I think the argument generally is: people will spend most efficiently and effectively when they spend the money on themselves, based on their own unique needs. This lowers the cost on everyone else, while providing maximum benefit to those in need.
It's a wishful thinking. If anything, people are worst money managers. Free money will simply be used to turn on pleasure centers. Ofcourse, there will be many who will channel the money wisely (80:20). But if argument is that basic income can be used for better life, why not simply give that better life as defacto infrastructure.
Is governmentally planned/allocated spending contrary to the wishes of the individuals really better? If someone gets more pleasure/utility from X instead of Z, why should we force them to consume Z instead of X? Where's the line? If Z becomes effectively a government mandate, would the commercial manufacture of Z become more or less efficient and competitive?
Would you rather get $100 cash, $100 Amex gift card, or a $100 Home Depot gift card as a gift? (Each of those can be used to buy something later in the list, but not the other way, or at least let's pretend that's the case.) In no case are you better off holding something later in the list.
The problem I see is that you're ignoring the real world decision making problems many people have.
Lets assume David owns and lives in a house where the roof has a leak, one which is slowly causing damage to the structure. David can't afford to repair his room. We have the option of David 1) giving David $1,000 or 2) giving David a $1,000 credit with a roof repair company or 3) repairing David's roof for him.
For the vast majority of Davids, all three options are equal as far as getting the roof fixed, but (as you noted) 1 > 2 > 3 as far as utility (since David could find someone to repair his roof for less, or he could learn to repair it himself).
The problem is that there is some subset of David's that will just spend the $1,000 on going out to dinner instead. David enjoys going out to dinner at nice restaurants and it's worth more to him (instant gratification, etc). However, next year at this time, David's entire house structure has rotted down and now he needs us to repair the whole thing. That's going to take $50,000 of our money.
We want a solution that is the most beneficial for the general case ($1,000) while still preventing the cases where the cost to us (society) isn't negatively impact. There's a lot of factors that go into that decision
1) What percentage of Davids would spend the $1,000 on going out to dinner and let their house rot?
2) What percentage of Davids would trade the $1,000 credit for $800, go out to dinner, and let their house rot?
3) How much are we willing to be negatively impacted by Davids with poor decision making skills? If it costs us $1,000 to repair the house later, we've only wasted $1,000 by giving him the cash at the start. If it costs us $50,000 to repair the house later, that's a much bigger impact.
4) How much are we willing to negatively impact the Davids with good decision making skills (reducing the utility of what they get from us) in order to mitigate the negative impact of the the bad-decision-Davids?
5) At what point are we willing to cut off the Davids with bad decision making skills? Are we willing to say "Here's the $1,000 dollars you need. If we come back next year and your house has rotted, you get to live in a cardboard box"?
6) lots of other questions...
There's a LOT of factors that going into making the "right" decision, if there even is one.
It's hard to react fairly to the analogy, because I know you're not literally suggesting that David's literal roof is any way anyone's problem except David's. (In the 1% of cases where you're literally arguing that, my response isn't much longer than "that's 100% David's problem". The house-owning David is so far ahead of the average American and few would reasonably suggest that free roof repair is a basic human right or governmentally subsidized/funded activity.)
If the analogy instead is meant to apply to general basic income topics, provided we're willing to remove more than 95% of the other enormous governmental support programs (replace, not augment), then I'm inclined to give cash and let the Davids figure it out.
I believe it's more wasteful to society and intrusive/insulting to the Davids to propose that "we know better than you" and erect even more governmental "choosing for the population" administrations. Is ketchup a vegetable? Is eating meat morally wrong? Is eating meat calorically efficient? Yes, there are Davids out there who will make poor choices with the money, but I believe there's more value in letting the individual decide than in me deciding for them (directly or via proxy).
> There's a LOT of factors that going into making the "right" decision, if there even is one.
100% agree and the second-order application of that is exactly why I favor giving cash. Because what's "right" for David-1234567 is different from David-1234568 and I'd much rather have them decide, even if it means that David-1234569 makes choices that he later regrets. (If he doesn't regret it, but we regret it on his behalf, then there is no problem other than our own over-reaching and over-controlling of others tendencies.)
>What percentage of Davids would spend the $1,000 on going out to dinner and let their house rot?
I think it's reasonable to assume, an absolutely tiny percentage of them.
>If it costs us $50,000 to repair the house later, that's a much bigger impact.
In what way is this society's problem? David has already paid for the house, that means he has already done things for society worth more than the cost of rebuilding that house. If he lets it fall apart, that's his problem now.
