit* (communism)
Everyone getting exactly the same regardless of merit has nothing to do with communism. So much so that Marx spent a lot of time criticising this idea and tearing it totally apart whenever someone raised it (Critique of the Gotha Programme has a substantial section on this subject).
> and everyone gets a guaranteed income on which you can just barely make a living (basic income).
You realize that basic income will just become another campaign promise to secure votes, right? Couple that with "I can barely live on my basic income!" sob stories and we'll quickly find that basic income won't be so "basic" given enough time.
Seriously? Do you not think you're in a bubble of 1%ers? Most people aren't itching to start a company you know... Most want to watch American Idol and do nothing.
Why does everything have to be an extreme at each end of the spectrum? Either starting companies or doing nothing?
I'd like to believe, possibly naively, that for a lot of people there would be a middle ground. Spending their time on personal growth, creative pursuits, general fitness and well being. In essence, living well.
Just because you're not attempting to start the next social media, it doesn't automatically mean that you have no other interests or internal framework for living.
That's exactly what would happen. Many people would transition to part-time jobs to spend time with their families/friends/volunteer or civic organizations they are already involved in.
You can see it when an 'Average Joe' gets a windfall. Anecdotal evidence is all I have, but having observed several people inherit money from older relatives who have passed, the general first focus is on creating free time to spend with family and friends. Then they focus on those organizations they are already involved in. Then they focus on fun nonsense like large TV's and dumb cars.
Listen bra, if you're not crushing it you ain't worth .
Welcome to the hyper-individualist bro culture based around status and money. The self-worth crutches for people with low self-esteem/ huge uncontrollable egos.
There are also a lot of things that can and need to be done for others (as opposed to personal growth, general fitness, etc.) that don't make sense as companies, or that are perverted beyond recognition when exposed to market pressures. Starting a company is one of many ways of doing things useful to the public, but not the only one.
Who says it has to be a company? How about that guy that wants make music but doesn't have the time to practice due to work. The girl that wants to paint, but is to tired after work.
Why does everything have to be about companies and money? Can't you really imagine any useful social, artistic, or other things these "dumb, lazy" people might want to invest their time into? How about just being a stay at home parent and investing more time in their kids? Do you really think society would not improve from any of these things?
How about science or engineering? Imagine how it would be if scientists actually had time to read papers in their field, perform experiments and pursue some research goals, instead of cranking paper after paper in order to stay employed?
What about all those social projects that people want to do, but don't have time to really support?
Struggling everyone. Why the hell is some bank CEO making several hundred million a year and we have people that can't even reliably be home in the evening to tuck their kids in because they're working 5 jobs. I'm all for taxing high-end income (coporate and private) even more to pay for this.
Why would everyone need to work anyway? It's not tenable. A few more years/decades and we'll have automated so much it'll be impossible to actually employ everyone. So unless you suggest we let everyone who is in a now obsolete field starve, I suggest we start thinking of how we're going to manage a society where it's just impossible for everyone to work.
EDIT: Also, where's this 240 billion figure coming from?
The level of koolaid here is just too large a mountain to attempt to scale.
Automation will just move a few jobs around, like it always has done. And yes - we don't need jobs. But no - that doesn't mean the state should give everyone free money.
Why is it laziness? As I pointed out, repeatedly, above. There's two ways we can go with this discussion. You can state "There is nothing worth of value, except economic value". If that's what you believe, fine. But I think that is a very shallow and hollow belief and then there is not much sense in further discussion.
Alternatively, you can agree that there are pursuits that, while not producing any economic value, are very valuable to society. Such as arts, social projects, research, etc. and that those of us who are good at maximising economic value (but, most likely not spending as much time/effort in other areas) should subsidise those of us who ARE taking care of our elderly, raising kids, or otherwise fulfilling socially and artistically important roles. In which case we can discuss whether basic income is a good way to accomplish this or whether there are better ways.
And what is so terrible about subsiding laziness? Why do you care? If you have more than enough money to do whatever you want, what does it hurt you that someone manages to "not starve" even though they don't "do anything"? Is that really so bad? You would honestly prefer thousands, if not millions, starving to avoid "subsidising laziness"?
The irony that you chose American Idol as the TV show is delightful. It's a prime example of people often from impoverished background trying to better them selves rather than sitting around doing nothing :)
Alternatively you could interpret American Idol as people spending one day a year pursuing an unlikely dream of lavish wealth before going back to the couch to see how the few contestants that made it through get on :)
I'm not sure "practising for reality TV shows" falls into the category of self-actualisation I'm particularly keen to uproot the economy as we know it to fund.
The more I read your posts, the more I imagine you're just someone who's scared that they won't be able to have a bunch of employees paid minimum wage at his beck and call, that he can treat however he wants because they're dependent on him for a job.
Wrong. The majority isn't lazy, the majority is rebelling, in a passive-aggressive way. Faced with a job that they easily recognize as worthless economic make-work, they do as little of it as they must. Faced with having their mental energy drained down to nearly nothing, they prefer no-effort recreational activities like TV.
Basic income will unleash a temporary plague of laziness, as people snatch back control of their own life, raise a middle finger to the world that has hurt them, and seek comfort activities and recuperation. This will continue for a month or two, and then they'll get intolerably antsy for something constructive to do. It's at this point that you'll start to see how much human creativity was stomped upon by "the 9-to-5".
Communism: "A theory or system of social organization in which all property is owned by the community, and each person contributes and receives according to their ability and needs."
Basic Income: "An income unconditionally granted to all on an individual basis, without means test or work requirement."
Communism: From each according to his ability; to each according to his need.
Basic Income: From each according to his willingness to work; to each according to his need, plus a share of society's surplus production proportionate to the market value of his contributions.
In the event where people are as a whole unwilling to contribute an amount greater than necessary to meet everyone's basic needs, Basic Income is very similar to Communism. There is no additional incentive to work harder, because any excess you produce is immediately applied to the shortfall. If you really bust your ass instead of skating by, everyone gets an extra roll of toilet paper this year.
If people are generally willing to contribute more than is strictly necessary to keep everyone else alive and healthy, they are very different. Once everyone reaches that critical tipping point, additional voluntary effort is rewarded by the ability to get things you want in addition to the things you need. And that is probably incentive enough to keep the economy from tipping back into "looks like Communism" mode. If you bust your ass instead of skating by, you, personally, can get your very own expensive thingamabob. And that allows someone else to work a job making those expensive thingamabobs, which in turn allows them to get an uncheap doohickey.
As such, it seems rather important to always calculate the "needs" in such a way that people are always incentivized to work, or to work harder than they otherwise would.
Yes, but the state will take more than it gives from the billionaire. This is actually more bureaucratically efficient than manually means testing every possible recipient.
How would they take more from the billionaire? Means test them? What if they're asset rich, cash poor... or if they have no income?
The whole idea is unworkable. It's like it's been dreamed up by a 5 year old.
In the current system, yes. But at least we do away with one set of means testing. I would actually argue for a flat tax rate in the presence of a basic income. As for "asset rich, cash poor, no income" there are plenty of ideas out there for capital or capital gains taxes.
The point of it is that our technology is far outpacing our own capabilities, and pretty soon you'll have to literally become a robot in order to compete for basic income. Instead of allowing only the 1 percent of the rich people to own everybody else, we'll have them pay for everyone to live comfortably so they can do good works, while the rich continue to have their robots do all the work. Everybody wins.
So what if some people decide to use their money to watch TV all day? Its a trade off, in return for some people being able to do things improving society they couldn't have done otherwise, or being able to spend time with their kids rather than work a bullshit job which mostly pays for childcare so they can do their job, we have to put up with a few people having more reality TV to bore us about in the pub. Sounds good to me.
Unless you cite any scientific sources I am going to be blunt here: You are dead wrong. About every point you try to make. Its exactly the other way around. Give people minimum wage with no perspective and they will learn to love the TV. Give people opportunities to be creative and they will flourish.
Be under no illusion: the reason why our culture is so fucked up and our common psyche is so damaged is the capitalist system, that robs humankind of its humanity by stripping humankind of its dignity. We are not cheap resources. We have rights.
Communism is something else entirely (C & P from wiki: "is a socioeconomic order structured upon the common ownership of the means of production, absence of social classes, money, and the state."). Clearly we can see that UBI is not communism by I will take the bait anyways.
Every single person I know has a passion they would pursue outside of work. Some of them would be productive for society (startups or SME's) and some would be largely neutral (self-indulging in sports for example) but none would be destructive. Contrasting that to their work lives I have witnessed some of them taking part in activities that are largely destructive to society because it is the only thing that will put food on the table. Surviving at a minimum level of comfort should not be merit based. Living in opulence perhaps but not at bare minimum level.
Finally with your last point if society is stabilized through UBI and we leave behind our guilt based protestant work ethic and crime through desperation ridden society I can't see how I would be worse off. I would be able to pursue any project I deemed worthy (even some that are not profitable but would have a profoundly positive impact on society) and not fear financial ruin. The quality of society would improve and therefore the quality of life for everyone also.
Your post is heavily emotional but full of glaring factual inaccuracies that reflect on you more than they reflect on society itself.
> Communism (Which is what this is), has failed. Why this generation seems determined to try it again is beyond me.
Isn't communism about central economic planning? Basic income is explicitly capitalist. No-one decides who ought to do what. We just distribute money, and let the market determine what to fund with it.
Though because you bring up central planning - I think that we should reconsider this idea. In a technological society, central planning run by supercomputers executing global optimization algorithms doesn't sound like that bad of an idea. Historically, central planning failed mostly because there was no way for flesh and blood humans to react fast enough and to optimize well enough (that and usual human corruption). Not to mention we didn't have properly developed optimization theory before the 60s.
It's extremely funny how every argument for Basic Income completely ignores the fact you will have to centrally plan how you're going to get all this endless money to give people. You're going to decide where to raise taxes.
The other problem is that if implemented, any future elections would boil down to which party is going to raise basic income the most (Bribing the electorate).
> This is about stealing money from the successful, and giving it to everyone, regardless of merit. It's a fantastic way to reward failure and penalise success,
That implies that being poor is a product of a personal 'failure'. Sometimes it is. From what I understand though, the vast majority of times it's not. Much like the vast majority of wealthy people aren't wealthy because they really worked at it, but because maybe they worked at it and mostly they were given opportunities that the less fortunate weren't.
I believe you are making yourself upset by arguing from the point of the ideal.
Its not a matter of meritocracy vs basic income. Its the current welfare state vs basic income.
People like you and I are already paying loads of money to the masses in the form of (from an American perspective) Food Stamps, continued Federal make-work programs (like the USPS/military), Social Security, Disability Insurance, Medicare/Medicaid, etc.
Just as a freebie example, The US spends ~$3000 per capita on its military. Cut that in half and give everyone $1500/year no strings attached. That alone would relieve a lot of stress for a large percent of Americans.
No one's arguing that only a small percentage of people are geared toward pursuing high risk/high cost opportunities. But it's not really relevant to the idea of basic income or an indictment of the majority.
The vast majority are happiest when they are doing meaningful work, not by sitting on the couch and eating ice cream while being void of engaging work. This is true for people of all walks of life, the super bright, the super disciplined, the super motivated as well as the other end and everything in between. The concept of basic income would free people to pursue engaging work. Meaningful work does not have to come in the form of trying to cure diseases or build sky scrapers, or start a tech company.
Meaningful work is abundant and not limited by the arbitrary limitations created by a material-consumption-based society what was ushered in by the industrial age, which for the the majority has dictated what is economically viable to make a living. Meaningful work can come in the form of volunteering, gardening, looking after elders, helping the environment, creating beautiful neighbourhoods, social support, skilled crafts, the list is endless and not limited to people with above average intelligence or motivation. Right now these types of endeavours are not economically sustaining for people to focus on.
Given that technology will drastically cut down the amount of jobs required it is beyond obvious that the current orthodoxy just isn't applicable in tomorrow's world. It is obvious today and it's only get worse tomorrow. Autonomous cars and trucks alone will kill millions of jobs, how do these people find economically viable jobs? Office jobs will decline at an exponential pace, because there will be no economically viable reason to employ people for work that is done more efficiently by software.
Given that we can actually sustain billions of people's material needs with most of the work being done by our tools, rather than people, it is complete lunacy to handicap the population by limiting it because the majority won't actually be able to find economically viable work according to yesterday's economy. It is also completely arbitrary. The conditions have changed dramatically and the sooner we adjust the system to fit the new conditions, the better.
“What then! Do you think the old practice, that ‘they should take who have the power, and they should keep who can,’ is less iniquitous, when the power has become power of brains instead of fist?” - John Ruskin.
Practically, I believe you have an argument (though it may not be correct). But I think it's worth reassessing your moral framework: if there's any correlation between wealth and moral worth I expect that's purely a consequence of an increased ability of those with greater resources to act morally; a lifestyle choice.
I'm not sure what you are getting at. Basic income is a form of income transfer -a practice that is considered civilized and expected of modern nation states in a scale or another. This is not communism. It is to enable stable societies with people who are content and not prone to be recruited for an armed mob for populist causes.
Income transfers were implemented as tools to block communism by no one else than the benevolent, friend of the people, Iron-Friggin-Chancelor Bismarck, not because of fairness, but of social stability.
Most successful North European countries can implement basic income in cost neutral way. For example, in Finland 560 EUR basic income would not increase overall taxation.
> This is about stealing money from the successful, and giving it to everyone, regardless of merit. It's a fantastic way to reward failure and penalise success, and society will suffer because of it.
Then those people starting companies you mentioned are not interested in creating things; they are interested in making money.
I think the basic argument for testing this is that in the future it might very well be the case that only a small portion of society can do "meaningfull work". Think of an AI future or a vastly automated one.
Sure one solution is pushing the wages of say a factory worker up so it's enough to sustain them. In reality we'll probably reach a point where lots of manual labor jobs shouldn't rationally be done by humans. It's a very hard problem to solve imo and naive "comperative advantage though" isn't the answer.
I mean I can see a ton of reasons against base incomes but I also don't see many good answers for a scenario where say half the currently working population could be "optimized away".
With just basic income, how will the majority afford buying a TV or ice cream? Neither of those two products are basic necessities, and ice cream specifically is kind of expensive and would require a job in order to be afforded.
> The majority are lazy, and if given money, will sit watching reality TV and stuffing their face with ice cream.
I'm sure you can cite evidence of this claim from basic income pilot programs, then? (there has been a few).
> Most people are also selfish. The idea that they'll all start doing things to benefit others is a bit far fetched.
Here we agree, but it's beside the point as there's a very good reason for them to do things to benefit themselves that will have the side effect of benefiting others:
They'll make more money. The point of basic income programs is to create a lower threshold that is predictable, simple to administer and unconditional. It's not to create a ceiling on income.
> Communism (Which is what this is), has failed.
This is quite comical, because it has nothing to do with communism, and indeed the idea predates socialism by about 300 years.
It has over the centuries had supporters spanning large parts of the political spectrum. One of the important aspects of basic income is that it is not particularly ideological in its basic form:
There's no implication that the basic income is meant for widespread redistribution, though some proponents wants it to be high enough for that. Many proponents, in fact, specifically makes the argument that done properly it may potentially reduce government expenditure by eliminating a whole host of benefits programs that are expensive to run and hence cut administrative costs. This is an argument often made by liberalists (as in classical liberals by the European definition) for example.
In fact, if you were to push for a form of basic income that would be high enough to make it something most people would happily live on if they could otherwise work, it would be fundamentally at odds with Marx ideas of communism. In "Critique of The Gotha Programme" he skewered the idea that communism involved equal pay, by pointing out that this would be extremely unfair:
People have different needs. Instead, according to Marx, the goal for a communist society should be from each according to ability, to each according to need - in other words: while a basic income could fit within a communist framework, as the only source of income it would just create different problems: it would overpay people who choose to not contribute even though they are able to, and would underpay people with special needs.
This, incidentally is also the reason pretty much no proponents - regardless where they fall on the political spectrum - advocate a basic income that is particularly high. It's called basic income for a reason.
And even if your dim view of people is true - that all but a minority of people are so lazy they would all just sit on the couch and do nothing - it would not matter. When our tools are providing all of what the population needs, what is the realist, capitalist, economic argument for employing them?
What you say may or may not be true, but such a sweeping statement about humanity needs to be backed up with facts. Has anyone studied whether people are generally lazy?
Are you that scared that it might work? It's a social experiment carried out by the government, not judgement day. Let's see what result it produces before rejecting it.
"People starting companies are driven, determined people who want to create things."
Most of them are also extremely lucky in that they either don't need things like healthcare, or don't have families.
"This is about stealing money from the successful"
No, it's not. Those people would not have been successful in the first place if not for the advantages and benefits they had growing up in a first world country.
The basic income concept is intriguing to me (because it simplifies things) but I do not think it will work for this reason: Who administers the basic income? The government and by extension politicians. Once they have every single person who breathes on the dole, this will give them unbelievable leverage against the people.
If the government is giving everyone a check, how hard is it to argue that the check should be more? Not hard. How hard is it to reduce the amount of the check. Almost impossible.
It will eventually devolve into a problem like Greece has now. Too many people receiving money, not enough people paying in.
Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen.
I'm sure it will be attempted in America at some point and the "public servants" are licking their chops.
"Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen."
It doesn't matter if redistribution is inefficient in terms of dollars if it's efficient in terms of utility.
The idea that a rich person gets less from money than a poor person does is called diminishing marginal utility.
An example of this is $3,340 can buy a very rich person a purse, or it can buy a very poor person the life of their daughter.[0]
Now suppose that this government bureaucracy is terrifyingly inefficient and burns one dollar for every dollar that makes it to the malarial foundation. This would mean that a rich person has to give up 2 purses to save one life. In most people's books this is a huge gain in utility, and is why even if redistribution is inefficient[1] financially, it is very efficient when measured by utility.
[0] - Give well estimates that the malarial foundation saves 1 life per $3,433
[1] - The latest papers by the IMF actually argue that redistribution does not reduce growth.
good choice of examples: purchase a purse that costs as much as a used car or save a daughter (not a son).
I am seriously impressed: you've hit all the proper buttons to evoke the proper emotions in people reading your comment to take your side. How can anyone argue that a purse provides more value than someone's daughter? they can't, and so you've provided no room for any one to disagree with you.
congratulations! you are fluent in propaganda and argument framing!
how about using a different example, since the money would be taken from everyone, not just the rich:
3,433 is about 6 months rent for me. that does provide me a lot of utility.
or its about 8 months rent for someone else. that also provides them a lot of utility.
so why should I pay for them to be sheltered for 8 months instead of sheltering myself for 6? especially considering that the inefficiency of the government bureaucracy means that they will likely only be sheltered for 6 months: the exact same utility as if I had just kept my money for my own rent.
> Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen.
So apparently the federal highway system isn't a net benefit? How about the internet?
Also in more direct terms, the government "magically" made profits by bailing out AIG, GM, and so on -- so we got taxpayer money (or printed money, doesn't matter) being used to create (a) more money than was used, and (b) the net benefit of not having the economy implode together with the more arguable net benefit of (c) GM staying in business.
As an aside: a friend of mine used to work as a transport economist, trying to figure out the net benefit of government projects. (This was in Australia, but Australian politics is every bit as borked and corrupt as American.) Typically the cut-off point for a government road project was a societal benefit / cost ratio of 20/1.
The thing about corporations -- they raid the societal common (the benefits of public education, civil order, roads, etc.) and make profits "themselves".
I think you're right that a lot of things like roads are a huge net benefit to everyone. But those are things, not money.
I don't claim to know what basic income would do, but I worry for the supply side of the equation. I used to work in a factory making windows. It was a terrible, terrible job and nobody would do it given a choice. So if everyone has the choice not to do it, what happens to the supply of goods like that?
While I'd like to believe that the job could be made good enough to be attractive somehow, I can't think of an amount of money that would make me agree to go back. This, of course, makes me wish we could free the people stuck doing that, but I wonder just how many goods there are like that? We're suddenly playing with the 'free rider' problem for our entire society. Sure, we can print enough money for everyone, but what happens when it's nothing but worthless paper because there's nothing to buy?
If a job is so unpleasant that people will only do it to avoid abject poverty and its miseries then something is wrong with that job. Probably that window manufacturing job could have been much more pleasant given the right process changes, but the factory owner was not incentivized to try because they could find someone willing / forced to accept that job as it was. In essence, basic income does away with wage slavery, but that is a good thing. Those goods will still get made, but they won't get made in the same way. Though to be honest, most places will probably not bother making the job nicer and will just move it to somewhere where wage slavery is still legal.
I'll be honest: even if you gave me unlimited money to fix it, I wouldn't want to work there. It was already about as robotic as it could get and yes, there were definitely a few things that could have made it less bad, but I don't think that job could be good.
Also, I'm not so deluded to think that it was the worst job in the world, either. I mean, in that world, who collects trash? There are a lot of necessary jobs that just plain suck and we're simply zeroing any incentive one might have to do those.
In that vein, if we go this route, I'd almost think we would be better off to supply basic goods (food, shelter) than cash. That at produces some semblance of incentive structure for improvement while leaving an out for those who have been made irrelevant by technology.
Providing food and shelter versus cash makes the government have to solve all the distribution issues(something that I think we need a benevolent AI to do for us), making the dole actually be food makes entire groups eat the same food, countrywide chicken casserole nights will become a real thing.
Basic income would only cover essentials such as shelter and food. While some people would choose to work because they enjoy their jobs, many would work to be able to buy a nice car, dishwasher, TV and other non-essentials. Unpleasant jobs might be the only choice for some people, particularly for unskilled workers.
Basic income is only money, though. You don't control whether someone pays rent or buys $x worth of beer with it.
I say that not to be mean, but because of the times I watched my coworkers get their paycheck, walk or bike[1] straight to the gas station to buy lots of beer (estimated cost ~10% of paycheck), and call in sick the next day.
[1] This was mostly due to being unable to afford a car, though I was aware of a few with DUI convictions. In one case, they were able to bike there because I helped them replace their bike after it was stolen around Christmas time.
I have to assume you haven't worked with glass much. Maybe artisan glassblowers enjoy it, but at the factory level it's pretty miserable.
It's pretty easy to get injured in spite of safety gear. There are the minor cuts, scrapes and splinters one might experience when dealing with (literal!) tons of broken glass, to say nothing of the times it breaks in your hands. And I was grateful to work on the tempered side. Raw glass breaking when handled is terrifying.
I personally gave first aid to someone whose wrist was slit open by glass. After the ER airlifted to a bigger hospital for reconstructive surgery, he at least retained most of the use of his hand. Note that everyone was issued Kevlar wrist guards (not to mention the jackets, goggles, etc.), so it's not like we were unprepared for such injuries.
Another plant had someone crushed under a forklift just before Christmas when it tipped over when they were emptying a glass hopper. Yet another plant had a sheet of glass break when two people were carrying it. It was raw. It cut open the person's neck and they died. One of the machines used to be called a 'Gas Chamber' (it was used to fill IG units with, e.g. argon). I'll let you guess what sort of incident made them rename that one...
I'm sure there are many more such stories, but I'm including only those I know about directly. There were many other issues as well, I don't have a complete list. I'm deliberately leaving out those issues that could be fixed merely by spending money.
I think these sorts of things can still find solutions under BI. By eliminating wage slavery, only those that are compensated proportionally to the risks will take on the work.
If manufacturers cannot afford that level of compensation, or cannot afford to automate the risky kinds of labor, then they cannot function, and that's a good thing, because if they can only do so now because they are allowed to externalize the costs to society of their health hazards, then they don't provide a net utility to society.
I can really sympathize with that having been one of the people subject to those externalities, but at the same time, I have to wonder just how many such goods there are and which industries would collapse.
I'd be glad if crappy industrial jobs could be made less so, but if suddenly computers are no longer affordable to anyone due to the inability to find anyone willing to work in the myriad industrial processes that feed the semiconductor industry, I'm not sure that society will actually progress as a result and perhaps there could be less socially disruptive ways that better achieve the goals of basic income.
> asking any government to take money from the people [...] and magically produce a net benefit to the people is [...] impossible
But that happens already in the country where I live. People pay taxes, and via taxes, we are able to provide health care and university education to everyone. I like this system, and I'm one of them who pay taxes. It's good for me if everyone is well educated, and healthy.
Whether or not a basic income would work, depends on the number of citizens. Fairly few, and many efficient machines and robots that can do most of the hard work, then it'll work okay. Too many people, then basic income won't work I think. In the future, thanks to contraceptives, I think there won't be too many people.
>Once they have every single person who breathes on the dole, this will give them unbelievable leverage against the people.
That may not be a bad thing if we're talking about people who contribute nil to society.
>If the government is giving everyone a check, how hard is it to argue that the check should be more? Not hard.
Not hard to argue, very hard to accomplish. Political change in many countries is slow and welfare recipients are rarely afforded much sympathy by the working and managing classes.
In any case, the real function of basic income is so much more than a moral institution (we've heard those reasons a million times and I won't touch on them here). The exciting thing is that it gets the useless and/or uncommitted to self-select out of the labor market. That means better productivity, higher quality services, a better work environment, lower labor supply and higher wages. They can continue contributing little-to-nothing, be provided a reasonable minimum by local standards, and leave the rest of us to accomplish what we want to in business, research, etc. That would be a HUGE weight off the backs of workers and companies, and I would gladly pay to keep people who can't be bothered out of work. Make no mistake, we're already carrying these people financially and professionally. Not having them gum up our operations would be well worth whatever instinctual annoyance their mooching causes.
> The exciting thing is that it gets the useless and/or uncommitted to self-select out of the labor market. That means better productivity, higher quality services, a better work environment, lower labor supply and higher wages.
you're going to have to explain this logical leap as it is non intuitive and I don't see any sources on your comment.
Simple enough: clearing the lazy, the unmotivated, and the unaccountable from our labor market would make it easier to get work done (less drain from employees who don't contribute); make work more pleasant (surrounded by motivated colleagues who value what they do); and eliminate competition from useless employees who leech jobs, artificially inflate the labor supply and tarnish average applicant quality because they'd rather stay home and do nothing (improving employees' position relative to employers).
The above doesn't seem non intuitive to me, beyond the idea that it might actually be worth it to pay some people to go away.
>all of the problems you just described can be solved by simply firing a bad employee or not hiring bad ones in the first place.
Hardly. If hiring and firing could effectively eliminate poor employees, there wouldn't be so many. As it is, only the most egregious are weeded out. Firing costly employees can be exceptionally difficult depending on local regulations and may not even be worth the trouble considering the risk of simply finding another costly employee. In a world where you more or less must work, low-quality job applicants are especially incentivized to misrepresent themselves. Basic income would divert many of these people out of the workforce and into their homes where they can do less damage.
>I'm still not following why paying them to do nothing is necessary.
They're already being payed to do nothing. They're just doing nothing at work where it costs businesses money, hurts the experience for customers/clients, and worsens the workplace for employees who really care about what they do. And at work they do worse than nothing: not only are they paid to do nothing, but they fill a position that could be filled by a productive employee. So while the business loses money on the employee, the whole machine is simultaneously thrown off balance by a missing cog. Usually fellow coworkers wind up compensating (paying) for this imbalance, with no extra reward. Best case scenario, the business manages to fire the employee. Then the individual either moves on to pilfer another company or goes on welfare. They don't just fall out of the system, they continue racking up costs while contributing nothing. Basic income would allow us to filter them out cheaply (letting low-quality "workers" opt-out instead of making businesses review, employ, and reject them) and fix their monthly cost relative to our economy. Meanwhile, our businesses would become leaner and more effective.
You can't eliminate leeches from society, but you can minimize their economic impact. It is less costly to pay them to stay home than to pay them to come to work where their costs are multiplied.
ok, that makes a bit more sense. thanks for explaining.
you also mentioned higher wages for those that are working due to a reduction in available labor supply. wouldn't the higher labor costs for employers off set any productivity gains from getting rid of bad employees?
Because right now those fired employees still _need_ to work, so they apply somewhere else. Even the most incompetent eventually get past the filters and gum up someone else's operation. So we have a cycle in which we harden the filters (e.g. day-long interviews for programming jobs) which makes life worse for everyone involved.
If those bad employees could self select the "good enough" lifestyle provided by a basic income, we could reduce all the overheads associated with trying to protect workplaces from them.
> The monetary system is pretty well understood. Basic income just becomes another input for money to enter the system.
I'm no fan of basic income however basic income comes from tax. This is redistributive, but not expansionary.
You say it's well understood but you seem to think that central bank issued currency is the cause of inflation. Most "money" is created as credit from private banks (against land).
Again, basic income is not creating money. Read up on money creation, you will be surprised and then perhaps see how you are being fooled on much of how your entire world works with regard to democracy.
"I'm no fan of basic income however basic income comes from tax."
Basic income does not need to come from tax. The debt that comes with creating money need not exist, and with debt-free credit you vastly reduce the need for the credit to provide a taxable return.
Initiatives such as the Positive Money campaign show that we have got options when it comes to changing how money is created, it's something I believe could work, I'd be interested to hear your thoughts.
Sure, but in this case I was responding to the parent comment who was totally unaware of how money/credit works.
I get that this could also be supplied via the state by issuing "new" money. It's good you posted a link to this link. Thanks I'm already aware of their work.
Basic income does run the risk of causing ancillary money creation. People may end up lending more because they have a guaranteed income. For example, my country at one point introduced a tax credit for home loans, provided it was your only home, to incentivize people to become owner instead of renter and gain financial security. The net effect was that home prices rose to offset the tax credit, because many people lend at the upper range of their budget and suddenly that limit was higher. Basic income risks having a similar effect.
Ok yes it could do, but your example augments my main point. Most credit creation is against land. When you incentivise land speculation you create inflation. We've seen this leading up into 2008 when the money supply rocketed.
Basic income is IMHO a bad idea and we should do land value tax, as I said in my post. I don't think basic income would prove as inflationary as a direct tax subsidy against land speculation as the former could feed into some land speculation whereas the latter is basically intended to fuel this fire.
edit - whoops realised I put about land value tax in my other comment. Anyways: land value tax - the establishment hate it.
> In the simple ILF model, bank loans represent the intermediation of real savings, or loanable funds, between non-bank savers and non-bank borrowers. Lending starts with banks collecting deposits of real resources from one agent, and ends with the lending of those resources to another agent. In the real world, however, banks never intermediate real loanable funds,
> Rather, the key function of banks is the provision of financing, meaning the creation of new monetary purchasing power through loans ... The bank therefore creates its own funding, deposits, through lending. It does so through a pure bookkeeping transaction that involves no real resources
Read the whole thing. Digest it and don't get caught just trying to win an argument with a guy on the internet.
We are now through 2 layers of falsehoods.
Layer 1: there is a fixed amount of money
Layer 2: reserves and money multipliers
From the end of the article:
> To summarize, banks are not intermediaries of real loanable funds, they do not collect new deposits from non-bank savers. Instead they provide financing, they create new deposits for their borrowers. This involves the expansion or contraction of gross bookkeeping positions on bank balance sheets, rather than the channelling of real resources through banks.
A lot of the confusion comes from the fact that there are two sorts of money that are in circulation: base money and bank money. This blog post is only talking about bank money, and does not reference base money.
Base money (dollar bills, Euro notes, pound notes etc.) is controlled entirely by the central bank and base money can be created and destroyed by the central bank, whenever they like. Think of it as like digging some more gold or creating some more bitcoins.
Bank money is created by people either depositing base money with a bank, or indeed by a bank issuing a loan as described in the blog post. A deposit can be seen as a loan to the bank: all deposits are loans, all loans are deposits when looked at from the other PoV. Anyway, bank money has similar characteristics to base money - it can be used by purchase goods, it stores value etc.
I can buy a book with base money, by handing the merchant a few dollar bills. Or I can buy the book with bank money, by handing my bank card to the merchant and after some settlement magic my bank will stop owing me some money and will instead owe it to the merchant. The IOU is the bank money, it is a claim on base money that was previously deposited. Base money and bank money act similarly from my PoV, they are both denominated in dollars (or Euros or pounds or...) and they are normally interchangeable at a 1:1 rate. Sometimes they are not.. e.g. if my bank was nearly going bankrupt with no deposit insurance, I might be happy to get my base money back at 80 cents on the dollar from my bank money. Bank money has credit risk of the bank, base money has no counterparty risk.
Banks do need to have reserves of base money relative to the amount of bank money they are allowed to create; this is called Capital Adequacy and is a primary restraint on bank money creation. A bank has a limited amount of capital (its own real base money that is not owed to anyone else) and it cannot easily create more capital. If a bank is lending out too much to borrowers, then its Capital Adequacy Ratio will get out of line and it will have to stop lending.
Base money is 3% of all money. Go ahead pull the lot out. It won't matter. Only parking meters that can't take cards will feel it.
Reserves are unconstrained as banks lend to each other after creating credit via deposits from borrowers. If two banks create 400k and then each borrower buys land with this 400k and the seller then deposits the fresh "money" with one another's bank they have 400k credit. Demand is pulled forward and the credit will be destroyed only when it is paid down.
Money supply since the end of the gold standard (I'm not a goldbug) has rocketed. What constrained the near vertical rise? Nothing.
Capital is absolutely not unconstrained! It is one of the most difficult things for a bank to increase its capital base.
Base money is a low percentage compared to bank money - its true - but all bank money is a claim on base money. Pull out the base money and every bank has a liquidity crisis and would in turn have to recall every loan. More than parking meters would feel it; a bank cannot issue a loan without appropriate capital base, and only high quality liquid unencumbered assets can be considered capital, which cannot be created by a bank (a new loan/deposit is not an unencumbered asset). In practice capital can only be increase by a new share issue or by retaining profits over years.
I read the bank underground blog post. It is fine and interesting, but it is talking entirely about bank money creation (loans/deposits) and not about base money or capital ratios. That's OK, no reason for an article to talk about everything. But just because one article doesn't talk about capital in the point it is making, doesn't mean that capital is not an important constraint in banking.
There is a reason why bank CEOs have been in recent years judged heavily on their Tier 1 capital ratios, and why they consider it difficult to adjust these ratios. Issuing a new loan makes the bank's capital ratio worse not better.
It's very frustrating to discover that everything you've learned in college was either very wrong or completely wrong. This is why I tell people that parties and social time are so much more important than classes, for which I get called an idiot.
I've almost never had a bank loan. Banks have traditionally refused to lend to me. Thus we can't have me start with the FMC model; I've always lived in the ILF model.
If banks aren't reliant for central banks or others for their money, then why are there not more banks? Why don't we see poor people just set up their own bank, loan money to each other, then use that money to go and buy food and shelter?
If banks create money, then where do Bitcoin come from, and why are they valued? What happens if everyone stops using other currencies and use Bitcoin instead? And how does the world of Finance plan to stop this?
What? You want the plebs at the front of the queue? You need a banking license. Go set up your own bank that is not an intermediary but instead issues dollars. I bet the cops come to see you faster than if you were murdering a person on the hour every hour.
Speak to others about bitcoin. It doesn't interest me, it's not "state" money. The state can guarantee it can pay you back by squeezing citizens. Bitcoin can't do this.
For more info go see my other link or just google. It's all out there if you look, and I'm not talking zerohedge conspiracy lunacy as demonstrated by my url to the BoE's own blog.
> Go set up your own bank that is not an intermediary but instead issues dollars.
Wait, wait, wait. There are different types of banks? How many different types? Let's start again, talking about all of these types. How do they interact? Got any good links?
I'm curious enough that I'd like to look into your worldview. So please, tell me what to read. What are the 4 or 5 links/resources that explain it best in your opinion?
Reality is the dreamworld as far as I can see. It's a total disaster that people don't understand they are seeing all productivity gains now (and forever more) captured by land prices.
> "Besides that, asking any government to take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen."
Your logic is sound, but you've misunderstood something crucial.
Where does money come from? In short, money is created in one of two ways; by government spending and by bank loans. All money that exists in the rest of the monetary system was originally formed in one of these two ways.
From the viewpoint of the worker, money exists only after something of value is created, after all that's how we get paid, we do the work then the money ends up in our bank account.
But in reality, money exists before we earn it. The money in my bank account and your bank account isn't 'ours' before it's someone else's.
The way that money is spent into an economy has a large role to play in the the quality of life of a society that is based on money as a medium of exchange. Some of the ways the money is created can be destructive to the economy (for example, when mortgage values increase faster than wage values), whereas other ways can boost the activity of an economy (for example, healthcare spending).
The role that the banking industry plays in the creation of money has the potential to undermine the social good that UBI could offer, but I don't want to detract from the main point, and the main point is this; understanding how money is created is very useful in understanding how to get the best out of the systems we build on top of money.
UBI organised by a government can just be a different way to spend new money into the system. Aside from the usual effects of inflation it doesn't have to involve your savings or earnings at all.
America will be about the last place to attempt this, if the past (and our current welfare) are any guide.
It's an interesting concept. My immediate reaction is that it creates disincentives to work. In theory it does, but the only data we have is those who are currently on welfare and do not work -- but maybe those people were basically not going to work anyway! We have no competing group of people who are on welfare yet still CHOOSE to work to better their lives, because as soon as someone gets a job, no more benefits! So it's natural that an outsize chunk of people on public assistance don't work -- and the ones who stay on the longest, of course, don't WANT to work. But it undercounts those who go on the system then back out of it as they get work.
Other things that seem "obvious" to result: inflation. If everyone can afford $x for housing, why should housing costs not go up by a similar amount? The same way 2 incomes is now "normal", and the same way giving tax deductions on mortgage interest to make housing "more affordable" means, now that everyone can afford more housing, housing is bid up.
I don't know, but it's a fascinating experiment, anyone who is not paying for it should be in favor of this experiment -- unless you just hate poor people.
> We have no competing group of people who are on welfare yet still CHOOSE to work to better their lives.
I think we do, every state has a Vocational Rehabilitation program that attempt to do just that. In fact, I became disabled at the age of 22, and could have lived the rest of my life with full disability benefits, But instead chose to use one of these programs. I have since payed back in taxes to the state + more that what I most likely used. http://www.fda.gov/downloads/AboutFDA/WorkingatFDA/UCM277757...
> I don't know, but it's a fascinating experiment, anyone who is not paying for it should be in favor of this experiment -- unless you just hate poor people.
What a bizarre statement. It's really easy to read that as two things:
1. You're totally game to experiment, just so long as it's not your money.
2. Anyone who doesn't agree must hate poor people.
I'm pretty certain you didn't really mean either, but the net result of that sentence is awfully unproductive: "anyone who doesn't like this must either have skin in the game or hate poor people!"
1. It's POSSIBLE to be unhappy about this, IF it is your money being used, and you have certain criticisms.
but
2. If it's not your money, I can't see how anyone could possibly have an issue with the experiment.
Which part do you disagree with? I'm not saying that anyone whose money is involved here HAS to be upset about it. I'm just saying, if they have skin in the game, they at least may have REASON to quibble. And if they don't, I don't see what complaint a person could possibly have with research (that, incidentally, benefits people).
That's the common tactic of argument these days. The notion of "criticism" has been re-cast as "hate". Hate is more easily dismissed, ridiculed, and trivialized.
After re-reading your parent's statement a few times, I think (s)he thought I was saying you must dislike it if you're paying for it, but if you're not paying for it, you can't dislike it.
I merely was saying I can't see a valid criticism for those of us who aren't paying for it. There may be some valid criticisms of the idea, but I'd rather see how this goes.
I can't think of a single (valid) reason to oppose basic research on solving poverty, when that research has no negative impact on the person who might be opposing it. Can you? The only one I can think of is "I want to ensure poor people are kept poor."
"America will be about the last place to attempt this"
In a small sense, the US is already doing it. 60 minutes did a story on an area in Kentucky and West Virginia where they estimated 10-15% of the population, 250 thousand people, are on social security disability. Local lawyers guaranteed, and the Social Security Administration agreed, that they could get anybody classified as "disabled" to get benefits.
Yup, I'm well aware of how the disability system is being used. But we all know increasing social services has been pretty much a toxic idea since at least the early 90s.
Yeah, the APF was mentioned in the Medium article, and I'm familiar with it as I have family both who live in Alaska, and who have worked in the oil industry. Also, I've been to deadhorse myself, but I'm not sure that qualifies me for anything other than glancing at the pipeline now and again for hours and hours and hours on the Dalton.
I don't think killing motivation would be something to worry about. I can think of lots of examples of people who don't need to work but continue to do so anyway, from my own group of friends as well as Bill Gates, Elon Musk, etc etc.
I can see that being a problem but what about this solution (to be honest I don't see basic income becoming a thing in the United States in my life time)
Peg it to a CPI? GDP? Or maybe codify it in a constitutional amendment?
> take money from the people, run it through the giant bureaucracy machine, and magically produce a net benefit to the people is both logically impossible and naturally never going to happen.
Seems to work in late stage free markets dominated by 2-3 large-scale players.
It looks like this is not a "saturation" site for testing the basic income theory. All participants appear to start with the same income, but the basic income group receives their income with no strings attached. This can create some unfortunate incentives that would not occur had everyone received a basic income.
For example, if you have one group with a basic income and one group without a basic income in the same population, the group without would be more likely to be hired for low wage jobs because that salary is much more important to them. If everyone had a basic income, then all potential hires would be on an equal footing and it would not look like the non-basic income group is more employable.
One way to test the basic income theory is to give everyone a very low basic income and then slowly increase that amount over time. If basic income works, it should be beneficial even at low rates that do not massively disrupt the tax and welfare system. When this is seen to have beneficial effects (or at least not adverse effects), the rates can be increased.
>the group without would be more likely to be hired for low wage jobs because that salary is much more important to them.
That's not necessarily how it would work. In the UK we've had a top up with tax credits for low paid jobs. What we've seen is an explosion of low paid part time jobs as businesses know people will take them as their income will be topped up by the govt.
That's irritating to read because when basic income is being discussed it's always about people taking advantage of it for not working when in the real world it's more likely the bosses and the people in power who will take advantage of it (and they will, a relative of mine lost his job at 50 because a govt sponsored win-win program targeting the youth: hire a young gun and the govt will pay a part of his salary. Now they had to pay my relative a hefy sum of money in social benefits. He luckily found a better job later and his old company is now playing carousel with young guns and getting less done of course.)
well those who take advantage of it from the top down tend to be those who already are willing to work and employ others. As in, those who don't want work are not likely to see it.
So I would not worry about it when the bosses and people in power step in unless they are laying off those already employed to do so. That is the area where abuse would be bad and must be prevented
Basic Income is sometimes dogmatically derided as 'socialist' thus evil. Proponents of Basic Income - or varieties thereof - can be found on the left and the right of the economic political compass. Even Milton Freedman was a proponent of some guise.
Personally I think it is lazy to dismiss the thinking behind Basic Income as merely communism.
There is no arguing that basic income, welfare, disability benefit etc. are socialist. That is not deriding them, it is an accurate description. It's strange that this is a bad term in the US, not so here in the EU.
It's not even slightly socialist. People talk as if all government action is socialist, but socialism includes controlling the means of production not just taxes. In the end the problems with socialism are organizational in nature, and large corporations face the same issues of misaligned incentives.
Edit: A minimum wage is socialist a minimum income is not.
Since he mentions he is European, I think that he is thinking about Social Democracy rather than Socialism (which has a very clear economic meaning which, like you said, assumes state/social control of the means of production).
Friedman and Hayek were not socialists. One of the points is to get rid of the massive government overhead of distributing welfare. This particular aspect is anti-socialist.
That's why I hate political labels. People say UBI is 'communist' because it's similar to one aspect of communism, and therefore must be bad because of all the other aspects of communism. It's a strong failure mode of human thinking.
There is one subtle difference between basic income and welfare systems, which is that welfare systems (even if you remove the requirement to look for work) place a higher effective marginal tax rate on the lower end of the income scale. This might seem like a bad idea, since it reduces the incentive to work for those people. E.g. in Australia, at some levels of income, you lose $5 of welfare for every $10 you earn, making the effective marginal tax rate 50%. However, every redistribution system reduces the incentive to work for some people. Basic income (plus progressive income tax) would make this disincentive gradually increase with wealth. Welfare systems have a high marginal tax rate up to the point where people no longer receive welfare, then the marginal tax rate drops sharply, and gradually increases with progressive income tax.
When viewed in this holistic way, it's not clear which system is better. Some might say that it's not worth "wasting" incentive to work on people who might, for all number of reasons, not be willing or able to work anyway. This is the argument for the welfare state. On the other hand, basic income advocates might argue that poor people are just as willing to work as anyone, and that creating very high effective marginal tax rates for them results in welfare dependence.
just fyi, in "communism" E-Europe everybody was forced to have a job. Vocational or not, efficient for the system or not, was there, mandatory. Thus the "guaranteed" income.
The Friedman negative income tax would surely be better than the complicated patchwork of taxes and welfare programs modern countries have today, if only for its simplicity.
I would not mind seeing an experiment in putting everyone on a BI and then taxing at a flat rate like that. What makes the welfare we know so terrible is that for all its good intentions, it works out to a system that pays people to do those things that keep them poor in the first place.
The international press seemed to get hold of this last week and the early coverage pointed to a Dutch article with far more direct quotes [1]. My Dutch is poor but my understanding is that the primary aim is as much (if not more) about reducing administrative burden as it is about basic/universal income.
Also, I haven't seen any coverage in the mainstream Dutch press... which is somewhat telling.
Here's a quick translation (I tried to do it correctly, but didn't want to spent too much time on it)
Utrecht starts experiment with basic income.
16-06-2015 • 10:15
Everhardt2
After the summer holidays Utrechts starts an experiment around the basic income. Counciller Victor Everhardt from "Work and income" likes to see if a basic income principle works in practice.
"It would be more simple if the system is again based on trust."
Why this experiment?
I have been counciller "Work and Income" for a year and I think that it's a sign of civilisation that people who, usually temporary, but sometimes also longer, cannot take care of their income get social security benefits. At the other end of that system we have built up a huge verification system, often based on mistrust.
People with benefits usually have to take into account a large number of rules, like welfare, special welfare, rent assistance, children welfare etcetera. All these systems have their own verification mechanisms. There's a forest for the trees amount of rules and verification methods. It's quite easy to get stuck here. It would be a lot simpler if we could base the system again on trust.
People could abuse this and not go to work?
From our data it appears that less then 1.5 percent abuses the welfare payments system.
However, before we get into all kinds of principle debates about should we do this or not, we would like to research how a basic income system works.
What happens if somebody gets a monthly payment without additional rules and verifications? Will such a person go sit at home passively or is that person more motivated to develop him/herself and make a meaningful contribution to our society with paid or voluntary work?
How are you going to research that?
Together with the University of Utrecht we have designed an experiment at which people who live on welfare get to meet specific regimes. For example a group that works with rewards and 'jobs' for a payment, another group with a basic income without any additional rules and of course a control group that lives by the current rules.
And are you allowed to do this from the minister?
We have verified this at official level to see if an experiment with a basic income is possible and we have not yet heard "njet". In addition, minister Plasterk of internal affairs has announced that cities should get more room to experiment with existing law.
We think the basic income is very suitable for this.
When does the experiment with basic income start?
End of June we have an expert meeting about basic income with other cities that also have plans into the same direction, like Nijmegen, Wageningen, Tilburg and Groningen. Together we can make our call for more room of possibilities for cities stronger. In addition we like to start with the experiment in the second half of this year.
I live in france (10% unemployment), and unless you're listed as seeking work, you're not given welfare.
It's odd because they don't really check that you send resumes, nor do they really try to contact companies or just propose you a shitty jobs. The "get a job" mentality is really weird to me, because if you have freedom, and you can't find a job that suits you or that you're just too humiliated to beg all those employers, why punish people for being moochers ?
Unemployment is such a political subject, it always ends up being about social stratification anyways. Employed people are just safe and sound, and there are many parameters and behaviors that keep many individuals away from employment or social integration.
Being a marginal and being unemployed, to me are the same problem.
The UBI solves this problem, since it's injecting money that increase consumption, which in turn also increase business and growth.
That money has to come from somewhere, it will either reduce the consumption from where it was taken or it will reduce capital stocks that can be used for investment.
The consumption will increase. The poors consume much more than the rich because the money they have is just enough to cover basic needs. Investments may decrease but the relation between savings and investment is far less direct.
Look at, eg, the English "Working family tax credits" system.
People on low wages pay some tax on those wages, then apply to have some of that tax returned. There's a lot of bureaucracy involved. It's not great to be on those benefits because you can't budget your money.
Scrapping that system and then just reducing the amount of tax that everyone on low wages pays would probably be better.
That may be true, but dantheman was simply correcting jokoon's implicit claim that paying people money is good in itself ("since it's injecting money that increase consumption, which in turn also increase business and growth.")
I think there are good arguments for basic income, but they get obscured by the fact that it has become a political campaign, so people like you argue for their own side rather than correcting people who support basic income but for the wrong reason.
You are correct that there are reasons why basic income be more efficient than other redistribution measures. But this doesn't contradict the fact that the money has to come from somewhere, and it isn't relevant to this particular thread of discussion.
Voting a budget is a tricky subject. Sometimes ideals will get you nowhere, but I think developed countries have showed that redistributing improve not only the country as a whole, but it also improve the status of the wealthiest, the wealthy people will benefit from the fact that people are fed, educated and not just wandering around either stealing or doing shitty jobs.
At that political level, money becomes an abstract thing, and I think it becomes a matter of national interest, not individual interest. Try to think about absolute wealth, not relative wealth. If the koch brothers can have 100 villas, would they be able to have so many without a redistribution system ? I don't think they would. Look at developing or third world countries, and look at their wealthiest, I'm sure they don't even have proper health care.
It can also be created ex-nihilo by the state, similarly to what the private banking system currently does through credit, but without interests. This system causes inflation and to avoid ending up with ridiculously large numbers it requires devaluating at regular intervals.
What you're saying is some other formulation of the trickle down, and it just doesn't work.
Welfare is a form of redistribution. The economy is much better when money is spent for housing people, feeding people, and let them have a decent, small amount of leisure. It's a matter of scale. You better have more people spending money, than fewer people spending it.
You better build 25 town car than 1 ferrari. But I agree that some can praise individual success and consider that people living in poverty is okay, but I don't think it really the country as a whole.
> “People say they are not going to try as hard to find a job,”
Or they will bargain for a job that is worth their time so they won't accept a job that won't improve their lives. That is a subtle but important difference from just sitting around because they can.
My bet is that when people aren't bargaining for their life -- food, shelter etc because those things are a given they will begin making trades that are a net positive for them rather than just trying to control their losses. 'Head above water' bargaining is a fact of life for the poor that is easy for the middle and upper classes to forget. It leads directly and almost inevitably to exploitation by the other party that is in a better bargaining position.
Further in the article it talks about young men continuing school and mothers staying home and taking care of children. These are decisions that are made by people who are not desperate and not in a terrible bargaining position.
I'm excited to see the results whether they agree with my intuition or not. We need more policy experimentation in the US and I'd love to see some of that experimentation in this direction.
The more I think about it, the more I really like the idea of a basic income. One of the great things about universal healthcare is that you just never worry about it. I never have to think about what would happen to myself or my spouse or my kids if they get cancer after I quit or lose my job. Whether my insurance will fight me on some treatment, or if it covers the rights things. It's nice.
Basic income seems like it will give you that kind of piece of mind as well. You know that in the worst case, you'll have a hassle-free, indefinite, (modest) income to get you by. That's worth something.
Whether my insurance will fight me on some treatment, or if it covers the rights things.
I don't think universal healthcare addresses those issues. I'm from Canada and people fight with the gov't all the time over the coverage of medical care and drugs.
Sure, if you have a really common condition you might get everything you need, but if you have a rare condition, you're often stuck trying to fight it out for coverage.
>I'm from Canada and people fight with the gov't all the time over the coverage of medical care and drugs.
I'm from Canada too, and yeah, the system isn't perfect. Generally conditions which require a more intensive and personalized long-term care (read: expensive) are lacking. Drugs may be expensive. Dental isn't covered. But let me tell you, you need to see your family GP? You'll see them without worry. Your GP refers you to a specialist for tests? No charge. Your specialist orders more tests because of a finding? No charge. Surgery? No charge. You're hospitalized for a few weeks? You'll never get a $70,000 bill.
There is a certain freedom in being able to go through all that, even when unemployed, and never think about whether you'll have to re-mortgage your house.
The output side of BI is naturally attractive. Everybody gets money. How could that not be attractive?
I'm just skeptical about how we would fund BI to a level that is meaningful while maintaining some modicum of equitability and equanimity. Just to lift everyone to the poverty line in the USA ($11,770) would require paying out more than $3 trillion in net benefits, or roughly the size of the entire federal budget today.
To be sure, in a certain income range, you'd be taking more money out of their left pocket while putting it back into their right pocket. (While simply taking more money on net from higher incomes.)
That said:
It's 1.) very hard to see how you make the numbers work and 2.) I imagine that if you told a lot of the BI advocates on this thread "Fine, I'll wave a magic wand and give everyone a BI of $10K," the reaction would be "I can't live on that!" (I also assume that someone in the US today right at the poverty line is probably eligible for certain types of assistance that BI proposals would supposedly eliminate.)
>The output side of BI is naturally attractive. Everybody gets money. How could that not be attractive?
That's not why I find it attractive. Most people would not be satisfied with a basic income. Most people are more ambitious than that. They'll want a condo, a nice car, a nice TV, a nice vacation. That's why they work for more stressful jobs that pay higher than minimum wage work.
I like the piece of mind BI gives you, like universal health-care does, like social security does. I know that if I get a run of bad-luck or I fuck up, there is a safety net.
Poverty line for each household is $11770 + $4160 per person. Average persons per household is 2.58. So the average cost per household would be $18343.
There are 318.9 million people in the US. Divide by persons per household yields 123.6 million households.
Multiply the two: $2.267 trillion.
Of course, if this is how the math ends up going, there would be a huge incentive ($7610) for two persons to remain "individual households".
For poverty line, on a family basis, the incremental cost of another person approaches $5k (compared to $11.7k) so taking families into account the lower bound of payments is $1.5-2 trillion (if all we had were really big families)
The problem is that income does not get you by. It's a totally abstract concept and cannot sustain a physical being. Maybe an income of potatoes and butter could sustain you.
An income of digital credits only gives you some accounting leverage to access goods in a public market (which may or may not exist).
If there are no doctors, your income won't ensure you receive treatment when you need it.
You're describing non contributory Social Security not a basic income. The difference is that those systems usually make everyone but the retired look for work or be in education etc.
Where did the grandparent commenter say anything about "mak[ing] everyone but the retired look for work or be in education etc."? Their comment seems to describe basic income just fine to me.
They are not testing a universal basic income scheme. They are testing an unrestricted basic income scheme, for welfare recipients only. If the experiment is a success it would mean that welfare schemes will become less paternalistic.
Can this really work when applied just partially? This experiment is about ~250 people with basic income in a large city. (The text mentions 300 people, but some of them form a control group that doesn't receive basic income.)
So if any of these selected people will try to find a job, they will probably voluntarily "lose" it to somebody to really needs that job. Even without that moral issue, this makes still sense from a business point of view: All else equal, hiring a poor worker is probably perferable to hiring a wealthy one, as the poor worker has more incentives to work really hard.
Actually, money worries are some of the worst things your employees can have. An employee without them is happier and more productive. So I would definitely hire the one with the minimum income.
> All else equal, hiring a poor worker is probably perferable to hiring a wealthy one, as the poor worker has more incentives to work really hard.
Or conversely, they might just have more incentive to do what it takes to get paid rather than doing a good job. I think work ethics is a better incentive.
> Can this really work when applied just partially?
Since this is an experiment I doubt anyone reasonable participating in it would leave their work and live only on basic income. So the result is already determined - basic income doesn't change anything.
IMO to test basic income theory, it should be implemented nation-wide for unspecified period of time - with the ability to cancel it at anytime in case of when negative effects significantly outweight positive ones. When it gets cancelled it failed.
No, what vog means I think is that if A receives basic income competes with someone B who doesn't receive basic income (because only 250 people gets it in that test), then the moral thing to do from A's point of view is to voluntarily lose to B since B needs it more than he does.
So having a small sample set in a big city invalidates part of the experience since the situation is very different from what would really happen if everyone had a guaranteed minimal income.
There are other reasons to "really need a job" though. Self-realization, fulfillment, social coherence come to mind. Or are those factors of happiness reserved only for the 1%?
Yeah, but their point is its not really a real world scenario.
Since the other person, who's not taking part in the study, wont receive a basic income, the person in the study might feel morally required to give up their job potential job to the person who really needs it, which means the results of the study will be inconclusive.
I wonder how much you'd need to save and to own in order to conduct this experiment on yourself? I've wondered about what I would do day to day if I didn't 'have to work to live'.
I honestly think I'd be doing very similar things. I'd still be programming, and I'd be wanting to make things that'd help people do their jobs better, but I wouldn't feel like I 'had to'.
That alone would improve my sanity immensely (I think), and yet it's only a small conceptual jump between what I'm already doing day-to-day.
I sort of ran this experiment on myself this year.
The answer is that I have actually probably learned more about coding than I had in the 3-4 previous years when I was working a lot, since I had more time to delve in to topics in depth, rather than rush to ship.
It feels great, and I've come out the other side much more productive in the projects I have kept working on.
Assuming you average 7% each year on the S&P 500, inflation averages 3%, and 50K per year is your target, you would want at least 1.25 million USD in the bank. Taking into account volatility, you'd probably want at least 1.8M.
The problem there is that you have a cushy programming job.
The bigger question is what about the gas station clerks? Or cleaning people? Or wait staff? Or any of the people working the millions of other jobs that just totally suck. Having done it in the past, I'm 100% sure nobody wakes up totally stoked to go bus tables or wash dishes.
So, maybe people who have awesome jobs will just keep doing what they're doing, but for people with shitty jobs, why not say, "F* it, I can get by with the guaranteed minimum, so why bother?"
If you are 20-something living on minimal income that barely covers food and a roof, would you take a job working as a gas station clerk in order to afford to go out and eat and socialize, buy a drink in a bar, or participate in the culture of everyone else around you?
If you asked a anthropologist, I suspect you would hear a pattern of human beings doing all kind of work in order to increase their status in society and finding a mate. Working in a low status work is not perfect but it is better than nothing and money is quite useful when it can be used on things beyond a 1-room apartment and basic food.
To be more realistic, most of the time I wouldn't even take a job programming if I had food and housing covered. I might do a contracting gig here or there to buy a new bike or skis, or pay for a big trip somewhere, but it's very unlikely I'd work all the time.
I've considered doing something like that now. I have enough savings to pull it off for a few years, so why not take a few years off and play? With a guaranteed minimum income it'd be an even longer time.
I like the idea of providing for everybody, but people need to be realistic about what could actually happen. If it's just a plan to shame and guilt trip everybody into working all the time, I'd prefer we don't do it.
>If you asked a anthropologist, I suspect you would hear a pattern of human beings doing all kind of work in order to increase their status in society and finding a mate.
Being a garbageman wouldn't help with this nearly as much as spending 4 hours in the gym and then spending 4 hours building socializing skills. Especially since the other side is now guaranteed being provided for thus reducing the already low impact that being a good provider has on mate finding.
Depends. If every euro you earn there adds to your unconditional minimum income, instead of replacing a euro from welfare, the motivation to work for that new car, or whatever, becomes pretty tangible.
Note that €900 (or €1300 for a family) is pretty barebones. You won't be putting much more than bread and potatoes on the table using that. And you'll probably live in a rather small house too.
Yeah but at the same time, it would allow people to be more picky about where they work. "I need money so I'll take any job" is a different mindset than "I am financially independent and I'm looking to make more monies in a job I like"
The I'll-take-any-job crowd might not be very motivated in their work anyway. At worst this will force us to pay better salaries for ALL jobs that have fewer applicants, instead of only the ones that require a higher education or lots of experience. Seems fair to me.
Income has a diminishing return, once you're out of "minimum income" the ammount requred to take the shit job is not linear.
You can either lowball the minimum income to the point where you can't realistically live on it for long or a lot of services get more expensive + tax hike to support it = lower standard of living for normal people (unaffected by minimum income but not rich enouh to ignore the costs)
The idea of basic income is to take people out of starvation and lack of shelter. It would still leave people wanting to earn in order to e.g. go on holiday, own a computer, go to a bar, go to a restaurant, eat nice food, own a car (in Europe where owning a car is not required at least) etc - i.e. still plenty of incentive to work, earn and save just more freedom to take risks by e.g. starting that business...
You also miss a basic premise of basic income - everyone gets it with no means testing. It is a different concept to current benefit systems. Normal people would receive it as much as unemployed people.
I doubt people are starving in developed countries so I wouldnt say it's taking anyone out of starvation, it's an alternative to existing welfare in that regard.
And when we get to "basic shelter" well coupled with free health care I guarantee you there are people out there who have very little ambition beyond that, I know more than a few from highschool that literally said things like "all i need is enough money to play WoW" or just work enough to earn money for weed and go out with their friends and live with their parents (and these are people in late 20s early 30s).
People with ambition aren't the ones that benefit from minimum income (unless they get really unlucky, which I guess is a valid concern, but then again those same people are not the ones doing the bottom tier jobs, at least not for long).
Also that's not how I saw basic income schemes suggested, usually it's paid out to people below min income and then progressively lowered to some point otherwise the taxes would have to be insane to finance it.
>I doubt people are starving in developed countries so I wouldnt say it's taking anyone out of starvation
Grew up with friends who had no food sometimes. My mom would give me food to bring to their house when I went to visit. The mother also had very serious medical problems which was a big reason for that.
You didn't have social services/food charities/local church/neighbors etc. ?
There is a difference between not having food sometimes and starving. Minimum income doesn't fix that either - there will be people who will spend their kids food money on other things.
> Also that's not how I saw basic income schemes suggested, usually it's paid out to people below min income and then progressively lowered to some point
NO basic income is a flat amount paid to everyone regardless of their income.
What you are talking about is called means tested in work benefits in my country. It is bad - for all the reasons you mentioned but it is not basic income.
Criticise basic income if you want (please do so if you are trained economist) but please do understand what it is before doing so otherwise you are merely burning a strawman.
>Negative income taxes can implement a basic income or supplement a guaranteed minimum income system.
IIRC it was proposed as a simplification of the means tested welfare. Basically NIT is the most realistic funding for Basic Income I've seen - but it's irrelevant - the incentives stay the same the only difference is that it screws over regular people a little less (depending on how it's funded, I'm unconvinced by any "tax the rich" scheme).
Anyway I was interested in this stuff in college when I took my intro econ classes I never looked in to it further but I'm 100% sure NIT is a basic income scheme.
Basic income (NB not minimum income!, not negative income tax!) is not means tested at all. No means test period. Everyone gets it. From the beggar to the millionaire. This is a totally different concept to means tested benefits. The proposal is a so called universal benefit.
If nobody is required to do the "shitty jobs", I wonder if those jobs would increase in value as less people do them? Maybe having a waiter at a restaurant would become a luxury.
Perhaps all the jobs would continue to exist but there'd be some very interesting rebalancing.
Robots and automation. I think in near future (put your number here) only cool jobs will be available for humans and shitty jobs will be done by robots. So, we need to find a way how to feed and entertain let say 90% of population.
Very likely. Think of how uncommon household servants are today compared to before the industrial revolution. Now only the super-rich have them, as a rule. The rest of us get by with automation (washing machines, vacuum cleaners), with the occasional hiring of a temporary "servant" when neccessary (e.g., calling a cab compared to having a dedicated chauffeur, or having a landscaper or cleaning service come in once in a while).
"A middle class woman was entirely dependent on a supply of domestic servants, ranging from the untrained ‘slavey’ to a staff of several highly trained specialists."
> I wonder if those jobs would increase in value as less people do them?
Sure. Although technically it's not that the value of the job changes (to the employer, the value of the job is basically the same), it's that wages go up due to the decrease in the labour supply.
yeah what I fear it would happen is either all wages go down of an equivalent amount, or an inversion of wages according to job satisfaction, or a cycle on inflation with prices surging and minimum wages following
in this experiment they can test the latter, since the scale is too small to affect global pricing.
I wonder how far the 'unregulated' goes: could one pocket the monthly allowance and then live on a cheap city abroad while maintaining citizenship and privileges?
at the very least this should promote entrepreneurship: given social security that what I'd do. I can't risk anything now as I have no savings and live in a country that offer zero (monetary) supports to startups via neither private nor public capitals.
Just go to a country with really high labor costs. This is exactly what you'll see. Lots of work goes undone because people just don't care enough to pay for it. Usually just cosmetic or convenience stuff.
I read an article a while back that some types of manual labor are having a really hard time filling positions because nobody wants to do them for what they can afford to pay, and IIRC, they were already paying significantly higher than minimum wage.
> So, maybe people who have awesome jobs will just keep doing what they're doing, but for people with shitty jobs, why not say, "F* it, I can get by with the guaranteed minimum, so why bother?"
As more of their jobs get automated away, this could be seen as a feature.
"So, maybe people who have awesome jobs will just keep doing what they're doing, but for people with shitty jobs, why not say, "F* it, I can get by with the guaranteed minimum, so why bother?""
That'd be a good thing. People leave the bad jobs behind, which would either free up room to automate them without social consequences, or the job would have to be made more attractive in some way (shared between multiple people for less stress, better pay, etc...).
>I'm 100% sure nobody wakes up totally stoked to go bus tables or wash dishes.
Maybe you don't but there's some people who do. I, personally, actually did enjoy my time working at food service. The first place I worked was poorly run and it sucked but the second place I worked at great management and it was generally a good job minus the pay. I enjoyed my time there.
I also know someone (with a degree) who is a restaurant manager who loves her job as well.
> why not say, "F* it, I can get by with the guaranteed minimum, so why bother?"
Because, most people want to be able to do more. Working at McDonalds might give you enough spending cash to be able to do the stuff you want to do like have a fancy car, jewelry, nights out, vacations, etc.
I'm not saying the shitty job argument is invalid, but it is much more complex.
It has so many different sides a test sounds like a good idea.
Taking the shitty out of a Subway (sandwiches) employee's job might now sound hard. But there are so many solutions to this single situation. And these might be fairly different for many shitty jobs. Just to name a few in this case: better pay, automation, better working conditions, smaller one-person franchises, disappear altogether,...
It's nearly impossible to find the solution upfront nor generalize. I personally believe society's creativity can easily solve this.
Which means the shitty jobs will have to pay more in order to attract people to do them. People should be paid well for taking on a job no one else wants. That's how the free market is supposed to work.
Yes, but that includes wanting to do the job because they want to live, but not necessarily because they see it as a good use of their time beyond that.
Because right now, people are forced to work in order to survive. Meaning they have to take the shitty jobs for shitty pay because that's what they can get. If you remove the forced to work part, then they can be more selective.
I'm talking about the basic necessities of life. Whether you choose to admit it or not, one is forced to have a job in order to provide basic shelter, clothing, and food for ones self and family.
I know what you are talking about, but: The term "force" is utterly missplaced in this scenario. ..also: Most in the civilized world have broad welfare benefits for those who decide not to work.
The problem is that if you're at an income level where you could comfortably save up for something like this, you're also likely to have much higher fixed costs (bigger house, car, etc) and more expensive habits (food, subscriptions, etc).
That said, without living particularly frugally I'm currently able to save up to a third of my monthly income. This means that without cutting costs I could spend one month jobless for each two months of saving. Truth be told there's still plenty of spending I could cut back on, although that would mean a change in lifestyle.
The number I've heard is 20x your annual expenses. I don't think there are any meaningful sources to cite here, but I remember reading that from the Mr Money Mustache crowd.
I am kind of in this situation so I'll chime in: I quit my full time job nearly two years ago and since then have been freelancing and contracting remotely. I'm now taking a 'sabbatical' for a couple of months over the summer to recharge and hopefully start my own business.
I've had a lot of people asking me when I'm getting a job again, as I assume they aren't in a financial position to be able to do this so wonder how on earth I could afford it. Although I have been lucky to have some jobs that reimburse me well, I also don't have a car, house, wife (that's happening next month!) or go out drinking. The amount I have in savings is equivalent to what friends who own houses have in equity - which is about enough for me to live off for two years, so I'm definitely not retiring yet.
The plan for the business is to build something (I'm not 100% sure what yet, but I've been following the bootstrapped community for a good few years) that will bring me in a couple of thousand dollars a month with a lot less stress than a full time job, so it's pretty equivalent to a basic income. I will probably end up moving to somewhere where the cost of living is cheaper (bonus: the cheaper parts of Europe also have much better weather than the UK), and then 'work' on whatever interests me - to start with I'll probably take a break from tech and do something more creative and hands on.
> Although I have been lucky to have some jobs that reimburse me well, I also don't have a car, house, wife (that's happening next month!) or go out drinking.
I find amusing that you include "wife" with all the other expenses. You'll become DINKYs ("Dual Income, No Kids Yet") and thus you will have even more financial independence :-). By the way, congratulations!
> [..] but I've been following the bootstrapped community for a good few years)
> You'll become DINKYs ("Dual Income, No Kids Yet") and thus you will have even more financial independence
Haha, thanks! She is currently studying, and we will probably have kids in the next coupe of years - when we do she wants to take care of them rather than working, so unfortunately not! At least being Europeans we have good social welfare.
> Could you please share the name of the community?
There isn't a HackerNews-for-bootstrappers, at least I've found nothing worthwhile. There are a lot of disparate communities depending on what area you want to get into (e.g. creating a consulting agency, building a SaaS, internet marketing, brick-and-mortar business, etc). Most of what I follow revolves around Microconf, here are a few notable podcasts:
When I see that discussion about basic income I am always wandering, who is going to pay for that?
I assume the money will not be printed (this would not help, as inflation would make that income very small).
So the country that applies such policy must have some way of finding money. Some countries have natural resources that they can sell, so the problem is solved. But how about the rest?
I guess this will be financed by those, who are earning more money.
Let's forget about the question if this is moral or not to take away money from people who are working hard just to give away these money to those, who are not working at all.
However the taxation will make costs of work higher and higher. Country economy would become less competitive.
In addition avoiding taxes would start to be really profitable - people would start opening fake companies abroad, create fake costs, etc. it happens now as well, but the scale could be much bigger.
As usually, big players would be able to avoid taxes, so the one who would be hurt most are the "middle class". Taxes will eat their profits and the gap between the best earning people and the rest would be growing and growing.
For me it looks a bit as if we were trying to solve the problems caused by goods redistribution by applying more goods redistribution.
I am always wandering, who is going to pay for that?
Most countries contemplating this already spend a lot of money a whole host of welfare and various support and safety net systems, as well as the massive bureaucracy needed to administer these systems. By replacing the massive patchwork of existing systems with one simplified and unified system, you can save a lot of money through reduced bureaucracy and increased efficiency.
Basically this system won't be added to what is currently there but replacing an already expensive and highly inefficient system. So while it may end up being slightly more expensive it won't simply be a completely new cost added to the budget. There may even be secondary savings from things like reduced crime rates and increased health.
When I see that discussion about basic income I am
always wandering, who is going to pay for that?
The typical justification is that it pays for itself in simplified management, improved education, lower crime, etc. I haven't seen the sums, but given that the US incarcerates 1% of it's population at exhobitant (direct and indirect) cost, it doesn't seem that unrealistic.
Let's forget about the question if this is moral or
not to take away money from people who are working
hard just to give away these money to those, who are
not working at all.
We might have forgotten it, but you brought it up and left it hanging like a yeasty fart in a confined space.
Your interpretation of 'moral' here is a narrow one. Socialism is a moral economic solution; it's just not as efficient as well-regulated free markets. In a post-labour-scarcity society this will broadly be moot anyway as much fewer of us will have marketable skills.
Update: I say socialism isn't as efficient as well-regulated free markets. It actually depends on the market. The UK's NHS for example covers the entire population and costs less per capita than the US spends on Medicare (which only manages to cover the elderly). Funding healthcare through insurance creates moral hazard, conflicting incentives, information asymmetry, etc. which adds up to a deeply inefficient market.
While for profit prison is a pretty dangerous conflict of interest, 94% of prisoners are in public prisons. And even private prisons only profit a few people, and cost the rest of us money.
The US doesn't have so many in prison because it's for profit.
Poverty and the pathetically ineffective "War on Drugs" put them there, and the prison system's focus on punishment rather than rehabilitation keeps them imprisoned and/or reoffending.
Imagine the economic effect of having 1% of the population turned from being a cost-drain to being young healthy tax-payers. The reduced load on policing. The fact that people would be less afraid of crime. Imagine the economic boost if people could interact with their neighbours and build communities without fear.
Sure, in reality it wouldn't be as rosy as that, but chances are it'd be a darn sight better than where we are now.
The same people who are paying for the other welfare, unemployment and disability payments, the lower tax brackets for lower incomes, etc. Those are all things that basic income could eventually replace.
It's not like there's free money coming out of nowhere, it's simply a smarter and more efficient way to distribute the money that's already there.
The big advantage of basic income, though, is that it rewards working more than what we currently have. It's currently possible for someone on welfare who gets a part-time minimum wage job, to end up worse off. With basic income, you always get ahead when you work more.
And your opinion would be wrong. In my opinion, not having something like this would be forcing people to stay in shitty, abusive jobs because they have no alternative, due to needing to buy food and keep a roof over their heads. Alleviating those issues would mean that low income workers would be able to be more selective in the work they take, which means that employers would have to work harder in attracting employees. Not a bad thing at all.
Most civilized countries already have something very similar - social security. Everyone who works pays into the system that distributes that money among those who are unemployed.
It's a type of insurance if you will. If I participate in the system, I can be reasonably sure that were I to lose my job, I wouldn't end up on the streets.
A spectacular example of why this is a good thing is J.K Rowling who was able to write Harry Potter because the British welfare system kept her in reasonably good shape after she lost her job -> http://imgur.com/gallery/FIQYq
I've never understood the exact differences between basic income and social security, but it fundamentally feels like such a safety net should exist.
> I've never understood the exact differences between basic income and social security,
The difference is that everybody gets basic income, and not just the unemployed. You don't get a sharp division between the employed and the unemployed, your welfare won't get cut when you start earning money. Work is always rewarded, and it's easier to get out of the poverty trap.
And for the countries that have already got welfare, the argument of "But nobody is going to work!" is already out the window. If that were a real problem, everybody would already be on welfare.
Yes there are people that abuse it. The vast majority doesn't. Even if it's just because they couldn't look their friends in the eye if they did.
> When I see that discussion about basic income I am always wandering, who is going to pay for that?
Just look at all the social "safety nets" that many European countries have. That money then gets relabled "basic income". Pensions, unemployment benefits, paid sick leave, child support money, etc...
For people who are working full-time and don't get anything at the moment, the taxes would have to be increased slightly to offset their "basic income" on average, so maybe with a low wage you would have a small gain, with a big wage you would have slightly less than before.
The advantage could be a massive reduction in bureaucracy. The disadvantage in Europe at least is that many people prefer perceived "fairness" over efficiency, i.e. they are more worried that someone who "should not get that money" will get it than they are worried about their social systems wasting money and peoples' time.
> When I see that discussion about basic income I am always wandering, who is going to pay for that?
The real question is why are we hindering the whole of humanity in terms of social development, medical and technical research, environmental management and..pretty much everything.. because we are beholden to an artificial system of numerical control (ie: money and finance) which we invented as a tool for stability and control, but has become a total, fucked-up liablity because the numbers don't line up properly and has large parts of the world limiting themselves artificially (ie: austerity measures) just to make the digits on a spreadsheet tick over in the right way.
We need to reset, respawn and start again.
Edit: And because my original post doesn't make it clear, I mean we need something other than 'money', ie: get rid of the whole damn concept, or reengineer it completely - something a few notches below 'shoot all the bankers and accountants'.
Basic income is openly and explicitly redistribution. Many of us in Europe have found redistributive tax-and-spend policies to be quite successful.
> Let's forget about the question if this is moral or not to take away money from people who are working hard just to give away these money to those, who are not working at all.
In civilized countries those who are not working at all are already given money that's taken from the rich. The big difference with a basic income is that those who are working hard at low-paying jobs also get money.
> the taxation will make costs of work higher and higher. Country economy would become less competitive.
A country with closer income equality will be more pleasant to live in, so maybe people will be willing to work for lower take-home wages and this will balance the higher income tax.
It would be good to have some kind of international tax settlement though. Otherwise we have a race to the bottom (we already see that with corporation tax and e.g. Ireland) that ends in no country being able to tax and the whole world (except for the very rich) being worse off.
> In addition avoiding taxes would start to be really profitable - people would start opening fake companies abroad, create fake costs, etc. it happens now as well, but the scale could be much bigger.
People already avoid tax as much as they can, I don't think this would change that. If you're the kind of person who avoids 40% tax you would still avoid 30% tax, IMO.
> As usually, big players would be able to avoid taxes, so the one who would be hurt most are the "middle class".
The whole idea of it being universal is that it's the working / lower middle class that benefits the most. Blindly assuming that the rich are just not going to pay their taxes is no way to run a government - if they're not paying, make them pay.
We tried without goods redistribution, it doesn't work (19th century anyone ? ). Beyond a certain level of poverty you don't have the lawful/legal means to reach a better situation, you need external help or to turn criminal. There are a lot of (documented) threshold effects.
Beside, without some form of solidarity, a society tends to degrade into some "every man for himself" : the poors use violence (that's all they have), the richs task evasion because they feel no obligation to their fellow men. We have too many examples of that, local or national.
The mechanisms you describe might happen but they may be minor forces in the end. A real economic system is very complex, many many forces and behaviours are at work (and many are social/cultural). A complex reactive organism.
So no, this experience is not silly and it's hard to see what it will produce.
Every time universal basic income is discussed someone claims it can't be done because if we were to do this tomorrow the costs would be astronomical. That's true, but it's a bit like stating in 1950 that the world will never see personal computing because a computer costs millions and there are billions of people.
Universal basic income amounts to (providing or) paying for food, clothing and shelter. What is the cost of food when we have labgrown meat, the robots till the farm and self-driving cars deliver it everywhere?
What's the cost of shelter with industrial scale 3d-printing and robotic assembly?
What is the cost of providing everyone with basic clothing when all the factory workers are replaced with robots?
Stop worrying about the price of everything and start thinking in terms of scarcity. Will the stuff required for basic human survival still be prohibitively scarce in 5 years, 10 years, 50 years?
In theory, a basic income should shift wages from skill to demand. For example, sanitation workers and doctors would get a high wage whereas video game designer wages would drop. (You won't care about a video game when there is 3' of garbage on your lawn.)
In a heavily automated society, the only question we need to answer is, should people have only as much money as they have earned, or only as much money as they need?
If the former, then it will be seen as almost immoral or evil to give a comfortable wage to someone who didn't earn it.
If the latter, then it will be seen as almost immoral for the one guy who owns the robotic factory to reap all of the profit and earn a fortune every year by having made workers redundant.
The third option is to eschew automation entirely and keep a steady supply of make-work jobs, just to justify enough salaries to keep everybody from starving. Which strikes me as more dystopian than the oligarchy in option #2.
The third option is what society does now. Every time you hear politicians talk about "creating jobs", that's what it means, nearly always: the amount of available make-work just went up.
We don't so much eschew robotics, as under-bid them. McDonalds finds it cheaper to hire humans than automate - for now. (The touch screen, card-accepting menus I've seen appearing lately, make the case that this won't last much longer.)
Yes, I did start off stipulating "in a heavily automated society". I don't think we're quite there yet, but we will be soon, and increasing our make-work programs in lock-step with the progress of automation is a quick road to dystopia #3.
Any discussion of basic income should at least mention the excellent novel by Janusz Zajdel, "Limes Inferior" (https://en.wikipedia.org/wiki/Limes_inferior). I think he very accurately portrays a system where everyone is guaranteed basic income (along with some other interesting and mostly terrifying concepts).
It is true (and sad, I think) that many people, given basic income, will do nothing to improve themselves or their surroundings. But I still think basic income is an idea worth pursuing.
Limes inferior has not been translated to English (I was only able to find amateur translations of the first chapter [1]) and as such remains largely unknown outside Poland. Which is extremely unfortunate.
The pirate party in Germany had this as one of their ideas (Grundeinkommen), not sure if they still do.
I like this. My basic economic instincts scream "nonsense" but I like testing it even if the test results are likely useless because the city is still surrounded by "normal" ones. Reminds me a bit of the socialist calculation debate.
There's enough money wasted on stuff I consider more useless and at least this experiment has the potential to generate surprises.
I'm all for experimenting with economic systems, worst case it generates some new ideas.
The main thing to remember with this is that even if you do end up with a % of people who do just bum around on basic, a lot more still would rather earn enough to live a more interesting life. And wages will probably go up to incentivize people to do the crap jobs - or encourage someone to find a way to automate it.
My knee-jerk reaction was 'ah, jeez - there's going to be a big percentage of lazy people just gaming the system'. But on reflection, as some other posters have already said, these folks would probably not being looking for work regardless - and if this helps the majority be more productive and happy... to me, it's worth a punt to see what happens.
Good on you Utrecht - I love the bold thinking. It might not work - but at least they tried something new to address one of our oldest problems!
The problem I see with any basic income scheme is that lazy people can get in the trap to become trapped in a lazy for ever state. Basic income should be accompanied with a policy to motivate people to develop their capabilities and enhance their self confidence. Once you are trapped in the basic income scheme and automation replaces all the low skilled jobs, lazy people can see themselves as completely disposable objects, so you need a great self-confidence and a change of mentality to change from a lazy people to a do it person.
> lazy people can see themselves as completely disposable objects
Many people who are in long term unemployment already feel that way. (I think that's my case.)
There is no political motivation to just take unemployed people and just create businesses and do something with them, so I think it's a problem of entrepreneurship. It should be a huge opportunity, but it's not getting done for a simple reason, people consider lazy people to be subhuman moocher and they don't want to deal with them. It is plain stigmatization. People pity the unemployed, but they don't want to help them eitherway.
The thing about the UBI, is that it simplifies the process of welfare, but it also stimulates consumption, which in turn boosts the economy.
> lazy people can get in the trap to become trapped in a lazy for ever state
Do you have any evidence for the existence of these lazy people, and in any significant number? The literature and actual experiments done with basic income shows that people are not lazy, but rather they lack opportunities, or a safety net for small risks, or any of a number of other things.
Thanks for asking for real data about this. I was only giving my very humble opinion about what could happen, I would like to know some links to literature and actual experiments with basic income. I think that laziness is learned and you need to be kicked strongly to move in a doers direction. In a weak economy with no expectations for people to progress laziness and hopeless bloom, if basic income is a step in the right direction it should be along with a way to foster better expectations. Your are not in an asylum for live.
Basically, people who were working out of desperation worked less, otherwise people used the money to ensure food safety, invest in businesses or improving their lives.
I really don't think "lazy" is a valuable label. It tends to be applied when there are underlying causes for the supposed "laziness". When those causes are repaired the laziness tends to go away. For example: illness, precarity, hopelessness (as you mentioned), a lack of opportunities. I'd suggest doing away with the overly simplistic "lazy" and using more accurate words which express the underlying causes.
You can't change people with a formula. There's a lot of lazy people working now today, to the detriment of society and the economy. Think of the opportunities though, a bunch of nerds could move up to the countryside and work on nuclear fusion and cure for cancer instead of having to apply at a bank or some ladder-climbing corporate gig.
I think that if you are able to do deep research in nuclear fusion or a cure for cancer you should also be able to find the way of earning a good salary under any circumstances and at the same time finding a way of allocating time for your real passion. Great people become greater under difficult circumstances. I don't think basic income should make a real difference in that. You can't change people with a formula but I think there is a lot you can do to motivate and coach people, opium is not a solution. Could be basic income the opium for the people?
"I think that if you are able to do deep research in nuclear fusion or a cure for cancer you should also be able to find the way of earning a good salary under any circumstances and at the same time finding a way of allocating time for your real passion."
In theory, sure. But in reality, most jobs suck. Even if you are of that level, odds are the job you'll get is going to be emotionally or mentally draining, and at the end of the day, you'll really just want to relax.
We already provide public schooling to develop basic skills. But, many adults aren't capable of being productive, regardless of motivation. And even absolutely low-skill jobs are being automated out, like McDonalds cashiers being replaced by machines.
Not everyone is smart enough to be productive in a competitive society.
The basic income is going to prevent larger potential problems with them, like crime or health costs or decreasing property values or other social expenses, beyond their immediate income expense.
These people already cost you money. The basic income is the option where you pay them little now so you don't have to pay a lot for them later.
perhaps public schooling is more about you learning to pass some tests than to enhance your abilities. Many very intelligent people are so bored in school that they don't learn anything there. With basic income school should change to train teachers about coaching people and less about tests. I think there is a lot to do besides basic income, I am not against UBI but there are side effects that we need to address the sooner the better about it.
Economic experiments can never really have a control group, so what the Dutch government learns from this will depend greatly on the theory they already have when interpreting the data.
I suppose they should be commended for the effort, but the other issue is that the experimental group is unlikely to represent what things would be like under a truly universal basic income. Incentives throughout the economy will shift and cause reactions none of us can predict, except in very broad strokes. For example, €1000/mo for a tiny experimental group will probably not have the same buying power as the same amount given to millions.
When people don't have to pick their housing based on the location of low-wage jobs (dense cities), I would expect the rent to go down due to better utilization of the total housing supply.
Currently, if you are on minimal-wage pay, you need to spend all your money on basic necessities.
With BI, you increase the purchase power of a whole bunch of poor people. People that didn't live in the city before, now think they have a shot and can afford rent for a while and get a job in the city!
Demand goes up, prices go up. If you still want to live in the city, you will need to spend all of your BI-income AND all of your pay on the VERY SAME basic necessities.
Sounds pretty obvious to me and I can't really see it turn out any other way.
Moving back to the country side, where it's cheap ? Ok, you can live from BI, but you still don't have a job, your kids don't get a proper education and their future looks just like yours. Barely getting by and sitting around watching tv.
I don't think that's how rent is set right now. I believe people charge rent based on what people can bear to pay - so as long as another person with BI comes along willing to pay the higher rent, the landlord will sell to him instead!
It's not the house that's valuable to a renter, though. Most of the price variation for a given floor space comes from location-driven land cost. If someone on basic income plans to live solely on their BI for a bit, maybe to work on a personal project, maybe just to play videogames, they won't be location-bound and can seek cheaper housing in the suburbs or a rural area. There is a lot of underutilized land in America that could become very attractive to developers if the pool of available consumers suddenly included a subgroup that didn't care about commute time. That's not just greenfield developments, either; it would also apply to major cities, like in the Rust Belt, where housing and land are incredibly cheap because there are no jobs available.
Quoting a recent article in The Economist (Edited by me)
"
The Swiss will soon vote on a proposal for a basic income of 2,500 francs ($2,700) per month, following the success of a national petition....
Turning it into a substitute for all welfare payments would be prohibitively expensive. But it might work as one element of the safety net....
Although the basic income has so far failed to take off, it does have a commonplace cousin: the tax-free allowance....
It is feasible only if it is small, and complemented by more targeted anti-poverty measures.
I'm a strong supporter of the concept and motivation behind universal basic income, but I admit I don't understand one part of the calculations - what's the solution for the problem of prices universally rising to the point of cancelling out the UBI? I mean, if everyone suddenly gets additional $500 a month to spend, how do you prevent the market from correcting for that?
It changes the allocation of resources. Let's play with some numbers.
We will say that 5 people have the following monthly incomes
[ 0, 500, 500, 2000, 3000, 4000]
Our economy only makes one good: bread. There are 1000 loaves of bread produced. Assuming everyone spends all of their money, since there is a total of 10000 dollars, the price of bread will be 10 dollars. Each person can buy =
[ 0, 50, 50, 200, 300, 400]
Now, let's say in 2016, everyone gets 500 extra dollars from some outside source, giving incomes
[ 500, 1000, 1000, 2500, 3500, 4500]
There are now 13000 dollars. The price of bread will be 13 dollars. Each person can buy
[ 38, 76, 192, 269, 346]
Some people can buy more bread. Some can buy less.
IANAE and would like to hear an expert's answer as well. But as far as I can see, the demand for basic food and shelter is not elastic, people need roof and bread always. And the capital is mostly reallocated from existing subsidies, not created. With UBI, prices for non-essential goods and services would maybe increase a little, and there would be a revolution in employment market, but my guess is that potatoes and basic accomodation prices would stay low.
I think basic income is a bad idea, but if you liberated people from seeking jobs, many of them wouldn't live in overcrowded cities. If rent is too high in the bay area, you'd go live in Madison, Wisconsin. Or in a pre-fab house in the middle of nowhere.
In the context of a thought experiment, where people would live is an interesting question. There are certainly many places today that are inexpensive in no small part because there are few jobs. It doesn't have to be in the middle of nowhere. Detroit qualifies too. On the other hand, moving somewhere cheaper would imply moving away from existing family and social support structures.
However, I suspect a lot of the people who are championing basic income are implicitly envisioning living in a relatively comfortable apartment in the Bay area from which they can follow their muse--not public housing in Detroit.
Who are the groups driving all of the mentions of basic income/mincome on social media? Or is it a coincidence that we're seeing more and more discussion of the topic on places like reddit and HN? I'm genuinely curious to know how organic this topic is, versus whether or not there is a concerted effort to "get the word out".
My guess is that much of it comes from technologists and futurologists, who are over-represented online, and way over-represented on Reddit and HN. Perhaps we've even filter-bubbled ourselves a little bit here.
In any case, the relationship between technologists/futurologists and basic income advocacy would be that basic income is the solution to an ever-shrinking labor market as automation gets better. Sort of an exit strategy from the current economic regime.
It's an organic effort to get the word out. The idea really got a hold of me in 2008 and I've been a proponent ever since.
It does a great job of both stimulating my imagination and being a fun topic of conversation.
For history's sake, I first came upon mention of it on this website, while searching for 'the art of conversation' which was a phrase that i randomly googled.
I'm not sure if there is a conspiracy, I've observed a slow increase in it's coverage over the last few years. Much in line with the mainstreaming of ideas about robotic work forces and other technological advances like uber which are bringing unpredictable disruption to the labour market.
My guess would be a more so organic reaction to labour predictions.
Well, the developed world is in a crisis, with unemployment levels not seen since the inter-wars period. At the same time, robots are happening, and visibly so.
It would be strange if people weren't think about it.
Ah, finally everybody can work on their personal projects instead of an annoying job.
But won't someone have to pay all those annoying taxes? And when we go to spend other people's money, won't someone have to be there earning that money?
How good of a test could it be, if its population is limited to a single Dutch city?
Europeans from small countries love to tout their welfare policies as "so much better" than places like the U.S., but they ignore one massive difference: Small European countries are localized, ethnically homogenous populations. The U.S. has to deal with more land, and more people, from more places. You cannot make an apples-to-apples comparison between welfare systems in the U.S. and small countries.
There is more than "white" and "all other ethnicities." Considering geneology is important when designing systems like healthcare, for example. If a disease is isolated to a gene present in only people of Irish descent, and not Scandanavian descent, then the country with more Irish people will pay a higher healthcare cost than one with less. The more unique subsets of genes present in a population, the greater the ethnic diversity. Since the U.S. is comprised almost entirely of immigrants, it will naturally have a more ethnically heterogenous population than a country with population centers dating back millenia.
In order to reduce the amount of money needed to support the BI scheme, you are given a card to buy some standardized products: jeans, bread, soup, chairs, tables, beds, bikes, ubuntu and the like. The main point is that those products are cheaper to produce and distribute. You lose some of the power of money but since society is paying the bill I think you should accept the deal.
You reinvented food stamps. There will be costs running that card scheme and costs for retailers accepting it, and maybe the BI recepient wants to buy used clothing p2p or not have to go to bigbox retail corp to buy jeans. Maybe they buy fabric and make their own unique clothes now that they have time. My city is full of hipster hobbyist dressmakers and drop in sewing lounges, maybe they will become successful designers if not forced to do meaningless work to survive.
It'll be gamed by corps wanting to get their products on the approved list while cheaper products might end up not being approved. I've seen government justify buying items costing 4 times the price with less than half the features due to cost saving measures, because the expensive crap was approved but the cheaper consumer item was not.
I buy tables, bikes, and beds solely second hand (oftentimes from an individual not a store). If I had to buy new it would destroy the second hand market and encourage massive amounts of waste.
What I find is often not considered when discussing this topic are fundamental economics. Giving everyone a basic income will almost certainly be consumed by an increase in the price level of that country.
A somewhat similar example are countries with very high wages like Switzerland. Wages are high but not in real terms as their price level is high also.
Basic income would need to be pegged to the CPI or some standard of living.
I imagine partitioning living NEEDS [housing, food, transportation] as an area of the economy with its own money/token/basic-income-credits system separate from the WANT economy of everything else.
it is quite funny and sad how many comments focus on how this system can be abused (and implicitly why it is inefficient). I think this is a bias from our programming/hacker culture where things (aka programs) tend to work with absolute. My experience in economic policy has more to do with relatives ( a trend vs another one, the percentage of free rider vs the gain for the whole population ) and tuning ( adding counter-balance and conditions as we get feedback from the terrain ).
Having lived under a communist regime and also in the ghettos of NYC decades ago, I can tell you just how idiotic this is. But I guess there's no shortage of idiotic ideas when you are playing with other people's money.
Witnessed the total lack of motivation of people to do anything for themselves. It was the result of the policy at the time. When the policy changed, the behavior also changed. BMI provides no incentives for people to do the right thing, which is to work hard to better themselves. Quite the opposite. By removing any requirements, it enables unmotivated people to just sit on their ass. Nor does it discourage antisocial behavior. Just giving people free money doesn't do that in itself. All it does is set up an expectation of free money.
I believe the best way to spend the money is to help people who work hard to improve themselves, regardless of their income level. The money is given according to the impact of the money. So people with low income would benefit proportionally more because the before and after difference is larger percentage wise.
Edit: The thing that should redistributed is not wealth, but opportunity.
Collect taxes at high stakes -> Give money away for free -> Expect from people to be happier. Why governments just decrease some tax rates and let people to choose what to do with their own money?
You won't help people by addicting them to free money. Individuals should be independent, what if government change their mind and stops giving money away for free?
The main problems I see with the guaranteed job idea are that it presupposes a judgment about what types of work are inherently valuable (and does so at the cost of exploring the unknown) and it sounds a lot like a life of forced servitude for which the only rational was the original income inequality.
Forced servitude? you gotta be kidding... Let's look at the world as it is today: work for money. Is that slavery? No. Let's look at the world I'm proposing: guaranteed work for guaranteed money. Is that slavery? according to you, yes. If you're saying one is slavery and the other isn't, then I have to disagree.
>guaranteed job idea are that it presupposes a judgment about what types of work are inherently valuable (and does so at the cost of exploring the unknown)
Picking up the trash and cleaning up the neighborhood are unknown high risk ventures? Fixing pot-holes, washing graffiti off walls, planting trees, picking litter off the beach, helping the environment have no benefit to society? There are PLENTY of jobs that can be created that are not high risk ventures and can benefit all of society. I'm not proposing to start another NASA program.
Are you trying to say that paying people money to sit on their asses while entire cities have thousands of little problems is a more worthwhile venture then telling someone to help out the community in exchange for the same amount of money? Your reasoning being that we as human beings are not intelligent enough to make judgement about which types of work are more valuable?
Make a judgement on this: which is more valuable? Helping the community for money OR sitting on your ass for money?
What kind of fantasy world do you live in where you think technology will automate all jobs?
If it happens I can assure you it won't be within your lifetime or your children's lifetime.
Also why would I pay you to dig a hole and bury it? Are we really so dense that we have to give people free money and not find them anything to do? No. I believe humanity is greater than that. I have a dream about a world where we all have the power to tell someone to mow the lawn or clean up the house AT THE VERY LEAST.
Never said all jobs would be automated in my lifetime. I'm thinking long term (1000 years). And maybe we won't automate all the jobs, but the only jobs left are ones only a few people can do.
Though mowing the lawn... that could be automated today.
when it comes to utopian ideas i would prefer the right to work, to get a job to handing out cash to everybody.
my reason: handing out cash destroys the incentives to do better and improve...and not all necessary jobs are actual fun to do and others would surely completely vanish...
That's probably because you've found a job that you like. In reality however most people hate their jobs and would rather do something else. This idea of living in a society where people need to do something they don't want in order to survive is a form of slavery.
Except your vision causes people to be forced into shitty jobs where they're abused by management, because they're forced to do so to survive. Under your vision, there is absolutely no incentive for a shitty, low end employer to really improve, because there are more people that need a job than jobs available.
Basic income usually assumes money comes from nowhere, from "the state"... This experience is fun, but to be correct, those who find a job should in turn pay 1300/m... because the money cannot come from anywhere else than people.
Or you'll get VERY biased results.
Think of it: they could have tested the financing instead. 300 workers get to pay 1300€/m to the city. Who wants to be first?
France spends 600B/y in social spending. That's about 15k per citizen (minus children). 1/3 of the GDP.
So let's change it to a Basic Income of 1000+/m for everybody...
Many will loose a lot... because that's what France is already spending, for a lot less than 40ish M citizens.
I know downvoters would love this to work.
But think about it: today, the system cares for people with a handicap (for which 1000/m is not enough), for single families (for which 1000/m is not enough), etc...
You just can't have everybody receive the same amount and remove help from those who need more...
So Basic Income will need much more money than what is already spent... just to take care of inequalities it will create.
If you think a country like France needs more redistribution (than 1/3 of the GDP), okay... but Basic Income will not achieve that.
Proponents often say BI will replace social spending. I think that's impossible.
If you just want more taxes, just say it. Be clear. BI is not clear at all, even if it looks easy to understand.
Basic income is a nice theory, but completely ignores the financing part. The money has to come from somewhere.
I would be really fine with receiving a basic income. From the social side I would support it. People can do what they like, like artists, developers, and creative people. May be there will be the next business opportunity, startup from that work. Yes, may be other people are lazy, that is like today.
There is a big BUT. Where does the money comes from to support this basic income? All those experiments, which are regarded as successful had the wonderful position, that the money came from outside. From the outside there was money put into the experiment, including the so successful experiment in Canada, where 75% of the money came from Ottawa, people, which where not part of the experiment.
I have not seen any experiment, the people taking part in the basic income have supported them-selfs, meaning the money for the basic income came from within this community. Only if the money can come from within the community them-self I would regard that experiment as successful.
In The Netherlands we are already spending that amount, so it doesn't need to come from anywhere. We spend well over 1000/mo on services for unemployed and poor people. We send social workers, health care all sorts of things. The general theory is that if we would supply these people with basic income they will live healthier lifestyles and not need so much care. In the long run it's thought basic income might even save The Netherlands money.
There's a lot of complaining about how it will make people 'sit around and eat ice cream' as if that's all the unemployed do. They've clearly not gone outside much. The unemployed drink a lot of beer, they do meth and they walk around aimlessly through the city and generally cause all kinds of damages and harm.
I live in the east of The Netherlands with pretty high unemployment, and it's already quite visible. But I've been to San Francisco and that's just horrible. I can't imagine how a rich person (and you have to be rich to live there) would want to live there amongst so many homeless and desperate poor people. Would it really be so bad to pay a bit of extra tax just so those people have a little less shitty lives and don't need to stroll around the SF center? It's not like they enjoy that.
Of course, it's not 100% certain that the basic income will solve that particular problem, but I feel it's worth a shot, so I'm happy Utrecht is trying it.
edit: Also let's remember that most people are simply decent. There's not much wrong with watching American Idol and eating some ice cream. If people do decide to not work under basic income (I don't think the majority will) they won't because they have a satisfying way to spend their time at home or wherever. Why is that a bad thing?
The problem is, all the calculation I have seen so far (by different members and friends of the Pirate Party Germany) included also the benefits for people with disabilities, and other illnesses. It included also the money currently used to support the public health care system and other social benefits.
If you remove all those also to finance basic income, then you are taking the money who really need it.
If you are saying - like some who support basic income - here is your basic income and now you need private health care and also all those other things of the safety net removed, than this is pure capitalism in the form of "take it or leave it".
I am more for the safety net. I am the one who also pays extra for public health care. I could easily switch to private health care and safe some big bucks monthly. No, because public health care is an important part for the society.
All the working financing models I have seen so far meant: less then 500 EUR as basic income, which does not work. Or they took the money from important parts of the social net.
May be there would one financing model: remove the costs for the military system. But that will never happen, I assume.
Ah no. Some benefits would become obsolete, The Netherlands already gives basic income to artists and people with work prohibiting disabilities for example. But it's obviously not a substitute for health insurance and other public health care systems.
The idea is that it would reduce the expense on health care services because people would become ill less often. Whether this is true remains to be tested on a larger scale, but I think some research has pointed to this being the case.
I think you are right, 500 euro would be extra spending money, not a basic income and quite possibly would have the reverse effect. It's why the basic income in Utrecht is 900, which is enough to live off as a single person.
Money isn't a "thing". It's not something tangible that gets printed or mined. Money is a representation of what humans value, relative to each other. Having lots of money is like having lots of momentum.
When monetary systems break down, for reasons such as a lack of liquidity, people fall back to the barter system. I'll give you a sack of potatoes for your hours of legal services. We're still playing the same game, but the "Monopoly Bank" ran out of paper, so we're using IOUs and direct asset exchange.
Being poor is just a state where the person lacks liquidity. Bank bailouts were enacted to "rehydrate" banks. Basic income is the bailout idea extended to the individual level.
Currencies are only valuable to you for 2 reasons: there's a finite amount, and other people value it (because they can also trade it for stuff). There's no finite amount of currency that satisfies a person; people can sense the total quantity of currency and want a fraction of this; this is why "printing money" or otherwise increasing the total pool of a currency causes inflation.
If Basic Income has a tax or other system to remove equal amounts currency from the pool, then the system might work; you would be transferring value from Producers to Consumers, much like many social programs do today.
But if there is no tax or other mechanism to remove currency from the pool, Basic Income will just create massive inflation, as the total amount of currency gets bigger, each piece of currency just becomes less valuable.
Basic Income isn't a different game. This is still the same economics. We're just adding another input to the system, everything still flows in, around, and out the same. Many poor people lack liquidity, but why they lack liquidity is because they lack something that other humans value more than their own money or assets.
It could be self funded, most advanced economies have a progressive tax system, if they switched to a flat tax system and moved the lost tax benefit to basic income it would be mostly cost neutral.
That's the thing: the money is already there. Most countries already have an extensive (and expensive) social security system. The problem is that they tend to have a lot of administrative overhead, and they effectively punish people for working, because they lose the social security payments once they get a job.
Basic income is basically the same thing, except that it's also for people who work. Same rule for everybody.
Let's normalize the total amount of money of today at 100.
If the economic grow of a 5% a year, in 365 days the total amount of money will be 105, where those 5 come from ?
Suppose you build a fountain, you pay whoever physically build it, and your money go from you to the builder, the total amount of money in the system is the same, it just change hand, however now your city enjoy a new fountain which bring some amount of new value.
If a government were to do that for everyone it seems pretty obvious that society will be better off - people will spend their time working on things to improve everyone's life rather than worrying about how to afford their rent.