UBI should cover government-regulated and government-provided essentials to living.
Ex.:
* Government housing: $500
* Government basic food package - daily (1500kcal): $300
* x kJ electricity, x m3 water, x m3 gas, x bps internet connection: $500
* Clothing, hygiene, cleaning supplies: $50
* Universal healthcare: free (and free condoms)
* Free education (from abc to PHD)
This is not a comprehensive list, or even the right values, however you can guarantee a base-level of what is "living with dignity" and apt to participate in the democracy.
I doubt you'd have too many people deciding to live without a job. It's not the best life, but you can survive with some human dignity. Many around the world live with much less.
UBI isn't the American Dream, it's the safety net.
> UBI should cover government-regulated and government-provided essentials to living.
The reason you don't do this is that the government is not better at making diapers and laundry detergent than Procter & Gamble nor better at manufacturing Tylenol than Johnson & Johnson nor better at growing tomatoes than local farmers.
If you give people $300 then they can buy $300 worth of food. if you give people $300 worth of "government food" then they'll have $150 worth of actual food because half of the money will go to the agriculture companies with the best lobbyists, and the same lobbyists will get to choose what kind of food it is. Government cheese is not an ideal. Meanwhile if you have $300 then if you want to you can grow your own tomatoes in your back yard, eat those, and use some of the money for something else entirely.
Also, special fail for these:
> * Universal healthcare: free (and free condoms)
> * Free education (from abc to PHD)
Suppose the government could provide healthcare for $10,000/year. Okay, let them do that while giving everyone $10,000/year to buy it with. But don't force them to.
Suppose a private health insurance company could provide coverage for $5000/year with a $10,000 deductible, instead of $10,000/year with no deductible. You're taking more risk, but not that much more (best case you gain $5000/year, worst case you lose $5000/year). And overall you would expect it to be a gain because you're paying the first $10,000 out of pocket, which makes you price sensitive, which causes you to not waste money on unnecessary care, which lowers average costs.
It's the same thing for education. Give parents money and let them choose a school. Solves the entire mess with school quality being tied to home prices. Doesn't screw over parents who home school, because they still get the money. And if the government can provide the best schools for the best price, parents will choose them anyway. But if not, they shouldn't be forced to.
> provide coverage for $5000/year with a $10,000 deductible, instead of $10,000/year with no deductible.
that's the wrong way to think about it. The above makes an implicit assumption that by doing this you "save" $5000/yr because the insurance company is "more efficient".
That's wrong - you actually cost $5000 (this being the "profit" the insurance company makes if you _didn't_ need the medical treatment that year). Under the gov't version, if you were healthy, you're "free". You only cost when you actually need the medical treatment.
Healthcare should not be done under a private insurance model. Any profit made by the private insurer is a cost to providing medical treatment, and does not contribute to the outcome. By making medical treatment a tax payer funded scheme, the cost of an unhealthy society is spread out amongst all. Not only does this give the gov't buying pressure to lower the margins of all medical treatments, it also makes a policy pressure for gov't to give preventative measures for good health outcomes (like legislating low sugar foods, or incentivize exercise and good diet etc).
> Under the gov't version, if you were healthy, you're "free". You only cost when you actually need the medical treatment.
Government insurance is still insurance. It isn't that each individual costs the government $10,000, it's that most cost them nothing and one in ten gets cancer and costs $100,000. Insurance is the same. The large majority of the money isn't going to the insurance company, it's going to healthcare providers.
> By making medical treatment a tax payer funded scheme, the cost of an unhealthy society is spread out amongst all.
This is literally the definition of how insurance works. It's also why insurance sucks, because it allows people to make risky/unhealthy choices and socialize the costs of those choices, and therefore why high deductible insurance is more efficient by introducing at least some price sensitivity.
> Not only does this give the gov't buying pressure to lower the margins of all medical treatments
This is equivalent to legislating prices. They can already do this regardless, but it's a bad idea for the same reason price controls in general are. How do you determine what the price should be? Too high and you're overpaying, too low and you force providers to lower the quality of care to meet the price target. If this was so easy then why wouldn't the insurance companies be doing it too?
> it also makes a policy pressure for gov't to give preventative measures for good health outcomes (like legislating low sugar foods, or incentivize exercise and good diet etc).
Couldn't they do this anyway? Also, wouldn't they have the opposite incentives, because then the companies making blood pressure medicine or whatever would lobby against any such programs, and be more proficient lobbyists because they're already dealing with the government to begin with?
And if the government really is so much more efficient then they should easily be able to out-compete the insurance companies and other healthcare providing systems on fair terms in a competitive marketplace, right?
I get the impression you're idealising the free market. The numbers[1][2] speak for themselves in proving that universal healthcare is the most affordable way to provide good healthcare.
In the UK the NHS (2016) per capita cost was $4,192 (PPP) and in the US the per capita cost was $9,892 (PPP). The OECD life expectancy average for the same year in the UK was 81.2 in the US it was 78.6. Comparable healthcare outcomes for vastly different costs.
I don't know how the politics of healthcare and lobbying differ between the UK and the US but whatever they are the numbers show that Universal healthcare is better for everyone in spite of your (or really anyone's) arguments against it.
Average life expectancy is a really flawed metric to measure the effectiveness of healthcare systems, because there are a ton of non-healthcare related confounding variables that impact average life expectancy. Anyone that dies early brings down the average life expectancy, and that includes suicides, homicides, drug overdoses, and car accidents. The US has more traffic fatalities per capita than any other Western European nation. The US has more opioid deaths per capita than any other Western European nation. The US has more gun-deaths per capita than any other Western European nation. While each of those problems have their own political causes...none of them have much to do with the underlying healthcare system, so using it as a metric to measure the quality of the healthcare system in question is ill-advised.
All that being said, if we were to use this metric, for the sake of argument...these charts are quite illuminating, but not for the reasons you think.
If you plot them on a graph, you'll find that the most efficient healthcare system is actually one closer to the "idealized market"...in Singapore[1].
Also the comment to which you are replying is strictly talking about "government insurance". "Government insurance" is not the only way to deliver universal healthcare. Germany, Switzerland, Netherlands, Singapore all have thriving multi-payer systems. In Switzerland and the Netherlands, ALL insurance is private. In Singapore, while the government covers catastrophic care, 70% of total health expenditures are private. Singapore's approach is actually the closest to what a system might look like if you replaced healthcare-specific targeted subsidies with a UBI — most health expenditure is through compulsory health savings accounts.
The common theme is that there is some degree of government intervention/regulation and subsidy. Having the government be the sole payer is definitely an approach, but it's by no means the only approach, nor even the best approach.
"Universal healthcare" just means that everyone has healthcare, it doesn't necessarily mean that the government provides it for everyone. We have pretty close to "universal food" in most of the developed world, and the vast majority of the food system is delivered through the open market.
>"Average life expectancy is a really flawed metric to measure the effectiveness of healthcare systems, because there are a ton of non-healthcare related confounding variables that impact average life expectancy. Anyone that dies early brings down the average life expectancy, and that includes suicides, homicides, drug overdoses, and car accidents. The US has more traffic fatalities per capita than any other Western European nation. The US has more opioid deaths per capita than any other Western European nation. The US has more gun-deaths per capita than any other Western European nation. While each of those problems have their own political causes...none of them have much to do with the underlying healthcare system, so using it as a metric to measure the quality of the healthcare system in question is ill-advised."
A socialised healthcare system forces government and the healthcare service to write and maintain policies that consider the health of the nation. Where as a private insurance based service doesn't.
The US opoid crisis is a perfect example of this. Many of those addicts in the US moved on from prescription opoids that they had been prescribed unnecessarily to streets heroin because there was little concern of the wider public health implications. In the UK getting a prescription for addictive strength opoid pain killers has long been near impossible because the healthcare system has to be careful not to create another problem in trying to fix the first one because it's their responsibility to fix it which also means Doctors are not motivated to meet the patients wants (e.g pain free) and only fulfil their healthcare needs. This is why the UK didn't go through the same crisis
So I say that life expectancy is a good measure of healthcare systems because it forces policy makers at all levels to consider the wider impact of public policy on public health.
Again, it's debatable, but as I continued in my comment, even when charitably accepting your premise, your argument loses its strength.
A fully socialized healthcare system is one of many implementations of universal healthcare in the developed world today, and you'll have to find an answer for why the most efficient system in the world is the one that just happens to rely the most on consumer-driven market mechanisms.
Perhaps but then you also have to consider that Singapore is such an outlier that maybe comparing with them is overlooking what universal healthcare system is more likely to really be possible to politically implement.
Chasing that vision of efficency that Singapore shines a light on likely only serves to distract from other universal systems that are more commonly provided that are more realistically achievable.
Singapore is so far off the scale close to Hong Kong that it suggests they have political, social, geographical conditions that can not be replicated.
That’s not what “outlier” means. If every country attempted to implement Singapore’s system, and only Singapore succeeded, then you would be correct that it is an outlier. Instead, other nations settled for different systems and are generally satisfied. There lacks a political will to move out of the local optima.
Singapore’s path to its current system wasn’t by accident. It tried an NHS style system, which failed due to overuse, then tried a US-style system, which failed for obvious reasons, and then settled onto the system it has today.
The US is in the unique position that someone else has tried this model and we have enough data to prove its superiority. There also appears to be enough political will to reform the current system. There’s no point in settling for local optima when we have more than enough information to be able to go all the way...
There’s actually no evidence whatsoever that it “cannot be replicated”, there is little about Singapore, geographically that uniquely lends it to such a system. Suggesting otherwise is just ignoring an inconvenient data point. You’re also conveniently ignoring Switzerland, the Netherlands, and Germany which have a significant degree of privatization in their healthcare systems. Pure socialization isn’t the only way, it’s not even the best way.
So then what are the friction points of the Singaporean healthcare model that prevents other countries from adopting it?
If it were a Bill up for a vote by politicians in the US then what issues would they have with it?
Also comparing healthcare costs of Germany, Netherlands, and Switzerland with the UK from the links I posted earlier clearly shows that socialised healthcare is more efficient.
The per capita cost in Germany ia 32% higher than the UK, Netherlands it is 28% higher, and in Switzerland it is a whopping 88% higher compared to the UK.
Even France and Greece which are more socialist than the UK and both also have national insurance schemes are much better value than their private counterparts.
> So then what are the friction points of the Singaporean healthcare model that prevents other countries from adopting it?
The friction points aren't necessarily with the model itself, the friction is strictly political will. Democracy doesn't always seek out the most objectively superior solution, it simply seeks out the solution that the people want. Strict gun control might be a "superior policy", but that doesn't mean that people in America want that. Similarly, people in Denmark don't really want to change their system, even if there exists a superior system in Singapore.
In contrast, the US is in a unique position in that there is growing political will to change the status quo system, and the Singapore model happens to be one of the few that enjoys bipartisan approval. Also uniquely, the fully socialized single-payer system couldn't even get majority support among the Democratic Party. Indeed, the current nominee was the guy who explicitly campaigned on "the public option" rather than a strictly socialized system.
> If it were a Bill up for a vote by politicians in the US then what issues would they have with it?
The GOP's proposed Fair Care Act[1] happens to make one key change that moves the US closer to parity with Singapore: namely easing the rule that requires one to enroll in a high-deductible plan in order to qualify for an HSA — so that even those on low deductible plans may take advantage of the HSA. The American HSA is similar to the Singaporean Medisave system, which is a pre-tax savings account for healthcare spending only, where the savings are invested in funds. With American HSA's, they are private custodial mutual funds. With Singapore's Medisave, the fund is the Singapore sovereign wealth fund.
The Fair Care Act may get buy-in from the Left if it includes universal catastrophic coverage (analogous to Singapore's Medishield), and also making HSA contributions compulsory, just like Singapore.
Indiana's government offers its employees what is widely considered to be superior health insurance[2], in which the state deposits funds into HSA's equal to the annual deductible. This is very similar to Singapore's Medisave + Medishield system.
Another proposal that enjoys generally bipartisan approval: Medicare Advantage For All. Medicare Part C, or Medicare Advantage, is the part of America's Medicare system that is working best. Medicare Advantage plans have lower costs, broader benefits, and better health outcomes than traditional, single-payer Medicare. Today, almost 40% of Medicare enrollees are in a Medicare Advantage plan, as opposed to traditional "single-payer" Medicare[3].
So the political will is there, and the empirical results are proven by one of the US's very own states (run by the GOP, no less).
> Also comparing healthcare costs of Germany, Netherlands, and Switzerland with the UK from the links I posted earlier clearly shows that socialised healthcare is more efficient.
> The per capita cost in Germany ia 32% higher than the UK, Netherlands it is 28% higher, and in Switzerland it is a whopping 88% higher compared to the UK.\
> Even France and Greece which are more socialist than the UK and both also have national insurance schemes are much better value than their private counterparts.
"Cheaper" != "More efficient". While you're right that the nations that provide "socialized healthcare" can have lower costs per capita — Germany, Netherlands, Switzerland, and Singapore all enjoy higher average life expectancies than Denmark, UK, and Greece. Switzerland & Singapore both enjoy higher average life expectancies than Denmark, UK, Greece, and also France. The goal of these systems is to get the most bang for our buck, not strictly to just spend the least.
This is why Singapore's system shines — it enjoys the lowest per capita spending while enjoying the best health outcomes.
I'll close by saying that Singapore tried the UK's system[4] (listen at 12:35). The US also has a UK-like single-provider healthcare system, the VA — and that's been an abject failure[5]. The fact that this failure was reproduced twice, independently, suggests that UK's success might be the "outlier" (to use your framing). In contrast, we are yet to see a failed attempt at replicating Singapore's system, and thus cannot yet conclude that it is some sort of an anomaly.
Same story for education [1]. I won't be moved by cries of "we're exceptional" until the US actually tries adopting the policies that have worked so well for Europe and Canada.
This is the same old tired argument again and again. "European countries have lower costs, therefore socialism is better than capitalism."
There are two problems with it. First, the US system is completely broken. It isn't a free market system, it's a worst of both worlds compromised hellscape. It's like comparing the USSR to Colombian druglords as evidence that communism is a great system. The USSR isn't great, Colombian druglords are just awful.
Second, the European systems rely on the US to fund world medical research through its high medical costs. We're subsidizing them. That makes us look bad, but they're the ones free riding on our system. And it's obviously not possible for the US to pay lower prices by doing the same thing and offloading its medical research costs onto the US. What we could do is make the EU pay more of the R&D somehow -- that could lower our costs for sure, or improve outcomes world-wide because there is more R&D. But what does that look like? Higher costs in Europe, right?
Ultimately the problem with a private healthcare system is there is no incentive to provide appropriate affordable healthcare and every incentive to divide, marginalize, and monopolize markets in the aim of driving down competition and driving up profits.
Now that the US healthcare industry has grown so rich and powerful it can lobby and win against any serious political efforts to either increase market competition or socialise healthcare. I.don't. Know how you could politically fix a system that is essentially "every man for himself" the incentive for corruption is far too high when payouts equal political power.
I doubt the US is subsidizing medical research as much as you'd think. The Pharmaceutical industry for example is very profitable compared to other industries. A socialised healthcare service would enable more competitive prices eating into industry profits for these products due to market scale like we see in the UK due to the buying power of the NHS.
"Among the largest 25 companies, annual average profit margin fluctuated between 15 and 20 percent. For comparison, the annual average profit margin across non-drug companies among the largest 500 globally fluctuated between 4 and 9 percent."
> The large majority of the money isn't going to the insurance company, it's going to healthcare providers.
I have upvoted you but on HN, the prevailing belief is that doctors are gods and insurance companies are evil.
The data clearly shows that, on the average, insurance companies lose money while hospitals charge a 10000% markup - that's right, a 10000% markup.
I have written extensively on this topic (see my Quora) but I am finding it incredibly challenging getting people to see the reality.
Because I am often a contrarian here I am no alien to the downvote silence system here on HN - it's likely you can't respond to this comment of mine because HN won't let you for a few hours.
My email is in my profile, would love to connect with you - a person aware of reality.
you've cleverly argued in a way to make hidden the major point i wanted to make - which is that insurance companies making a profit is a loss to the payer. I'm purely talking about the insurance system, and not the medical provider system (hospitals/doctors etc).
> The large majority of the money isn't going to the insurance company, it's going to healthcare providers.
Any money going into insurance as profit is a loss to the payer - insurance doesn't _provide_ value. If the gov't is the one "doing the insurance" as you say, then any profit from that operation will count as a lowered cost of providing medical treatment.
> allows people to make risky/unhealthy choices and socialize the costs of those choices, and therefore why high deductible insurance is more efficient by introducing at least some price sensitivity.
so therefore, insurance companies will pick out the least risky people, least unhealthy, and not allow the sick into their programs. That is exactly what you see today, because those more ill people are what saps the profits.
The price sensitivity is at the wrong end - it should be at the medical provider end, not at the insurance end. Why do you think the cost for treatment is low when you're covered under medicare (for low income people)? It's because medicare is such a large buyer that hospitals are able to sell their services at that low a price.
> This is equivalent to legislating prices. They can already do this regardless, but it's a bad idea for the same reason price controls in general are
no it's not price control. It's buying power, from a single entity that is not profit-driven. The market for medical treatment is unchanged under my model. Insurance companies currently all own their own little monopoly in their region/network, and hence, there's no competition for pricing the medical treatment today. You are forced into the insurance's monopoly (or face the higher ticket price hospitals charge because they can).
> why wouldn't the insurance companies be doing it too?
> ... if the government really is so much more efficient then they should easily be able to out-compete the insurance companies
Insurance companies provide efficiency in operation vs gov't perhaps - i don't know. But what efficiency they provide is taken out as profit instead of being passed on to customers. And insurance company's efficiency is not in lowering the cost of medical care - it's in finding customers that don't cost them more than premiums they charge. They are more incentivized to keep medical costs high to force people onto insurance plans (that they negotiate using their purchasing power)!
There is no real place in the world for a profit-making medical insurance company imho. Or, if there is, they will be _in addition_ to a tax-payer funded universal healthcare system, and they can provide non-medically necessary operations that are not covered by the universal system.
It's really even worse than that. The amount of money spent on medical billing is just obscene. It isn't "profit" for anyone, but it's vast inefficiency.
> The amount of money spent on medical billing is just obscene. It isn't "profit" for anyone, but it's vast inefficiency.
Which is the thing caused by low deductible plans. If that sort of paperwork was only necessary in cases where you're already paying for $10,000+ in medical services, the fixed overhead isn't that significant. But with low deductible plans you pay it for every little thing that ought to cost $50, and then the $50 thing costs $550 because even walking in the door requires $500 worth of paperwork.
How much more efficient would it be if you just walked in with $50 in cash in most cases, which you can take out of the thousands a year you'd save in insurance premiums?
Extreme inefficiency. Extreme amounts of money spent simply on accounting and legal teams to keep track of all the plans, in companies which often have at least a dozen different plans per state. And every doctors' office and hospital and urgent care must hire or contract these services. Before beginning to serve a patient they and/or the patient must do paperwork to look up in-network specifics and insurance coverage terms.
It really is obscene and totally a waste, and it doesn't have to be this way. The notion that the free market does things more efficiently isn't always true, particularly in captive-market situations like healthcare, particularly in purely middleman industries like insurance which are actually incentivized to poorly allocate money to the alleged business purpose (covering medical services for people) because it increases their own profit margins.
> you've cleverly argued in a way to make hidden the major point i wanted to make - which is that insurance companies making a profit is a loss to the payer. I'm purely talking about the insurance system, and not the medical provider system (hospitals/doctors etc).
But then you're not addressing the majority of the problem, because insurance company profits are only a single digit percentage of premiums.
And even the "profits" aren't all waste, because you're paying money but not getting nothing in exchange.
If you want to have patients not paying directly for care then you need somebody to process claims, and those people need an office to work out of. The investors in the insurance company paid for that office. A lot of their "profit" is just the internal rent being paid on the building. If you move that function to the government, the cost doesn't disappear because the government still has to pay for buildings to operate out of to process claims payments to providers, which had previously been paid for by investors in exchange for profits.
Health insurance companies don't generally produce above-market returns on capital, so there is no real evidence that their "profits" are introducing any avoidable cost at all. It's just a method of paying for the things the investors' money bought.
Heck, there are non-profit health insurance companies that make no profits. Where are the savings, if some existed? (Answer: They still had to raise capital, but they used loans or bonds or spent labor begging for donations instead of selling shares, and that turns out not to be much different in efficiency.)
> so therefore, insurance companies will pick out the least risky people, least unhealthy, and not allow the sick into their programs. That is exactly what you see today, because those more ill people are what saps the profits.
The premise of insurance is that you don't know who those people are yet. If you already know then the event to be insured against effectively already happened. You can't expect to switch to lower deductible fire insurance after your house catches fire but before you file the claim. But equally, if you bought it to begin with the insurance company can't cancel your policy just because you're about to file a claim.
> The price sensitivity is at the wrong end - it should be at the medical provider end, not at the insurance end.
How is that supposed to help? The medical providers are the ones who profit from over-providing. They have no incentive to eliminate unnecessary costs -- to them the costs are profits.
> Why do you think the cost for treatment is low when you're covered under medicare (for low income people)? It's because medicare is such a large buyer that hospitals are able to sell their services at that low a price.
It's because Medicare pays below amortized cost and relies on private insurance to pay higher prices and cover the providers' fixed costs. That doesn't exactly work if you get rid of private insurance.
> no it's not price control.
So let's think about this. There is one buyer. If they won't buy from you, their own customers have no alternatives, so you can't make the case that they need to buy from you or their customers will switch to their competitor who does. If they won't buy from you, you have no buyers.
The buyer can set any price they want and the provider has to take it or go out of business. That's price controls.
> Insurance companies currently all own their own little monopoly in their region/network, and hence, there's no competition for pricing the medical treatment today. You are forced into the insurance's monopoly (or face the higher ticket price hospitals charge because they can).
The existing system is all messed up, nobody is denying that. But why not fix it? Require price transparency. Stop creating tax incentives for low deductible plans that make it so nobody has the incentive to shop around and then consequently nothing is configured to enable anyone to do that because nobody does.
> Insurance companies provide efficiency in operation vs gov't perhaps - i don't know. But what efficiency they provide is taken out as profit instead of being passed on to customers.
Not in a competitive market it isn't. If insurance companies were making above-market returns then it would be profitable for rich investors to start a new insurance company that takes their customers by charging lower insurance premiums and still makes at least the market rate of return, until such time as the efficiency is getting passed on to the customers.
> And insurance company's efficiency is not in lowering the cost of medical care - it's in finding customers that don't cost them more than premiums they charge.
Neither of those is true. If an insurance company can deny a claim for a legitimate reason then it saves them money, which in a competitive market is passed on to the customers.
And insurance companies can profit by identifying higher risk customers and charging them higher premiums. The insurance company's job isn't to avoid risk, it's to accurately price it.
Meanwhile the real efficiency doesn't come from the insurance company at all, it's from not using insurance for low cost routine care, which makes the patient price sensitive. Then the patient has the incentive to choose the provider with the better price and is inclined to refuse procedures that are unnecessary or not cost effective.
> not using insurance for low cost routine care, which makes the patient price sensitive
i would argue the patient cannot be price sensitive. The utility of staying alive is infinite - therefore, a patient will pay _any_ price for a procedure that saves them.
I don't want to see a world where going to the GP for a cold is not free. But that's the world we live in today.
The insurance efficiency, if any, is just a drop in the bucket i suppose - because the main issue i'm talking about is socializing healthcare, so that even healthy people pay a cost. And insurance _doesn't_ help with that (and having an insurance industry certainly prevents it from existing as well).
> i would argue the patient cannot be price sensitive. The utility of staying alive is infinite - therefore, a patient will pay _any_ price for a procedure that saves them.
The vast majority of healthcare is non-emergency care. It's either preventive health checkups, or planned treatments. The price elasticity of demand in healthcare is virtually identical to the price elasticity of demand in food. The utility of not starving to death is infinite — therefore a patient will pay _any_ price for food that nourishes them, right?
The huge flaw with that argument is that the value to the patient might be infinite, but the cost to provide it is not. In an open market, competition brings down the cost to the minimum possible value — unless you have barriers to entry or a cartel.
But none of these things are happening in US, you have double the cost of healthcare for a lower life expectancy than countries of comparable living standards who have universal healthcare.
What's going wrong with the system of perfect competition with insurance companies?
> What's going wrong with the system of perfect competition with insurance companies?
The biggest problem is the regulatory incentives for employer-provided insurance. This creates indirection (a corporation is choosing the insurance plan rather than the patient) and whatever is spent is tax exempt, which creates the incentive for employers to provide the most expensive low-deductible plans that are also the least efficient and involve the insurance bureaucracy in the smallest dollar value medical procedures.
> Any money going into insurance as profit is a loss to the payer - insurance doesn't _provide_ value. If the gov't is the one "doing the insurance" as you say, then any profit from that operation will count as a lowered cost of providing medical treatment.
The other users have already mentioned that insurance profit margins, on average, are about 5%. But you should also know that a lot of insurance carriers in the US are non-profit — including Blue Cross Blue Shield and Kaiser Permanente.
> The price sensitivity is at the wrong end - it should be at the medical provider end, not at the insurance end. Why do you think the cost for treatment is low when you're covered under medicare (for low income people)? It's because medicare is such a large buyer that hospitals are able to sell their services at that low a price.
That's true, in theory, but in practice Medicare fee schedules aren't that much better than private insurers.
Additionally, providers themselves are starting to charge out-of-network rates that are LOWER than Medicare fee schedules. For example, Wal-Mart has launched healthcare in Georgia, charging $25 for a cleaning[1], which is significantly lower than the amount for a cleaning (procedure code D1110) set by Medicare/Medicaid. You can look it up yourself by visiting the FAIR Health code lookup tool (https://www.fairhealthconsumer.org/dental/results), and setting the ZIP code to that of Carlton, GA (location of the Wal-Mart clinic), 30627. The average allowed amount is $64.
Finally, the US government has historically been pretty bad at setting prices, as a monopsony buyer. The US military spends more per capita on the military largely because it pays more per-soldier, per-fighter jet, etc than any other nation on the planet. You would think that, as the sole buyer of US defense sector fighter jets, it could negotiate better rates. The F-35 is expected to cost $1.5 trillion (!!) over its lifetime, and the US enjoys monopoly/legislative powers over that cost.
Another example: NASA's planned SLS moon mission is a bit of a disaster — way over budget and way behind schedule. Because the boosters aren't reusable, each launch is expected to cost $1B (with a B) dollars — EACH launch! Meanwhile SpaceX's target cost-per-launch is $50M.
So while you're right that, in theory, a monopsony can extract the lowest possible price, there's absolutely no guarantee of this, indeed American empirical evidence has at times proven otherwise.
this whole school choice and insurance choice neoliberal mantra is what has gotten us into this mess to begin with. The entire insurance sector is a huge waste of manpower and essentially just huge dump for the surplus of white collar university graduates that have nowhere to go.
There's not a single person on the planet who derives benefits from navigating the trade-offs of byzantine insurance plans, and school choice is a good way to speed up social and racial segregation and enabling quasi fraudulent religious schools that teach people nonsense.
It's time we do away with this altar of choice. I moved from Germany to the UK years ago, and I've never enjoyed anything more than the NHS because I literally do not have to waste a minute of my life on health insurance any more. I pay X amount of taxes, I go to the doctor, I get treated, I go home.
> The entire insurance sector is a huge waste of manpower and essentially just huge dump for the surplus of white collar university graduates that have nowhere to go.
US health insurance is garbage specifically because it's tied to employers and employers have strong tax incentives to use insanely inefficient low-deductible plans that both destroy price sensitivity and involve the insurance bureaucracy in small time medical procedures.
> There's not a single person on the planet who derives benefits from navigating the trade-offs of byzantine insurance plans
The cost difference between different insurance plans is thousands of dollars a year. It's one of the most financially impactful choices most individuals can make. Meanwhile if you don't want to make it then... don't? The government could easily recommend a specific plan and anybody who doesn't want to spend a few hours choosing for themselves a thing that could impact them to the tune of $100,000 over their lifetime could just choose that one and be done.
> school choice is a good way to speed up social and racial segregation
Sending kids to schools based on racially segregated school districts is the status quo. You're saying giving those parents the option to send their kids to the same school as the white kids is going to increase segregation? How is that supposed to work?
> enabling quasi fraudulent religious schools that teach people nonsense.
Those "schools" already exist. If they're dangerous enough to deny parents the right to use what is really their own tax money to send their kids to then they're dangerous enough to shut down entirely, right?
Unless you run into some questions of free speech and religious freedom doing that, but then I'm not sure how you were expecting to avoid them to begin with when using "we need to deny them the ability to do that" as an argument.
> I moved from Germany to the UK years ago, and I've never enjoyed anything more than the NHS because I literally do not have to waste a minute of my life on health insurance any more. I pay X amount of taxes, I go to the doctor, I get treated, I go home.
So buy a low deductible insurance plan that covers everything. It costs more than making individual choices, if you don't like to do that. But the cost comes either way -- either you pay with time or you pay with money.
(The status quo in the US is ridiculously broken because you pay with time but then it's still costs a ton of money for multiple independent reasons. Nobody thinks the status quo in the US is a good idea.)
School choice and medical choice are very different.
With school choice, parents do incredible amounts of research, and can send their kids to excellent schools wherever they live, or however bad their local school boards are. And yes, ALL parents invest in their kids' success, your (not OP's but generic reader's) stereotypes against minorities aside. It's a relatively efficient market. It benefits from choice + competition, with just transparency regulations (choice schools should be subject to FERPA, PPRA, public records laws, allow parent visits, etc.), and possibly governance regulations (not-for-profit school choice works best).
Medical choice comes up when I'm hit by a car. I don't have time to do research then, and it's the definition of an inefficient market. I go with whoever shows up, and worry about the bankrupting bills and/or malpractice lawsuits later.
Dumping private insurance 100% makes sense. It's pure overhead. It's a place conservatives deny science and evidence.
Providing school choice 100% make sense too. It makes for better schools. It's a place liberals deny science and evidence.
> And yes, ALL parents invest in their kids' success
Categorically false. Generic reader here, and I grew up in an abusive home with parents that could literally not have given two shits about my future, success or emotional well-being. For you to assert that they ALL do this is either an incredibly sheltered or willfully ignorant point of view.
The government gives you $300 and makes sure that enough healthy food is available for those $300. You don't get $300 worth of food. You get money. Cold hard cash. And the option to buy cheap food from the government.
Companies can also make cheap food targeting those $300, and I'm sure there already exists non-government government cheese.
About education and healthcare. The government just needs to provide the bare minimum. Broke an arm? Goverment will cast it. Still crooked? Get in the wait line or go work for money and get an insurance or pay for the surgery. Want a better education for your kids? Homeschool if you can, or just work for more money and pay for one.
> And the option to buy cheap food from the government.
But then why do you need this at all? There is already food available in the market. If you have $300 you can buy it. There is nothing the government needs to do other than give you the $300.
> The government just needs to provide the bare minimum. Broke an arm? Goverment will cast it.
There is a pretty good argument that the local government should provide emergency medicine for the same reason they provide fire departments -- you can't choose a provider while you're bleeding out. But most medical care is not provided under emergency conditions.
> Want a better education for your kids? Homeschool if you can, or just work for more money and pay for one.
But that's the problem. The government takes $10,000 from you and then gives it back if you use their schools. If you want to use your school and it only costs $8000, not only do you not get the $2000 back, you don't get any of it and end up having to pay $18,000 for what should have cost you $8000. So your school doesn't just have to be better than the government's school, it has to be so much better that it's worth paying twice. There is no legitimate reason to impose that requirement instead of allowing people who don't use the government's school to get back the money they saved the taxpayer.
Leave it to capitalism to inflate UBI out of usefulness. Let the market compete with the baseline, never replace it.
> you don't get any of it and end up having to pay $18,000
Well, supply and demand should work here, right? Isn't the market the mythical machine of just prices? If the market won't pay taxes + $8,000 for private school, there will be no schools for that price. If it does, it is worth it and you'll pay.
I'm very confident that all this quarantine will do is show the world that disrupting the market won't break the world. The world will just adapt. It should be the same with UBI.
UBI could just be a government guarantee that a citizen will never become homeless/neglected because of lack of work(by any cause, be it skill, opportunity or mental health). It's the new baseline.
"Losing everything" now would mean just going back to surfing the web and eating government cheese in some cramped apartment. Not homelessness, starvation, abuse and neglect.
> Leave it to capitalism to inflate UBI out of usefulness. Let the market compete with the baseline, never replace it.
Okay sure, but that's probably what would happen. So what do you do when the government tries to sell food and not enough people buy theirs for them to stay in the black? They'd have to raise prices to cover fixed costs and then have even fewer customers. Presumably once the price was so high they had literally zero customers then you could shut it down?
> Well, supply and demand should work here, right? Isn't the market the mythical machine of just prices? If the market won't pay taxes + $8,000 for private school, there will be no schools for that price. If it does, it is worth it and you'll pay.
The problem isn't that private schools aren't worth $8000, it's that they aren't worth $8000 more than public schools. Which leads people to send their kids to public school and waste money (public schools cost $10,000 instead of $8000) in order to get something worse (people don't value private schools at $8000 more than public schools but do value them at $2000 more).
> "Losing everything" now would mean just going back to surfing the web and eating government cheese in some cramped apartment. Not homelessness, starvation, abuse and neglect.
The UBI does that without the government providing anything but the money. If you have money you can buy food, housing and internet in the market from anyone you like.
> They'd have to raise prices to cover fixed costs and then have even fewer customers.
That's the part where government officials do their job and figure the best way to solve this. Subsidize regional staple foods, community farms, fix prices for some type of foods... The government doesn't actually have to have the food in warehouses, it only has to guarantee that you'll be able to buy healthy X/calories a day with those $300.
Maybe put out a weekly menu, with sources of cheap food?
For UBI to work as intended the government has to act as a guarantor that you'll be able to buy everything that UBI was meant to buy. Or else big daddy capital man will just find a way to consume those pennies and UBI becomes UB-bye.
No matter the amount of taxes, profit will still exist. The rich will still be rich. The rich can still do what they do. The difference is that they can't take from the poor. They have to do what capitalism really is about: provide value so that the market will pay you.
The government has an interest in long-term worker productivity, to increase its tax base. So what possible economic incentive would a government have not to return an injured worker to full productivity? Not taking investments like these is actuarially throwing money away.
Capitalism is just worse at providing universal services. Private mail can’t compete. Water is provided by private industry at rates thousands of times more. Could you imagine the harm caused by fire fighting becoming a protection racket?
Infectious disease is like fire: not a moral choice, it just spreads from person to person. I would be happy with my taxes doubling in exchange for getting sick less often, because I could surely make it up at work.
Fun fact: government cheese actually used to be pretty good, because it was made and stored in a cave the government owned. It turns out that caves are pretty close to the ideal place to make cheeses, so the government’s stuff wasn’t bad!
This feels like BS. Sorry! K12 is free. There should be no problem expanding to college and beyond. Also, see no reason to not have a good universal healthcare that is detached from your employer. These are smart ideas worth pursuing.
The cliche that total scientific socialism sounds great in theory but doesn't work in practice actually applies far better to laissez-faire capitalism (scientific socialism doesn't even look good on paper). Your arguments against free education and universal healthcare sound clever apriori, but they are completely at odds with the evidence. Countries with universal healthcare and robust public school systems invariably have better outcomes on both fronts.
No, you are describing a European social state like France (or where they would like to get to). This is anything but UBI.
1) UBI should be cash, the consumer chooses how to spend his dollar, giving him/her control, and keeping markets somewhat efficient.
2) It should be more like a dividend. We are all shareholders in USA inc. and get a percentage of it's GDP handed back to us. Not more bureaucrats and policies to decide what to funnel where.
I'd be curious to see it play out in a smaller country for a few years. The U.S. is a big place to gamble on it.
No one is saying flip the switch for 328.2 million, I know that, but at the same time it would be best to do an MVP on a smaller scale with, say, a population of 5 million and then learn and iterate from there.
Even when testing with 5 million though, you often have countries of that size having more of a shared culture that's tighter knit, such as the Nordic countries.
Perhaps somewhere like Singapore or Hong Kong could be a test. But there's so many variables again between so many countries. Perhaps a test case could be the whole state of Colorado, but then you have border permeability issues...
One of the problems with UBI on a small scale in the US is that it’s difficult to study the macroeconomic effects that people are so worried about. The studies on direct cash assistance in terms of social science are rather strong evidence in favor of what left leaning proponents claim. The reservations typically come from the American right which is more of a Social Darwinist party these days than a conservative one, which is closer to the Reagan Republican era GOP.
We probably need tens of billions of dollars to pilot UBI properly in the US across borders and to help setup the infrastructure to distribute the funds. But compared to another missile program, the social good of such a program is undeniable. Which is probably why it’ll be rejected in today’s hell world US politics.
One point to consider is that once UBI is rolled out, it can never be taken back, even if it is disastrous from a bureaucratic, economic, or social standpoint. I think the success of UBI is heavily dependant on the details of how it is funded and paid out, and getting people to decide on what the best method is will be more difficult than getting it accepted.
Even if it works brilliantly in other places, you'll still have a big part of the US saying "it'll never work here, we're too different" etc. Same arguments as the metric system that's been great everywhere for such a long time.
>Same arguments as the metric system that's been great everywhere for such a long time.
The biggest argument against the metric system is that it would cost trillions to retool all factories etc. to metric.
Secondarily, countries like Canada and the UK aren't 100% metric and use a weird sort of Frankenstein system (i.e. Brits measuring body weight in "stone"). And if anything that's worse than one or the other
One (edit: another) problem with that thinking is that the U.S. is a uniquely capable financial entity with an associated population, while your other examples are merely political entities.
To a certain extent we have an opportunity to experiment now. Might as well learn what we can.
Andrew Yang had the right idea with the Freedom Dividend. That's a smart way to frame it, and Alaska is an example of it working with an annual payout to residents ("Permanent Fund Dividend").
Based on what profit? The U.S. economy is on life support and its printing $3+ trillion deficits with massive incoming unfunded liabilities and a shrunken worldwide economy. We are due for a world of hurt and economic pain for the next decade.
I tend to agree - it should be Universal Basic Stuff (UBS). Particularly if housing is in a low cost of living area, then everything should get cheaper through automation. High End Manufactured housing [1], MOOCs, Telemedicine, Consumer Products will all get cheaper. Entrepreneurs in SV can create robots to automate the production of these things so even more UBS categories can be added. UBS assurances will avoid the inflationary effects of UBI.
Housing has been made artificially scarce by the small property owners (homeowners) who have the most to gain from the situation. The government could make housing 3x-5x cheaper in the space of a decade by greatly curtailing the authority of local zoning boards.
I think the hope would be to avoid trying to build Universal Basic Stuff housing in areas of the high cost of living areas. Encourage everyone to not cram into the most expensive cities.
Nobody is advocating for the removal of free markets in the existing housing market. They are advocating for the increase in the supply through removal in the artificial scarcity created by bad policy.
I think the idea here is that UBI replaces all of the other government welfare programs, no?
What happens when someone spends all their UBI on whiskey or oxy and consumes it all and is then hungry? Should we keep food stamps around? Why can't we do that part (universal food stamps) by itself?
I don't think the all-or-nothing approach of UBI makes a ton of sense. We can do things today like more free or subsidized food that would work exactly the same way as it would under UBI, with potentially more buy-in.
> What happens when someone spends all their UBI on whiskey or oxy and consumes it all and is then hungry?
What's the difference between that and the current reality? Food stamps can be sold and bought on the black market in exchange for drugs and alcohol; people who want whiskey will be able to get it. Whatever money is spent on enforcing the "sanctity" of food stamps could just go to more people directly.
And this is really the main point: the administrative burden all of these social programs incur, especially in terms of labor and office space, means that a very large sum of money is going into these programs that will never be seen by the people who need help. Just give everyone a check and be done with it.
To answer your main question: the person who blows their UBI suffers. They will be hungry for the rest of the month, and not many people will have sympathy for them because they already got their check. All mentally sane people realize this reality, and that is enough to prevent them from spending their UBI poorly. For the minority of people who are sadly physically addicted to drugs, there can be social programs specifically aimed at recovery and rehabilitation. This was another one of Yang's policies. UBI would help here too: let's say you spend 8 months at a government funded rehab facility while you kick your addiction to meth or heroine. At the end of the 8 months, you have $8000 waiting for you - to go forward, get a job, rent an apartment, and rebuild your life.
This is much cheaper than a bloated social program that ties your aid to measurable checkpoints, like how you have to prove you're looking for a job in order to keep receiving unemployment. Under UBI, the Fed just runs some script every month to raise a double somewhere by $1000; under unemployment they have to hire people to process your application, approve/deny it, review your weekly application submissions, hire someone else to distribute the money, hire a manager for all these people, pay an office to give these people a workplace, pay pensions and benefits for all these employees, etc.
If that’s the core argument for UBI i.e. it’s far more efficient, why do such proposed initiatives come with significant tax increases on the population? Your analysis should theoretically support a net decrease in spending on welfare (hence lower taxes) or best case, no additional increase. You would have a lot broader support if UBI wasn’t tied to egregious tax proposals like a wealth tax.
> If that’s the core argument for UBI i.e. it’s far more efficient, why do such proposed initiatives come with significant tax increases on the population?
This is really just a framing issue.
The way existing programs work, you get $12,000 in food stamps and housing assistance and student loan interest subsidies etc., and then they phase out at higher incomes.
With a UBI, everybody gets it, unconditionally. The "phase out" is taxes. You get $12,000, but by the time you've made e.g. $60,000/year in income, you've paid $12,000 in taxes to fund the UBI, and it cancels out. Opponents paint this as you've paid $12,000 more in taxes, but really it nets to zero. Meanwhile the person making $80,000 might "pay $16,000" in taxes, but it's really only $4000 because they still get the $12,000 UBI.
It's the same as having $12,000 in benefits which phase out below your income level, except that the accounting is much clearer so that you can easily see what the true marginal rates everyone is paying are, and you can't accidentally create ridiculous marginal rate cliffs by having independent programs phase out in the same place.
I’d guess that’s where the 5 million from Dorsey comes in. Figure the dollar amounts for replacing certain services. (I didn’t read the article, appologies If I’m way off.)
> why do such proposed initiatives come with significant tax increases on the population?
This depends on your definition of "population." If you consider billion dollar multinationals as part of the population, then yes, there are significant tax increases. You mention a wealth tax - first off, that's not a Yang policy, and I'm not aware of any prominent politicians pushing a wealth tax and UBI at the same time. However even if we consider Elizabeth Warren's wealth tax, that only kicks in once you start making over $50M / year, and there just aren't many people doing that. Is it really a significant increase if it only targets a few thousand people out of 330 million?
> Your analysis should theoretically support a net decrease in spending on welfare
Not exactly. It supports a net decrease in spending on welfare administration. Plenty of people, especially those leaning right-wing / libertarian / "small government", absolutely loathe the idea of useless government jobs, even though they would agree with purpose of the program (i.e. feeding the homeless, paying out unemployment, taking care of the elderly, etc.)
Even though spending would go up (although not really on the individual level, as AnthonyMouse points out), the political popularity of UBI would far surpass that of any individual social program, ensuring that it stays around for a long time and remains untampered. We are finding out how critical this is now, where states like New Jersey ended up having garbage unemployment programs due to ineffective management and states like Florida purposefully made applying for unemployment as difficult as possible to dissuade people from trying (to make their labor force numbers look better). The only social programs that have this "legendary" reputation among the public that protects them appear to be Social Security and Medicare: nobody can run and win on a platform aimed at destructing either. Destructing UBI would also be very difficult: people tend to get very angry when you promise to pay them, and then don't!
> "What happens when someone spends all their UBI"
I think that's the most important question.
I believe the story is that one will abuse whatever welfare they get. Whether it's stamps, credits, services or money.
Here in Australia they've been trialing a cashless debit card to control what people spend their welfare money on. Somehow, it's still costing _more_ than just giving people money and the recipients aren't happier either. Some are using the card to buy things like batteries and re-selling them to then buy their drugs and alcohol. So there's money spent to restrict the money, but the money is still abused. So why not just give them the money?
In the end - money is money. Poverty is literally only solved with money. Surprisingly, the cheapest and easiest way to solve someone's poverty is to just give them money. If they abuse it? Fine. They were going to do that anyway.
That's a big statement, with a lot of evidence against it. I recall an experiment where a homeless man was given $100,000, and was back on the streets in no time.
The idea that you "solve problems with money" seems to be an American disease. That we just haven't pumped enough money into the machine to make it work.
Homelessness and poverty are big, complex problems. Money is likely part of the solution, but so is education, and we aren't going to fix that with Yet More Money -- seriously, the US spends an insane amount on education to receive incredibly poor results.
> Surprisingly, the cheapest and easiest way to solve someone's poverty is to just give them money. If they abuse it? Fine. They were going to do that anyway.
I agree with you there. All the efforts to curb "abuse" have been an absolute waste of time.
The psychology of a large one time payment versus a passive, smaller one is absolutely immense and should not be equated. Native tribes have oftentimes given their youth large payments that get spent on expensive consumer goods that wind up back in pawn shops, but UBI experiments in Kenya and in low income areas around the world have shown dramatically different results with the hallmarks of upward mobility presenting (risk taking, lower stress, future orientation, etc.). Lottery wins are nothing like a permanent trust fund that pays out if you stay out of jail like in Yang’s UBI.
I read somewhere around 80%+ take the lump sum about 12 years ago. Given the risks of inflation over 25+ years it isn’t a bad idea. Most lottery winners get accosted by family members or spend like crazy with their money and wind up broke in the end. However, a great deal of them do at least take care of their health at least (getting teeth fixed was common). A mental trap of scarcity makes it difficult for the perpetually poor to think of money as nothing more than something to be spent rather than invested, but even here the HGTV dream home winner around 2007 sold the house to create... a construction company, which went bankrupt quickly.
Financial literacy can be taught over time though similar to helping people diet and control portions.
So what if someone spends it all on whiskey or oxy? They're maximising their own preferences. If they were addicted to alcohol, sudden withdrawal can kill.
One of the big reasons for UBI is the belief that an individual can better assess their own needs and wants, and procure them more cheaply than the government.
This is partly a moral/philosphical stand - the tension is between giving individual freedom in the form of money, or giving freedom via paternalistic methods where the government decides what is best for you. It can be argued either way.
I do agree it would be wise to have systems in place to trickle the money in daily instead of monthly - this would help your concern of people blowing all their money at once (but not prevent them spending on what was most important to them).
I also think that just UBI will never be enough - there is a place for targeted government support - healthcare, addiction (part of healthcare), mental health (also part of healthcare).
I agree very strongly with you, but I don't think that's where the parent poster was going.
Imagine we have a UBI, and we do all kinds of other smart things -- end the War on Drugs, establish Bismarck-style national healthcare[1], all that.
Let's do a thought experiment.
What happens when Alice blows all of her UBI on Lady Lee Vodka and Oxy. Nothing left for rent, food, the rest. Nobody else in the picture to help: no relatives, nada.
If we look at UBI as the only social assistance program, Alice dies on the street.
That's the reality, and we need to accept that.
Alternatively, we would need some sort of "backup" reserved for people that are not capable of caring for themselves.
Maybe something like restarting the mental hospitals that Reagan closed in the 80's after Geraldo -- and the rest of Our Friends In The News -- ran wild with the scandal of how awful those government-run mental hospitals were, with the end result being that a bunch of mentally ill folks got chucked out on the street.
Now, I don't know what the answer is. I really don't.
My concern is that I see a lot of people talking up only the benefits, and not in any way addressing the failure cases.
[1] Yields better results than single-payer, and is better at controlling costs.
I actually agree with both you and the parent poster - this is a real problem.
My position would be that you still need assistance programs as well as the UBI for people like the above, but I'd treat it as a health issue rather than a poverty issue.
I think this is where you really do need a paternalistic government for people who need the guidance, but it should be the exception, not the rule. Let's respect peoples choices for themselves and only step in if necessary.
I'd argue that Alice is either addicted or mentally ill, and supported living facilities or similar would be the way to go. She would still be entitled to her UBI, which would be her route out of the system once she no longer needs to spend it on drugs.
So I'd say that UBI will never completely replace all government programs, but it should be the default and go a long way to reducing the need for existing programs.
If I were implementing it, I'd start with a low amount (well below the cost of living) and increase it over time. I'd leave the current support programs in place. The current programs are means tested anyway, so the hope would be that as UBI increases, use of the current programs would reduce, and we would have time to reorganise them as needed.
This would also give us a chance to measure the effects and get real world data as to the impacts on society and government incoming/spending.
I guess the real question would be how much it would all cost. My gut feeling is that short term it would decrease productivity as people wouldn't feel the need to work so hard, but long term it would increase productivity as people will be able to invest more in themselves.
Alice could get a job and then lose it all on vodka and oxy. I don’t see why UBI needs to ensure that she doesn’t do foolish things with her money.
People are going to make bad decisions, unfortunately. You can’t live in a free society if you don’t let people make unfortunate, bad decisions that harm themselves.
If you think all people should be protected from their bad decisions then you’re basically sliding straight down the slope into totalitarianism.
In a free society, some people will make bad decisions and their lives will be miserable but hopefully many more will make better decisions.
In the course of their self-harm though they also tend to damage society. The starving addict doesn't just lay down in the street and die. They beg and they steal because they're desperate. They rip copper out of buildings while just harming themselves. And maybe eventually they're arrested and live off the state anyways (at much increased prison rates).
How far do you let them sink before you need to step in.
Yang’s UBI was never intended as a replacement for a safety net which was gravely miscommunicated / twisted by our outrage media dynamics. What he’s advocated for are completely universal programs without means testing that build on top of UBI as a presumption such as his (somewhat weak, yes) disability program. His entire thesis of the economy is that people both rich and poor are suffering enslaved to a dehumanizing economy that ironically destroys human potential and suffocating itself (the very opposite of one trend of capitalism in the past few hundred years) and destigmatizing assistance across all lines is important toward resolving the human toll politically.
"One of the big reasons for UBI is the belief that an individual can better assess their own needs and wants, and procure them more cheaply than the government"
Perhaps, but many of the major problems we have today are tragedy of the commons situations, and that's precisely when we need government to step in, not just leave it up to individuals.
Food stamps have similar problems to money. Food stamps are sold or the items purchased with food stamps are. The resulting money is used to buy oxy and whiskey. Food stamps are just another currency with a terrible exchange rate.
Appoint a guardianship or place them in a group home. Addiction isn't going to be solved by food stamps. Give them treatment and if they keep relapsing, then declare them incompetent.
> I don't think the all-or-nothing approach of UBI makes a ton of sense. We can do things today like more free or subsidized food that would work exactly the same way as it would under UBI, with potentially more buy-in.
Who is suggesting that this is the final form and cannot be ammneded? If anything, I think Dorsey just did what should have been done with the first wave of the vast amount of Campaign funds the 'Yang Gang' raised and actually create a through analysis along with coherent and cogent overview on the means by which it would initially be deployed with all of its cost-risk benefit analysis.
At which point it could then be vetted and and scrutinized via public discourse and eventually be further refined after some changes or be deemed worth a first trial process. I dislike Democracy as a system of governance on just about every aspect, but perhaps this is one of the few usecases it may have as we transition to this model at scale and will require the participation of everyone for it to succeed?
But your position is like following the fallacy that software is 'done' once its beta has been released... that's just not how this works. And the maintenance of this deployment is just as important, or more so depending on its application, as the creation of its earliest iteration.
You're a Cryptocurrency/Bitcoin person, don't you think Aurora was worth it, even though it failed? It showed us what had utility and what seemed sound in a theoretical sense and accepted via convention only to have it be stress tested and fail in practice.
As for subsidizing food, even further no less, is to undermine not just how broken it is but also how one of the biggest reasons the Global Ag/Food Industry not only relies on a system that often yields a near destitute farmer, but is also ultimately built on an expendable and often mistreated and undervalued labor force.
Just look at how meat packer workers are deemed expendable during COVID but required to remain at work due to being an 'essential worker' and a critical link in the Supply Chain, the deaths be damned. We can always get another low skilled, desperate worker to replace them.
You must understand that peril exists for a farmer everyday, getting injured on the job is the norm, working with those (ever compounding) injuries is enshrined within their very culture and it seems near exploitative when properly viewed for what it is as bankruptcy and suicide are often the alternatives to not meet one's obligations in that Industry (see wide scale suicide in Indian Cotton farmers in the 2000s, and the displacement and disenfranchisement of small farmers in the US in the 80-90s caused by large Big Ag-tech, Drug companies and Massive Food consortia).
Food has value that far exceeds its current fiat denominated Market valuation, it is specifically because Governments all over the World subsidize it so heavily (in various ways) and in turn obfuscate the externalities of not just growing a crop but also getting it to Market that it can and often forces a farmer to operate at a net-loss. If you allowed for freer access of Markets that create a means for producers to exchange their products with chefs/restaurants directly as well as the end consumer you'd have a more functional Market based form of price discovery. I should know, I've been both.
So I can tell you right now from both a Biological/Ecology sense as well as a Farmer POV tomatoes will NEVER truly be a $0.99/lbs product if properly priced, they are extremely heavy feeders that will require large preps and amendments to the soil upon planting, and ideally crop rotation as well as lots of labor during and after harvest, but also materials to trellis, prune, the labor costs for pest prevention, weeding, storage, transport etc...
In short, less subsidies could actually create not just more accurate pricing (as food prices are at very skewed Historical lows) but potentially also a greater supply overall as the incentives for growers/producers have been created to profit from a newly created venture if they can deliver to Market a desirable product at a desirable price.
> * Government basic food package - daily (1500kcal): $300
I agree with UBI, but basing it on only 1500kcal will give a slight advantage to smaller people over those of us who are a bit more, er... calorically expensive.
Maybe at least make it 2000kcal to hit the median calorie requirement.
Everybody should also have a computer and a fast internet connection to access knowledge.
People should also get free books.
People should also get free fitness coaches, so they can be healthy.
People should also be entitled to a job, so they can have a sense of purpose.
We can spend days thinking about what should be a right that everyone should have for free. The only problem is figuring out who should pay for these things and what’s the correct price of things without a market
Even at $1500/mo, this will cost at least $150B/mo. That’s almost additional $2T/yr. This is still not taking in to account free medical care and education. How do you think govt will pay for this? I think UBI is possible sometime in future when US GDP grows by another 50% and if somehow not all gains gets concentrated to top 1000 richest people which ironically UBI proponents like Dorsey, Altman etc are part of.
Remember that you get the money back. You're sitting there in the middle saying, $150B/mo? I don't want to have to pay that in taxes. I'd have to pay like $1500/mo more in taxes! But then you'd receive $1500/mo. It cancels out, so it doesn't matter.
You're really only making net transfers to the bottom half, and even most of those aren't for the entire amount. Someone at the 25th percentile gets $1500 but would be paying $750 in tax themselves.
Meanwhile it replaces what the people at the bottom were already getting in food/housing/other assistance. So it really "costs" almost nothing. It may even reduce costs, because now you don't need a wasteful means testing bureaucracy to process and determine eligibility for dozens of separate government benefits that no longer exist.
That looks like very bad math. If you are paying $1500/mo in taxes, you are not in majority. And if you get back that money then who is really paying government bills? The UBI is additional expense and needs to come from extra income to government. I can see the argument that top 1% should pay for it by taxing the hell out of them. Unfortunately that back fires as we have seen in heavily taxed countries and still I don’t think even those extra taxes would be enough to cover it.
A weird nit pick, the GP commenter was just using an easy-to-conceptualize number. Let's use real numbers:
In 2018, the household income quintiles were as follows[1]:
Lowest quintile mean: $13,775
Second quintile mean: $37,923
Third quintile mean: $63,572
Fourth quintile mean: $101,570
Highest quintile mean: $233,895
There were about 159M employed persons in the US in the most recent high[2], about 50% of the US population. We want our UBI to cover everybody.
To make this simple, because quintiles comprise an equally populated group of people, let's imagine that instead of there being ~32M people per quintile, that our nation has 10 people, where 5 people don't work, and each of the remaining 5 falls into one of the quintiles.
If we wanted to define a UBI of $18,000 per person, we need to somehow come up with $18,000 * 10 == $180,000 to distribute to everyone equally.
If we fund this progressively, each individual would have to pay:
Unemployed #1: 0
Unemployed #2: 0
Unemployed #3: 0
Unemployed #4: 0
Unemployed #5: 0
Lowest: $8,000
Second: $12,000
Third: $18,000
Fourth: $33,000
Highest: $103,000
Total revenue: $180,000
Then consider that everyone here is receiving back 18,000 under the UBI. The highest quintile earner’s net take-home is, thus 233,895-103,000+18,000 == $148,895, which effectively renders their net tax rate approx 36%. If you run this breakdown across all quintiles:
You'll notice that the median worker pays nothing, net-net. They pay about $1,500/month, and get back $1,500/mo. The bottom 2 will get back more than they pay. The top 2 pay a tax rate that’s comparable to today’s.
The 5 unemployed persons all get $18,000, and because the lowest quintile still ends up with more than that after their taxes, there isn’t a disincentive to work.
We can play with different levels of progressivity and generosity, but the idea is the same. We can scale up from single-person quintiles to million-person quintiles, but the percentages don't change.
Years ago, proponents of UBI claimed that it was a replacement for all other forms of social welfare. Now it appears by most proposals to be yet another means-tested add-on.
Because replacing all other forms of social welfare is completely impractical from a political standpoint in either the short or medium term. It would involve huge societal changes that would require most people to rethink how government works. That isn't something that would happen quickly. If you are a UBI proponent, you can either spend multiple decades fighting that fight before you see any progress or you compromise on a more feasible implementation.
It's also just not a good idea. Social welfare programs act as single buyers/negotiators and can exploit economies of scale and collective bargaining to deliver reduced costs. Something that individuals can't do.
Giving everyone their own money for, say healthcare costs, and having them navigate markets alone... achieves exactly the kind of divide-and-conquer that price-gouging pharmaceutical companies and hospitals have wet dreams about.
The only good UBI supplements, but does not replace, most existing social welfare programs.
Replacing existing programs just creates an open season for vultures.
Why would people making individual purchasing decisions tend to coincide with prices going down for essential goods like food and clothing, but not for healthcare?
Because the largest chunk of healthcare delivery expenditures is for chronic and severe or emergency procedures for which people have no ability to shop around for due to the time sensitivity of the issue, or because the complexity and presentation of their health issue is not understood enough to put any price on.
For example, you go into the hospital for abdominal pain, but it turns out that you need a massive orthopedic surgery to fix a congenital issue that only 2 surgeons in your area can perform (true story). Or you are a severe diabetes or lupus sufferer who has routine hospitalizations for a variety of infections you get at random due to their underlying condition. Need a tooth filling replaced? Of course, shop around. Need emergency dental surgery because you had traumatic facial impact playing soccer? Not so much. Emergency treatments to sick geriatric patients to extend their lives by weeks and months: also very expensive.
Routine doctor's office visits to remove a wart from your foot, or diagnose a sore throat, which you can shop around for, are not where the high costs comes from.
> Routine doctor's office visits to remove a wart from your foot, or diagnose a sore throat, which you can shop around for, are not where the high costs comes from.
Think of UBI as another lever in a countries' monetary and fiscal policies. In fact is it completely insane that this is not already in the mix from a purely pragmatic perspective.
it...is? what else would you call sending stimulus checks to nearly every American? however shortlived, we effectively had UBI, helicopter money, or a negative income tax, whatever you wish to call it
It's an authortarian dream. Got a fine? Just deduct it. Putting people on the take gives government significantly more leverage over them. Just wait till China pairs it with their social credit score.
the other thing is, without proper price controls (rent, basic food stuffs, transportation etc) business will look at it as a chance to jack up prices because "free money"
the other aspect is, no amount of ubi is going to cover huge medical costs that the current u.s system incurs, as well as higher education for those thst really do want to improve themselves and contribute
so (i think) ubi isnt a bad idea, but it needs to be coupled with other structural reforms and price controls to prevent being a huge potential diaster
> the other thing is, without proper price controls (rent, basic food stuffs, transportation etc) business will look at it as a chance to jack up prices because "free money"
I don't buy this argument. Businesses that do this would be leaving money on the table: namely the poor people that were outside of their total addressable market. Whereas before those folks would never have been able to provide revenue, with more cash in their pockets, they are now potential consumers. Increasing prices just maintains the same TAM for no real reason — you can make more revenue by serving the newly minted consumers.
The only good/service for which this breaks down is housing, for which there is a true supply scarcity — but even that ceases to be true in a regime with proper zoning reform (like Japan).
You can only keep the prices high with cartelization or true scarcity. Though removing subsidies (for things like public transport) can also raise prices. But our food supply is highly distributed. If one vendor charges higher-prices, others will take the opportunity to offer lower prices as long as they still can get the margin. We often debate various forms of market failure on this forum, but in the cases of functioning markets, supply and demand does indeed work.
If non-Indiana-carrots started to cost $40/lb, you bet some local farmers would switch to carrots. Right now they have existing investments and benefits of scale, but the right incentives switches that.
> our food supply is highly distributed.
I meant this in the sense of diversity if firms, not geographically. We've certainly seen consolidation with some of the bigger agri-conglomerates, and the trends are worrying, but we are nowhere near monopolization of the industry as a whole.
From Wikipedia:
> The 2012 US Census of Agriculture indicates that 5.06 percent of US farms are corporate farms. These include family corporations (4.51 percent) and non-family corporations (0.55 percent). Of the family farm corporations, 98 percent are small corporations, with 10 or fewer stockholders. Of the non-family farm corporations, 90 percent are small corporations, with 10 or fewer stockholders. Non-family corporate farms account for 1.36 percent of US farmland area. Family farms (including family corporate farms) account for 96.7 percent of US farms and 89 percent of US farmland area;[17] a USDA study estimated that family farms accounted for 85 percent of US gross farm income in 2011.
There are plenty of issues with our food supply system. But I don't think we need to worry about monopolies raising prices unilaterally. The OP thought we needed price controls to keep food costs low. I don't think this in the case. The problems are instead on the poverty side of the equation. Who has the money to pay for our (generally pretty cheap) food? The are too many that are food insecure, not because groceries are expensive, but because they are in poverty.
This is only if you assume that a market saturated by advertisement is (properly) "functioning".
While advertisers like to claim that they are merely improving distribution of information (bringing us closer to that mythical "perfect information" assumption about competitive markets), in practice they mostly do the opposite.
That is, taking advantage of cognitive biases to sell people things they don't need, increasing net market participant irrationality.
Which is why Coca-Cola, which has decisively won the advertising war as much as a corporation can, can jack up prices willy-nilly and people plagued by cognitive biases don't switch to Pepsi.
US government injected about 3 trillion worth of liquidity into the country since the start of the coronavirus, similar to how UBI of $1000/month to every single adult would cost. And did you see any price rise?
Right now consumer spending is way down because people can't or won't leave the house, and millions of people are unemployed. Injecting 3 trillion into the economy in normal circumstances would of course have a different effect.
What's wrong with competition as a price control? Isn't that the basis of capitalism? If someone else wants to raise their prices because "free money" then I'll just keep my prices the same and steal all their business.
I think there has been growing momentum behind the idea that some needs aren't met best by a market approach. One of the ideas behind UBI is that people can figure out what they need, and just spend the money.
But that doesn't really solve the needs that may not be optimal for a 100% market approach - probably the big two being health and education.
> America just needs zoning policy that isn't totally broken (i.e. geared towards the rich). Japan has been doing a pretty good job.
Compounded by nearly 2-3 decades of astonishing population decline, and a 'freeter' type lifestyle for all but the most 'privileged' youth that also helps in reducing access to desirable housing, too. Personally speaking had Fukushima not occurred, I think I would be owner and chef of a Kaiseki kitchen at an Onsen Ryoukan in the Country-side by now given how affordable and plentiful those abandoned compounds are all over Japan.
NIMBY is real and gets the nouveau riche up in arms and drives them out to the polls and releases purse strings for lobbyists like nothing else, but to be entirely honest as a multi-generational Californian: they can keep the Valley.
Its atrociously managed, its old, over-crowded, needlessly expensive and stricken with horrible politically ambitious and greed driven shortsightedness, the homeless problem is a glaring symptom that has clearly proven that neither money nor legislation can solve its core problem.
My family up there divested from their businesses and sold their homes in the area in mid 2000s to move to the South, and while its not perfect it shows that there are is no better way to show your opposition to a system then to just leave.
If many former office jobs and school classes (K-12 as well as University) can be optimized to be done remotely, then I will reluctantly accept that the COVID situation was worth it. Having a population density like seen in New York is not just undesirable (for many reasons) but also a biological hazard. Disruption had to come the housing situation, and I think this could be just as good as anything else in trying to alleviate the damage caused from having remained in an archaic system created to benefit the Land-owning class for doing nothing but being born at a time when housing prices as well as overall Economic health and sound wages were accessible to most in the US.
These land owners don't create wealth, they just consume it off the backs of people far more risk-prone than themselves that still have Utility in the Labor force, and we're thinking they'll ever allow for implementing something that is against there interests? That's a deluded panacea that won't ever be achieved using orthodox methods, like voting for fairer zoning laws.
Current proposals have not been written by long-time proponents of UBI afaik, it's been repurposed and repackaged, rather badly, by political opportunists who now see the need resonate well with electorate during the ongoing COVID-19 crisis?
The successful ones create coalitions, certainly! It's also a good argument against painting people who seemingly agree with too broad a brush.
But in this case, I remember a coworker of mine who a while back created an advocacy org for UBI. He's a socialist. I specifically remember him reaching out to work with libertarians and getting them in leadership roles. (Not sure if this org still exists.)
It definitely should. But one real problem with bureaucracy is that it tends to go to great lengths to justify itself. It also self-replicates like a virus.
So, in practice, I imagine there would be lots of offices and agencies, services and interdependent liaison offices and agencies along with the requisite inspector general offices and agencies and the necessary committees, subcommittees, and working groups that would have to be created.
In the land of government bureaucracy, the rapidly increasing fixed-pie of current and (hopefully) future taxpayer revenue gets divided up into more and more slices every day.
I think that was a major point, too, because a significant portion of the money available for social assistance is spent on deciding who can get it and fighting 'fraud'. A blanket universal give is a lot easier.
However - I've always been puzzled by how each person in the US doesn't have a public, singularly identifying number assigned. Doesn't that make even an 'universal' basic income hard to define? How do you guarantee that every person gets one, and only one, BI check every month? How do you find out who is dead and should stop getting one...?
From what I know, SSN are used for stuff like that, but there's all this weird stuff about it (althoug I admit my knowledge of it comes from a half forgotten CGP Grey video, and that the impression that stuck)
Social Security's admin costs are ~.7% of the program's budget, eliminating admin overhead, means-testing, and fraud fighting won't get you many gains:
I'm not in the US, so I know little about its social security programs. But isn't Social Security is one of many?
Also this paragraph from the linked article suggests that the 0.7% figure does not include means testing:
Indeed, universal participation and the absence of means-testing make Social Security very efficient to administer. Administrative costs amount to only 0.7 percent of annual benefits, far below the percentages for private retirement annuities. Means-testing Social Security would impose significant reporting and processing burdens on both recipients and administrators, undercutting many of those advantages while yielding little savings.
Every single proposed UBI was either insufficient to cover people's basic needs, obscenely expensive, or both. That's what happened. There simply isn't enough tax revenue, even if you seized 100% of the wealth and future earnings of the wealthy, to provide a basic income sufficient for most people to live off of.
Also a lot of proposals would have ended up giving the poor and elderly less than they get under current programs. And the claims of reduced overhead wouldn't have made much of a dent in things either, IIRC admin costs for Social Security are less than 1% of what the actual payouts are
> Every single proposed UBI was either insufficient to cover people's basic needs, obscenely expensive, or both.
I don't think that's true. In a really simple model imagine UBI of $2000/month given for everyone. Then imagine increasing income taxes by $2000 for all employed workers. Then the true cost would be difference between current unemployed benefits of the UBI, which shoudln't be obscenely expensive (in normal economic times). Employed workers shouldn't care about the increased taxes because their take home money would remain identical.
That's of course a very simplistic model, but explains how you shouldn't just count the UBI amount times population as the cost.
But it wouldn’t be $2000 per worker, as you’d have to get enough tax money to pay the people who aren’t working that $2000. If I make $6000 a month and you make $0 a month, and then we both get $2000 a month from my taxes, how can my take home pay remain $6000?
You would get an increase of $2000 in the form of UBI, but increase in taxes of $2000, so your net would remain the same. It's assumed tha UBI would replace current unemployment benefits. Of course UBI can be expensive if the amount is too large.
Well, it would be you and several of your peers making $6000 a month, one or two people making an order of magnitude more per month, and a whole heckuva lot of people making $3k-$4k a month, contributing a progressively bigger portion to the one person making $0. So, no, you don't hang on to the full $6000... But then you may get it back from taxing the capital holdings of those people who own exceptionally large amounts of private property.
People studied the UBI idea and recognized the costs of giving money to everyone are so enormous that it's unworkable. That's there the means testing has come in to try to limit that.
Something more like a "guaranteed minimum income" where you can't have less money than what is required to have a good standard of living is a cheaper and more effective idea that accomplishes the same goals of ending poverty.
UBI is indirectly means-tested; if you make too much money, you end up giving back as much or more in taxes and/or partial UBI clawbacks than what you would get via UBI. This actually ends up working better and being cheaper than most alternatives (including the "guaranteed minimum"), because it's comparatively easy to structure a comprehensive tax system so that it minimizes distortions on people's behavior, and hard to design a means-testing policy to the same effect. The latter is especially true given the patchwork of social-insurance programs that currently exists. Giving cash can replace many of these programs, and making the policy a 'universal' one reduces administrative costs.
The universality doesn't just reduce admin costs, it also eliminates the "maybe I shouldn't get this really crap job because then I won't get to collect my unemployment" and similar mindsets that can be a result of means-testing.
It's actually a big bureaucratic problem to give people several thousand dollars and then demand most of it back later. Most people don't notice income taxes since it comes out of their paycheque. It would genuinely be tough problem to educate people to not spend their basic income, or to design a system where it's clawed back through paycheques.
> or to design a system where it's clawed back through paycheques.
It would be no different than e.g. the existing payroll tax, or income tax withholding. You'd just notice it as a reduction in your paycheck. And if your income is high enough, the UBI can simply be a tax credit.
> It would genuinely be tough problem to educate people to not spend their basic income, or to design a system where it's clawed back through paycheques.
We can use the system that we already have, that is, income tax. It has worked fine for quite a while.
No, it's an income tax which grows progressively with income plus a general refundable tax credit. So the overall tax liability goes negative for low incomes, and since the credit is "refundable" that involves actually getting money from the government. The general idea is sound, there's some difficulties involving ease of administration, e.g. paying the grant weekly or monthly rather than yearly.
No. A negative income tax is a well established principle. It can be implemented as a bracket, but it can also be implemented as a tax credit or in a fully progressive tax system.
Yes, I understand that. It is indeed far more common to hear the term negative income tax than with "bracket" at the end. I was giving an extra detail to distinguish the term from the truncated jargon the above poster appeared to misunderstand. (It is NOT a "negative income tax rate" but effectively a bracket that owes a negative tax liability thanks to the tax credit/UBI/call it mana if you want to.
So basically it's called a "negative income tax", but it's not actually implemented by multiplying income by a negative percentage.
In the model proposed by Milton Friedman, you start with an exemption amount, and a specific proportion of any unused exemption is refundable.
The first dollars you earn reduce your exemption, but at least they aren't taxed, until earnings equals the exemption amount, at which point you are getting no subsidy and your next earned dollar starts being taxed at the lowest rate.
The effective tax rate on those early dollars would be equal to the subsidy rate. For example, an exemption amount of $20k and a subsidy rate of 40% would mean earning nothing would grant you a $8k credit ($20k * 40%). Earn $10k and you would get a $4k credit ((20 - 10) * 40%). Earn $20k and you would get no credit and pay no taxes. But effectively your tax rate on the first $20k earned is 40% -- because you earned $20k and only netted $12k in additional income.
If instead you just give everyone $X, and just have the first dollar earned get taxed at whatever the lowest rate is, you don't have the same problem with regressive rates.
The idea of replacing existing social programs with cash handouts reminds me of Bitcoin's earlier days. Proponents were thinking of what it would be like if they were poor, and not what life is like for poor people.
It is not the case that you can reasonably just give large groups of people with histories of poor financial literacy cash as a replacement for food, shelter, or other necessities. Many people will make bad choices if just given money. That's why many of these programs were built this way: to ensure people can't spend all their cash and be unable to afford baby formula or rent.
Many experiments have been done that involve giving UBI-like grants (and even large, one-time-only cash grants) to people in extreme poverty. The money gets spent in sensible ways, by and large. Investing in one's shelter (e.g. replacing a leaky roof), paying for children's education or buying assets for a profitable business venture are extremely common choices. Regardless of their "financial literacy" (people in extreme poverty are hardly used to dealing with financials!) people seem to grok that they're getting something quite valuable, and are not inclined to waste what they get.
Why shouldn't cash be the benchmark when it comes to aiding poor folks? If giving food or shelter really is more helpful than just giving the equivalent cost in cold hard cash, that will be quite interesting. But let's see the proof of that.
They don't have the financial literacy skills to manage it properly.
I'm not trying to be unreasonably judgemental, and I don't mean things like bond rates or yield curves. Things like making sure you have enough dollars at the end of the month to make a rent payment. Making sure the check gets written so it actually happens. Keeping track of automated withdrawals and ensuring the number stays above zero with the timing of all of them.
This is not trivial at all for a huge chunk of the population that is served by social welfare programs. You can't just expect it to work out giving them cash instead.
I believe this has been debunked by previous UBI studies, Give Directly, etc..
The vast majority of poor people do just fine with money when given to them. The 1-2% who are addicted to substances or mentally ill will always need additional services, but why throw out the huge efficiency gains in just direct cash transfers to all because of the worry that 1-2% might waste it? The efficiency gains of a UBI vs. most means-tested programs is likely more on the order of 20-50%.
A similar argument is “would we give a UBI to billionaires too?! What a waste!” Yes, what a waste of 0.0000003% of the UBI!
> I believe this has been debunked by previous UBI studies, Give Directly, etc..
One shortcoming of the UBI studies I've heard about is that (naturally) they focus on settings that I don't have much confidence would necessarily translate to other settings like the current US. I can easily imagine the efficiency of UBI changing over time, let alone across locations, due to a plethora of factors. This isn't really a criticism of the studies (they're probably doing the best they can, and achieving good results on those is obviously a prerequisite), but rather of how much we can extrapolate from them and how much weight we can put in positive results currently. No matter how perfect their results, I'd totally expect people to be reasonably skeptical of their extrapolability (if that's a word) in the beginning.
If the rhetoric is solely around "government spending" then the perspective will always be that UBI is "too expensive".
But the money doesn't just vanish when it enters people's bank accounts. All of a sudden, banks have a lot more collateral against which to borrow and invest, by virtue of the fact that the bank accounts which store the UBI have money in them. People spend that money and it enters and moves through the economy. The government taxes it back out via sales taxes, income taxes, capital gains taxes, etc.
I think, in general, it's worth having an economy that keeps moving. If you let too few people have too much proportion of available wealth, the consumers won't have any to work with and your economy will be entirely dependent on luxury goods for a tiny proportion of the population.
A higher velocity of capital ~= larger economy, which is good.
However, a higher velocity of capital without commensurate economic value being created ~= massive inflation.
This is a potential risk for UBI, and one that small-scale studies do not cover. Ideally, the additional economic value would be greater than the face value of the capital transferred every year, but there is no guarantee that is correct (nor is there any reason they should even be on the same order of magnitude).
Implementing UBI on a national scale would be a grand experiment. Most grand experiments tend to fail with massive upheaval. I think for UBI to be adopted, you would need a plausible incremental strategy with a lot of safety checks.
Yes, taking things ad absurdum in either direction will lead to catastrophe.
The perspective of MMT is that government can and should tax out money at a rate that keeps the economy from inflating beyond the scope of our control, and inject it at a rate that sustains the velocity of capital. Making this perspective the dominant one in discourse, however, would require a lot more public trust in government before people got comfortable with the idea of governments taxing us for our benefit.
Well, in this case "ad absurdum" is pretty close to a reasonable UBI. A reasonable UBI (say $1000/mo) is going to be ~15% of the entire US economy "printed" every year.
The NPV of that dilution would be enormous, unless the economic value being created is very close to $1000/mo (or higher).
Consider all the government spending that currently goes to companies (tax credits, subsidies, etc.) and how that money further goes into people's pockets as (at $1000/mo, close to minimum) wage. I don't have hard numbers but this is probably not much different from the overall cost of UBI. All UBI does is cut out the middleman. Especially post-recession, many companies only survive because they run at a loss for a while and soak up investments to stay afloat. If we are to believe capitalists, we should structure the economy to discourage corporate grifters. UBI would do exactly that and replace costs that currently support the grifting behavior.
I'm perplexed by how often people assume that spending will only increase with the introduction of UBI, when there are many existing pathways for capital to travel that will become obsolete when UBI is enacted, and can be diverted to funding UBI instead.
> However, a higher velocity of capital without commensurate economic value being created ~= massive inflation.
This is a good point. Money maps to stuff and services. But there is ample surplus production (and unused capacity) in our economy.
Every year 40bn+ pounds of food is wasted at the retail level (on top of all the waste that happens before retail in production), while ~11% of the American population is food insecure.
Nearly every clothing company — H&M, Nike, Burberry, Eddie Bauer, and so on — destroys billions of dollars of unsold clothing every year in order to preserve their brand.
We have material abundance thanks to highly optimised mechanisation and more recently automation in agriculture and manufacturing. UBI can allow the poorest parts of society access the surplus that we would otherwise destroy.
Having an income (via UBI or some other mechanism) would help the poor, that is true (minus the caveat above about economic upheaval). Assuming that said income will reduce economic waste is not at all evident.
That's literally untrue. It's built on people spending money. If there is no trade, there is no economy.
This fetishism with "work" as a proxy for the value of the human life which performs the work is a very American concept with corollaries in only a couple other countries. This is not the norm and certainly not a healthy way to look at labor and the economy.
Money is a recent invention, and economies have flourished without it. Money facilitates trade, increases liquidity, and reduces friction in transactions.
> This fetishism with "work" as a proxy for the value of the human life which performs the work
It is not a proxy for the value of a human life. It is a representation of the value of the labor of that human.
Americans are very generous in voluntarily giving to charities.
Compensation is a representation of bargaining power. If anything, compensation for labor has an inverse relationship with actual value. Teachers get paid little despite educating future generations, sanitation workers contribute more to the public health than doctors but make peanuts, and stay-at-home parents nurture children and are paid nothing at all. Bargaining power is not value of labor.
We are paid what can demand and not a penny more irrespective of our labor's actual value.
> It is a representation of the value of the labor of that human.
By withholding economic power until someone provides "labor" as defined by the state, and leaving them embedded in an economy which requires money to survive, you are directly tying the value of the human life to the value of their labor.
> giving to charities
Interesting, probably has a lot to do with the low taxes and high amount of disposable income.
> probably has a lot to do with the low taxes and high amount of disposable income.
A young lady I used to know was the kindest person I ever met. She didn't have much, but would donate a few dollars to every charity that called. They had her number, and called her all the time.
She was the real deal, not one of those people who are only generous with someone else's money.
> you are directly tying the value of the human life to the value of their labor.
Oh baloney. Plenty of people will voluntarily give food to a hungry person.
If "plenty of people" can be organized to consent to giving up money, maybe we can organize some kind of centralized method to collect funds and distribute resources to those in need. We can probably set up something through the government for this. Come to think of it, shipping food around is a lot harder than just giving money to them to go buy their own. Why don't we make it so the government hands out money to everyone who needs it, so that we can coordinate the good deeds of many to serve the needs of many more?
I'm not aware of any social problem that has been adequately resolved by any organization, government or private. There's always someone who thinks it's not good enough.
There are 12 US cities that have achieved "functional zero" homelessness -- no chronic homelessness and no homeless vets.
The country of Finland has done the same, with a plan to reach absolute zero (nobody staying temporarily with friends or relatives) by 2022. Right now, over there, with 5.5 million people, 500 people don't have permanent housing of their own.
You said: "I'm not aware of any social problem that has been adequately resolved by any organization, government or private. There's always someone who thinks it's not good enough."
If you think that 500 people out of 5.5 million -- who aren't sleeping on the street, but have access to shelter and only lack their own permanent housing, with a plan to house them in the next two years -- is "inadequate," that's a you problem, not a "no social problem has adequately been resolved by any organization" problem.
> People studied the UBI idea and recognized the costs of giving money to everyone are so enormous that it's unworkable.
Not really. There are UBI models that are more or less zero cost - taxes are increased by roughly the UBI amount for employed workers, and for the unemployed the UBI would be similar to the unemployment benefits they would lose.
> What happened?
> Now it appears by most proposals to be yet another means-tested add-on.
"Universal" means not means-tested. That hasn't changed.
What happened is that those who promoted UBI in order to achieve their objective of dismantling the social safety net and reducing overall taxation and government expenditure lost interest in it for many reasons.
First, and most important, the UBI supporting right largely returned to the standard economic platform of the right, since the political changes in 2016 resulted in many of their goals being achieved, including the attacks on Obamacare and food stamp programs, and the massive tax cuts for the very wealthy.
Second, they couldn't really explain UBI to others in the mainstream right. Simply cutting the safety net to punish "lazy" people who leech off the system is, and has always been, an easier line to sell politically vs "we consolidate all the existing safety net expenditures, cut them by x% by dismantling the bureaucracy, and distribute the cash as UBI, for a net reduction in total expenditure". UBI is economics nerd stuff on the right, a clever scheme and experiment whose costs would be ultimately paid by others who were less fortunate - in the form of reduced overall benefits.
Those who were left supporting UBI (no pun intended) were those who see it as one tool among many needed to reduce inequality, not as a way to further reduce government assistance to struggling people. They believe the cost should be payed by greater taxation on the wealthy, and their support is rooted in their beliefs about what a more just society would look like. Their perspective was further bolstered by Andrew Yang's advocacy, and the measures being taken now due to covid19. Therefore their perspectives on UBI have become the dominantly heard perspectives on UBI.
Just happened to be reading about how the current stimulus checks are being used this morning. Perhaps its a bit of click bait, but interesting to ponder nonetheless. It does seem like using UBI to play in the stock market would not be the intent of UBI and be hard to prevent.
"Many Americans used part of their coronavirus stimulus check to trade stocks"
I actually think people putting their stimulus checks into the stock market is better than the existing QE system.
Why have the government choose which companies to bailout when they can instead bailout the people. Then the people can decide which companies are worth saving and which are economic glut.
I'm not making any morale or financial decision making judgements :) - I'm mostly pointing out that using your UBI to make stock market investments is not usually mentioned as a use case by UBI proponents.
maybe they got a reality check insofar this is possible for BI proponents. someone with (say) a broken arm needs more than a healthy person who is just unemployed.
Their are two main factions of UBI. On one side you have free market libertarians and conservatives that would cut social spending to pay for it. On the other hand you have a "progressive" version of UBI that is founded on Modern Monetary theory and would simply make UBI an addendum to social spending. Modern monetary theory holds that a government that issues it's own currency can never go insolvent. If you haven't heard of MMT I suggest you google the topic and listen or watch some material by Stephanie Kelton on the topic.
Edit:
With the corona virus "stimulus" people are getting a taste of modern monetary theory. They are starting to realize how little the nation debt matters and that what really matters is the result of the spending and the actions it invokes.
Some people are wondering why the stimulus checks are so small. I believe that if they were any bigger people might get used to the idea of living decent lives without economic anxiety thus the cats out the bag for the corporate big wigs, corporate democrats and republicans.
It might lead to a domino effect of a new standard of living and a new collection of cultural assumptions regarding money
Also, generally Andrew Yangs version of UBI would cut social spending and is not founded on modern monetary theory axioms.
Edit again,
I should mention Stephanie Kelton does not support UBI perse', she supports a federal jobs program but the economic assumptions still hold true.
UBI only makes sense in the science fiction world that Andrew Yang and other non-technical journalists think is somehow imminent. We still need people to make things. There are still guys hanging off the side of garbage trucks every day and people still pick fruits by hand. If no one does these things, you will starve and die. We cannot survive forever on financial engineering by bureaucrats and importing all our necessities from other countries that actually make things.
1) The "U" in "UBI" means that working another job does not stop you from receiving UBI, which means it may still make sense to do so if you want more income. UBI is supposed to be enough to live on, not enough to have everything you might want; there are at least preliminary results that show UBI doesn't stop people from working.
2) UBI will tend to mean less people willing to work low-paying unpleasant jobs, which means employers will have to pay more for those jobs. People who would only take such jobs because they have to, but don't actually want those jobs, will no longer need to take them.
3) Because of (2), more research effort and investment will go into automating and otherwise reducing the number of humans required for unpleasant jobs. And with UBI, that becomes an unmitigated good, with no worry about putting people out of work.
You can already see this in countries with less extreme difference in the society's economy, e.g. Scandinavian countries.
They do not have UBI (yet) but have generous benefits for unemployment, sick pay, disabilities and pseudo minimum pay so that most people earn a decent income.
I am not an economist or sociologist but the economy still works, most people still work and it has lead to 2) and 3). There is less interest in the less desirable jobs so their salary has subsequently increased. And there is heavy investment in automation, in farms, in manufacturing, in shops, etc.
It is not perfect though. Maybe UBI will be even better.
It's a gamble - either 2 will lead to 3, or 2 will lead to input and output prices of goods being raised. Probably some of both.
Hopefully more of 3 than the alternative, because the alternative scenario of prices rising has negative consequences in the form of economic deadweight loss even if UBI pays for the price increases.
2) and 3) are very simplistic predictions and we don’t have any idea if it has a higher chance to go that way.
For instance an effect of UBI would be disappearance of bullshit jobs. A lot of job won’t see wages increase and will just be automated/optimized away instead.
OTOH it could mean getting rid of minimum salary, which would lower the cost for high demand/vocational low paying work for instance (dog walking, cafe staff, event staff etc.)
All in all I’m not sure it’s as simple as saying “people have money without working = prices go up”
> which means employers will have to pay more for those jobs
Yeah no kidding so there will be hyperinflation. Making the net effect of UBI almost zilch. What use is $1000 bucks when toilet paper is $100 a roll.
> 3) Because of (2), more research effort and investment will go into automating and otherwise reducing the number of humans required for unpleasant jobs. And with UBI, that becomes an unmitigated good, with no worry about putting people out of work.
So there will be a giant underclass of people who live on nothing but UBI (UBIers) while a small minority of elite researchers in corporate labs come up with more ways to keep the UBIers from earning their own living. Great. And who buys all the stuff? Is the "stuff" just for the gilded class smart enough to work? Or do we just give the UBIers a raise every now and then to "stimulate" the economy? How is this not communism?
There would still be markets and competition. There would be some baseline price increase when people stop being exploited. At a certain point equilibrium will be met and someone will come along with cheaper toilet paper.
The difference will be there are more consumers in a safe position to make purchasing decisions.
First, some monopolies are monopolies forever - network and utility monopolies.
Second, you still have to deal with aggregate monopolies - ie when one societal class has monopoly pricing power over another. You cannot break up these as they are already broken up.
The prime example is real estate and land market. Landlords have monopolistic pricing power over tenants. Price for rent is not governed by landlord's costs but by what the tenant can bear.
If you inject UBI to the economy then tenants can suddenly bear more and landlords can and will rise rent prices convincing others that their cost increased so it's justified.
It's not the inflation of produced goods which would kill VAT or similarly funded UBI but rent and monopoly good inflation which by definition can't be competed away.
Therefore before you can implement UBI you have to deal with monopolies first.
Hint1: Fix it by implementing monopoly based taxes such as Land Value Tax and natural resource auctions. You will raise more than you need and will also abolish labor taxes stiffling productivity.
Hint2: Georgists (economical movement after guy named Henry George in 19th century - who coined the term "Progressive") were discussing UBI ideas already pretty extensively and understood these implications. They realized the monopoly problem and made it central to their teaching. Only instead of UBI they called it a Citizen's Dividend.
> First, some monopolies are monopolies forever - network and utility monopolies.
Could you expand on this a bit more? Network and utility companies can clearly be broken up. The actual infra can be owned by municipalities.
> Price for rent is not governed by landlord's costs but by what the tenant can bear.
Citation needed. There is competition amongst landlords as long as housing supply is not severely limited. If supply is limited, that is a failing of zoning policy. The flat I just started renting a few months ago was priced on supply-and-demand, not on how much I earn (otherwise the landlord did a pretty terrible job of gouging me because relative to my income I got a good deal). You can look to Japan as a country where zoning policy isn't totally nuts like it is in parts of the US.
We are dealing with monopolies, the current administration notwithstanding. Andrew Yang in particular has a number of thoughts on these issue:
You can have competition among landlords but you can't provide the key ingredient of which there is fixed supply - land. No more land + people moving in = price only goes up.
> The flat I just started renting a few months ago was priced on supply-and-demand, not on how much I earn (otherwise the landlord did a pretty terrible job of gouging me because relative to my income I got a good deal).
A single example doesn't prove or disprove anything. You haven't mentioned cases for example of many others who are living on level of bare sustainability in the same city. You cannot apply micro analysis to understand this problem by citing individual cases. You need macro analysis for this.
Zoning is not enough of a solution because it doesn't deal with the underlying problem - city land supply.
Maybe tech workers will no longer need to live in the cities after covid crisis. That still doesn't make it a casr for the rest of the society and cannot serve as a basis for ignoring the issue.
Cherry-picking only some monopolies which are currently under scrutiny doesn't fix the problem either. Land monopoly is the biggest one out there and is not mentioned. Fixing the others without considering this one is merely applying a bandaid on a blister while the patient's artery is bleeding.
You don't get it. The cost of labor would rise. You would have to pay paper factory workers more when they could just not work at all. The truck driver also needs to get paid more. The shelf stocker also needs to get paid more. The security guard needs to get paid more. Eventually you get $100 toilet rolls.
> At a certain point equilibrium will be met and someone will come along with cheaper toilet paper.
Yes, from overseas, where they have no UBI. That's one of most insidious parts of all of this.
Consider wages 10xing and taxes becoming over 50% and it's not hard to see how firms would have to charge more money for their products just to remain in business.
UBI is central planning of the economy, where the government decides the market value of you simply existing is worth $1000 a month or whatever. Whenever the government thinks they are smart enough to set prices for things, historically people end up dying of hunger. The value of the dollar will collapse unless other countries also adopt UBI, but of course that wouldn't be possible since UBI in America would hinge on cheap overseas labor. Only WE are allowed to be lazy bums! At some point the dollar would disconnect from intrinsic value and no longer represent money, because people are being given it simply for existing. One day we we would show up to the Chinese or Mexican port asking for a ship full of All The Things We Need To Survive and they throw us away because they don't want our monopoly money. That's when the music stops and the real panic begins.
1. The US is already spending over a trillion a year on welfare
2. These programs have high administrative costs and create negative incentives to work (you can make more not working than working)
3. UBI has low administrative costs, does not have extra disincentive to work (because you won't lose it by working, and most UBI proposals are poverty subsistence anyways)
There's plenty of conservative economists who support flavors of UBI. Charles Murray and Greg Mankiew to name a few. Yang's UBI was sort of centrist, it actually eliminated several existing social programs which would arguably be better replaced with the UBI, but did not go as far as Murray's which eliminates social security, medicare, etc.
> We still need people to make things. There are still guys hanging off the side of garbage trucks every day and people still pick fruits by hand. If no one does these things, you will starve and die.
Sure.
There are also millions of unemployed and disabled people who don't work, and we haven't suddenly starved and died. On the contrary, we just throw away billions of pounds of food each year[1]. So it seems that the problem isn't a shortage of workers.
Meanwhile, though, people are starving and dying, in the US, at higher levels than any other industrialized nation, because our social safety net is inadequate.
So if you are worried about people starving and dying, maybe look at what actually is causing people to starve and die.
> Meanwhile, though, people are starving and dying, in the US, at higher levels than any other industrialized nation, because our social safety net is inadequate.
Yes the death rate is higher in US than a lot of other countries, but overall it is quite low. According to this page [0], it's .64 per 100,000. As of May 20th the population was 329,672,928 [1]. Comes to a total of about 2110 people or 0.0000064 of the population. While tragic nonetheless, is an extremely small number.
It doesn't replace people making things, though. You'd still want to work and create value to improve your situation. It'd just function as a floor and provide some stability.
Bearing in mind the increasing rate of job destruction and creation. We're no longer in a world where you can rely on being able to have the same profession your whole life.
Having that floor would be useful to smooth those transitions out, and a boon to entrepreneurship if it's easier for people to take risks.
> It doesn't replace people making things, though. You'd still want to work and provide value to improve your situation.
Doing shitty jobs usually doesn't improve one's situation though. If you earn minimum wage you're going to be better off just trying to gain a marketable skill and living off your income.
You say 'easier for people to take risks'. Well, yeah. So who's gonna be dumb enough to keep scrubbing grime off the bathroom floor when its easy and safe to invest in yourself? There's a solution to that of course, which is "pay people more", which is great. Now people get paid enough to merit working a shit job even with UBI. But now we have a different problem, things cost more to produce, which means prices go up! How much do they go up? Well probably to around the point at which the guy scrubbing grime is at the same level of economic wealth as before, and the guy who stopped to work on self improvement suddenly can't survive on his not-longer-basic UBI.
We need people to perform shitty jobs. Increasing real wages would be a good step to do that. Talk of people being able to take more risks in entrepreneurship is just techie dreams about how it could be better if their privileged economic condition were a little more privileged. It's not wrong, but it's hardly an important problem for society.
There are countries with a permanent dole. See the UK and other Northern Euro nations. You just have to fake an autism diagnosis to get $3k euros a month in cash alone (not counting all the other programs). Why isn't that the entrepreneurship capital of the world? Why is Europe still so poor? Why is America--the only place where there isn't a safety net and you can literally die on the street if you make too many bad decisions--the entrepreneurship capital of the world? Lots of businesses have been founded by people desperate to make a buck. Necessity is the mother of all invention. People take risks out of desperation, not for "fun".
> See the UK and other Northern Euro nations. You just have to fake an autism diagnosis to get $3k euros a month in cash alone (not counting all the other programs).
> If you have been found to have limited capability for work, you will move onto the ‘main phase’ for New Style ESA and you will get the basic allowance, plus a ‘support component’ if you are put in the support group.
> basic allowance (standard rate) – up to £74.35 (per week)
> support component – £39.20 (per week)
((74.35 + 39.20) * 52) / 12 = £492.05 per calendar month. That's €550 per month.
To qualify for this with autism you'll need to persuade your GP to give you a referral to local MH services, and persuade them to give you a referral to an autism assessment service, and then you'd need to persuade two specialist healthcare professionals that you have autism. That will give you the diagnosis. However, the Department for Work and Pensions will use their own independent healthcare professionals and you'll need to pass that assessment. That's not seeing if you're autistic or not, that's seeing if you have impairments in your day to day life that interfere with your ability to work. These functional assessments are carried out every 3 years.
Sorry, what? The EU is the most highly developed unified economy on Earth.
>Necessity is the mother of all invention. People take risks out of desperation, not for "fun".
"People who can provide for themselves in dignity, won't let me whip them." You're expressing a strangely fetishized, sadomasochistic view of business. Perhaps you should take a cold shower?
Yeah, was hoping to hear how he planned to address that (unless I missed it?).
It'd need to be indexed to something or have other hard controls to prevent that spiraling: "Vote for me, I'll increase it to $2k" "No, vote for me, I'll increase it to $3k!"
There are no controls. Once you put something like that in place and create a dependent population, there is no going back. It would take a violent revolution to repeal it.
> You just have to fake an autism diagnosis to get $3k euros a month in cash alone (not counting all the other programs).
Do you think the type of person who would fake an autism diagnosis for $3k a month is the same type of person who could successfully run a profitable enterprise?
My parents came to the USA $500 in debt. They had no place to stay and a 6 month old baby to raise. They refused all welfare programs out of pride except for Medicaid, because they needed a doctor to vaccinate me. 21 years later and we are comfortably living as an upper middle class family. They didn't get here by swindling bureaucrats, they got here through honest work and a quarter of a lifetime of pain.
Most criminals stay stuck on the bottom rung for this reason: of course you might be able to sociopathically hustle your way to the top a la Theranos or Enron, but to do that you have to believe you are capable of honest work. Hustlers don't believe in anything except for their next hustling opportunity. For every successful hustle there are another 1000 failures that never got anywhere.
The point is to compensate these vital workers properly and give them some leverage in negotiations with their employer. That's what a UBI does, it makes the life of your fruit-picking wage slave a little more bearable.
This is anecdotal but I haven’t seen guys hanging off garbage trucks in a long time. Around here it’s just one guy with a hydraulic arm on the truck that picks up the cans and dumps out garbage, and he does it very very efficiently. Pretty soon it should be possible to even replace the driver with a self driving truck that goes around pre determined paths in the neighborhood.
Moved to a poor, small (~250k) "metro" area midwestern city around 2008. Robot arm garbage trucks!
Moved back to a much richer one 10x larger a couple years later. No robot arm garbage trucks then, and still none now. Bags on the end of the driveway, guys hanging on trucks.
"pretty soon" is when? garbage trucks are giant, quarter million dollar machines with giant forks on them that could demolish thousands of homes in an accident before someone shoots its tires. this seems like one of those things that will still be done manually for years after level 5. imagine a self-operated crane constructing a skyscraper. it's not that it's inherently more difficult than self-driving--the stakes are too high and one disaster could undo decades of savings from not hiring people.
It's the same here, but not where I lived a few years ago. It's just not practical in the densely populated inner city. Garbage containers can't be lined up at the street, are stored in back yards etc, and you still need people to pull them to the street and push them back.
Where I live now, that job now is done by the home owners or by staff of the apartment buildings. The job didn't go away, it's just no longer done by the garbage collectors.
That may be true in populated areas. But, what about areas that lag behind? Rural america that is too poor to afford robot trucks. I see people hanging off garbage trucks all the time in the midwestern low pop and rural areas.
>> The robot trucks are cheaper than the humans that operate the non-robot trucks
not if you understand accounting. I can hire a guy today at <$20/hr operating cost to do it manually. That robot truck is a much more significant capital investment that will amortize over 10+ years.
2. Private garbage collection companies: just because a municipality doesn't have money to buy a robot truck in cash, doesn't mean the private garbage collection company that serves most of the surrounding municipalities doesn't.
3. If you actually look up the prices, the numbers are so skewed in the favor of automation that even without loans or private companies, I very much doubt there are any cases where this would take 10+ years to amortize. Your $20/hour collector translates to $30K/year if they works 30 hours/week, or $300K in 10 years. Is it your claim that robot trucks cost $300K more than non-robot trucks?
Keep in mind a truck lasts for years, while a truck driver has to be paid yearly. I'm not figuring in maintenance costs for the truck here--if you'd like to argue that yearly maintenance costs for the truck are the same as the cost of the truck, I can look that up too, but I'm hoping you are a reasonable person.
You're welcome to personally finance south pedoka county's multi-million dollar purchase of robo-garbage trucks. oh, and figure out how that garbage collector can now support themselves.
I realize this runs against the reality of HN, but not all solutions are technology, and not all technology solutions are as simple as "just do X". It's like the "dropbox is just ..." meme turned up to 11
I don’t think there is any good way to test UBI at any small scale, I think there needs to be a critical mass of people who can pay their housing and food costs how society and economic activity would be reshaped under such a system.
Social Security and Medicare are already UBI at large scale, but age tested (62 is the minimum age, 70 the max for social security benefits, age 65 qualified you for Medicare, US universal healthcare for seniors). Caveat: you needed to have worked and earned certain amounts to qualify for Medicare and your benefits level.
To test at small scale, you'd need an endowment that would use the investment returns to pay folks their UBI, and then payroll taxes that would include OSDI so they'd gracefully land onto Social Security and Medicare when they reach the age that qualified them. Pick small cohorts: students in their early 20s, some middle age folks mid career, and folks near the end of their career in dead end industries (ie coal). Observe and report.
If you can "cross the chasm" (see: companies going remote first after being forced to see if it can be done with COVID), it then becomes PR getting an audience with the Fed and Congress to rejigger monetary and fiscal policy to print and distribute accordingly. Can't see we can't print, money printer is running exceedingly fast right now [1], but can we put that money in the pockets of average citizens instead of simply inflating asset values of the richest Americans? That's the question.
Seems like nonsense to me to say 'this is universal income just except it's not universal.' If you take away the 'universal' then you're missing the entire point.
This is policy and PR hacking in lieu of having incredibly deep pockets. Sorry to tell you that real life is messy. Think of it as growth hacking. This is a sales endeavor. You must sell that the current form of capitalism is fundamentally broken.
This is no different than contributing to the "right" Congressional candidates with few dollars so they control hundreds of billions of dollars of policy (or in this case, trillions of dollars). This isn't anything new or weird. NGOs face this issue all the time, having to prove out models before they'll get gov or foundation funding.
But you can’t prove anything about universal income without the universal part. As without it it’s not the same thing and we don’t know if it’ll have the same effects.
So your posterior probabilities on most things will shift zero post intervention? Interesting.
I'm a UBI opponent, a short term HM proponent, but I think my posterior probabilities would shift depending on the size of the effect and the duration over which the experiment was performed.
A small nit: "Original Medicare" isn't really a UBI because you don't really get to choose your healthcare. A key benefit of a UBI is that the government provides cash to buy goods & services, rather than providing the goods & services themselves. Medicare is a government-run service, where the service is a combination of catastrophic insurance, cost-sharing, and general payment.
Medicare Part C, or Medicare Advantage, is much closer to a UBI than "Original Medicare". Nearly 40% of Medicare beneficiaries are enrolled in a Medicare Advantage plan.
Agree, but I'd push back on the "single payer healthcare" bit and say that "Single payer" is not the only way to deliver universal healthcare. Germany, Switzerland, Netherlands, Singapore all have thriving multi-payer systems. In Switzerland and the Netherlands, ALL insurance is private. In Singapore, while the government covers catastrophic care, 70% of total health expenditures are private.
The common theme is that there is some degree of government intervention and regulation, but having the government be the sole payer is definitely an approach, but it's by no means the only approach, nor even the best approach.
How do you handle people wanting to move to Alaska? And how do you get Alaskans on board for paying higher taxes to fund it?
If you're not asking them to fund it, you're not testing UBI, you're testing "if an external entity provides money to a community without asking for anything in return, will that be cool?"
Yeah, and to increase it 5 or 10 times would certainly require new taxes. I don't know whether oil and mining will still be profitable with a ten-fold increase in royalties, taxes and fees, but I have a feeling that it won't.
Many people actually survive on that one check. Alaskans are fiercely independent for the most part, and those living outside the main cities are typically self-sustainable. They own their land, hunt for their meat, grow their veggies, trade for what they don't have, and spend whatever money they do have on the essential tools to sustain that.
That's income, even if it's not denominated in dollars.
Presumably they also own land and a house, which is wealth.
The point behind the UBI concept that it does it's thing even if you have no income because you love somewhere where you can't farm your own food and have your own land with your own house in it.
You really don't need much land to get by. Alaskans who are self-sustainable usually have small greenhouses they only farm in during the summer months. In a place like California where you can grow things year round, a quarter acre plot would be plenty for a whole family. Thanks to marijuana farms, indoor hydroponics equipment can be had for cheap. If you have a space to setup, you can grow fresh vegetables indoor year round.
Unlikely that someone paying a million an acre would want to hunt for their meals. Alaska works because people are self-reliant but community bonds are incredibly strong. Beyond a certain population density, that type of community doesn't work.
Maybe a small economy somewhere. There are small city-sized nation-states here and there around the world --both in industrialized areas and not so industrialized areas. They could try it in both and see what's what. $5MM isn't enough though.
I think for the purposes of UBI it’s enough of a criterion.
Implicitly I was contesting it against say trying it for a county or other political subdivision like state/province/canton. By state I meant sovereign state/nation.
The GiveDirectly trial in progress now (been a few years) is the closest to what you're talking about - 20k people in 197 villages in Kenya getting a basic income covered fully for 12 years.
It’s possible, Y Combinator Research seems to be doing just this with a randomized controlled trial study in two states: https://basicincome.ycr.org/our-plan
I believe what OP is getting at is you need a significant portion of a community to be receiving UBI to truly transform the local economy.
To use an example the Yang often uses: It may not be economically viable to set up a bakery in some small dying town. But if everyone in that town were receiving UBI, it might become viable, due to a change in the town's spending habits.
Why do you need a critical mass? Everybody with an income can try it at any given moment:
Find one or more persons who _you_ want to support and support them with a basic income. If UBI works, they will also start supporting other people. Sooner or later, you have an economy of people who support each other with UBI.
Chances are that you are unlucky and your choice of seeding persons wasn't good. But for science, that doesn't matter. If others copy that approach, sooner or later, a working economy will emerge - if UBI works.
There is no need to establish UBI in an area even though it helps. Thanks to the internet, the economic connections can all be organized online.
UBI is no good if it's not durable and reliable to the recipient.
If you imagine that UBI would allow people to live with a lower level of stress around starvation, you have to imagine that they would want to rely on that income a decade from now. Saying "find a rich benefactor to decide to give money away" doesn't reasonably test anything meaningful about UBI. I can tell you that people will generally be happier if you give them money one time. Don't need much experimentation to validate that hypothesis...
I haven't said 'find a rich benefactor', but 'be the benefactor'.
There is no need to be rich. Spouses stay at home and are not worried if their partner has a regular job. It doesn't have to work for everybody. For starters, find somebody who can handle the risk of you losing your job.
Of course people are happier if they get rich. But that's not what UBI is about. The question is: do people need a monetary buffer to get on in life and become more profitable so that society benefits as a whole?
If that theory is true, then supporting one or two persons will lead to them making more money and being able to support one or two persons in return by themselves. That's a system that can grow, if UBI works.
So, whoever believes in UBI: start supporting one person, and see what will happen.
You mean like children?
Children need you to support them for years as a buffer before they can get on with life.
Society benefits as a whole when we foster the development of proper adults.
If the development to making them a net contributor is not done yet, why would we stop?
Hey, that's angle I've never thought about before.
We support children for years and all we expect them to do is go to school. While a lot of kids could decide to just not work and be taken care of by their family, the vast majority want to work anyway, if only for the fact they want to move out and build their own family.
This may be the key. UBI + Making people go through further education so that they can have the foundation of knowledge and skills to be able to work. Right now, we have a lot of people who go through years of school and in the end it amounts to nothing because no one will give them a real job unless they had the money and a stable environment that allowed them to go to fancy universities instead of being forced to work to provide for themselves. This is a 3 angle attack. UBI + education/training + lowering the barrier for people being able to get a job. With UBI, you will have substantially less people desperate to get any job, so the supply of workers is no longer so high that companies can afford to be picky, because people will be able to tell those companies to go fuck themselves.
UBI+further education sounds like a great idea. After graduating people won't be stressed about finding a job to help pay for their mounds of student loan debt and will have the knowledge to work on projects that they find meaningful.
That's right. People hear about UBI and lament how people are going to become lazy and quit working, but they don't ask themselves why some people would stop working. They don't think that maybe some jobs are not worth doing unless you are at the threat of poverty and homelessness from not working. We need to reevaluate if we want to continue this horrible system where a class of people are denigrated to working slave tier jobs with poor wages and working conditions so that the classes above them can enjoy their first world lives.
Sure, but by flipping the direction, you can just pick an arbitrary person, set up a trust fund that only disburses a certain amount and set this person up for life. If you have 10 people, each contribute $100k, that's a $1 million fund. Fund a person in Nebraska for life with the fund for $36k a year with an annual rate of return of 4% (fairly conservative).
That person is guaranteed the durable benefactor and you can see if their behaviour changes and if they are enhanced through this.
I've proposed this very idea to UBI supporters on many occasions, and they always seem to dodge and say it will only work if everyone does it through the government. It's apparently an all-or-nothing situation where the outcome of failure is catastrophic economic collapse. Doesn't exactly inspire confidence.
We are currently with unemployment doing a great UBI experiment. Lots of people are earning more with unemployment than before. The benefits are only a year, but I'm willing to bet these people take their time finding work if it means a pay cut.
California is a perfect place to test these sorts of public welfare and social safety net initiatives. It's the 5th largest economy in the world, and medi-Cal already covers a third of the population, it only need be expanded.
Even something like $1000/year for every citizen will be significant enough to affect lives of some people. Assuming over 20% of Americans have near-zero amount of savings, this can be just enough money to avoid eviction, or pay off credit card debt, have home internet, or travel to other city for job interview etc.
Not really, the central premise of UBI is that its recurring allowing you to plan for and adapt to the income. This was just a bandaid for a financial disaster.
What is interesting about the payouts is that we magically made the money for them while also magically making the money for a ton of other stuff. Obviously the scale of one time vs recurring is vastly different but I feel like this does go a ways towards proving its possible.
No more so than the 2008 stimulus checks. Both programs were non-universal and under both the number of dollars sent to eligible recipients depended on their incomes.
The cutoffs before payments started to taper off—not even get cut off entirely yet, but drop—were pretty damn high. Much higher than I expected when they started talking about it. Not by SV or NY professional-class wage earner standards, but very high for normal people. It wasn't universal but it wasn't too far off, either.
I think the idea that it needs to be tested before just jumping in and trying it somewhere is just a way to state that you don’t support it. Which is fine, but just say that.
If there had been the same testing requirements around say Capitalism, Communism, and Socialism we’d never have seen any of them rolled out.
At some point you have to buy in to the ethos and goals and be prepared to adapt along the way.
Savers aren't entitled to a return. No one is entitled to fiat holding or increasing in value. The utility value of capital is declining, plain and simply.
Central banks exist to ensure debasement. By its very nature, fractional reserve banks cannot honor their contracts. The purpose of a central bank is to print money to ensure the solvency of the fractional “reserve” bank cartel.
And predictably, we’re here at zero percent interest rates, large levels of private and public debt, and the public starting to realize that they can use the printing press too and demand to be given free money (UBI).
Same here but I really wish he wouldn't kowtow every time some wackjob group is screaming at him. He took a very moderate and reasonable stance on a lot of contentious topics during his campaign then rolled them back within a day of getting lit up by twitter trolls. I think he lost a large section of centrist voters by appearing spineless.
He took the best policies from the left and right, but also seemed obligated to tow party lines a lot of the time rather than offer up better alternatives. I wish he would have run third party, he could have taken a lot of moderate votes from President Trump. The democrats didn't stand a chance of winning this election, at the very least he would have sent a message to the next generation that there are other options.
Yang definitely waffled on MFA and appeared to not support it towards the end. That was something of him that I was disappointed - I couldn't understand why he didn't realize that MFA is the way to go. I do wonder if he waffled on it to retain support from people further to the right.
That said, I actually think Yang's ideas are going to reverberate throughout political discourse over the next decade. Similar to how Bernie pushed the base range of the Democratic party to the left, Yang shed light on some great issues that will plague us. For example, what are going to do about the massive loss of employment due to automation? Are we going to attempt to retrain these people? That's historically not been very successful.
in interviews he literally said, when challenged, that "mfa isnt actually a bill" and that "mfa to means xyz" when actually mfi is a bill and specifically defined as a policy not some ambigous goal of "getting everyone covered, lets discuss how to get there"
Retraining is not the answer (and I don't know what is). Many of the jobs killed by automation were things people could command a reasonably high salary to do, but did not need extensive training for (these are referred to as "good jobs"). Offering the same salary (or even more), but requiring multiple years of training, just isn't going to fly with these people.
Retraining is part of the answer. For professional jobs (in the classic sense) continuous training is a core tenant of remaining current in the field and if applicable maintaining licensure. The faster technology moves, the more everyone should be thinking about how careers will be in a constant state a flux. Not just retraining from a factory job to some service job, but every few years basically having a role that has morphed into something new. We need institutions, practices, and norms that reflect the new normal of high-technical change.
Many historical blue-collar jobs that have been automated (or even things like farming before it) were much higher-skill than most people give credit for. It is just that the training and general knowledge available to perform well were more ambiently available. An example today is working with standard business software. You don't get trained in office and excel, you get trained on how they are used in the company's specific workflows. Companies also had more on the job training and apprenticeships.
So I also don't know what do with the wave of truckers that will be automated away with self-driving big-rigs (presuming that happens) but I think the future is one where we don't actually have as many folks dedicated to one line-of-work where such a jarring transition is necessary. Or perhaps the corollary, that we should aim for that more dynamic approach to prevent further disruption of big discontinuities
Creating new jobs is the answer. The question is whether you think rich CEOs and capital owners or a wide, empowered middle class are the best to come up with those jobs.
Tech should know better. The best thing Apple et al. ever did for their platforms was to open them to the ingenuity of the masses, and keep the barriers to entry low enough that they didn't discourage new ideas from blossoming. The market economy isn't an end unto itself; it's a platform on which goods are developed and needs can be identified and met.
Quarantine has accelerated forecasted job loss. Whether we return to baseline by next year, a lot of companies are going to take this opportunity to lean out without fear of backlash.
"every time some wackjob group is screaming at him"
"He took a very moderate and reasonable stance "
No, you don't get to label anyone who disagrees with a risky, existential upheaval as a 'whackjob'.
UBI is a fairly extreme ideology, partly because of the social welfare application, but mostly because of the cost - which its proponents tend to ignore.
We can argue a little bit over what 'free money' means for people, but the case falls flat when someone talks about a program that costs $350 Billion a month, or about 3 Trillion a year. FYI US economy is about 20 Trillion.
UBI is not a discussion about 'free money' or 'welfare' or 'means testing'.
UBI is a discussion about the existential level of wealth transfer or debt creation that comes from the most expensive program ever conceived by any government in the history of civilization.
The UBI discussion really needs to start with 'where do we get $350B a month'?
Because all the nice talking points are otherwise academic.
Yang reminds me a little bit of Marx - really amazing insight and thoughtful understanding of problems ... but solutions that miss the point entirely.
"The UBI discussion really needs to start with 'where do we get $350B a month'?"
Congressional appropriations create money. That's how fiat currency works. We're not on the Gold Standard, we don't need to trace who holds how many Pretty Yellow Rocks.
The real question is "What is the inflationary impact of that spending?", and thus what level taxes have to be raised to destroy enough money to negate the inflation.
One interesting insight of MMT is that taxing $1,000 from the rich and giving $1,000 to the poor, is not actually necessarily "free", or net-non-inflationary. Because the poor on average spend more of the money that they have (on basic necessities like food and consumer goods), causing prices of those goods to rise which reflects in headline inflation. Whereas money in the hands of the rich tends to result in inflation of financial asset prices.
If a redistribution of this sort did cause a too-high level of consumer inflation, some additional counter-cyclical policy would be needed to counteract it. (The point I'm trying to make is that making sure that federal spending debits and credits cancel out to zero is neither necessary nor sufficient for good economic policy.)
Yes, and it's part and parcel of the worst economic crises since the great depression, and in some ways worse than the great depression, i.e. the worst numbers in the history of the entire US.
So yes, the scale and repercussions of UBI are issues that nobody seems to want to talk about.
I could see UBI as an alternative to federal government spend.
E.g. every time I hear about the U.S. sending billions to the middle east, I wonder how much more effectively it could be spent in the hands of thousands upon thousands of americans.
It’s almost like implementing something closer to direct democracy instead of representative republic democracy in regards to spending...
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children...
This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.
Yeah, I think UBI should/would/could actually be very popular from a small government perspective as well.
What if a republican ran on the platform that “if elected, I will make it a law that 10% of all federal revenue must be directly distributed equally to all citizens. Then is grows 5% a year until it hits 80% in 2036!”?
Because then the government inevitably either 1) runs out of money, 2) cuts spending drastically, or 3) drastically increases taxes on the wealthy to pay for everything.
We all know that 1 and 2 (probably) aren't going to happen. And I don't know many republicans that want the wealthy's money redistributed equally amongst all Americans.
1 definitely won't happen. Money is nothing more than a number on a computer screen. When the fed spends, they just type a new number on the screen - literally. Modern Monetary theory really opened my eyes around the phony assumptions regarding U.S. "debt".
Edit - I know money is more that a number on a computer screen, it's also a general collection of cultural assumptions, it's a partial reflection of the energy system etc. I'm replying in the context of "running out of money"
For every billion the USG wastes, $3/year could go to each citizen. Not to mention that almost all the money sent over makes it's way back to defense industry jobs in the US.
If the government starts giving me enough money each month to subsist while drastically raising taxes on my earnings from employment then I'll simply stop working. I would imagine most people would do the same.
Every experiment in UBI says otherwise. Direct cash grants usually lead people to do more work, because now they can do the work they enjoy.
Also, look around groups of wealthy people. The ones who don't have to work anymore. Sure, some of them live a life of leisure, but many of them still work, because they get bored otherwise.
>>Every experiment in UBI says otherwise. Direct cash grants usually lead people to do more work, because now they can do the work they enjoy.
But probably less "meaningful" work, in however society defines meaningful.
>>Also, look around groups of wealthy people. The ones who don't have to work anymore. Sure, some of them live a life of leisure, but many of them still work, because they get bored otherwise.
This is due to earning a return matching their effort. At some point, if enough income is withheld at that level, what's the point? Or, they will leave en-mass to countries more willing to employ entrepreneur muscle. These aren't anecdotes. Look at emigration from USSR, China, Venezuela or others of their scientists, professors, doctors, lawyers, financiers, etc.
I think you're overestimating how much would be paid out. Taxes can go up on the employed by roughly what they receive in UBI, unemployed get UBI instead of unemployment benefits. It all balances out.
I don't think there is a widespread agreement amongst proponents on how things are to be funded. Some want it to be revenue natural, others a wealth tax, others VAT, others via printing money, others a mix.
I'm not sure UBI is the right way to go. But if we are to do it, my own current thinking that you start by trying to keep it neutral in the tax code (so most families get increased taxes that claw back the majority of the UBI value)
But then we need need to account for additional funds needed beyond that:
- Those currently earning less than would be clawed back (net-recipients of UBI)
- Those who we would expect to become net-recipients, that would also cut back on their current earnings.
The latter group, I'd expect to be smaller than some suspect, but still big enough that it needs to taken into account.
If we take the approach that this acts as an income floor (the clawbacks per above), and we set that floor at $40k.
We can see that 33% make less than that from the data. For laziness sake, I'll assume a linear transition from 0% to 33%. That would imply $20k/year at 16%, which is roughly what the data shows. So we can assume an average of 20k UBI for 33% of households as the net benefit.
127,679,100 * $20000 * 0.33 = $843B
Then we need to take into account those that stop earning. So let's round it up to a trillion. Note household income already take into account existing transfers like social security and unemployment benefits so we can't subtract those out as savings.
The US is wealthy enough to raise taxes by a trillion/year. It is something like 5% GDP. But that is a massive increase. It doesn't come for free with "neutral" taxation. On the other hand, we could have a lower floor, but then I don't think we actually get the benefits.
I think that the work that needs to be done, will still get done but it'll be better rewarded (ie it'll be more expensive) - jobs that people don't want to do need to get paid more because employers can't just rely on economic coercion of the poor to force them to do dangerous or boring jobs, they need to remunerate them accordingly - which IMO is how the system should work. Result would probably be that businesses whose only value prop is predicated on cheap labor, will suffer, and businesses whose value prop is predicated on quality, will be rewarded.
EDIT: I do think there is risk that the coercion will become more intensely focused on illegal immigrants and foreign labor to fill in that niche, however, so better safeguards for illegal exploitation probably need to come along with UBI.
There has never been a test on a scale which would lead people to do it though. If you know you're part of a short lived experiment you're not quitting your job.
> "Also, look around groups of wealthy people. The ones who don't have to work anymore. Sure, some of them live a life of leisure, but many of them still work, because they get bored otherwise."
People who built their wealth, they keep working because it's in their personality makeup.
People who inherit wealth often wind up frittering it away.
I don’t know why they don’t do this at $1K/mo for life for 30 people (and then study them qualitatively) instead of $250 one-time for 20,000. What is a one-time payment of $250 going to tell us about a UBI?
The biggest problem with UBI is political. Even if you manage to implement it you have no guarantee that the next administration will continue it. If you can't guarantee that your $1k/mo will really be for life then you can't take the risks on things like starting a small business because you might have to go back to work one day and if you have a large employment gap that's going to be tough.
In this case you would set up a trust and fund it with the $5M so legally the only thing that could happen with the money would be $1K/mo to the recipients for life. I just meant in terms of what to do with this $5M that might be more useful for studying UBI.
Are you familiar with the concept of Bullshit Jobs? In short, I'm not convinced that all or even most jobs are actually necessary.
Surely it's reasonable to expect that people will be passionate about the things that actually need to be done, precisely because they are necessary. One of the most intense people I've ever met has cleaned SUPERFUND sites for decades. I'm not sure how well paid they are, but I am sure it isn't about the money. If they have trouble attracting people, they'll raise wages, and surely we can expect that what some people enjoy is making lots of money. Would it be so bad if working a shitty job no one would do voluntarily was well compensated, instead of poorly?
In experiments with UBI, many of the people who quit do so to spend more time with their family - and keep in mind, domestic work is _work_ that is _necessary_ and incredibly valuable to society - or to retire earlier. Doesn't that sound reasonable? Do we really need to force people to work when they could be engaged in other activities valuable to society or to themselves? Wouldn't it be nice if there was more room for young people to be promoted?
Another thing idea I've been toying with is the devil's bargain of trading UBI for eliminating minimum wage. I was watching a video about getting into locksmithing, and the speaker joked that if you made some faux pas, your potential employer would value you at $2/hr and send you packing.
But that begged the question for me; what if I could work for $2/hr, with very few barriers, and get enough experience to earn more? In order to be hireable, I'd have to work at a negative rate, investing money in tools and locks to practice on. I have the privilege of having a family that could support me while I did something like that. But what if we could all do that, not because you won a socioeconomic lottery, but because our society was willing to invest in you and take a chance on you, regardless of your background?
How many jobs exist for things that don’t “need to be done” though?
I’m aware the definition of “need” is a can of worms - but as an example, I know plenty of people who started doing call-center work in their early-20s while they “figure out what I want to do with their life” and by the time they know what they want to do (and it’s definitely not call-center work!) they’re trapped in their jobs, especially as after a few years they will have moved-out of their parents’ home - so having to pay rent and cover their cost-of-living while they’re getting started or experimenting with their own personal life projects (e.g. doing art, etc) is unfeasible - and don’t suggest getting a loan either. Meanwhile people with wealthier and accommodating parents can afford to take their time living off their parents - I see this as an example of the inequality of opportunity in our society.
Another example is the unseen and underreported unpaid work that exists, such as when a family has a child and the child has a disability that requires extra care: if they’re a married couple then one of them would drop-out of their career to become a full-time - unpaid - caregiver. If it’s a single—parent situation then the outcomes are often heartbreaking. This isn’t the society I want to live in.
UBI would mean the cost of labor for “McJob”s would rise - probably significantly (UBI would mean the end of the minimum wage, however) - but having fewer people doing jobs they don’t want to do means greater net happiness and we’d see further rises in automation - which further raises GDP. I see employers using human labor for unrewarding work because it’s cheaper than automation as a terrible local-maxima in our system. We just need to push past it to get to an even bigger maxima.
I think that the work that needs to be done, will still get done but it'll be better rewarded (ie it'll be more expensive) - jobs that people don't want to do need to get paid more because employers can't just rely on economic coercion of the poor to force them to do dangerous or boring jobs, they need to remunerate them accordingly - which IMO is how the system should work. Result would probably be that businesses whose only value prop is predicated on cheap labor, will suffer, and businesses whose value prop is predicated on quality, will be rewarded.
EDIT: I do think there is risk that the coercion will become more intensely focused on illegal immigrants and foreign labor to fill in that niche, however, so better safeguards for illegal exploitation probably need to come along with UBI.
There are lots of jobs people don't enjoy. Who's going to do those?
If they raise the salaries and start getting applicants, who's going to buy the much more expensive produce? They'd have to increase the amount of ubi, and there you have inflation.
You are assuming a business and industry is a god given right. If a business fails to get applicants, they need to raise wages or relocate to where there is labor. If they need more income to pay for these workers then they will charge more. If the price they charge for their goods or services is too high for the given level of demand, the business will just fold.
And that's OK, there area a lot of parasitic zombie companies around that could use a culling, wasting peoples working years doing inane tasks rather than starting a project of their own and innovating. As they say, imagine if Mozart never held a violin but was busy working double shifts flipping burgers for 30 years instead.
For a few months maybe. Soon, you will realise that to keep your previous lifestyle (or to simply fill your time with something other than browsing text-heavy sites) you need to work. So you will go back to work. And so will everyone else.
People get a UBI regardless of whether or not they work, that's the 'U' part. So any money you get from working is additional money on top of the UBI. It would be taxed, but it's still more money. It's not like other benefits where once you start earning your own money, you lose the benefit, and thus have to make a choice between not working to keep the benefit and working 40 hours a week to make similar or marginally more money.
Or, maybe you're taking that into account already, and are worried about an uncanny valley in between "not working" and "working" where a significant number of people simply don't work because that first rung in the "working" ladder isn't rewarding enough to start climbing the ladder, so they're incentivized to never work. If so, that's certainly a concern, but that would also be an indicator of a failed system that needed to be revised. It goes without saying that any implementation of a UBI system would have to be designed such that that didn't happen, but that's not an intrinsic quality of UBI systems.
Tax increases themselves would have to be progressive (as our current tax system supposedly is and always has been) to avoid creating these sorts of discontinuities that would disincentivize people from working. Any functional UBI system would have to take that into account, otherwise it's a failed implementation.
>Or, maybe you're taking that into account already, and are worried about an uncanny valley in between "not working" and "working" where a significant number of people simply don't work because that first rung in the "working" ladder isn't rewarding enough to start climbing the ladder, so they're incentivized to never work.
This was a concern with the recent economic assistance bill, the additional money from this bill going to unemployment was higher than minimum wage. Should the amount given been lowered so that "it doesn't disincentive work"? Maybe this shows that minimum wage needs to be raised?
You seem to forget that while you might be an affluent middle/upper class person, a lot of people out there are struggling really hard to fulfill their primary needs. You realize how many people in the states are poor (lacking primary needs resources) or borderline poor? Yes, some people (plenty of HN users I am sure) might struggle to maintain highly consumerist lifestyles (not sure if that's necessarily bad) but for the majority of people, this will improve their lives for as long as UBI is a thing. All the money spent on fighting social phenomena that is the result of people being unable to or/and having being raised without enough primary need resources to ensure their physical, emotional and cognitive capabilities are not hampered by their poverty will be able to be allocated to better uses?
The idea is that everyone receives a basic income, equivalent to a (hopefully) updated minimum wage. Then if people want extra money for luxuries, then you work a job which will pay you on top of your standard basic income.
Even assuming that the vast majority of people would keep working to maintain their standard of living, there are major issues with UBI:
1) The incentive to enter the workforce is greatly reduced. Every high-school graduate would have the means to shack up with a few of their buddies and live the college lifestyle indefinitely. I'm currently a productive adult, but only because there was no alternative. UBI is an alternative.
2) The nest-egg required to retire is greatly reduced. If a married couple is saving up for retirement with a retirement income of 60K, they're currently need $2,000,000 to retire (pre social security). If that same married couple is receiving 12K each in UBI, the required nest-egg is almost halved to $1,200,000. That means couple can retire a decade earlier than they previously could. This will see millions of people retiring during what would have been their most productive (i.e. tax-payingest) years.
3) Much like a shorter work week, UBI will be a tremendous competitive disadvantage for US goods and services. When the labor market inevitably shrinks, wages will necessarily rise. This will a competitive drag on exports of US goods and services.
I'm not saying that these things are bad. They sound great for the individuals in question. But they will eventually hollow out the workforce.
If you are only making the COL, most people are simply not going to sustain the college lifestyle indefinitely. People have wants and needs and drives outside of financial hardship. Yes, it might mean kids 18-23 are relaxing a bit more on getting into the workforce, but thats ideally the age in which they are learning and getting prepared to get a real job. Ideally we want to remove those barriers of entry for them, and allow them room to develop.
If financial hardship was a main factor of drive and high impact, productive work, we'd only see people under the poverty line entering into the high impact fields. That isn't the current reality.
Also, people that are willing to group up and live a college lifestyle for 30 years are people who were unlikely to EVER get involved in high impact work. At worst it's a net neutral here.
As for the retirement age, is that really terrible? Since we have established drive isn't inherent to financial hardship, it stands to reason people would continue to work through their prime working years. If people are now able to call it at 55, thats just a better quality of life for everyone, and ensure a constantly revolving job market.
3 is possible. But if we expect insane inflation due to UBI, then it invalidates all the other points you made, as now the UBI isn't meeting COL for a normal QOL.
I don't think we have enough information in either direction to assume the impact to the workforce. When in history has this ever been achieved in a society that also has high social mobility? People have interests and drives and I believe they will always pursue these things. And instead of squandering peoples potential on useless jobs that they enter into only to make ends meet, we can allow them to achieve a much higher potential by contributing to something that better aligns with their skills.
1) Everyone that wants to live a college lifestyle past 25 is already doing it, it's not hard where how things are currently (shack up with people, have minimum wage job, drink lots of beer). The vast majority of people want more out of life though.
2) One goal of UBI is to unlock human potential by allowing people to actual pursue things they care about. Smaller scale UBI experiments indicate that this most often means starting some form of small business. If you're doing something you actually enjoy, I think you are more likely to retire later, not earlier.
3) See above about unlocking potential. One of the greatest strengths of the US has always been the inventiveness of its populace. This would potentially be multiplied many times over by a UBI that allowed people to actually pursue things they want.
What I'm confused by is what prevents the cost of housing and luxuries from going up and ultimately defeating UBIs increase? Landlords now know people have a minimum amount of money and theres either mega landlords everywhere or all of them play the only going up game (without needing to actually meet and collude).
And, by definition, everybody who earns higher than the median wage will also receive a tax increase higher than the basic income they're being given "back".
I don't think there is a strict definition, but there certainly would be a threshold in the bracket where taxes > UBI, but what is your point?
That UBI is therefore worthless for everyone, because some people won't get it, in effect?
There are many variations, but one benefit of continuing its issuance even if someone is in a high tax bracket is unemployment - one of many services that could go away if UBI were in place.
If I make $200k, and lose my job, I don't apply for unemployment - I just get the UBI for that month to pay for expenses.
If the point is to ensure everyone has a basic income even between jobs, but that nearly everyone will continue to work, and the purpose is to provide a safety net for the unemployed- think a minute before you reply- is it really that different from unemployment insurance?
I disagree the purpose is that people will continue to work, but regardless, it’s a much improved unemployment insurance because it doesn’t go away when you do work, and so doesn’t disincentivize work.
It's very different, because there are many reasons why UI can be delayed or denied - ask some of the people who are supposed to be receiving it now! - and in any case it only lasts for six months or so.
If the government provided food, shelter, and video games, I expect quite a few people would see no purpose in working. Also the surfers and backpackers.
I don't think UBI is meant to supply a cushy life. You may be able to afford a modest apartment and food, but what about a car? A nice bicycle? A nice phone? Books? Money to actually go out instead of eating soylent? Saving for buying a house or land?
Many people who "go off the reservation" and travel/live mobile tend to settle down after a while.
Good for them. The point of work is to not have to anymore so you can follow your passions. We've invented machines that can do basically everything it takes to support human life. Seems like there should be a lot more people following passions now.
> Bob's work isn't subsidizing Fred's lifestyle unfairly (at least under Yang's proposal) because the UBI is paid for by a tax on consumption (the VAT)
So then it's Bob's consumption that subsidizes Fred? That doesn't seem fair either. When Bob consumes, he spends money he earned through work. One way or another, money he earned is taken from him and given to Fred.
I suggest you and Andrew Yang start giving Surfer Fred a cut of your paychecks every month. I bet the idea palls after you pass Fred hurrying to the beach with his surfboard as you drive to work.
People are trying to express this idea that the "people will be lazy and content themselves with a meager UBI" is not an accurate one, and nearly every reply you've made has been a nonsequitor about how we should presumably be resentful at paying surfers to surf.
There are two kinds of people who need to be contented with UBI: those who choose not to work, and those who keep working.
Nothing I've seen in this thread would satisfy the people who keep working.
Most people feel a fundamental sense of moral injustice and outrage when people who work are forced to support people who could work but choose not to. That is why our current welfare systems have means testing.
Bob is somebody who enjoys his job, or creating value, or material things, more than surfing and playing video games.
The thought is that we have enough Bobs in the world now, and enough technology and infrastructure, that allowing the Bobs to be Bobs and the Freds to be Freds will still work out fine.
> We've invented machines that can do basically everything it takes to support human life.
We have? We have machines that can do everything it takes to grow food, prepare it, ship it where it's needed, with no humans? We have machines that can build houses, cars, bicycles, and other forms of transportation, with no humans? We have machines that can make our clothes and all other necessary items with no humans? We have machines that can fix all our crumbling infrastructure with no humans?
I think you are drastically underestimating the amount of human work that is needed just to keep the basic functions of society working. Let alone to provide all the nice to have things that we all want.
If we really still want them, the law of demand will help us out. The price will go up, and people will start working to be able to afford it.
If it turns out that we don't actually want smartphones, new jeans, Starbucks coffee, etc -- then that's great too. We'll end up with a lot less pointless consumption and people can spend their lives chillin' with their buddies!
> We've invented machines that can do basically everything it takes to support human life.
It's not about "support human life" as in "3000kcal a day". Nobody wants that. They want a comfy human life. We can do that as well, only we need other humans to work to make that happen. Still, good for them if enough people are found to voluntarily work more so they can work on self-actualization and enjoy hedonism.
I wish you'd explain why this is a bad thing, and that you'd elaborate on it. Do you think half of the people in a UBI world stop working entirely and subsist entirely on their pittance? A third of the people?
How few people would be allowed to go screw around instead of working, for this outcome to be okay?
If you follow my suggestion, you'll know the answer.
If you don't like surfers, think video gamers, artists, chillin' with the boys (as another poster mentioned), hanging out at the mall, going fishing, hanging out in front of the drugstore, watching TV, etc.
Now, I might make an exception if they were into drag racing :-)
I think you either haven't thought about this hard enough or you're embarrassed at being asked to spell it out. Again avoiding any kind of actual answer isn't nearly as clever as you seem to think.
Are you currently only working just to subsist? Because most people on HN work much harder than they need to and make much more than they need to just to subsist.
You currently don't have the option to not work. Most people work more than they need to because they realize that the future is uncertain and having savings will be beneficial if there's trouble at some point in the future. Give the same people a trust fund that takes care of them and that they trust to last for their life time, and most will stop working as hard. They may still work, but much less and most likely on very different things.
It isn't a binary option between work and not work. Most people on HN make much more money than they need to subsist. If the goal is to only subsist, there is an option to reduce hours worked in exchange for reduced pay. The exact form that could take varies as not everyone works at a company that would support either a shorter workday or workweek. However other options exists that don't rely on your employer such as taking regular sabbaticals or a very early retirement.
There are also numerous financial options available to you such as annuities or insurance if you are worried about protecting yourself from unforeseen financial hardships.
> If the goal is to only subsist, there is an option to reduce hours worked in exchange for reduced pay.
No. You need to factor in the future.
The whole passive income/early retirement crowd is a great example of it. They want to create regular income (from projects/businesses or investments) to allow them a simple life for all of their future years, while they go do whatever they please. Few people do that, because it typically entails working much harder today so you don't have to work as much or at all tomorrow.
If you removed the hurdle or working harder today, many people would choose that route.
> There are also numerous financial options available to you such as annuities or insurance if you are worried about protecting yourself from unforeseen financial hardships.
Absolutely. And you need to pay for those. To do that, you need to earn more than you currently need to subsist.
Maybe I didn't explain my point well enough since you are just talking past it. People generally don't stop once they get to a level that would guarantee them subsistence living for the rest of their life. Most of us could buy a combination of annuities and long term care insurance that could provide for ourselves for the rest of our lives well before we actually retire. Very few people actually pursue this path and most of us continue to work until a point that would provide a higher standard of living in retirement.
I know quite a few people who have achieved that level of wealth, all but one have dropped their work load massively, down from 40+ hours/week to 2-4 hours. They still love making money, but they value their leisure time much more and enjoy their largely work-free life, so I have some doubts that people generally continue working as usual when they have enough money to guarantee work-free subsistence for the rest of their life.
Maybe I have a different understanding of subsistence than you? They don't live of the land and sleep in a tent, they live pretty average lives, living in an apartment in the city, buy food from the super market, wear normal clothes and ride bicycles. It does take quite a bit of money to guarantee enough secure long-term passive income (so "just invest it at 15% profit" is not an option) to pay for the basics, I'd put it at 300-500k Euros in my area, post tax.
> Most people work more than they need to because they realize that the future is uncertain and having savings will be beneficial if there's trouble at some point in the future. Give the same people a trust fund that takes care of them and that they trust to last for their life time, and most will stop working as hard. They may still work, but much less and most likely on very different things.
Where does this "trust fund" come from? It doesn't just magically appear.
What you are actually saying is: you don't want to have to exercise prudence and common sense and planning for the future in your own life, so instead, you want the government to forcibly take resources from other people (like me) who do exercise prudence and common sense and planning for the future, and use those resources to provide you a "trust fund" to take care of you. If I can't avoid having my resources stolen from me, my only other option is to stop producing any excess over my own minimum needs. Which means the "trust fund" you are counting on is no longer there, because now nobody has any incentive to exercise prudence and common sense and planning for the future--because you punished all the people who did that by taking their resources away.
This is (a) incompatible with having a free country, and (b) a very, very bad idea in general, since society cannot survive if people do not have any incentive to exercise prudence and common sense and planning for the future.
> Where does this "trust fund" come from? It doesn't just magically appear.
I agree completely. People work more than they currently need to because they don't have a trust fund. I'm not arguing that we should give everybody their personal trust fund, I'm explaining why people work and try to save up money even though they don't need those savings in the next 10 minutes.
> People work more than they currently need to because they don't have a trust fund.
No, people work more than they currently need to because they are exercising prudence, common sense, and planning for the future. Which every adult human being is supposed to take responsibility for doing for themselves, and not expect a "trust fund" to magically take care of for them.
You're arguing that if people had a "trust fund", they wouldn't need to plan and save for the future. But no such "trust fund" can exist in the first place unless some people are exercising prudence, common sense, and planning for the future. You can't get rid of uncertainty about the future or the need to plan and allow for it. So, again, you are saying that the people who are going to take responsibility for planning and allowing for that uncertainty are going to be punished by having the fruits of their planning be taken from them to provide a "trust fund" to people who didn't bother to plan and allow for uncertainty.
In other words, you disagree with me completely. I think I should plan for my future, and you should plan for yours. You think I should plan for both our futures, and then you should get to just take resources from me when you need them in the future since it's a "trust fund".
UBI feels like a way of addressing the incoming loss of jobs due to automation.
> No, people work more than they currently need to because they are exercising prudence, common sense, and planning for the future. Which every adult human being is supposed to take responsibility for doing for themselves, and not expect a "trust fund" to magically take care of for them.
It may not be materially possible for everyone to actually do this within our current economic organization in light of automation. People that benefit from UBI may very well be responsible and organized.
We can twist this a little and say that the responsible and organized thing is to plan for automation, to develop skills that make sure you aren't put out of work, etc. Personally I find that position logically valid, but I ideally would push for UBI while also making sure I have a good chance for not needing it.
A cynical take is that UBI is just enough to ensure the masses of unemployed would be complacent enough to not riot.
> UBI feels like a way of addressing the incoming loss of jobs due to automation.
A better way of doing that would be to allow automation to make the necessities of life drastically cheaper, so that the amount of work required to obtain them is drastically reduced. In the limit, if automation can produce all the necessities of life for everyone at essentially zero cost, then those necessities should simply be free, the way air is free now.
A big part is anxiety about the future. You are not guaranteed economic opportunities in the future, so we make the most we have of the present to ensure we can provide for ourselves in the future.
You also enjoy not subsisting. I enjoy not subsisting.
You don't want to starve if your industry becomes obsolete, you have an accident that leaves you unable to work or some other twist of fate changes your ability to work 10 hours a week at your current level.
> Most people work more than they need to because they realize that the future is uncertain and having savings will be beneficial if there's trouble at some point in the future.
That really says very little. If you live paycheck to paycheck, you're unable to save for the future, because all of your income goes out to pay for rent, food etc.
It's a different story if those 58% contain plenty of SV SWEs who make half a million a year and still only have $1000 in savings. My intuition tells me that there are very few of them in the 58%.
Do they have the option to work more to make more? Is more work available? Are they already working close to or at maximum capacity and their current level of wealth is the result? Without the contextual information available, that's hardly useful. I'm sure somebody that's unemployed and wants to work would work more than they currently are, but can't, because, well, they don't have a job to work at.
Some random singular statistic doesn't say anything.
> Most people work more than they need to because they realize that the future is uncertain and having savings will be beneficial if there's trouble at some point in the future.
It really does contradict the above statement. This "random singular statistic" is a broad survey of the American populace which concludes that 58% of Americans do not have savings worth mentioning. Those people are clearly not working more than they need to because the "future is uncertain and having savings will be beneficial", otherwise they'd have savings. And 58% is in fact a majority, so the "most people" in the above statement makes it unequivocally false.
If you have "better" stats that don't falsify your premise, I'm happy to look at them.
I doubt people could afford fancy tech gadgets on UBI. As others are saying most people would continue working because they want to achieve more. Do you really think Jeff Bezos or Bill Gates would quit what they're doing because of UBI?
UBI just gives you more options, yes you can stop working and pursue passions which I think would be great if more people did that. You could also maybe get a less demanding job and volunteer more.
You know, I thought so too, but I would probably instead just work _less_, maybe half time for half pay, I dunno. Seems like a great way to transform how we think about work and the economy. Fewer hours, when it's by choice, are pretty much always a good thing.
Yes. You click a button or fill in a form to say you were. Done.
It's obviously not full-blown UBI, but it's certainly a form of BI, and I think it very clearly dis-proves many of the "supposed" problems that a UBI will create like massive inflation, people lazing about not working, everyone doing drugs, etc. etc.
> This VAT would vary based on the good to which it's applied, with staples having a lower rate or being excluded, and luxury goods having a higher rate.
That's the beauty of a VAT. It can be tuned to reach the desired result.
> That's the beauty of a VAT. It can be tuned to reach the desired result.
But who will do the tuning? My guess, as a former corporate tax lawyer, is that it would be done by industry lobbyists, seeking preferential treatment for their clients' products.
Yea that's the problem with tuning these things, same with tarrifs, just leads to companies having a rational reason to spend money on lobbyists. IMO the VAT would be much simpler as a flat tax than trying to tune it, but it's not as popular with people who then complain when the price of goods go up (despite the fact that you'd have to be spending something like $120k a year in order to offset the losses of a 10% VAT with 100% pass-through (in Europe it's only 50%) with a $12k/year UBI)
Yes, it’s that simple. It’s already super expensive as is, it’s gonna to be even more when half of the population stop working. We just not rich enough yet.
UBI is meant to be a gambit to distract us from seeing that the playing field is so heavily tilted against everyone but the very rich and fortunate. the rich buy this diversion by periodically sliding some pennies down to the rest of us on the other end, while patting themselves on the back for doing such a magnanimous thing.
what we really need to do is bring transparency and fairness to labor markets, and squeeze rentiers and financiers, so that we can start to tilt that playing field back to where innovators can innovate in all sorts of directions, not just in the ones deigned to make the rich even richer.
Yea I really fail to see how UBI addresses the real elephants in the room. Mega landlords, investor firms hoarding real estate, and generally "unspoken collusion" where prices will only go up and they'll let rentals sit empty for years. Just throwing UBI money at people now just sits the minimum they can jack rental prices up. And we are back to square one with the rich being richer.
While I think UBI is one of the better solutions to the poverty problem in the US, I think almost any solution to poverty will fall prey to inflation if we don't address income inequality.
One way to do this is pay ratio caps at companies. It's pretty hard to argue against this: if you really believe that wealth trickles down, then you should have no problem trusting but verifying that.
This is a classic pre-distribution versus redistribution debate. I’d just note that they are not mutually exclusive strategies and can both be undertaken simultaneously.
You can see Sweden has been able to do so but countries like US, France, Germany, UK all have similar levels of inequality before redistribution.
The US inequality compared to those countries is primarily due to lack of redistribution:
> One way to do this is pay ratio caps at companies. It's pretty hard to argue against this: if you really believe that wealth trickles down, then you should have no problem trusting but verifying that.
That's not what trickle-down economics was ever about, to my understanding. But more importantly, a plan like you suggest would surely increase the user of contractors, rendering these the proposed pay ratio impotent.
Yes, there are loopholes that need to be closed. The same as any short description of a complex economic policy. I'm not sure why you think this problem is insurmountable: states already have regulations around who may be considered contractors.
States do have rules around considering individuals to be contractors. I don't know of any laws that do the same with regard to contracted companies — for example, the company that employs the people who clean the bathrooms at FB. This seems much harder to overcome with regulations.
I don't see the connection between inflation and inequality. Inflation is relative currency growth vs true economy size and productivity.
Pay ratio caps don't seem that productive in several ways. For one humans are tricky in that they don't just lie down and accept the laws you want that go against what they want and instead undermine and loophole it in ingenius ways. Trivially that would encourage "nesting doll tiered" subsidary companies and contractors to bypass the limits.
Second the high end of income wouldn't even be affected as they make their money largely from investments not salary or wages. Even if they got the seed for investments from their high salaries - like every retired athlete who managed to stay rich and even get richer after endorsements dried up.
> I don't see the connection between inflation and inequality. Inflation is relative currency growth vs true economy size and productivity.
If you implement UBI, you're essentially also implementing a minimum wage, since companies will have to pay significantly more than UBI. Rather than accept a cut in their own pay to pay workers more, executives will raise the price of goods and services. This effect, across the economy causes inflation. So if you don't find a way to prevent executives raising their own pay to maintain inequality, you get inflation any time you give money to the poor.
Economic conservatives tend to overstate this problem, in my opinion--there's nothing preventing you from just raising the UBI proportional to inflation. But historically, minimum wage hasn't tracked inflation, and I worry that UBI would suffer the same problem.
> For one humans are tricky in that they don't just lie down and accept the laws you want that go against what they want and instead undermine and loophole it in ingenius ways. Trivially that would encourage "nesting doll tiered" subsidary companies and contractors to bypass the limits.
This problem exists in any solution, including all the ones that already exist. It should be addressed, but I don't think that's a reasonable criticism of any solution if it applies to all of them.
> Second the high end of income wouldn't even be affected as they make their money largely from investments not salary or wages. Even if they got the seed for investments from their high salaries - like every retired athlete who managed to stay rich and even get richer after endorsements dried up.
Yes, we'd have to find a way to treat investment income as equivalent to pay in order for this to work.
> While I think UBI is one of the better solutions to the poverty problem in the US, I think almost any solution to poverty will fall prey to inflation if we don't address income inequality.
Please define the "poverty problem" in the US.
How is an increase in the money supply related to income inequality?
> How is an increase in the money supply related to income inequality?
Go read about whose asses were saved with printed the money during the 2008 financial crisis. Or the 7 trillion bailout fund for corporations that just passed.
Ugh. That's way too complex, and you know it. But I'll try to give you some bullet points:
1. Homelessness
2. Inability to afford healthcare
3. Home ownership being inaccessible to most people
4. Inability to afford childcare
5. Inability to afford education
Note how 1, 4, and 5 aren't solvable by providing jobs--these are problems that prevent you from entering the workforce even when jobs are available.
Frankly, I don't think you're asking this question in good faith.
> How is an increase in the money supply related to income inequality?
If you implement UBI, you're essentially also implementing a minimum wage, since companies will have to pay significantly more than UBI. Rather than accept a cut in their own pay to pay workers more, executives will raise the price of goods and services. This effect, across the economy causes inflation. So if you don't find a way to prevent executives raising their own pay to maintain inequality, you get inflation any time you give money to the poor.
Economic conservatives tend to overstate this problem, in my opinion--there's nothing preventing you from just raising the UBI proportional to inflation. But historically, minimum wage hasn't tracked inflation, and I worry that UBI would suffer the same problem.
My personal situation is an example: if UBI were implemented I would quit working immediately to pursue a graduate degree. Granted, that graduate degree would lead me back into the workforce eventually, but at least in the short run, it would take significant incentives to keep me in the workforce if pursuing education instead were an option.
I also know someone who works for $20/hour, and pays $12/hour for childcare. $8/hour isn't worth anyone's time in 2020, but they do it because government assistance doesn't pay their bills. If they were receiving a livable UBI, I have no doubt that they would choose to raise their children full time rather than work for an absurdly low wage.
> If they were receiving a livable UBI, I have no doubt that they would choose to raise their children full time rather than work for an absurdly low wage.
Having a child isn’t some externality requiring government intervention. Your friend is an adult who choose to allocate their time into child-rearing rather than wage-increasing activities.
UBI (in the U.S.) would be like printing more shares of a publicly-traded stock and giving all of the new stock to the employees of the company.
USD is the reserve currency, so foreign interests (or large corps) w/ stockpiles of USD will be the losers due to inflation.
Foreign interests can change which reserve currency they use at-will, so wouldn't this be like a direct-fee/dividend U.S. citizens (or any UBI-country citizens) could charge those that use the currency of the country but don't live there?
Think of machines and robots as workers that earn pay for their work. Then imagine that pay is spread back into the economy (like payed workers do), rather than just sitting in the robot owners account to "trickle down." Another way of putting this: Slavery (or automation) are really great for the upper class who owns, but destroys the livelihoods of everyone below who has to compete.
Follow up question: How many inventors created their world changing machine in dreams of making more money for the upper class, vs how many dreamed to help all of humanity?
So overall dilution of the currency. Then, increase UBI some more to make up for it. Then, dilute the currency some more. Over a few cycles become the new Venezuela as most entrepreneurs leave for greener fields.
Easy solution -- we stop the process of QE and replace it with a UBI. Why is dilution OK in the name of big corps but the next incarnation of Hitler when it's for you and I?
I have difficulty believing that UBI will ever work, unless you get the basic problems solved first.
Namely, housing.
The problem actually boils down to democracy itself, where people vote for laws that favors themselves, and excludes outsiders, specifically the NIMBY crowd. These are the people that vote in housing regulations, environmental review injunctions to prevent construction, etc.
Regardless of whether UBI is given freely like welfare, these NIMBYs will continue to exist, and they will act as a corruption on society. They got theirs already, and they will prevent others from getting it too.
For all other things, technology should be able to help make things plentiful. Food can come from mechanized and automated mass farming. Medicine can come from mechanized and automated mass production. Clothing, cars, consumer goods, well, I guess there are factories in China that can mass produce that.
But either way, unless you solve the core problems first, then UBI is dead in the water.
Otherwise, with the low interest rates, and massive corporate stock buybacks, then this will just continue to inflate the stock market, and property bubble, and other asset prices.
Then, what is the end result? The rents will continue to rise, and it will just eat away at your UBI. Now, we’re back at square one.
In the short term it would eat away at any income but it won't be 100% of it, and it will also vary by location. Some housing markets are more supply constrained than others.
Also a portable source of income would reduce demand for housing in cities too.
Are you sure were are not heading towards The Expanse ;P
Here's one counter argument for UBI. Who will do all the boring work needed for building a dam / apartment ? If we are honest about it, most of this boring, physically harmful and repetitive infrastructure work is only done by the working class that chooses to do it because the alternative is begging. It's because of the threat of extreme poverty and unemployment that the working class works. If they are able to sustain themselves with UBI why would they work ?
Who will do the boring data entry work in our industry ?
The boring work has to get paid better because companies can't exploit the fact that people have no other choice. I think the businesses based only on that exploitation and not on real innovation will probably suffer as a consequence.
People who do stuff out of fear generally don't stop being afraid if you give them safety. They would continue working even if unpaid, which most of them are kinda doing the whole time.
Replace a standard you can use with any client with... Spotify.
[EDIT] incidentally, I'm about 90% sure they're gonna succeed and open podcasts are doomed to decline, though they'll not go away immediately. Though I do have non-computer-nerd friends who are refusing to follow their podcasts as they move, one by one, to closed platforms, usually Spotify. Still, I don't think it'll be enough to stop it.
The narrative for UBI is strong enough, the details on its policy and implementation isn't. I think there's a couple of major initiatives that people need to take:
1) Give UBI to a small county / city for 1 year and study its economic and social impact.
Do the full 12k, $1000 a year grant to a small city. With a 30k population, that's around $500m dollars with research overhead?
One goal (among others) is to show how the money improves the local economy and gets earned back by the government / taxes, since that is a significant part of UBI's way of paying for itself.
2) Create a more robust policy for paying for it.
I want a document that is 50-300 pages long and covers EVERYTHING I can think of, like, 1) what exactly is excluded in the VAT tax? 2) Charts of consumption levels and how much you'll end up paying, with examples of actors at each level. 3) How much does Amazon, Facebook, Google, etc, actually pay for UBI? 4) What is the breakdown of where UBI money comes from in the economy? 5) What are contingency plans for if we have a deficit? Print money? Loan? 6) What are the contingency plans for if we have a permanent deficit, year over year? Inflation?
3) Find out the answer to the harder questions truthfully. The easy questions are things like, "will poor people be grateful for extra money?" The answer is obviously yes. The harder questions are things like "What % of people will spend their UBI on drugs and alcohol?"
You don't want to just brush aside the hard questions and treat them like roadblocks. If it turns out that UBI becomes people's weed stash, you have to look yourself in the eye and say "did we mess up". Of course, we could create policy to limit that behavior, but that comes from addressing the hard questions.
4) I would love personas that detail what the "average" US citizen's economic situation looks like with the population representation. Even if this is more fiction than fact, I think knowing about a Bob Smith who makes X amount of money, spends X on the following, has the following monetary problems, and by the way, is emblematic of another 2-5 million people in the US, would be really helpful for me to understand what the point of UBI is, since I'm not one of the primary users. 15+ of these kinds of profiles would be really cool to read especially if they cover the 70% of Americans living paycheck to paycheck.
Please note that there’s a box down on the left of that page, which is called “Stanford scholar explores pros, cons of ‘basic income’”, with the info and may be useful. This is the box link: https://news.stanford.edu/2018/08/08/stanford-scholar-explor...
>> Yang says Humanity Forward plans to immediately distribute Dorsey’s contribution in the form of small cash grants of $250 to nearly 20,000 people who’ve lost their jobs or taken an economic hit as a result of the COVID-19 pandemic
So money based on certain non-universal conditions?
Isn't this one of the root problems? People cannot accept a truly universal system - you've already got too much; that guy lives in the wrong part of the country; you have too much education; they're not citizens...
Bill Gates has stated he doesn't have enough money to tackle all major areas and make significant advances; then guys like Yang want to use far less money for even bigger mandates. This just looks like a way for rich guys to pick very specific winners.
UBI seems like it would be the most powerful vote-buying weapon ever created in the hands of any government given the opportunity to implement it.
That isn't exactly new politically for better or worse and essentially "bug report closed - a feature not a bug". Fundamentally that is what more democratic systems are - more distributive of political power and interests to please. They are supposed to "buy" votes by pleasing the voters! Every human has their price but that price may not be monetary. Of course all ways are not equal in terms of wisdom or morality.
Athenian democracy was rather different but they had voted for several wars of conquest to enrich themselves and the rowers (the job was higher paid than a soldier due to scarcity and militarily you both want better performance of professionals vs slaves and for them to be allies of soldiers during naval boardings instead of slaves who rebel for freedom).
> UBI seems like it would be the most powerful vote-buying weapon ever created in the hands of any government given the opportunity to implement it.
What's the difference between debating over UBI and increasing/decreasing taxes with regard to buying votes? Truly universal as you say there's only one question re: UBI what's the monthly payment? With tax code there's a million different loopholes and special interest carve outs etc.
Because the earnings part comes before the tax part, which is the proper order of operations. In order to produce earnings, our system dictates that you do something economically useful. That's not a perfect system, but it has produced the modern economy and for all its flaws, no economy in history has produced as much wealth as exists today.
I am highly skeptical of UBI. The U.S. is the last place that should try it, it should be experimented on in a country like New Zealand or Italy... not on an economy like the U.S., which could bring down world trade if UBI ends in economic catastrophe, such as hyperinflation, which is a very real possibility.
I see UBI as more of a response to the existing conditional welfare system which already exists and circumvents this system in the most perverse way where you can make _more_ money on disability than doing something economically useful. At least with UBI you can eliminate these incentive gaps.
Doesn't have to be UBI either, a NIT could do the same thing, maybe even the EITC as long as it keeps the earning curve monotonic.
I would LOVE to see more US experiments with UBI. The economics have already been tested. The federal government has these enormous funded installations where the people living there don't have to worry about the economy at all.
These gov-funded individuals then go and spend their largesse in the local economy, in many cases propping them up all by themselves.
This happens on a massive scale, right here, right now. They're called military bases. Politicians lobby hard to get the federal government to build them in their states, whether they're needed for military purposes or not.
People pooh-poohing UBI just don't seem to understand just how much of the economy already is paying people to do not much that is actually useful. So many of us have bullshit jobs. There would be mass poverty and unemployment otherwise.
Formalizing it instead of hiding it behind a veneer of fake usefulness will allow us to study it. Companies will have to entice people to take jobs rather than coerce them.
Bullshit jobs? Like which ones exactly? Who determines which ones are bullshit and which ones are not? We don't just create jobs for nothing. Companies that hire excess employees tend to go out of business or shed workers during a downturn like we're experiencing now.
In the meantime, no, we had a thriving restaurant and travel industry 2 months ago but the fact those people have been laid off or furloughed doesn't mean their jobs were bullshit.
It's never been tried at a macro scale for an extended period of time. You are being recklessly ignorant of the very real economic risks. Spending trillions more on top of the trillions in deficits we already have, but making those deficits permanent and ongoing with no ability to pay down will cause rapid inflation that could very easily evolve to hyper inflation like happened in the Weimar Republic in Germany in the 1920s and like has happened more recently in Venezuela and Zimbabwe. We may get there without UBI based on current trajectories, but UBI will just usher it in all the more quickly.
> Like which ones exactly? Who determines which ones are bullshit and which ones are not?
The market would, once one gets empowered to be created. Right now the market is tipped on the side of those offering money for work. If you truly flipped the tables around, then those offering money have to offer more and more and more. I'm not just talking money here but all those intangibles that make one job better than another.
As Henry Ford said, cars will never go anywhere, because, for all their flaws, no mode of transportation in history has been more efficient than the train.
> Because the earnings part comes before the tax part, which is the proper order of operations. In order to produce earnings, our system dictates that you do something economically useful. That's not a perfect system, but it has produced the modern economy and for all its flaws, no economy in history has produced as much wealth as exists today.
It should be noted that if it weren't for the energy we are extracting from fossil fuels, we'd all be subsistence peasants eating mud, and shoveling cow shit with our hands for a living.
The economic system is a rounding error, compared to the colossal increase in wealth unlocked by cheap access to energy.
In what decade? By the 1980s, the U.S. had far outstripped the U.S.S.R. in economic performance by every single measure. Here's some clips of a Soviet grocery store:
The citizen question is so very hard, because in practice, non-citizens are numerous and very vulnerable. Cementing UBI for citizens only, would construct a gulf state like two tier society.
Eligibility for the UBI will always be contested. Would it not make it even harder for immigration laws as well?
If the choice is between a comprehensive welfare state/UBI for both citizens and non-citizens, with restricted immigration vs. welfare/UBI restrict to citizens only but with more permissive immigration, I suspect the vast majority of non-Americans would choose the second. UBI for non-citizens is nice, but completely useless if the US won't even let you in.
For people in poorer countries, the quality of life improvement from coming in the US would be so drastic, that preventing people from making that movement, simply to give a small minority of them a marginal benefit, seems to be the wrong decision to take.
Another way to put it is that the two tier system already exists, it's just that the second tier is outside the US/developed countries.
Its troubling to imagine the negotiations that might get restrictions put in place, to further political wrangles. If the 'U' is not there, then its just another program to manage with a huge bureaucracy. Instead of the great leveler and simplifier it could be.
You can't buy a sandwich with a piece of paper that says your taxes are going to be lower next year (especially when you don't have much income to be taxed).
Even universal has winners and losers. How do you deal with different cost of livings between Bay Area and Mississippi?
If the UBI is not adjusted and covers living expenses in cheap areas but not expensive areas, then people might decide to live cheaply without a job. That risks creating slums.
If it's adjusted to locality, then areas will grow and dwindle based on accuracy of those adjustment tables. Which would turn those tables overtly political.
If you’re treating people wanting to live cheaply without a job as a negative situation that should be avoided, then I don’t think you’re in a mindset to be evaluating UBI specifics correctly. You should just be wholesale against it. The whole point is to free people from wage slavery. You’re worried that it will work!
On an even broader level though, location caused cost of living differences being taken in to account in anything like this seems odd. I read it as the equivalent of “but what about people who want Ferrari’s not Honda’s!?” When it seems like others see it as “what about people who have expensive to treat medical conditions?”
COL differences aren’t some arbitrary accident. You’re paying more to live somewhere more desirable.
I'm for UBI. I'm just suggesting it should be implemented in a way that doesn't causes jobless people to group up into ghettos. Those areas would have high unemployment and little opportunity, putting those people in a dead-end. Even with UBI you want social mobility.
It's one extreme that could worsen class divide. The other extreme is making UBI too comfortable, which you highlight. It's a balance, and I don't know how to do it across different COL.
"wage slavery" is such a disingenuous weasel word term. There's no slavery involved at all. Involvement is purely voluntary and you're free to leave at any time.
Here we go again. People are not always in a position to leave a job. People are living paycheck to paycheck and not able to get other jobs. You're being disingenuous.
"Slavery is any system in which principles of property law are applied to people, allowing individuals to own, buy and sell other individuals, as a de jure form of property."
Living paycheck-to-paycheck or hand-to-mouth like most humans lived for most of human history does not make one a slave. To state otherwise is to compare mere existence to slavery.
Unless someone is an actual slave under bondage or with threat of coercion from another person, they are always in a position to leave a job. Doesn't mean they are free of consequences, like no longer getting money because they are no longer willfully trading their labor for compensation, the same way that someone farming the land will stop reaping the benefits of their labor once they stop engaging in farming behavior or if someone living as a hunter/gatherer will stop collecting sustenance when they stop hunting and gathering. At no point are any of those people slaves because no coercion is involved.
Literalism does nothing here because the concept of wage-slavery is more like the concept of serfdom than slavery. But language is malleable over time and it's commonly understood what it means, especially to people familiar with the struggle to survive in the modern economy.
If the liberty someone is taking with the language is intentionally trying to manipulate how people think about something by abusing what words are commonly accepted as meaning, it's completely fair to call out that manipulation.
“The basic tool for the manipulation of reality is the manipulation of words. If you can control the meaning of words, you can control the people who must use them.”
― Philip K. Dick
It happens all the time that people chose their language precisely and in ways that clearly have more impact on another party's perception. Being pedantic over the definition of a word only distracts from what that word(s) is trying to do. I sense that you are really uncomfortable over what the word "wage-slavery" implies about the society you are participating in and are trying to cheapen it.
You're cheapening what slavery is. It's honestly pretty disgusting to equate serfdom to slavery. They aren't even in the same league.
Go read more about modern day slavery and then come back and try to justify comparing the circumstance of these people to those who are actually being treated as property by others.
People are free to move to lower cost of living areas. In fact, many would argue this is a benefit of UBI and will bring much needed economic resources to under populated parts of the country.
Not everyone needs to live in the Bay Area.
COL adjustment to UBI would be a huge mistake and undermine the entire concept.
I think it's a double edged sword. Encouraging people to minimize their COL and spend the money on underinvested areas of the country is fantastic for decreasing the wealth gap.
But the other likely outcome is drastic COL inflation in low COL areas which adversely impacts them significantly more.
Yes. Colorado hates on Texans for scooping up real estate and driving up prices and taxes. And Texans hate on Californians for scooping up their real estate. You can't have it all. And if you do, it won't last forever. Such is life.
Low COL areas are so widespread in practice that no real inflation would occur, even if all the money was spent there. Urban living is the kind that's scarce and expensive.
I believe so, but the economic impact isn't well understood yet.
The UBI experiments so far have shown that it does have an inflationary effect (which causes COL to go up), and at the same time, incomes decrease as secondary earners opt for UBI instead of working. People overall are much happier, but their financial situation gets worse.
> People are free to move to lower cost of living areas. I
That's probably NOT what is going to happen if you implement UBI. Rather people complaining UBI is too low for the place they are currently living in. Well known phenomenon.
It seems like people would like it, being that it's in their own interest, but you should hear how much people today disregard social welfare programs. Either throwing their hands up in the air that it would be impossibly expensive, and/or bread would become $20.
That's going to do absolutely nothing. Small UBI is damn near worthless. You need to go toward at least minimum wage's worth per year to see any decent effects.
Whoever figures out how to do full UBI on that level will be heralded as a messiah if they can actually put their plan in place and execute it.
I think that people can accept a universal program, but legislators and the think tanks that govern their policy cannot. The point of Dorsey's funding is to provide high quality data to bolster the policy, and this might have that effect even if, like you say, the payments aren't universal.
It's not bad, it just misses a lot of the benefit of 'basic' income. For example, my wife had just finished her education and was looking for a job when COVID hit. She's randomly just as hosed as everyone that actually lost an existing job, but qualifies for none of the same relief.
The benefit of the 'universal basic' part of UBI is that it just washes away all edge cases, and it's pretty hard to feel like you've been wronged by it.
Andrew Yang's Humanity Forward organization is not the nation's government. They don't have the resources to make something universal. That's one of the reasons he ran for president, was so he could do that. The people weren't ready this time, but maybe in 4 years, when he's probably going to run again, they'll be more willing to give him a shot.
But right now he is doing what he can and working with much, much more limited resources, so it only makes sense to target people who are in immediate need because of the crisis.
There are a lot more people than even that 20,000 that are struggling right now (40 million people have lost their job since the start of the pandemic, in the US), but if he divided $5,000,000 by 40 million people, it'd only give each person 12 cents, which doesn't help any single individual enough to make any difference, while simultaneously turning into a much more of a logistical nightmare.
For example he had Sam Harris on his Yang Speaks podcast recently, and Yang said that to a certain extent he sympathizes on how long the stimulus checks are getting out to people because he's been giving money out himself and it's been difficult to pin down current addresses for the people most in need.
So what is it you're expecting him to do with that $5 million instead, that would make it more universal?
I’m not the OP, but I would like to see some UBI studies that are at least permanent (per participant), if not universal.
It’d be a lot more interesting to me to see what happens when 30 people get $1,000/mo for the rest of their lives than what 20,000 people do with an extra $250 once.
You could run a test case in a low income country where 5 million goes a long way. For example, the median per-capita income in India is $600/yr[1]. You could use this money to provide 3,000 people with $300/yr for 5 years.
Give Directly does that. The organization is all about giving money to the extreme poor, and they're outstandingly effective at doing this. At the same time, they structure their giving activities as RCT's at varying levels (formerly household-based, now full villages AIUI) so they're also creating very valuable research output about these issues.
True.. I’d probably rather do $120/yr for 3,000 people for life (as opposed to just five years). Assuming $120 is equivalent to $12,000 in the US, and for life is going to be more interesting than even five years. And at 7% interest you could afford this forever off the $5M endowment.
I think developed countries will adopt a "Work on Demand" model that allows workers to order work and have it delivered and picked up (anywhere in their state, county or city) using the advancements of self driving vehicles. It compliments the trends currently underway with WFH/WHA and the same-day delivery aspirations of a few e-tailers.
UBI might be a transition to WoD, but the infrastructure, education and political models should go ahead and calibrate to the flexibility of the labor market(s).
The COL argument should revolve around someone only having to work 20 hours a week to maintain their lifestyle vs someone who has to work 40 hours for the same thing.
This is totally unrelated to the article but I keep thinking about this lately: does anyone know what happened to Noah Glass who was a part of the original founding team?
I watched an interesting, somewhat, kind of related video on this today. Although it doesn't quite answer your question about what happened to him, interesting watch nonetheless and quite informative. https://www.youtube.com/watch?v=p8N0xN0ihMA
As soon as I read the headline my first thought was "what can $5M tell you about the efficacy of UBI?" and the article quickly confirmed my suspicions: "nothing." From the article:
> Yang says Humanity Forward plans to immediately distribute Dorsey’s contribution in the form of small cash grants of $250 to nearly 20,000 people who’ve lost their jobs or taken an economic hit as a result of the COVID-19 pandemic.
What is this supposed to prove? People who are in a terrible economic position will benefit from getting $250? We don't need to run an "experiment" to know that the answer is "yes." And this isn't even "experiment," as there is neither a response variable being measured, nor a control group.
What's happening right now is terrible, and it is good that Dorsey and Yang for making this donation. It is bad, however, that they are trying to spin this as a scientific investigation into the efficacy of UBI. I think that we need to start experimenting with UBI sooner rather than later. But when I see stuff like this, I worry that a lot of UBI advocates are less interested in raising the poverty line than they are in creating excuses to gut the welfare state.
Even if there is a case for universal basic income these are not the droids you seek when it comes to endorsing it as a concept in fact my instinct tells me they'll fumble it and end up causing it to fall out of favour even if it could've been implemented
The reason is these two lead with their egos rather than engendering true community belonging
What is stopping companies that make money (to pay for UBI through tax increases) from leaving the country to elsewhere with lower taxation? Where would this money come from then?
If things do get automated it means labor is no longer needed to be sourced locally, making it much easier to uproot and go elsewhere.
Where would they go? Every other country has a VAT tax and to pay for the version of UBI that Yang proposes would be a VAT tax at half the European rate.
Even if companies uproot, selling to US consumers means paying US VAT taxes. US companies pay european VATs too, they all complain about it but don't leave the market as long as profits are positive.
If you're trying to build a case for UBI in general, it seems odd to do your experiment during a very non-standard time. What works or doesn't work in a pandemic may yield very different results in more normal times.
I seriously don’t know why people believe this will work and unlock the latent poet or artist within the average joe. As far as I have read most experiments have had mixed results, and we don’t really know what the full impact will be if implemented in a nation of 350MM people. My suspicion is in a couple years people will notice that housing, food, and transportation has gone up commensurate with their “basic income”. Then we will find ourselves in a vicious battle to justify raising or lowering it every couple years. And forget about ever putting the genie back into the bottle. The risks are huge.
>I seriously don’t know why people believe this will work and unlock the latent poet or artist within the average joe.
I completely agree. I feel that this is a narrative that's parotted by academics who believe that because they may have these latent abilities, everybody has this. I haven't seen a surge in poetry or startups in the Rust Belt, where lots of people are on quasi-UBI (disability payments).
>Then we will find ourselves in a vicious battle to justify raising or lowering it every couple years.
There's also the matter of having larger payments to people in certain areas in the first place. For example, I can see someone saying that there's a "flat" UBI for everyone, but that there's also a COLA payment on top of that for people in HCOL areas.
I agree, there is just no way for it to work. We'd be better off with less overhead versions of existing programs and higher tax breaks for the poor, maybe no federal taxes under 200% of poverty. Add in Medicare for all in the same bracket and we meet most of the "upside" in a simpler and sustainable plan.
I've spent some time trying to envision the goals of UBI from the other side. Could you supplement volunteers and artists using a closed loop rewards program? My thinking caused me to create The Good Loop, http://thegoodloop.org, it isn't implemented yet but hopefully someday.
This is what has me not liking UBI. It makes zero sense to figure out how to pay a monthly stipend that comes at an astronomical cost but not healthcare.
Free healthcare would make the country smarter, more productive, healthier, better economy, etc.
UBI looks to me like a very bad idea that takes away power from citizens over the long term. I think it would be very ugly 50 years later. Get convicted of a felony? Lose your UBI. Born in an enemy country? Lose your UBI. Late on your credit card payment? We'll just take it out of your UBI.
Technically speaking , many European countries already have "Basic Income". ( France , Sweden , Norway...)
They are reserved for individuals "Not Active" though ( Unemployed and not looking for a Job ) over a certain age.
Those "BI" massively lower poverty , which usually massively reduce crime-rate , drugs related usage etc...
With 700€/Month you aren't gonna far anyway, you have enaugh for food and rent , and that's it...
For America it's different, America cannot technically afford "BI" because the entirety of the US economy has been built on having 20% of the population living under the poverty line in order for good & services to be cheap and consumed in mass.
Having "UBI" in US would create a skyrocket inflation because worker who are paid 10$/Hour would drop their work and stay at home and do something that is more profitable for them.
Hence , the American culture revolve almost entirely around production of good and services for happiness.
In France few workers drop off the "Industrial" economy , they buy a Farm and live of "BI" and their own agriculture and go back to the city to buy commodities ( Gas , Cosmetic etc... ), it's common in Italy and Spain as well IIRC.
>Having "UBI" in US would create a skyrocket inflation because worker who are paid 10$/Hour would drop their work and stay at home and do something that is more profitable for them.
Unless you have some hard data, your argument doesn't seem very convincing. The numbers could easily work out in any way, and it would probably depend on the actual amount of UBI you use, because the effect on the workforce and the spending power of consumers would be important for determining the amount of inflation. Studies are useful in situations like this.
Also, I mean, this subtly doubles as an argument against a minimum wage increase. In the same sense that a UBI might slightly decrease the workforce and lead to higher wages for those remaining (and inflation), a minimum wage increase would also. Do you have a proposed tool to increase the wages of an immiserated 20% of the population that doesn't also have the potential to cause inflation?
> Unless you have some hard data, your argument doesn't seem very convincing.
Seeing as plenty of people are earning more with the federal unemployment compensation than they would if they were working full time, I'm not sure what exactly is "unconvincing" about it.
If only one country provides UBI to immigrants, that country will see a rise in immigration. At what point do taxes raised from the new residents exceed the money paid out?
Or maybe you're talking about UBI to immigrants, but not actually allowing any immigration.
Politics mainly. It's already hard to convince people to give up part of their wealth for their fellow citizens. Good luck convincing them to give it up for non-citizens.
Also, logistics. If immigrants can get the UBI, then people would flood in from all over the world just to get UBI. You'd either have a ton of expense, or you'd have to make legal immigration nearly impossible.
It would certainly be challenging to be a non-citizen resident if you have to pay the same taxes as everyone else, but are cut out of such a major benefit.
Basically a gigantic extra tax for not having citizenship.
Without the right to vote, I think it would be hard to get much political will for it. Even if we started out giving it to noncitizens, it would be the first thing cut in budget cuts.
Yes. Which is why the UBI wouldn't make nearly as much difference as people think. Nearly all the "work people don't want to do" is already done by immigrants who won't qualify for UBI (but would still be paying the VAT taxes that fund it).
That's basically how the math works out. Immigrants fund a lot of the UBI by paying into it but not benefiting from it. We would need a lot of protections for non-citizen workers to protect them from being exploited.
To be clear, I'm a big fan of UBI and think it's a great idea, I just worry about the unintended consequences.
> Have you got any sources on these claims about France, Italy and Spain? Never heard of this.
I'm one, I worked on the first Permaculture farm in Italy, (Modena) and it was nearly entirely funded by some incredibly underfunded Ag subsidies, and the elderly Mother's pension/retirement fund. It's labour pool was mainly made up of volunteers and apprentices like myself besides the 50 year old son who came back from Germany after a messy divorce.
When I arrived the eldest son (and to much lesser extent the youngest of his children, an 11 year old boy) had to do what was done by both parents and his siblings now entirely by himself. So Sales figures were less than optimal, even if the produce was amazing he'd be way too exhausted to do all of the farming duties throughout the day, so trying to get more exposure by going to more Farmer's Markets was out of the question.
Labour was the really needed part of the equation, once we got the Team organized and with solid schedules we were able to expand to 3-5 farmer's market a week as opposed to the single Saturday morning one that had been done for the past few years. The costs of transport and fees for the stands were higher but that was overcome with a larger volume of deliverable goods, as less was perished by sitting in the non-electric storage area after weekly harvest and we started to re-supply some local restaurants with our excess along the way to the farmers markets, too.
After I left we had turned sales around to a 10-year high, reached back when most of the family (2 parents and 5 late teen/early 20s children and a grandparent) could work with only just 3 extra men and myself in the fields in the morning and then going to farmer markets in the afternoons.
Suffice it to say, I met hundreds of people operating with some variation of that model at what I can best describe as an 'underground Farmer's Market,' where it felt more like a carnival than a typical one it was entirely 'Industry only,' some local chefs from the surrounding area arrived, too. Someone with a stand near us said they saw Massimo Bottura at one I didn't attend as I had to help in the fields that day.
In short, its a thing. WWOOF [1], the network I used for my apprenticeship, has most of the farms listed operating like that for decades now. I met lots of volunteers and apprentices in France, Italy, and Spain and much of Europe as far as parts of sub-Sahara Africa.
With that said, I think the majority of Farm labour should become automated and instead of making more Farm laborers alone, its best to offer people with limited opportunities in the City other opportunities to own farms with low cost barriers to the these tools. Land, especially between 'LA and Mississippi' is severely under utilized. On a road trip to Kansas City we could go 100 miles across Kansas before we saw anything remotely looking like it was inhabited by Humans.
>In France few workers drop off the "Industrial" economy , they buy a Farm and live of "BI" and their own agriculture and go back to the city to buy commodities ( Gas , Cosmetic etc... ), it's common in Italy and Spain as well IIRC.
Maybe this would actually be a better implementation. Rather than pouring resources into deciding who qualifies for BI you could just establish "havens" for people who cannot or will not work within the current system. The only qualification then is to move to that haven after which you will be provided with a place to live, an optional job, food, clothing, etc. but limited to only what's necessary. Essentially establishing small scale communes within the larger body of a capitalist nation. It could provide an escape for people who don't want to partake in the rat race and just want to exist quietly and pursue their own interests while living spartan lifestyles. You could even go the other way and provide other special zones for unfettered capitalism with 0 taxes and no publicly funded institutions. As long as people can choose where they want to live and can leave when it no longer suits them I don't see why this couldn't work to some degree.
> With 700€/Month you aren't gonna far anyway, you have enaugh for food and rent , and that's it...
Contingent benefits disincentivize people from participating in the economy. People paid to do nothing... do nothing.
> For America it's different, America cannot technically afford "BI" because the entirety of the US economy has been built on having 20% of the population living under the poverty line in order for good & services to be cheap and consumed in mass.
Under any economic regime there will be a poorest 20% at any given time.
> Having "UBI" in US would create a skyrocket inflation because worker who are paid 10$/Hour would drop their work and stay at home and do something that is more profitable for them.
It causes inflation because more cash is chasing the same number of goods.
> Hence , the American culture revolve almost entirely around production of good and services for happiness.
In order for welfare to be « legalized » , and for taxpayer to accept that their money will go to «Non-Active» individuals it’s necessary to have a cultural fit between the two.
You cant tax like Norway or France ( 40% overall ) if people believe that you should work to earn a living, it’s not right to do so.
American would never accept such sky high taxe rate if it cause against their believes and thus their culture.
US rely on entrepreneurship which create wealth which enable people to buy goods/services.
A very high progressive tax is compatible with the belief that people should work to earn a living. If I have a lot of money, I can invest it and for almost no work grow my wealth or get another income stream. How is that fair? And why does this observation often get left behind?
> If I have a lot of money, I can invest it and for almost no work grow my wealth or get another income stream. How is that fair?
One doesn’t just “have” a lot of money. People work hard for their money. A high wage is a signal saying, “We (society) value what you do and wish more people would do it.”
If you think profitable investing is easy then you don’t invest. Ask yourself, if profitable investing is easy, then why do wealthy people pay venture capitalists to choose their investments?
> Contingent benefits disincentivize people from participating in the economy. People paid to do nothing... do nothing.
That's, at best, highly debatable. I would like data showing that (or the opposite)
> Under any economic regime there will be a poorest 20% at any given time.
That's not what "20% of the population living under the poverty line" means. It means that 20% of people don't earn enough to live decently, which is highly dependent on the economic regime
A lot of the UBI in Europe is benefits in kind. Healthcare is the obvious one, but also police forces with a higher degree of professionalism, better access to (and treatment by) the justice system, clean water, higher food standards, it goes on. Right now we are benefiting from a coherent and effective response to Covid-19. All these things can be found in the US - if you can afford to pay.
I certainly don't want to be mean and I don't think that money should be how we measure people's value but I find it a bit odd that Andrew Yang claim to fame is being some kind of successful entrepreneur and yet his net worth is around 1 million USD. Much less than Obama for example.
I'm also talking as a non-us resident that doesn't know much about him except I've googled him a few times.
Looks like he made his million on his successful startup (making him a successful entrepreneur) and then proceeded to start a non-profit, which by definition should not make him exponentially richer.
A living income guarantee has my blessing, but UBI doesn't. It's either too low, and there's still need for welfare, unemployment benefit, etc., or so high that the (unpredictable) consequences can completely overwhelm the advantages.
The problem part we got down: We all need a living income and the current system cannot employ all with a living income. There are many people who are fully employed and cannot make ends meet. Many others still cannot leave their employer to improve or change their skills without losing their housing, healthcare, or food security -- short of being crucified on higher education debt. This hurts everyone.
If UBI becomes too high, people will stop working, inflation will rise, and there won't be a safety net of subsidies and welfare left to help. So if e.g. the price of housing rises, the UBI will be eaten up more and more by rent and mortgage, and people with only UBI will be as poor as before, and people will be forced into very low paying jobs.
Furthermore, I've never seen a convincing source of funding for UBI; at the first sight of an economic crisis, UBI will be lowered. At that point, there's no way to revert the UBI, leading to a new poverty trap.
And reality is going to be wilder than my imagination.
If the problem you're fighting is poverty, then provide welfare for poor people, stimulate work for them, make schools accessible (in backwards countries where that isn't the case), etc., but don't try to restructure society. That's just ego.
Given everything that is going on, the case should be fairly straight forward to build. In fact, Yang has bene on top of it since Covid19 took hold in America.
I truly hope UBI gains more popularity and strength going forward.
UBI has a lot of practical problems. Why not start at universal health care or wider affordability of affordable housing and education? Without that any UBI will immediately be eaten up by rising prices in these areas.
It seems to me that many people are trying desperately to push all of these proposals, and it's been a borderline immobile uphill battle on all fronts. If any of these gain traction, we should celebrate, rather than accusing people of not yet achieving the others. It also makes sense that UBI would be the first to reach the staging phase, since it's the easiest to explain and the easiest to implement.
Of course, your concern is still totally valid if UBI will indeed be pointless without the other problems solved. I just wanted to point out how easy it is to say "start with universal health care and affordability of housing and education". That's a huge thing to "start with", and in fact we're already deep into the fight for them.
"Of course, your concern is still totally valid if UBI will indeed be pointless without the other problems solved. I just wanted to point out how easy it is to say "start with universal health care and affordability of housing and education". That's a huge thing to "start with", and in fact we're already deep into the fight for them.
"
If you can't solve these issues, UBI simply can't work. It's basically a distraction from urgent problems that should and could be solved now but may cost money. Considering that UBI is often pushed by billionaires I wonder if that's the secret plan.
> It also makes sense that UBI would be the first to reach the staging phase, since it's the easiest to explain and the easiest to implement.
As opposed to socialized healthcare, which has a long track record and a variety of implementations in every industrialized nation to use as inspiration? We would literally just have to expand programs that we already have (such as the VA or Medicare/Medicaid) to start. Healthcare free at the point of service also takes no effort to explain - the "Medicare For All" marketing is actually designed to explain how easy it would be to implement.
I believe in markets with scarce goods and no alternatives this is the case. In healthcare you have no alternatives. And as long as housing supply is short, you have no alternatives there either. So people end up paying whatever is being asked for.
In other markets more money won’t raise prices because the purchase is optional and there are competing alternatives.
It's not directly UBI, but strong welfare programs don't seem to drive up rent prices. Since UBI with a corresponding progressive tax is equivalent to welfare, I'd assume it'd have similar results.
Better question: why would it? Economics is complicated.
In a free market there's no way to distinguish 'UBI money' from any other kind. Try jacking your price up - somebody else will have a sale and eat your lunch.
He alluded to how those systems being over-regulated and broken prevent the usual economic factors from working. E.g. if you don't allow people to build new houses in certain places then that makes it quite easy for housing prices to go up in those areas
There's no reason we can't implement UBI asynchronously
For what it's worth, of all of these solutions, UBI is the one that requires the least overhead, by far. Housing requires actually building houses. Education means making broad structural changes to many different levels of the whole system
UBI, as it has been mainstreamed, is literally just playing a trick within the money/accounting/tax system to lift people out of poverty. This will have a positive spill-over effect into other stuff
Or not. Because folks are hurting now. And with UBI they might be able to move to more affordable locations anyway, which helps solve the other problem right there.
Try foundational macroeconomic principle. But it wouldn't even get that far, the Fed would just raise rates to offset the would-be increase in aggregate demand.
Basic macro says this policy would increase AD, which would increase inflation in a vacuum.
What would really happen is that the Fed would raise rates, which would increase the barrier to market participation and we would be back to where we started.
Mental health & physical health are problems easier solved with money.
Most major cities have rent control of some sort, if not, it's not that hard to start new towns with nation wide UBI. There are other places in this country other than SF, LA and NY
Because Andrew Yang is a people pleasing demagogue, who operates under 'everyone deserves the same number of basic goodies' and 'I am here for the under-privileged' as his core messages.
Facing reality without cherry-picking problems the rich create while ignoring the problems the poor create would undermine his ability to people please the poor and get elected.
It's all bullshit - I don't know how many Obamas and Yangs it'll take for people to realize that there is no benevolent politician that can make the problems of the poor go away without having the poor change their ways, the same way there is no trainer that can make you get in shape without you working your ass off.
UBI or not - smart/creative people would rather not live among or deal with self destructive, dangerous dummies. Self destructive, dangerous dummies are being very actively replaced by robots who don't have the downsides of human beings.
The only bargaining chip the dummies have, is that they are still necessary for the infrastructure to function. This power will be eroded away, until one day, the dummies' only argument will be that of a street beggar - won't you spare some change? And the smart/creative class will throw some change their way, they'll call it UBI.
Stephanie Kelton and MMT should be part of the basic income discussion so that Yang doesn't create an ideologically tinted version that kills social security making it politically appealing to libertarian free market wing nuts.
Maybe the could just not take the money out of my paycheck in the first place? Why do I need management fees and inefficiencies to get money that was already coming to me?
Which is incredibly charitable! Opponents to UBI only oppose the income source being tax; which is a forced wealth transfer (opposite of my money my choice).
I'm a leftist person who isn't an opponent of ubi, but is an opponent of Yang's ubi. I have no problem with raising taxes, but I do have other concerns.
Namely, if everyone got $x,xxx a month, how do we ensure that rents don't just go up by that amount or wages don't go down by that amount? I worry that without a well thought out plan, UBI just ends up funneling money directly back to the wealthy (eg, landlords and business owners).
I'm not convinced yet that Yang has a thorough enough plan here.
>how do we ensure that rents don't just go up by that amount or wages don't go down by that amount?
Two ways to answer this:
1) If you're printing money, then yes, prices will rise, and if price controls are implemented it will lead to shortages (e.g. Venezuela)
2) If you're not printing money, then competition will simply lower the cost. It's the same as today - outside of terrible policies like rent-control, why don't landlords just raise rents by $5000? Because the renters will leave and rent from a landlord that undercuts the crazy landlord. In the market, profits tend to 0 and if profits are too high more supply will come in to get a cut of the profits. It's not magic.
>BI just ends up funneling money directly back to the wealthy (eg, landlords and business owners).
Your view on reality is skewed. I mean, yes, people will buy products and services from landlords and business owners. That's not 'funnelling money' anywhere, that's just buying products and services. What do you think people will do with that money, if not to buy things they want and/or need.
>I'm not convinced yet that Yang has a thorough enough plan here.
For sure. UBI does not solve anything and is unworkable, but not for the reasons you stated.
You have a lot more faith in markets than I do. I don't believe that we've been particularly well served by the housing or health care markets. It's been demonstrated, again and again, that 'more supply will come in' just isn't working for housing.
I think we fundamentally disagree, though, which is ok. I see rent control as one mechanism to attempt to decommodify housing (which I'm strongly in favor of). I'm not sure we're going to find much common ground via internet forum.
> 'more supply will come in' just isn't working for housing
Curious where you live because in Seattle this has definitely kept the rent prices from growing as fast as in the SFBA.
Admittedly these are apartments on the expensive side though, affordable housing is not a priority for developers because it's not as profitable per square foot. Blame {wealth inequality | zoning}, depending on your outlook.
So why wouldn't developers simply build higher-density housing to maximize this crazy profit per square foot? Why not buy your single-family home, demolish it, and build a multi-family/multi-storey apartment building and maximize the profit from that high-value land? Do they hate money? ... or are there regulatory barriers preventing them from doing that - barriers that are supported by existing property owners, who like their house prices tripling every 7 years.
>we've been particularly well served by the housing or health care markets.
Healthcare is going to be special. We're OK with a person not getting a Lexus if they can't afford one, but we are deeply uncomfortable with treating, say, cancer surgery the same way. So healthcare will always have a social component.
That's not the case for housing. Housing can be managed the markets just fine, you just need to make sure you don't constrain it a level where it cannot react to demand. Where housing fails, it's always the case of local regulations, from property owners who want to limit supply to keep their house prices up to activist and the local council who will restrict high-density housing development for the dumbest reasons (e.g. if the shadow of the new housing development falling on a playground - true story). You mentioned you're from Seattle - are you sure housing isn't constrained due to crazy progressive municipal policies?
>I see rent control as one mechanism to attempt to decommodify housing (which I'm strongly in favor of)
This is very perplexing to me. We know rent control hurts housing supply, and it hurts people that it purports to help because we have data on this from decades of studying this policy. There is no economist that supports it. I don't understand how it keeps coming back.
>It's been demonstrated, again and again, that 'more supply will come in' just isn't working for housing.
Where? Do you mean places like Seattle or San Francisco which make it almost impossible to build new development? Why wouldn't you look at regulatory policies of those areas before wanting to socialize an entire industry?
>You have a lot more faith in markets than I do.
It's not about faith in anything. Because markets are a messy, chaotic and complicated bottom-up structures where the individual transaction is impossible to predict, but where everything optimizes (at some minima) on a large scale - some people tend to be fundamentally uncomfortable with it. So the alternative is to fix the messiness of the markets by imposing a 'clean' top-down policy where the one true answer is dictated. The problem is that nobody at the top fully understands all the variables of the underlying messiness and hence they always get it wrong. If you take that to the extreme, you end up with a Communist disaster.
so by that logic, if we took money away from people the rent would go down? The answer is yes, it probably would, but not enough to negate the effect of the wealth change. With a UBI of $1,000 I would expect rent might go up in some areas by maybe up to a few hundred but this idea that rent would somehow skyrocket to the point that it would nullify any benefit seems a ridiculous assertion to me.
Landlords regularly capture upside from social, economic, or technological improvements. Cue conversation on the actual remedy to rampant wealth inequality, https://en.wikipedia.org/wiki/Georgism
Yeah the best solution is that we, as in our local governments, should be our own landlords and own more of the property that we rent out. Not just housing for the poor, but for every spectrum of wealth. If rental housing is such a good investment, then let's get in on it ourselves.
As a landlord [1] I can answer that question. Btw, I have not found any UBI proponent addressing it either (they tend to avoid that with economic speak if at all) [2]
Rent will go up. All you have to do is look what happens in 'hot' markets (SFO/NYC/Bay Area) where there are so many dollars floating around.
[1] Both commercial and residential but not in a hot market a 'normal' market.
People are actually downvoting the idea that rents will rise as high as the market allows? Hilarious.
Rent rises when: there are high paying jobs around (SF, NYC); there is public investment (subway stations, schools, parks); or, yes, when everyone stumbles across an extra $1k/month (UBI).
All of these mean "the market" (aka tenants) is able to pay a higher price, therefore landlords raise their prices and capture it.
By how much? Do you assume that the full UBI amount will be available for tenants to pay rent, and that no other prices will increase? I imagine that landlords in aggregate would understand that it would not be in their benefit to raise all rents by an amount equal to the UBI if they want to keep tenants.
Yang's campaign estimated that prices would go up about 12%, so for higher income (like many on HN) this would be net decrease in spending power. For someone in poverty, going from $12k to $24k per year, this could be life changing.
I think rents and other costs will rise to the equilibrium point where a lot of people are stressed by the price but just about able to pay it.
Same as now.
It's not a coincidence that the cost of living is equal to the amount which lots of people struggle with, yet are just about coping with.
However, a key benefit of UBI is that the situation is stable and predictable for people on it. Currently, people who are just about coping are living in constant low-level fear that their circumstances will change for the worse. For people who would have to turn to government support, a legitimate fear is not knowing what claims will be allowed, or being asked difficult questions about lifestyle for which there is no safe, honest answer.
That fear has a lot of consequences. For example measured IQ is lowered in that state. People do not make the best decisions; they can't. They are sicker too. They can't make plans. They can't make investments in their own future.
UBI addresses this uncertainty and fear, even if the markets react so nobody (on average) is better off compared with basic costs of living such as rent and food. And so it makes life better.
You agree that UBI will not fix poverty and/or wealth inequality, as cost of living will rise exactly to the level necessary to guarantee "slight poverty," but are still a proponent?
I would be interested to see evidence that it's the welfare system itself that causes these stressors, rather than the poverty itself, which is what you seem to be stating here. Why would that be the case?
Yes I am still a proponent. Though I don't think it's as simple as the economics simply adjusting to negate the benefits. I don't think that's true at all.
When people have a different quality of life and certainty about basics, that doesn't just affect those people. It affects other people throughout the rest of the economy too.
People who are poor or very poor often contribute a lot to the economy just like many other people. It just doesn't get the same recognition. Much of the work is invisible to people not actively looking for it. Probably the most clear examples are carers: Caring for their parents, their children, their ill, disabled and elderly friends and relatives. An astonishing amount of labour is performed by people who aren't paid to do it, sacrifice a lot to do it (e.g. many have little time for socialising and friends), and go largely unrecognised (after all they don't get out much, its unpaid, and its anything up to 24x7). A fair amount of cash or cash-equivalent is provided by the poor to the even poorer too, e.g. bringing over food, providing accomodation in a spare room.
I think the quality and level of the overall contribution to the general economy would improve with UBI ensuring some measure of stability and peace to people at the low end, or who are facing being at the low end (e.g. redundancy during COVID-19...). I also think there is a moral imperative to provide the basics for people if it's possible; a "dignity of every person" sort of thing.
I've seen what it's like for people who also have "welfare poverty", that is they can't access welfare reliably either. And I have seen people live on less than one meal a day for months as a result, saving their limited food stocks for good reason, and with no idea when their precarious housing will come to an abrupt end, and no bed to sleep on where they live, in a rich Western country.
I don't think it's welfare per se that causes the stressors mentioned, but rather the complex fear and uncertainties that are rightly associated with the common versions of it.
With regards to whether poverty should be seen as the cause, I think it is, but the degree of stress depends what kind of poverty you mean.
Having a low level of income that is absolutely predictable, in a stable price, food and housing environment, is a completely different experience from having no idea whether you will be able to eat next week or if the money will be suddenly taken away because someone saw you walk a metre in a park near your wheelchair and decided you are "fit for work" as a result, even if you can't walk 2m.
Both are experiences of poverty, but very different kinds of poverty.
>how do we ensure that rents don't just go up by that amount or wages don't go down by that amount
That's a feature of the plan. Rents will go up, and wages will go down, but by that point, people will be committed to UBI, and the only solution will be the gov to step in and control the prices.
No. Healthy public housing, universal healthcare, free public transit don't have the same ability for the benefits to be converted to income for a landlord.
Money is just a placeholder for value produced. You usually produce value by doing something with your brain and body. "My money = my choice" is essentially "my body = my choice".
I don't feel like spending my time debating libertarians, but just know that the little old "my body is my own means I have complete control over all wealth and taxation is never justified" syllogism is far from unassailable or widely accepted.
I'm not a libertarian, but I generally agree with "my body = my choice".
I don't mind taxes in general (if fair and reasonable, which I don't think the taxes in my country are), but the general principle still applies and coming out against it does sound weird to me. Taxes are a necessary evil to have a society, but I don't think starting from a position of "you should not have control over your body" is going to lead to models of societies that I'd like to live in. And again, you can remove the money part completely, it's just easier to use money than barter for everything.
That's not the part of the syllogism most people take issue with, you're being disingenuous. If fair and reasonable taxes are okay, then it seems like you aren't intrinsically entitled to all wealth that flows from your body, so then it seems like if the reasons for UBI are compelling enough, a taxation system to fund it would be justified.
It also seems unclear why you should be naturally entitled to all your wealth, because you don't produce wealth in a vacuum, but rather as part of a system of social cooperation - that is what determines what you are entitled to. Then, it seems like we should start with what the rules of a reasonable system of social cooperation ought to be, rather than starting from self-ownership. That's a sketch of a potential response to your syllogism.
It seems equally silly to me to structure society so that just because you happened to be born into poverty, your life choices are substantially constrained due to no choice of your own.
As I said, I'm not a libertarian. I'm fine with fair and reasonable taxes, you pay those in return for something else, but I'm generally against approaching it the other way round, as in "you might be allowed to keep some of the fruits of your labor, but they actually belong to the state/tribe/party/volk".
You're not getting "all your wealth", the market prices in a difference in what you make and what it's worth for others. But generally in that line of thinking, you could just as easily ask why you should be entitled to any of your wealth, since you're not in a vacuum and you wouldn't have any of it if you weren't part of the system.
I think it's primarily a question of whether you consider the individual as an agent or a cog in the agent that is society. I prefer the idea of individual agency, with all the issues it carries.
> rather than starting from self-ownership
Without being free, you cannot agree to any rules. And you can also not be allowed to leave if you don't want to live in that specific system of social cooperation.
> It seems equally silly to me to structure society so that just because you happened to be born into poverty, your life choices are substantially constrained due to no choice of your own.
Oh, sure, the luck of the draw is a major issue. I don't think making everyone a slave is the answer though. And I do believe there's a good reason to organize society so nobody is born into poverty: it's more efficient. Having millions of people sit around and not contribute is a waste, both of their time, energy and mind, and of the resources they need. I don't think just increasingly overtaxing those that do contribute is the answer though.
Is this a solution in search of a problem? I'm not trolling, but asking this honestly.
This is actually the article's tldr:
Exactly what is the problem?
Precisely how does UBI solve this specific problem?
There are examples of focused government programs achieving specific goals, and there are examples of programs with non-specific goals which merely become self-perpetuating.
I think from the shear scale of the federal government's power, it should be turning a profit and paying dividends to citizens. That would be UBI. But that is a way bigger issue and off topic.
What is the actual case for Basic Income? I hear that it 'solves' the problem of automation ... except that it doesn't actually solve it AT ALL. If automation will lead to high unemployment, basic income will do nothing for that. It will send cash to people who aren't working so they can provide for basic necessities, but our welfare state already does that. And we know that segments of society that are wholly dependent on government suffer despair, drug/alcohol abuse and crime - UBI does nothing to solve that either.
And of course, UBI in rich nations does nothing for the third world, which will be hit HARDER by automation and doesn't have the wealth to give every citizen cash.
There are also major structural ambiguities with Basic Income that are glossed over by supporters, namely the libertarian-types think that it will replace the welfare state, and progressives/leftists AT BEST think that it will complement the welfare state (i.e. that segment will NOT allow UBI to replace any of their cherished social programs). So if UBI has any chance of broad support, it will not save a dime, but rather add a tremendous amount to government spending.
In the end, UBI solves nothings and comes with its own set of baggage.
For one, it removes pathological situations where people are disincentivised to work because it would mean they lose means-tested support.
The great unknown is whether it also disincentivises work itself in a way that would be a negative overall.
The general idea is that it removes the threat of poverty, which potentially allows people to make more rational decisions, and negates the need for cruder solutions like minimum wage, regulations, unions etc.
>it removes pathological situations where people are disincentivised to work because it would mean they lose means-tested support.
That's a problem with how welfare is structured, that can be fixed with changing welfare.
>The great unknown is whether it also disincentivises work itself in a way that would be a negative overall
Why would you think it wouldn't?
>which potentially allows people to make more rational decisions, and negates the need for cruder solutions like minimum wage, regulations, unions etc
If you think you can get leftist/progressive support for UBI by cutting ANY social program, you are in for quite an awakening. Welfare state employes hundreds of thousands of people, they will not support UBI either. The libertarian view of UBI replacing social programs has ZERO chance of passing. So what's left is UBI being just another expense of top of the huge welfare state costs.
> "That's a problem with how welfare is structured, that can be fixed with changing welfare."
That's what UBI is...? UBI is changing welfare to not be means-tested.
> "Why would you think it wouldn't?"
There are many reasons to think it wouldn't. For example, lots of people work two jobs. People work full time when they could work part time. Bill Gates, Jeff Bezos etc all still work. The vast majority of people in a modern economy work more than they need to in order to earn what a UBI would pay.
The rest of your post is not relevant to the question you originally asked ("What is the actual case for Basic Income?")
> There are many reasons to think it wouldn't. For example, lots of people work two jobs. People work full time when they could work part time. Bill Gates, Jeff Bezos etc all still work. The vast majority of people in a modern economy work more than they need to in order to earn what a UBI would pay.
Bill Gates works, but he doesn't work as a janitor. Who is going to scrub the toilets for a meager supplement to a guaranteed living wage?
They'll have to raise the wage to get anyone to scrub those toilets, and that's the whole point. UBI reduces the power asymmetry between employer and employee, and gives the employee more leverage to negotiate better wages and conditions.
Ok, and if they raise wages, they'll need to raise prices.
The price level at which it's economical to pay someone wages that incentive them to work as a janitor rather than investing in themselves is the price level at which the janitor cannot afford to invest in themselves without work.
I'd buy that the janitor might be a bit better off in this situation, but you haven't solved any critical problems. Your basic income quickly becomes insufficient. Without controls for rent, debt, medical, schooling, etc. it's not hard to imagine that in real terms the poor become poorer.
> Ok, and if they raise wages, they'll need to raise prices.
No, not necessarily. In fact if they were able raise prices, surely they would have done so already? What they would actually do is either go without a janitor, or go without something else - a coffee machine, or computer upgrades or something.
The point is, unskilled labour is currently priced against desperation on the part of the worker. With a UBI it's priced against the actual benefit to the consumer.
The question is, what value is having clean toilets? If a company in an office block doesn't value clean toilets more than anyone is willing to clean the toilets for, then they will just be dirty. In actual fact they are likely to value clean toilets highly - more than what someone is willing to clean them for.
> No, not necessarily. In fact if they were able raise prices, surely they would have done so already? What they would actually do is either go without a janitor, or go without something else - a coffee machine, or computer upgrades or something.
I think you're underestimating the necessity of janitors, but for the sake of arguments, let's switch to another low paid shitty job that's definitely necessary. Say... slaughterhouse workers. A lot of food products are extremely competitive and run on super thin margins. An increase to gross costs means prices must rise or you'll be running a loss on each one. You can't just hand wave that off with coffee machines. Most businesses that aren't fancy tech companies are really cheap when it comes to employee benefits to begin with.
> The point is, unskilled labour is currently priced against desperation on the part of the worker. With a UBI it's priced against the actual benefit to the consumer.
I get that's the point. I contest that this strategy makes any sense. A lot the economy is premised on people doing unpleasant jobs because they require a paycheck to live. Current prices cannot pay for premium blue collar labor. The jobs that can't be moved will need to pay more and raise prices. Anything that can be moved will have massively increased incentive to outsource to another country.
And then you have a real trap. If everyone has a UBI, but prices rise, your UBI is no longer sufficient, but your doubly f*ed because there's fewer jobs in your country because labor is way cheaper elsewhere. So your would-be factory workers don't have a less than basic wage and no factory to work at.
More simply, however, if you recognize that we need these jobs to be done (we do), then you have a much easier option available to you than implementing ubi: raising the minimum wage.
* Does not require more new government spending than any project ever before
* Doesn't create any incentives for people, especially low skilled, low wage, but necessary labor
The last point is perhaps the most important. All the low skilled workers are still going to do their jobs. Prices might rise a bit, some companies might choose to layoff some workers, and at scale globalization may still take a toll; but you don't have the terrifying risk that half of your low level workforce decides they're ok to just relax or acquire more skills.
It's not as impactful as the lofty goals of UBI for sure... but the only way society is going to work with poor people not requiring a job to survive is if they agree, wholly in spite of their best interests, to work the shitty jobs anyway.
There's plenty of middle-ground with similarly minded goals, like paying people to stay at home and raise their kids that make plenty of sense. UBI is cool if we don't need poor people... but we do, and we probably always will. The ideal strategy recognizes this and instead tries to minimize harm done to poor people as a result of poverty
UBI with a progressive tax is just welfare without the bureaucratic overhead. Even in countries where there already is a strong welfare state, I'd bet that UBI would be an improvement due to reducing the stress of applying for unemployment benefits.
>UBI with a progressive tax is just welfare without the bureaucratic overhead.
Who says UBI replaces a single welfare program? Any support that UBI gets from the left is under the assumption that it is an ADD-ON to the existing welfare state. The people employed in the administration of the welfare programs will also fight tooth-and-nail from losing their jobs.
So UBI is just another cost on top the mountain of costs.
Seems like UBI fills in the gaps in a sloppy easy way, while also giving money to workers, who don't truly 'need' the welfare. It frees them from the chains of being stuck at their job, but universal healthcare would probably do a much better job at that for the worst-stuck people (e.g. hate my job but I have a chronic illness with monthly costs > a potential UBI).
Maybe give welfare a cool silicon valley style name instead of the one with baggage and Jack Dorsey will get on-board.
Right, so you're in the second camp where UBI adds extra costs to the existing welfare state. So there are no savings.
> It frees them from the chains of being stuck at their job
Yes. It would be nice to get nice things and not worry about working. You can't get away from the underlying reality that jobs aren't fun but they still need to be done. Also, we know that populations that are wholly supported by government welfare with no incentive to work suffer from drug/alcohol abuse and crime.
> segments of society that are wholly dependent on government suffer despair, drug/alcohol abuse and crime
Is there a causal relationship in the direction implied by this sentence?
There's a correlation among unemployment, drug/alcohol abuse, depression, crime, homelessness, suicide, and probably several other negative things in society. It's hard to tease out the causal linkages, meaning that if something like UBI allows some people to quit their jobs, it's not clear that that quitting would have the same correlation to depression/abuse/suicide as today's sources of joblessness do.
> Taking it from other people's earnings and spending it through a committee of politicians sounds pretty dystopian to me though.
That sounds exactly like how social services work today, with the extra bonus of high administration costs.
At least with cash, the government can't decide for you what to spend it on. In effect you end up relying on businesses to spring up to provide the things you want (which may be different than what I want). This is either a feature or a drawback depending on who you talk to.
>Taking it from other people's earnings and spending it through a committee of politicians sounds pretty dystopian to me though.
Assuming you're American: you do know that the House and Senate have Appropriations Committees who do literally just that, right? If you're not American, I bet you a dollar your government has a similar grouping of politicians.
I see why a government would want to to make as many people as possible dependent on them.
I fail to see why any normal people would argue for it, though--and perhaps even why Jack Dorsey would.
I hope it won't happen while I'm still alive, but I definitely see a lot of countries becoming totalitarian nightmares in the next decades, with these genius ideas being dreamed up more and more often.
I really don't understand the hype behind ubi as a new concept. If one wants to explore it's effect or anything like so - it is just enough to see Arab countries and other places who have been doing it already. Other than that it should be obvious to anyone that this is not scalable and it doesn't work. in the end basic income will translate into an artificially induced inflation.
> in the end basic income will translate into an artificially induced inflation.
Citation needed. Presumably this has been happening in the Arab countries that you claim have already instituted UBI, so I'm assuming you have sources...
Why can’t we outsource basic income to the private sector? Like VCs who give money to people who want to sit at home instead of lighting money on fire to exploit taxi drivers?
VCs primarily care about outsized monetary returns and you don't get that from giving money to people.
Tax-deductible charitable donations are probably the closest way to incentivize the private sector but VCs was more, not just to stay flat and most businesses don't make decisions for "the greater good" over more $$.
Can you think of a way to incentivize private experiments in UBI?
> Can you think of a way to incentivize private experiments in UBI?
Contracts that guarantee the recipient will pay X% of their income to the UBI source over the next Y years. Claims are that people's creative and productive power will be unleashed. If true, their income will rise dramatically, and they'll pay lots of "taxes" back to the UBI source.
Loans that automatically disappear after X years with interest payments that only apply if you make more than $Y (Y = UBI paid out).
It wouldn't be the person asking for a loan that speculates on them earning enough to pay it back. It would be the entity giving the loan speculating on the person earning so much more in the next few years that the income-percentage makes them lots of money.
Of course, for it to test UBI, the giving entity must not be allowed to decide whether they accept someone or not, that would lead to them picking and choosing, like insurance companies with pre-existing conditions.
However, if the claims about UBI are true, they won't need to, as even the odd slacker will be more than offset by the exploding productivity of the overwhelming majority.
I'm sure Dorsey could fund it, the question is whether he actually believes in the claims of giant benefits and virtually no slackers.
When the pipes in your house malfunction causing gallons of water and feces to spray out of the toilet onto the nice wood floor you just installed in your newly government granted free time. But, you can't call a plumber because they're all on UBI watching Bob Ross howto videos and painting beautiful landscapes, remember the name Andrew Yang.
It's not about lazyness. It is a matter of having all your needs and wants fulfilled and not needing to work. Where you can finally simply pursue hobbies. Why do any kind of labor if everything is met. Especially janitorial, plumbing, heavy lifting, dredging in miserable conditions, or any other number of difficult thankless jobs.
Go watch dirty jobs the tv show, it's an eye opener. There are even people who climb down in sewers and scrap our feces off the walls in big cities. Who would want to do that if they could just get on UBI and build gokarts in their spare time instead.
You know those wind turbines the power grid relies on? Dirty jobs had an episode that showed how they have to climb up inside them, crawl into really tight spaces, and clean out debris to keep the turbines functioning. It's a tough, harrowing, frightening and claustrophobic experience.
I think it's very likely that a UBI would make salaries for those types of jobs go up quite a bit. People wouldn't feel like they "had" to do them just to make rent. I don't have a problem with those people making more money for the jobs they do. I think they've earned that.
I don't understand the optimism around UBI. UBI is a band-aid and a sign that a system is actually failing. I get why some people, especially intellectuals, want UBI, but they seem to believe that UBI is free of consequence. If society "needs" UBI, that means that not enough people can build wealth or that the welfare system isn't effective. Handing people money isn't going to change the fact that too much of the economy is bolstered by massive amounts of debt. UBI may just perpetuate the problem and encourage more debt to be taken out. One argument for UBI I've heard is that places like Alaska give their residents a "dividend" of something between a few hundred to a few thousand bucks. But the reason Alaska can do this is because they effectively own their oil industry, and their GDP far exceeds their debt, whereas the United States federal government(as well as many states) have debt that exceeds their GDP.
UBI will be needed when automation actually destroys enough jobs where it makes sense. I don't know that we're quite there yet, but it will happen soon. Wanting UBI before its time seems like an admission of failure oh the system.
Much like how government backed student loans turned into guaranteed money for tuition seeking educational institutions.
People don't take into account that the value of money largely comes from the confidence that said money will have value in the future. If cash flow becomes guaranteed, the confidence that the business can demand more money from its customers goes up, ultimately lowering the value of said money for the customer while allowing the business to have greater investment opportunities.
There's a bit of irony in that, since the value of the US dollar largely comes from the confidence in the guarantee that the government will honor the value of treasury notes. The Chinese Yuan is comparatively worth much less than the US dollar, not just because of the dominance of the US, but because the perception of China is that it is far more corrupt and not as reliable than the US in terms of paying back its lenders, lowering the confidence that exists for its currency.
So I guess it comes down to this:
Business confidence > Customer confidence = monetary value decreases
Customer confidence > Business confidence = monetary value increases
The companies that own our data subsidize their collection of it. In other words, we get to use Facebook, Google, etc for free, and we pay them with our data instead of with money.
When you own land with oil, you need to buy/rent the equipment to drill it and deliver it. With data, all that is free for the end user.
Now the real scam are companies that both charge you to use their product and then make money off the data they collect as a result.
Are Google, Amazon and Facebook selling ads to robots?
I'm pretty sure we are the product, not the customer.
Think about what that means... advertisers spend money to get in front of people based on the data they think is important for their business, right?
It's derived from all of our data, which we are not getting paid for. Do you think these companies would be worth trillions if they weren't profiting off data we give them for free?
I don't think the argument is that society "needs" it, it's that it's a better system than the one we have now.
I don't know much about the current proposals. In my head, it's an adjustment of the current economic system. Pay everyone money, provide jobs for anyone who wants more money, collect more taxes, remove redundant social services, etc. It seems like it could work better than what we have now so it sounds worthy of serious consideration.
Ex.:
* Government housing: $500
* Government basic food package - daily (1500kcal): $300
* x kJ electricity, x m3 water, x m3 gas, x bps internet connection: $500
* Clothing, hygiene, cleaning supplies: $50
* Universal healthcare: free (and free condoms)
* Free education (from abc to PHD)
This is not a comprehensive list, or even the right values, however you can guarantee a base-level of what is "living with dignity" and apt to participate in the democracy.
I doubt you'd have too many people deciding to live without a job. It's not the best life, but you can survive with some human dignity. Many around the world live with much less.
UBI isn't the American Dream, it's the safety net.