The subhead asks: "Why should governments give cash-handouts before providing free, quality public services to all?"
That's pretty clearly because "free, quality public services to all" are really hard & expensive to deliver. Without prices & competition, they're prone to massive inefficiencies, over-provision or under-provision due to various political distortions, and resource- or agenda- capture by insider managers/public-employees/organized-lobbies.
Smaller, tightly-knit polities can often manage more-efficient public services. The two examples given in this article – "quality public housing" and "free public transport" – work well in some places!
But giant geographically, economically, ethnically diverse polities like the US have a much harder time. Public housing in the US sucks. Mass public transport here faces costs 5x as large in as other developed countries – due to the sclerotic interplay of dysfunctional bureaucracies, mercenary contractors, and powerful public employee unions. That is, those exact unions in the "Public Services International" federation which employs this op-ed writer. So of course she's arguing, "pay us first, and more, before spending more directly on the poor".
But the point of UBI, if it were to work as hoped, is to route around such non-poor middlemen – those who claim to be serving the poor, but rarely seem to reduce overall poverty. Cutting checks is comparatively easy to do, and most non-addicted adults can spend $X for their own welfare better than any supposedly altruistic outsider could spend the same $X.
This is a self fulfilling prophecy. Whether the services are like you describe is largely a function of government competence, attention to detail, culture etc. Compare the Greek Internal Revenue Service to the German one. One did not manage to collect even basic taxes on a population that actually had a lot of real estate property, the other one has a pretty good track record (far from perfect of course). When it mattered the Ecole de Mines (A french grand ecole) produced some of the best mine inspectors, that had a fantastic salary (Poincare was one of them).
If you run your country properly and efficiently, none of the things that you mention
must be true. This is really a question of mindset and culture, nothing more.
Of course rich people and their lap dogs, like Milton Friedman would like you to
believe differently. Ultimately if the private sector outcompetes the public sector
for (most of) the best and brightest, you will end up in a situation like in the US. At various
points in time, you could not achieve much higher prestige than being an elite public servant
in France (all the grand ecoles recruited for that) or be part of the diplomatic corps in
Germany. Some of these positions still have very competitive salary to this day.
Hopefully converting government services to digital services (the German government is planning to do this for all of its ~500 functions over the next decade) will eliminate a lot of the lower / middle management in the administration.
> If you run your country properly and efficiently
Have you ever wondered why very large companies are run inefficiently and have a lot of bureaucratic morass in them, while startups and small businesses actually get things done?
Now compare the size of the United States' landmass, population, and GDP vs. individual European countries.
There was a time when the United States' model was supposed to be like the European Union, with strong individual states governed by a national body, where each state would have wide latitude over how they conducted their business. In such an alignment, you might see examples of efficiency (Germany) and examples of stupidity (Greece). Alas, this is not the direction the US decided to go, and instead has a pretty inefficient strong national state that gets very little done specifically because of its size.
Perhaps ironically, the Federal government's bureaucratic approach to equitable pay is why public-sector jobs are not competitive in the United States. Why would a talented person work for a fraction of the pay that the private sector offers?
Of course the federal government might legitimately need higher average skill levels than the rest of the economy does. I wonder how that ratio, $76,810 / $51,960, compares to the ratio in other countries, particularly those with a reputation for being well-governed.
That's a useless comparison, you can't just take the mean over all workers like that. The Federal government employs a larger percentage of skilled workers, and a smaller percentage of burger-flippers, than the workforce as a whole.
So all we have to do is get a significant number of Americans to buy into the right culture and wait for the effects to manifest themselves in federal government? What a brilliantly trivial solution! Why has no one considered this before?
If you suggested to a European that a French person and a Serbian were the same and should be governed as such, they would find that assertion ridiculous.
Yet people throw rocks at "Americans" as if your average person from Oregon is at all similar to your average person from Mississippi.
>As if your average person from Oregon is at all similar to your average person from Mississippi.
They are. Speaking as someone that has lived in California, Kentucky, Maryland, Maine, New York and Florida - the average person in each of these states is almost exactly the same.
> Hopefully converting government services to digital services (the German government is planning to do this for all of its ~500 functions over the next decade) will eliminate a lot of the lower / middle management in the administration.
And provide a nice supply of testers! Nothing can beat German efficiency!!
Look at how well competition works in our broken healthcare system. Our costs are the highest in the world yet our life expectancy and infant mortality isn’t all that great.
Or look at education at all levels, where costs have also skyrocketed and public options keep getting cut because bureaucrats from “competing” private industries try to push their agenda (you could argue this is even worse in healthcare and pharma).
Competition and profit motive hasn’t been proven to work so well for public goods, in my opinion, but would love to hear of examples where it worked. This is why for some things we still agree we should pay for at a government level (local or national), such as firefighters, defense, mail, etc, etc.
Not even going to get into how inflationary ubi would be, instantly driving up costs due to “rational” economic behavior.
There isn't true competition in the US's healthcare system.
Could very well argue that it's not possible because you can't shop treatment for a heart attack to get the best price, but I can say with confidence that trying to keep costs down for prenatal/labor/delivery was unlike any other buying experience I've had.
Lasik is a good example of how a less-regulated medical procedure got more cost-competitive over time, but again, it's elective. https://surgerycenterok.com/ is an example of a place that's at least doing flat, visible pricing, which shouldn't be a revelation in a market-based system, but is.
Healthcare is NOT a free market, there is no pricing mechanism like there is in literally every other industry. It is the only good/service in America in which the prices are known/paid only AFTER the services are rendered.
> It is the only good/service in America in which the prices are known/paid only AFTER the services are rendered.
this is not really true. if you are having nontrivial repairs done on your house or car, they will give you an estimate upfront, but there can easily be unforseen problems that cause the work to cost a lot more. you might decide to have your car fixed later, but it's hard to pull the plug on a kitchen remodel halfway through. there's all kind of work that gets done without knowing how much it will cost beforehand.
to your credit, I can't think of another field where there is so much uncertainty over how much something will cost when they already know exactly what they are going to do, what materials they will need to do it, and how long it will take.
>Look at how well competition works in our broken healthcare system.
There no effective competition which is why the "race to the bottom" is not taking place.
>Competition and profit motive hasn’t been proven to work so well for public goods, in my opinion, but would love to hear of examples where it worked.
Shipping everything larger than a letter comes to mind.
>This is why for some things we still agree we should pay for things at a government level (local or national), such as firefighters, defense, mail, etc, etc.
Just because the government regulates and pays (fully or partially) doesn't mean the government should deliver the service. Private utilities seem to be slightly less dysfunctional than government owned ones. Private EMTs work fine. Private security isn't known for brutalizing people without a good reason. The roads are plowed at pretty competitive rates by private contractors.
Don't get me wrong, some "essential for society to function" services should be provided by or managed by government to varying degrees but the degree depends on the service. In housing a service does not inherently make it better.
> Look at how well competition works in our broken healthcare system. Our costs are the highest in the world yet our life expectancy and infant mortality isn’t all that great.
Yes, we have the worst of both worlds: We socialize losses and capitalize gains. Banking/healthcare are two examples of non-free markets, because there is no ability to let them fail. When you cap the downside, you get exactly what we have.
This is a good example of poor market interventionism, not free marketeering, which is not to say that a free market is the right approach for healthcare (I think it should be fully socialized).
I'm of the impression that public investment in education increased manifold since the ~60s without much improvement in outcomes. Presumably education is an example of goverment management gone awry (which is not to say that private management would fare better).
It would not be inflationary - inflation is a monetary phenomenon - not a fiscal one. Wages might go up, which results in higher prices, but that is not the same thing as inflation (which is a GENERAL increase in prices and fall in the purchasing power of money).
competition and capitalism work well to drive technological improvement in conditions of extreme scarcity such as existed 100+ years ago. of course, it does this pretty violently.
there's no reason to believe it is better than democratic, central planning (note: not stalinism) in either this or the last century. public planning would, of course, go out of its way to incentivize automation and further technological improvement... something that has historically been publicly funded anyway.
I can't, because American capitalism bombs every attempt to provide an example of an alternative out of existence, precisely to cause people to think there is no alternative in conversations like this.
I will say that despite massive sanctions and material scarcity, and an incomplete level of democracy, Cuba gets a lot of things more right than the US (for instance, healthcare for non-rich people). They are also fucking up their environment way less. But it's still scarcity socialism and could be way better.
the US also has a very incomplete level of democracy
> But giant geographically, economically, ethnically diverse polities like the US have a much harder time.
I've heard this refrain from a number of otherwise sensible people and it always makes me shiver. Not only does it imagine all the world's non-US megacities are quaint "tightly-knit" monocultures, but the dog-whistle "ethnically diverse" component is particularly repellant. To give the benefit of the doubt: that's probably not intentional, but I really wish we could end this meme as to why the US has inadequate public services.
You've heard it from sensible people because there's a significant social-sciences literature studying the idea, and largely confirming it – no "dog-whistles" required. I want more ethnic diversity in the US, but my eyes are open that in practice, such diversity (for at least a generation or two, maybe longer) tends to weaken political support for public services, and strain such services' competent administration. The right cultural & policy innovations might be able to overcome this effect! But probably not, if merely acknowledging it becomes a taboo, and we pretend it's not an effect at all.
And it's not just ethnicity – it's many dimensions of "largeness" and "diversity", including geographic dispersion, variety of economic industries and incomes, religions, density, etc.
Only 2 countries in the world have a larger population than the USA: China and India. They're not known for top-notch free public services, either – though China's anti-union, anti-local-control authoritarianism allows public infrastructure development at a crazy pace, and (forced relocation into) public housing. The other 7 most-populous countries (Indonesia, Pakistan, Brazil, Nigeria, Bangladesh, Russia, Mexico) aren't stellar examples of public services, either.
The "high services" models most often highlighted tend to be less than 1/30th the population of the USA and far more culturally/economically homogenous (the Nordics), or at most 1/6th to 1/5th the population of the USA (UK, France, Germany), and still less varied geographically, economically, and culturally.
> but I really wish we could end this meme as to why the US has inadequate public services.
You're going to need more than wishing for this to go away, because as other commenters have pointed out, this isn't dog-whistling. It's empirical fact that a greater share of tribalism and sense of community (of which, surprise surprise, similar race/ethnicity is a factor) improves socialized goods/services.
Inconvenient facts are not racist when simply noted, and that's a meme I'd wish would go away.
I don't know if "ethnically diverse" affects public services here in the US, but we are more significantly more diverse than the majority of other first world countries.
yes, but spend on what? Rent, privatized healthcare, and uber rides? This article is exactly right, it's idiotic to think that giving money to people with no affordable services to spend it on is going to improve their lives.
Give people $1000 per month and watch the next rent cheque go up by $900.
Why do you think housing would capture a majority of excess cash that people have, and not food vendors, or other groups that provide essential services?
In some instances it's probably cheaper to give money than build buildings, hire staff, etc that cost more money than the dole being given. If we could give 2-3k per month for less than the cost of other handout programs, then why not automate the process of check writing as much as possible and just make it happen?
Though, this must be combined with major healthcare reform (single payer or something akin to Europe/Japan/Canada). If people have food, housing,and medical without fear of losing any of those then they will have less stress. Less stress = less anxiety, anxiety leads to fear, fear leads to the darkside aka crime/suicide/mass-murder then suicide/becoming Donald Trump.
everything in this comment is completely, empirically wrong. public services are more efficient and have been basically forever. where public services are bad, it's generally because they are desperately underfunded and cut into by the private sector and austerity governments, which under capitalism are nearly all governments.
Also, there is a difference between how efficiently those services provide, and how well those services actually match consumer needs. The government can likely build cars more efficiently than anyone else, but would do a very bad job at determining what should be in a car or determining who those cars go to.
Not means testing so much as allocation: I bought a small car because I did not need a big car and wanted to save money. This decision is easy in a market. If the government provides cars for all people, who gets big ones and who gets little ones. Does everyone get a tiny car?
They can build cars cheaper than anyone but can allocate them inefficiently.
This still comes back to a means test of some variety. For your example with vehicles, if you possess the means to not require a large vehicle (such as being single or having a small family), then you would obviously be allocated the smaller vehicle. This is vastly simplified than what such a thing would likely look like in reality. For govt assistance in the US for example this usually begins with your income level.
On a separate note, I'm still very curious of your answer to my question referring to the source.
> New Internationalist does not slavishly follow the conventional news agenda.
They specifically call out that they are an alternative journal, with a focus on very left policies. Which I can respect, but I thought it was a poor choice of source to make the point. A stronger case could be made by pulling a more independent observer who may site a more gracious collection of sources.
And I would like to point out that the article advocated for eliminating all means testing. So in the case of this (admittedly strained) argument. I get a car, but it must be the same car for all.
what? the answer is to democratically come up with literally any policy for assigning cars that makes more sense than "rich people get whatever they want". it can even have market aspects to some extent if necessary.
I don't think "unbiased" sources exist, that's a technocratic myth as well. And I think your second concern is only valid for bad public versions of this. The state is perfectly capable of whatever product planning our handful of car companies do.
There's no such thing as an unbiased source. Having actually read the linked article, it's a detailed, well-cited, and effective piece. Indeed, it seems the bias you complain about is based on the political stances of the publication and not any merits of the piece itself, as if critiques of capitalism are only valid when written by proponents of capitalism.
Further, this kind of vague belly-aching about the supposed "bias" of an article is very much against the spirit of the board. It casts aspersions, intentionally or not, not only on the article that was linked, but on the commenter who linked it. If you'd like to criticize the article, please do that instead.
Choice is a luxury when a huge percent of Americans don’t have access to healthcare or would go bankrupt if they used it. Same thing with affordable housing, education, and countless other services.
I’m talking about the reality we face right now using the example of healthcare, which tons of Americans don’t have access to. Which I feel is a bigger problem than the problem of choice.
Healthcare also being a public good that almost every other developed country handles at a national level with greater success (life expectancy/ childhood mortality, other major kpis) and far lower costs.
healthcare should really be the nail in the coffin of the efficiency argument. the reason it's more obvious that it works better provided publicly is basically that it's way more extensively studied and the US is such a great negative example of how privatization destroys it even in the middle of extreme wealth.
UBI often gets held up as a panacea for an "inefficient" welfare system by allowing recipients to have "consumer choice" regarding e.g. healthcare or housing.
In my and the author of the article's mind, UBI only makes sense as a form of supplementary, discretionary income. If a UBI recipient is made to trade off housing payment against health insurance payment, they're required to make a choice between two essentials; if they're both essentials, they're not really fungible in the first place.
The argument often goes hand-in-hand with greater privatization of public services, which inevitably commodifies what should be for the benefit of the public.
Trade-offs are not that binary in real life. There is a reason you do not live in the biggest house possible, you choose to forgo a bigger house to pay for other necessities.
And these marginal trade-offs are exactly what drive the normal economy - small improvements for price-conscious consumers. As much as I may agree something is essential, that doesn't mean I think it should be one size fits all or centrally allocated.
Trade-offs are that binary in real life -- for everyone who would need UBI.
If you are wealthy, you can choose to "forgo a bigger house". If you are middle-class or lower-class, the options are pretty much binary already, today, in the real world. You eat, or you don't. You have a roof over your head, or you don't. You get medical treatment, or you don't.
There's no way to "penny-pinch" , when you are already at the bottom, because all possible savings an individual could make are already priced in. Comparison-shopping isn't a choice, when you are already priced out of all but one of the options.
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Unless UBI ends up being some huge amount of money (like say, $60k USD/yr/person), there won't be any meaningful non-binary trade-offs for any of those folks to make, regardless of whether UBI happens or not.
> If you are middle-class or lower-class, the options are pretty much binary already, today, in the real world. You eat, or you don't. You have a roof over your head, or you don't. You get medical treatment, or you don't.
This is a lie. Most 'poor' Americans have lots and lots of expensive things; they could choose to do with less. This is not to say all could, but the poverty level metric is so excessive, that many have lots of discretionary spending that many 'rich' households do not.
This has to do with how we define 'poverty.' The poverty level as set means that many americans with lots of discretionary spending (for example, television) are classified as poor, despite having easily fixed overspending. For example, according to data from the department of energy (accessible here: https://www.eia.gov/consumption/residential/data/2005/hc/pdf...), 26million / 39million households eligible for federal assistance (~64%) had cable television, meaning almost $70/month in unnecessary expenditure. For those below the poverty line, 10.6mil/16.6 mil had cable or satellite (again ~64%). This is data from 2005, but other years are similar.That is a bit ridiculous.
Are you choosing watching TV for $70/month as an example of an "expensive thing"? Living in poverty doesn't mean that you get should judged so harshly for mild discretionary spending to make your life less of a hellhole.
If the claim is that those living below the poverty line are going hungry (i.e., "there's no way to penny pinch when you're at the bottom", then claiming $70 (which can buy a lot of groceries) is 'mild discretionary spending' is incredibly disingenuous.
Most members of the middle class would classify it as mild spending, so I don't see anything disingenuous about my claim.
Groceries are not fungible for entertainment, and if you choose to spend a reasonable by middle-class standards amount on it you shouldn't be punished with misery and people tut-tutting at you for it.
Furthermore, I don't know what your point of revising the poverty line downwards is, apart from to tell people that they should be satisfied that their life isn't worse.
> Furthermore, I don't know what your point of revising the poverty line downwards is, apart from to tell people that they should be satisfied that their life isn't worse.
My point is that there should be various levels of poverty so comparisons can be made apples-to-apples. There is an income range where people cannot afford food, and there is an income range where people can afford food but cannot achieve a certain standard of living, etc. These need to be distinguished to make intelligent policy points.
> Most members of the middle class would classify it as mild spending, so I don't see anything disingenuous about my claim.
And many members of the upper class would say having a personal nanny is mild spending, but that seems ludicrous to literally everyone else. Luckily, my statement that 'If you cannot afford <insert basic need>, then <X> is a luxury' is a statement that could apply independent of the economic class of the speaker.
> Groceries are not fungible for entertainment,
Yes they are. I do not have cable so that I can purchase more food which I find more entertaining than vapid television shows. Also, consumeristic entertainment is not a human need. I will grant that humans need some level of entertainment. Luckily, libraries have free videos which are woefully underused. The radio is free, as is broadcast television. Also, humans have entertained themselves for literally as long as anyone can remember.
Look, the guy I replied to made a point about 'middle-' and 'lower-class' people, by claiming there's no way to penny pinch when you're at the bottom. I pointed out that, by the federal standards, those at the bottom (i.e, in poverty) are spending about $800 a year on cable (based on cable rates in my area, which may not be representative, but whatever). Thus, it seems clear that there are ways to penny pinch at the bottom. I'm not sure what is controversial about this statement. There are clearly ways to entertain oneself reasonably without cable, as I and countless others demonstrate.
> Anything that is essential (to life) should be provided by the government. Food, housing, healthcare.
Agree entirely. I'll add transportation, education and utilities to that list. (K-8 + community college, train/subway transit, water+sewer service, electricity + phone + basic internet)
> Is there anything that should not be?
Everything non-essential to basic life? Hollywood motion pictures, video games, fasion-based apparel, toys, luxury furniture, hardware, collectable cards, privately-owned books, airplanes, etc.
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This isn't a crazy idea. All of the US has a "public option" for postal mail, delivered to nearly every citizen in the nation at effectively zero profit margin. FedEx and UPS can happily exist and be wildly profitable, but they can't go too evil with their pricing or availability, because people will just switch to USPS. It keeps these private companies from exploiting everyone too much.
Similarly, most of the US has a "public option" for water, which is provided by the government to every single person in the district (regardless of income), directly at their home and at zero profit margin. You can buy "luxury water" (Bottled Dasani, Nestle, 'Culligan Man', whatever), and those private companies can happily make massive profits all day long. But these companies can't exploit the market for water too badly, because there is always a public option to fall back on and opt-out with, when these companies inevitably become evil.
Nearly every part of our society that is currently broken, is that way because it's a required purchase critical to sustain basic living, and there's no reasonable way to opt-out.
If Hasbro goes evil and prices toys at $10k each, it's fine, because I can just choose not to buy them. I don't need toys to live. In this way, their greed can be kept somewhat in-check.
But if a hospital prices the ER room at $10k, I can't opt out, or I'll literally die. If local housing market charges $10k/day rent, I can't opt out or I'll immediately become homeless and unemployable and, effectively, dead. There is no "check" on these people's greed, because all humans are required to purchase these things, just to sustain their own life. So the price can just grow indefinitely, and none of us can really directly do anything about it.
This is why public services are so vital, why it's so critical that they exist and work well and grow.
The problem is government services are generally inefficient because the motivation is welfare versus quality of service to attract more “users” (or to put it bluntly profit). It’s not run like a business and it shouldn’t be. ( I don’t think anyone would like the idea of public health program run for profit). I think the general premise of ubi being supplemental to some basic government services is an interesting thought. However I don’t think u can make government programs more efficient by throwing more money at it. The problem is not the money but the motivation when it comes to government programs.
but they're not. that's a huge misconception. public services are almost universally underfunded and almost universally more efficient than the private sector providing a similar good with similar constraints (eg, being accessible to all rather than a subset of rich people).
"public stuff is inefficient" is the worst sort of received wisdom. it's exactly propaganda by rich people who want to skim profit off of things.
This is one of those put up or shut up things. We should be able to see through trial where people actually prefer getting services from and keep what's not broken.
> "public stuff is inefficient" is the worst sort of received wisdom. it's exactly propaganda by rich people who want to skim profit off of things.
This is a VERY bad faith argument. You are assuming the only people who disagree with you are either malicious or brainwashed.
do you not assume people who disagree with you are acting in bad faith or are wrong? there are really only 3 options there. (the third being that you are in fact wrong).
anyway those choices don't exist in a vacuum and markets don't have the all-seeing empirical knowledge libertarians think they do.
Reasonable discourse dictates we assume everyone is arguing in good faith: i.e. that we are all similarly able to come to good conclusions, that we actually hold these views honestly, and we at least willing to entertain the idea that we could change our minds. If you do not believe this about a discussion, why waste time in it?
The all-seeing eye works for supermarkets all the way to the producer, it works for housing all the way to the builder, it works for cars, it works for services like garage, additional classes, etc. There is no reason people will all of a sudden be stupid when it will come to healthcare, transportation or education. Point is, competition is transitive, and the last tier is always competitive. Therefore by iteration every tier is competitive.
You can directly compare the overhead for say US 401k plans vs Social Security. Even in the US such public vs private comparisons generally favor pubic options as significantly more efficient. Replacing the VA with private insurance would cost vastly more for example.
Though public options are often heavily restricted so context is important.
UBI shouldn't be implemented until regulatory supply constraints on the basics of life (healthcare, education, housing, etc) are removed. Otherwise the rent will go up by about the same amount that UBI provides and we will be back at square one again.
I shopped around for a good price when looking for an apartment (in a college town). Would competition not be sufficient for keeping prices down for renters? I understand it would raise rent prices some, since people having more money would increase demand, but increasing nearly the same amount as the UBI seems surprising. I'm not very knowledgable in economics so I apologize if this is a stupid question.
Many places in the USA and elsewhere have NIMBY zoning policies that prevent new housing and / or dense housing from being developed, slow it down, make it significantly more expensive than it needs to be with 2:1 parking requirements, reduce property taxes for long term holders and so on.
This reduces new housing being developed in response to demand and thus increases the price when there is an increase in demand by an inordinate amount.
UBI will increase demand universally across the board in the form of cash for everyone, and inelastic supply constrained essential goods like housing will go up as a result.
It will take some, but not all. That's the refutation.
The problem isn't the idea that some cost-of-living things will increase in response to UBI. It's a defeatist "What's the point, the landlords will get it all" attitude that doesn't take into account the complexity of what people spend on and the supply/demand relationships of those things.
What I am saying is before or when a national UBI program is created, a national law making things like zoning restrictions illegal would also need to be implemented. Kind of like japanese zoning:
A couple of other (bad) examples is how national health plans are implemented in other countries, making things like being exempt from the national healthcare system illegal. Or the insurance mandate from obamacare.
I'm not saying UBI shouldn't be implemented in a why bother manor, I'm saying you need both if it's going to be an effective system. If you don't, you will significantly reduce it's effectiveness.
It's probably unconstitutional to eliminate zoning restrictions from the federal level. And even if it's possible, it would be political suicide, and even if it happened, it would have a lot of unintended consequences.
"Rent will increase to cover the entire value of UBI/minimum wage increase/anything else that helps" is a stock argument. That doesn't mean it's a good argument, just a common one.
On the other hand, in popular places to live (major cities), housing will continue to be a scarce resource. Adding UBI won't mean all the poor people get to move to nicer neighborhoods. But it also doesn't mean that increased rent will eat 100% of their UBI. Rather, it'll increase the amount of money they have relative to what they pay for housing, money that can go to less constrained resources like food and education.
And in those places, it's common for them to pay close to %50-%75 of their income on rent & commuting costs.
And I was unclear, I should of said economic rent. The supply constrained basics of life will expand to consume new demand in the face of a UBI subsidy. Not just your rent.
Not every major expense is supply-constrained, though, particularly not the rigid supply constraints of real estate. So asserting that "supply constrained basics" will eat 100% of UBI is unrealistic.
And even in cases where much of it will be consumed by cost of living, UBI will offer considerable flexibility, relative to current systems. Those who are homeless and/or long term unemployed will at least have some cash income that can be used to relocate or get them by. Lots of homeless people live out of their cars - and UBI will keep that car running and out of impound. That's just one example.
In rural or small-town areas, cost of living isn't so much of a factor, if income is available. UBI will make things much easier for the rural poor.
It will also have a tremendous impact on the middle class. It will reduce the dangers of financial emergencies and increase the savings rates for that majority who aren't in poverty but aren't rich either.
Since need-based evaluation is no longer needed, administrative costs will go down considerably relative to the welfare state. And people will no longer be punished for working with a loss of benefits.
> Providing a single mother with a cash payment to fend for herself in an inflated housing market is not as effective as providing quality public housing. Giving people more money to fill up their cars is not as progressive as offering free public transport.
To me, this is actually an argument for UBI. A poor single mother deserves access to the same market of housing as everyone else! And public transit is great, but your living and employment options are super limited if that is your only choice.
Absolutely, we need to study how much social services would actually need to be offset. Perhaps free housing and buses are still valuable even with UBI. But having dual-class public and private options is not true progress.
It seems that in this author's view, a UBI is only a means to an end for tackling inequality, and doesn't believe the actual poverty alleviation aspects are of value. While I respect the point being made, I would argue that this in itself is a pretty privileged position.
> Public transit is great, but your living and employment options are super limited if that is your only choice.
In most countries where UBI is even remotely a realistic possibility politically, public transit is just fine and how most people get to work. Indeed, for a single mother a personal car may well cost far more than the actual utility it provides. The USA is an odd one out in this respect.
True, this is a US example (although I was surprised by how many European cities have competing private transit systems). But I stand by my point that prescribing people's needs robs them of important choices.
I agree they are orthogonal. Part of the purpose of a UBI (and it needs to be U -- Universal -- not as a welfare replacement) is to correct for inefficiencies or inequities in structure -- you don't live close to a transit stop so you may spend some money getting to/from.
The other purpose is for signalling within the commercial system (tortilla chips are more / less popular that potato chips) which is crucial for the functioning of an economy.
As a welfare replacement it's terrible because it suffers from diseconomies of scale.
If it is Universal as you say, it cannot be zero-sum. If it is not zero-sum, what is it? Fueled by debt? Highest income pay more taxes (on income or assets)? In that case it is tecnically not Universal. You can't have money ex-nihilo.
In macroeconomics, you can have a liquidity crisis, and the large number of poor is a liquidity crisis which also affects business. Remember money has multiple functions of which store of wealth is only one (and it's not the only instrument used for that purpose).
At a microeconomic level yes, this seems absurd, but microeconomics and macroeconomics are disciplines as different as physics and chemistry: the emergent macrobehavior is quite different from the micro behavior and calculation based on micro is not tractable.
> Debt-based bond-backed money is already ex-nihilio
Every time you use a credit card you increase the money supply, though it is sterilized when you pay your bill at the end of the month (or when you default).
Arguably it's not really ex-"nihilo" as there is economically valuable activity (extension of credit) which is paid for via interest. Increasing the money supply to match economic activity (as best it can be measured) prevents deflation, among other things, and debt is the tool used, surely better than simply running the presses.
You would replace the interest ratio by resupply ratio (feeding expenditure taxes and income taxes for income exceeding UBI back into supply) in an UBI-backed monetary system. You could easily target zero inflation per capita in such a system.
Yes, this is a good idea. The current approach uses banks as the interface, hence the use of debt. Purely a mechanical artifact, not a moral issue as it is often taken by people fixated on microeconomics.
the point of UBI is to maintain liquidity of goods and a baseline level of demand for goods amidst a financial environment of increasingly extreme economic inequality which would otherwise cause sharp contractions in demand as a result of the public's lack of money.
if public services expand, each UBI dollar goes that much further. expanding public services alongside UBI creates a virtuous cycle in which a larger portion of each UBI dollar can be spent on non-essential goods, stimulating demand and subsequently funneling more money into the tax fund.
if public services contract, each UBI dollar has less purchasing power because a larger portion of its value is earmarked to purchase substitutes for essential public services. for instance, if your municipality slashes its water purification services, you'd need to purchase more bottled water than before, so you'd have less spending money because you'd still be paying the same amount of taxes yet you'd be forced to take on an additional expense as a result of the cuts. this situation completely undermines the economy as a whole because the cost of private sector substitutes will rise with every additional service cut until they are unaffordable, at which point demand will finish crashing and be incapable of recovery.
UBI fails because most people who we want to help won't make good decisions. As my childhood barber noted, in the great depression the "men" who couldn't afford to feed their family where the ones hanging out playing pinball with any cash they had. UBI wouldn't help them, any money they get wouldn't go for food, shelter (or a long list of other things), but to expensive entertainment.
This is a brilliantly concise explanation of this. I think it slightly glosses over one thing, which is that in any case where it might actually be implemented, UBI is basically a trojan horse to undercut and defund actually existing and useful welfare programs. That is what happened in Finland: https://www.socialistalternative.org/2017/03/07/finlands-bas...
The rhetoric in that linked article sounds like a fetishization of work, the old-school Communist praise of the labourer as the ideal human being. That is, the authors call for creating more jobs and building factories. That is a turnoff to those socialist-minded people who feel that work sucks, it is something our modern society ought to be avoiding by increasing automation.
SA is completely in favor of automation and actually calls for reducing the workweek. But under capitalism, automation is used to drive down wages and increase the ranks of the unemployed, which is the primary concern of the (growing amount of) people who are living paycheck to paycheck or unemployed.
That's pretty clearly because "free, quality public services to all" are really hard & expensive to deliver. Without prices & competition, they're prone to massive inefficiencies, over-provision or under-provision due to various political distortions, and resource- or agenda- capture by insider managers/public-employees/organized-lobbies.
Smaller, tightly-knit polities can often manage more-efficient public services. The two examples given in this article – "quality public housing" and "free public transport" – work well in some places!
But giant geographically, economically, ethnically diverse polities like the US have a much harder time. Public housing in the US sucks. Mass public transport here faces costs 5x as large in as other developed countries – due to the sclerotic interplay of dysfunctional bureaucracies, mercenary contractors, and powerful public employee unions. That is, those exact unions in the "Public Services International" federation which employs this op-ed writer. So of course she's arguing, "pay us first, and more, before spending more directly on the poor".
But the point of UBI, if it were to work as hoped, is to route around such non-poor middlemen – those who claim to be serving the poor, but rarely seem to reduce overall poverty. Cutting checks is comparatively easy to do, and most non-addicted adults can spend $X for their own welfare better than any supposedly altruistic outsider could spend the same $X.