UBI is largely about symbolic equality, the kindergarten-level fairness of everyone getting the same amount. That’s important because symbols of equality are important. But from an economics standpoint it’s not a complete plan, and it’s a bit nebulous because the choice of which taxes to include in your analysis is arbitrary.
Assuming a progressive tax system, though, it does mean automatic benefits for people without other income and more financial security for almost everyone, assuming you think you have some risk of losing your job.
This is similar to insurance. We don’t buy it because we think we will make money on average.
Since you lose welfare when you get a job often there is an opportunity cost decision, should I really work 40 hours a week to make a little more than welfare.
with UBI the salary is always additional.
The problem is that it makes poverty traps smaller, but doesn't make them go away. Like, if Johnny Hobo isn't able to feed his kids and blows his welfare on smokes and 40s, UBI isn't going to magically make him a better father or better at spending his money, he's just going to buy better booze.
If you just pay everyone, wealth still disproportionately moves towards the poor.
Fairness is not about everyone getting the same amount just for existing, for that in itself is not fair. Real fairness is everyone playing against the same rules and being treated the same under the law. Sadly governments and politicians are too corrupt to implement real fairness and have decided instead for the populist way out while keeping their insane advantage intact.
I prefer a definition of fairness that is actually achievable[1]: everyone has at least the bare minimum, regardless of fitness and deserving. You can quibble about what the definition of bare minimum, but to me it should include housing, food, education and health. Any society where anyone can't get those things by asking for them is not fair, as people who don't have access to those don't have the minimum to compete with those who do.
We can't have an equal playing field. But we can perhaps make the bare minimum livable.
[1]This is almost impossible, as opposed to entirely impossible
They both likely have cars, homes and an iphone. Sure, your Hollywood actor is probably driving an exotic sports car and their iphone is diamond studded, but fundamentally, what does it matter?
> housing, food, education and health. Any society where anyone can't get those things by asking for them is not fair
I agree in the general but I suspect we disagree quite differently on the details. We do provide housing for the poor, and short term homelessness outcomes are actually generally positive - we tend to get people who lose their home back into another house. We provide free education through a high school diploma and community college in most areas is exceedingly affordable with massive scholarship opportunities available for ivy leagues. You can walk into any hospital and it's illegal for them to refuse you treatment.
Does this mean our society is without fault? Of course not - we've shown repeatedly that we're terrible at finding real solutions for the persistently homeless (and no, shoving them into homes doesn't actually fix their problems as much as it fixes the stats), and healthcare is at best described as "horrifically abberant".
And we should fix those things. But that some Hollywood starlett is flying around in a gulfstream has nothing to do with those fundamental problems - it is not a lack of resources but a lack of willingness and deep understanding of the problem space.
It's easy to blame the wealthy, it's much harder to solve the actual problem set.
It will avoid the perverse incentives that lead people to get costly health care in the ER (which is then covered by other patients) instead of having health insurance and receiving preventative care
It can prevent people from avoiding getting a higher income lest they start earning too much to qualify for the social programs they depend on
No UBI won't fix all problems - but it may very well pay for itself through better externalities
But UBI decreases motivation while also inflating the cost of goods and services so that they rise to meet the new money supply.
NIT avoids both problems by scaling with income. It provides motivation without paying every one. More fair, less cost, and better purchasing power.
"Motivates working, avoids a blanket handout which would just raise the prices of everything in response"
"More fair, less cost, and better purchasing power"
I mean that it's a made up difference between UBI and NIT, they are simply equal in this regard, for better or for worse.
It makes no sense that they would be different, as the net money flow between individual (or household) and the government can be made exactly the same between UBI and NIT scheme, and how much money someone actually has in their hands is what determines motivation, fairness, purchasing power, inflation etc.
Under UBI: NetMonthlyIncome = income + UBI - taxes_ubi(income)
Under NIT (where taxes_nit can yield a negative value): NetMonthlyIncome = income - taxes_nit(income)
You can make taxes_ubi(income) == taxes_nit(income) + UBI and you get the same exact real life result, it's just that the accounting is different.
However the way they do it is very different and that's what changes everything. NIT guarantees min. income without just paying everyone. This costs less than UBI. NIT pays a (negative tax) bonus on the first dollars instead of immediately taxing earnings. This provides more motivation. Not giving everyone the same helicopter money prevents cost of living inflation. This provides better purchasing power.
How you provide the income is more important the final amount because the economy is an interconnected system with secondary effects. This is why Friedman recommended NIT instead of UBI. The mechanics of the system matter.
Well, if you didn't know, there's stuff like this:
https://www.hollywoodreporter.com/news/college-bribery-scand...
The special access and leg-up in society offered to people with very high wealth (whether an actor, a corporate CxO, or someone who inherits a business empire) is huge, and entire systems are set up to tend exclusively to their needs and the preservation of those advantages.
Can you actually do anything with just an associate's? In my experience, most places that require college degrees require a minimum of a bachelor's.
One has to keep working to live a comfortable life, the other doesn't (and neither will their kids).
> We do provide housing for the poor
Waiting lists for both subsidized housing and homeless shelters are overflowing in many places. Have you ever tried to obtain housing as a person with limited resources?
> short term homelessness outcomes are actually generally positive - we tend to get people who lose their home back into another house.
What do you mean by positive? That most people don't stay homeless forever? Sure, that's better than the alternative, but you're ignoring the consequences of becoming homeless in the first place (ex. losing a job because you don't have a place to shower, sleep, or are simply overwhelmed due to your position, eviction records that make it difficult to rent again, exposure to unsafe conditions, etc.), as well as the factors that contribute to that phenomenon.
> community college in most areas is exceedingly affordable with massive scholarship opportunities available for ivy leagues.
Community college is not as cheap as many imagine it to be. Tuition typically runs $3 - 5,000/year, which doesn't include fees, course materials, or, most notably, living expenses. Financial aid isn't as generous as many would expect - as you'll see below, a grocery store clerk earning $22,646/year would receive less than $1,500 in grant aid (while being expected to contribute ~ $4,700/annually). Loans can help, but they can also become a considerable burden, especially for the 47% percent of college students who don't end up graduating within six years (or, ever, for the majority of those students). [10] Perhaps surprisingly, the typical community college graduate actually takes around 5.5 (calendar) years to earn their associate's degree (assuming no participation in "dual enrollment"). [11] If they continue on to earn their bachelor's degree, the overall process typically takes more than 8 (calendar) years. [11] That's a long time to be in a financially-tenuous position.
I may as well ignore your comment regarding the Ivy League, as the amount of poor Americans who will find it relevant is virtually zero.
> You can walk into any hospital and it's illegal for them to refuse you treatment.
...for them to refuse you treatment for a life-threatening injury, not regular checkups, non-essential treatment or preventative medicine. And if you are treated for an emergency, you'll be billed for it later. Although the ACA has made things much better for Americans, you can't simply walk into a hospital and expect free healthcare without health insurance.
> What's the difference between your local grocery store clerk, and a Hollywood actor?
> They both likely have cars, homes and an iphone.
If your grocery-store clerk is a middle/upper-middle class teenager whose parents give them those things, sure. Otherwise, this assumption seems pretty unrealistic to me. Some quick googling seems to confirm my assessment...
According to Glassdoor, the average American grocery clerk makes $22,646/year ($1,532/month) after taxes. [1] Abodo says that rent for the median one-bedroom apartment in the US cost $1,078/month last year. [2] That doesn't include utilities, which average around $240/month for renters. [3] That leaves your grocery clerk with $214 to use for all additional expenses each month. Owning a (cheap) car costs around $486/month overall, according to Nerdwallet (including a $111 monthly car payment [4] and $118 for car insurance [5], plus misc. expenses). [6] Now this grocery clerk is going $272 further into debt each month. If they want an iPhone and a ("cheap") phone plan from a major carrier, that will cost an additional $90/month (assuming they buy the cheapest iPhone 11 and keep it for two years - $700 / 24 - and opt for the cheapest standard phone plan [7]). At that point, they're spending $362 more than they earn every month and they haven't even spent anything on food, household goods, clothing, entertainment, or education!
Assuming this person wanted to improve their financial situation by attending community college (average tuition: $3,660 for 2018/2019 year [8]), they'd be eligible to receive around $1400 in Federal Pell Grants (depending on their state) and up to $1,465 in Federal Work-study benefits (assuming their college participated in the program and that they could manage working two jobs while going to school full-time), plus up to $9,500 in Direct Stafford Loans (note: not dischargeable through bankruptcy). [9] However, they would still be expected to contribute around $4,700/year toward their education.
1. https://www.glassdoor.com/Salaries/grocery-clerk-salary-SRCH...
2. https://www.abodo.com/blog/2019-annual-rent-report/
3. https://www.apartmentlist.com/renter-life/average-utility-bi...
4. Calculated using https://www.cars.com/car-loan-calculator/ (assuming $5,000 car price/$500 down payment/7% sales tax/4.67% interest rate/48 month term)
5. Assuming average American cost in 2020 https://cars.usnews.com/cars-trucks/car-insurance/average-co...
6. https://www.nerdwallet.com/article/loans/auto-loans/total-co...
7. https://www.consumerreports.org/cell-phone-service-providers...
8. https://www.cnbc.com/2019/04/12/tuition-at-community-college...
9. Calculated using above income info via https://fafsa.ed.gov/spa/fafsa4c/#/landing (Note: "Expected Family Contribution" (EFC) ended up being around $4,700/year)
10. https://www.nbcnews.com/feature/freshman-year/just-over-half...
You are redefining fair to mean equal. I don't want equal at the expense of fair.
Inheritance is a made up rule, and as such can be unmade without having to change the definition of fairness.
But second, age is thing, older people tend to have accumulated more wealth than younger people, even without inheritance. Younger people tend to be fitter and more attractive and Hollywood knows it. An equal playing field in the way you describe it will never be achievable by humans.
And that is why I say fairness is the most important, the rules have to be the same for everyone because that is the part that is up to us.
Extreme economic inequality drives unfairness by tipping the scales towards the very wealthy. Nobody is suggesting that we somehow enforce biological equality, whether between individuals of the same age, or among individuals of very different ages. To suggest so is a strawman intended to distract from the real problem of growing economic inequality.
Also, you don't need to abolish inheritance to increase fairness, but in the context of growing inequality, you must limit the extent to which it drives unfairness by phasing it out as wealth grows exponentially.
"The Law, in its majestic equality, forbids the rich, as well as the poor, to sleep under the bridges, to beg in the streets, and to steal bread." --Anatole France (I always meant to get a more precise source for this quote.)
Perhaps I can put it another way: the existing laws are not the only rules that govern our laws. We all live under the same laws, but we don't all live under the same rules. For some people, it's a rule that if they quit their job they will quickly be homeless. For other people (whose only merit is to be born in the right place), there is not such rule. This is not fair.
My definition of fair is not perfect, but it looks to resolve the most egregious cases of unfairness I can think of.
What you describe is of course good, but maybe we could just call that a welfare society or some other words. Giving people the bare minimum won't automatically make their lives fair.
You are just targeting one thing it's called inheritance, what about other things like "social network and connections which are passed to the new heirs in the family", beauty/atheletic abilities and other talent?
More people are concerned about whether their uber eats driver is going to show up on time than food riots at the moment. I don't see that changing in the immediate future.
That is symmetry, not fairness. By your definition someone born with a disability should not be accommodated (because everyone has to be treated the same by your notion) and possibly left to suffer?
Or is it fair that you are enjoying products made in countries by workers that never had have the same rules and treatment you had? What did you deserve to get that, other than sheer luck of being born in the current circumstances?
Doesn't familial conditions differ so hugely that no one is really playing against the same rules and treated the same in the formative years of their lives, effects of which amplify for the rest of their lives?
No one gets to define "real fairness" without expanding what their normativity is about. And your notion is about symmetry for a subsection of civil life, not about the complexity and entirety of real human lives. I guarantee you if you were born into different circumstances you would have a very different sense of what is fair.
Can you explain why? And if your answer amounts to "because people provide different amounts of [effort|value] to society" how would you reply to "so what?".
> because the stuff they get for existing has to come from someone else.
Your statement doesn't hold unless we assume "it is unfair for one person to provide for the needs of another (unless it is reciprocated)", and it isn't at all clear that we can take that axiomatically.
Even setting to one side the more obvious cases of parents providing for children etc., if we were to assume that one person could, through their labour, provide for the needs of everyone else, why does it obviously follow that it is "unfair" for everyone to survive solely that person's labour?
More generally, it really isn't clear to me that these questions have such simplistic answers.
the axiom is more like "it is unfair to force one person to provide for the needs of another."
obviously some people would disagree, which is their right. however by making this axiom and their disagreements with it explicit, we can discuss the reality of the situation more clearly.
> if we were to assume that one person could, through their labour, provide for the needs of everyone else, why does it obviously follow that it is "unfair" for everyone to survive solely that person's labour?
well would it be fair to force that person to provide for the needs of everyone, if they could do so but chose not to?
> More generally, it really isn't clear to me that these questions have such simplistic answers.
agreed. but discussion can help us to understand the question better, and perhaps if we realize that there is no "right" answer then that conclusion could still help us to create a society where everyone is better off.
I think this seems like a reasonable statement (to me), but unlike for the axiom I provided, the original claim, that "fairness is not about everyone getting the same amount just for existing, for that in itself is not fair", does not immediately follow from your modified version.
Reading over the various answers people have provided, it seems clear to me that many people follow a similar line of reasoning, trying to argue from the (let's take it as axiomatic) unfairness of forcing someone else to do something, but that really isn't a necessary part of the original claim.
Returning to the extreme example of one person who could provide for everyone, we see this line of argument in your counter-question:
> would it be fair to force that person to provide for the needs of everyone, if they could do so but chose not to?
As we have agreed that it is unfair to coerce someone, the answer is clearly "no", but that isn't the only possibility in our scenario, because they could equally have decided that they do want to work to provide for the needs of everyone.
This (to me) makes it clear that the issue really rests on how this individual (and, in the real world, each member of society) feels about their obligations to others. Yes - if they (or we) have decided not to provide for others, then being forced to do so would be "unfair", but if, on the other hand, they (we) are happy to provide for others without coercion, then there is no apparent source of coercion (certainly not from the axiom you provided).
In short, "fairness is not about everyone getting the same amount just for existing, for that in itself is not fair" does not follow from your modified axiom, and instead is predicated on the beliefs of the "everyone" in question.
As a somewhat separate issue, some appear to have the impression that these kinds of beliefs are in some way fundamental, but to me it is incredibly clear that they are (at least typically) almost entirely socially contingent. Therefore, as I see it, it is entirely possible for society to shift back and forth between one that (collectively) believes in providing for others, and one that does not, without "coercion" in the sense as used throughout this discussion.
> discussion can help us to understand the question better, and perhaps if we realize that there is no "right" answer then that conclusion could still help us to create a society where everyone is better off
I agree!
Your statement is about motivations, not fairness.
It's not very fair to society as a whole if we implement policies which impede standard of living increases.
Despite others' somewhat antagonistic answers I really just wanted to explore the reasoning behind the original statement, which I think many people instinctively agree with whilst not being able to convincingly explain why (without referencing other ideas).
Effort has a clear opportunity cost which is why I think a lot of people instinctively agree that individuals should be rewarded based on the amount they contribute to the societal pot.
It may surprise people to learn that even the Soviets effectively acknowledged the validity of that second statement. According to the 1936 Constitution of the USSR:
"ARTICLE 118. Citizens of the U.S.S.R. have the right to work, that is, are guaranteed the right to employment and payment for their work in accordance With its quantity and quality."
https://www.departments.bucknell.edu/russian/const/36cons04....
I would suggest that your retort, presuming that is what it is, is mere posturing; either you have a substantive answer to the question or not - so far you have not provided one.
The question isn't whether people are obliged to provide for others, but whether or not it is necessarily unfair for them to do so. Your statement only addresses the former case, not the latter (irrespective of whether it is labelled "the fundamental moral principle of fairness").
sure, let's take a practical exercise and see how you feel about spending your days at cotton fields working for free. Doesn't have to be forever, just a few years, to get a meaningful conclusion about the level of that "necessarily" that you doubt about.
> Fairness is not about everyone getting the same amount just for existing, for that in itself is not fair.
I had asked for an explanation of why this should be so. Your example, "being forced to work in the cotton fields for free", is only rhetoric - it does not actually address the question. There are an infinity of circumstances that would involve "everyone getting the same amount just for existing" that do not involve "being forced to work in the cotton fields", "being forced to work", or indeed "being forced (to do anything)".
I find it interesting that in all the replies to my query, none have really been able to provide anything approaching an answer. The closest (in my opinion) is [0] by aeternum, but that boils down to saying that it is unfair if things don't progress as quickly as they could, but doesn't explain why - this in itself seems pretty radical, when made explicit (hopefully I haven't done too much of an injustice in my paraphrasing). These claims are made boldly, but the rationale seems more difficult to tease out.
By birth, you are unequal. Would you say we should have the same measures for people with physical disabilities from birth and healthy athletes?
No. That's why we have separate categories or measures. That is fair. And that is not treating everyone equally.
But we first have to accept the real world and get off this childish notion we are all born equal because as you pointed out, we sadly are not.
A 10 year old will be judged and rewarded in a favorable way compared to a 30 year old programmer. My example was to highlight the bias that people already acknowledge as fair. Poverty is a handicap in similar fashion. When we acknowledge the former in age should be judged more leniently and with grater praise, we refer to the statistical odds of a 10 year old being as good as a 30 year old and other 10 year olds.
That's the reality. You are refusing to accept it by removing the background of people in your hypothetical world. Fairness is not based on outcome.
Someone who never had access to computers, internet, mentors, etc would be judged differently compared to someone who always did. At least I would.
Note that having a leader at all means someone has more power, and that’s inherently unequal, but most people think the benefits are worth it.
by stopping enacting laws that are oriented towards the abstract "society as a whole" and "benefits to the society as a whole", and by beginning treating an individual as the smallest minority in the world whose unalienable rights require protection from the crowd.
Understand the politicians that most contribute to creating the problems are happy to absorb impotent rhetoric all day long.
Exceptional and gritty Americans will Grubhub, and social media, and otherwise luxuriate the country off a cliff rather than collectively get behind fairness in a real way.
I don't know much about the economics. Curious, how so?
> UBI is largely about symbolic equality, the kindergarten-level fairness of everyone getting the same amount. That’s important because symbols of equality are important.
IMHO, what you described is justice. Equality. Not kindergarten-level, or, rather, I guess it is, in the sense of it being fundamental to our moral understanding : ).
Most apparently-equal rules aren’t actually equal in their effects. Charging everyone the same amount usually hurts poor people more. UBI is one of the few apparently-equal policies that would likely help the poor more than the rich.
Yes and on top of the obvious absurdity of this statement, there is a second level. As long as we punish things with fines they are effectively legal if you're rich enough.
That principle is only relevant in societies that don't have lotteries or inheritance, among other changes.
Curious where that idea comes from - source? Haven't encountered it.
I know that many people _think_ that, or _feel_ that way, but I haven't read anything (philosophy, political philosophy, etc), that actually theorizes it _should_ be that way, or that it really _is_ that way.
Tim Berners-Lee -- how much money does he have, and what is his contribution to society?
Or, the classic kindergarten teacher vs NBA player, etc.
By simply asking the question "Who will pay for UBI and who will receive it", the degree to which it's "fair", "just", or "equal" becomes obviously nebulous
Whether it'll work or not, I know that's a larger question.
Also, I think it'd be more helpful if you would lead with what notion of fairness (why put it in quotes?) you yourself believe UBI represents.
Because it's possible that some people may agree with you, and others may not. And that would be a good starting point for discussion.
There is no proof that would actually appease you. There is no way you could measure the effect on inflation without having an entire currency on UBI. There is no way we could be sure about the macroeconomic effects of UBI without first implementing it.
That's not a reason to not even try to offer anything though.
You could start with a trial of these 120 persons (select from all classes of society), give them UBI and double their taxes to make it realistic, because the UBI has to be paid somehow. If plenty of them would have less money during this trial and still find UBI worth it, that would be a strong signal.
Few people would agree to be part of that study though, and one might argue that those that would (i.e. by applying) won't be representative of society at large.
Testing only the spending side of UBI is fun but useless, especially with that setting.
1. I'd image the poster would have the same objections. It's not large enough, etc.
2. Why double their taxes at all? You could just give them less UBI. I don't see how this makes any sense. What's point of having UBI if you have less money than you started out with. You've just invented a useless tax, which we already have in spades.
It'd only be less money for some, not for all. Since UBI is largely a redistribution scheme, you'll have to test what happens to those who are supposed to fund it as well. Are they happy? Will they move out of your jurisdiction? Do they stop working as much and rely on UBI instead?
These are important questions we need answered before we roll out UBI at large. If it turns out that everybody who's not profiting from UBI says their good byes and leaves for other countries, you'll have nothing to fund the UBI, and likely nobody to produce any goods either.
What'd be ideal is if you could randomly select a group of people and force them into the system, like it or not. Then observe their behavioral changes. This is likely of dubious legality.
A second option would be to offer people upfront an amount of money equal to the extra taxes you expect them to have to pay. E.g., if someone pays $50k/year in taxes now and would pay $100k/year in taxes under a UBI, you offer them $150k in tax-exempt income immediately to join a three year program, and afterwards they can do anything they like, including changing labor choices such that they pay less than $100k/year in taxes. This would get the microeconomic incentives fairly similar to those under a real UBI.
The issue with that is that I suspect higher-level governments (state, federal) would decide that
a. An individual county imposing taxes that high is illegal b. UBI benefits must be paid out immediately to all residents of the city upon moving there (and now every poor person everywhere wants to move to your city).
Still, maybe there's a clever way to try it out in a fairly self-contained system?
I don't know whether there are upper limits on local taxes. One of Germany's local funding is business tax ("Gewerbesteuer"), which communities regulate by setting their multiplier, the lower limit is 200% (of the taxation base), with most between 350% and 450%. The highest I know of is 900%.
Property tax also varies between 200% (minimum) and 1800% (according to Wikipedia), so there's some room as well.
Combined with an initial donation, that may be possibl. If it's somewhere where people don't naturally move to (e.g. not a major population center), the moving-effect might be very welcome as well, repopulating the area.
Ok, so we should never try anything related to macroeconomics? Let's also never change the tax rate ever again.
The main flaw is that one of the concerns with UBI is that many people might never start working and by the time they realize that UBI isn't enough, it may be too late. OTOH, someone who has been in the military for 20 years may well decide to retire early but that's a different situation.
So implementing something so drastic without knowing if it'll work is extremely risky.
Would you say that every country on the planet is either "capitalism with some social features built in" or is currently failing hard? And if all those systems are capitalistic, what specifically pushes UBI over the edge into being something that isn't capitalism? From an implementation perspective, UBI is simply an adjustment of the income tax rate including allowing that rate to be negative. It has nothing to do with ownership, markets, or many of the other mainstays of capitalism.
Yes, if by the overcomplicated first description you mean modern mixed economies (which are more accurately descended from capitalism than actual capitalism), and those groups overlap, too.
> And if all those systems are capitalistic, what specifically pushes UBI over the edge into being something that isn't capitalism?
Nothing, it's well-within the broad outline of the modern mixed economy.
> From an implementation perspective, UBI is simply an adjustment of the income tax rate including allowing that rate to be negative. It has nothing to do with ownership, markets, or many of the other mainstays of capitalism.
I think it's debatable whether downward redistributive taxation/spending does or does not conflict with mainstays of capitalism (I think it doesz in a good way), but in any case that's a feature of modern mixed economies generally, and UBI isn't really a difference in kind. Where UBI perhaps is more at odds with capitalism than traditional mixed economy welfare programs is in weakening the divide between the chronically excluded and the working class (the lumpenproletariat and the proletariat, to use the Marxist terms), which I think is arguably an important feature of capitalism that is underappreciated specifically because Marxist-inspired socialists don't usually directly address it, especially in a transitional rather than revolutionary concept, because they viee empowering the lumpenproletariat as dangerous because they view that class as prone to recruitment as paid agents, though not actual class allies, of the bourgeoisie while not being effectively organizable against the bourgeoisie.
The current social safety nets are not as drastic as something like a $1400/mon stipend for everyone in the country (as Germany is trying). That's $5 trillion a year in the US. That over doubles spending right there.
In 2019 the US federal government had $3.5 trillion in revenues and $4.4 trillion in spending. Add another $5 trillion -> $9.4 trillion in spending with $3.5 trillion in revenues. We'd have to almost triple our revenues!
I know there are plans to pay for it, and it's probably possible. But you can't deny that it is drastic.
It's very dangerous to implement such drastic changes to the economy. And the consequences of getting it wrong are horrific.
Testing in production (with rollbacks and safeguards) is actually how things are done in many endeavors in life, especially with processes that are reversible or where the cost of mistakes are bounded. Reality is a better teacher than a simulation. This it not to put down tests -- it has its place -- but in complex systems, it's impossible to have comprehensive coverage. Stochastic things show up in real life that never show up in tests.
In software, you just keep building up your test suite. In complex stochastic systems, you'll have a much harder time building tests.
Software people have a notion that the world should be TDD-driven, but it doesn't really work like that.
Not to mention that the real question is whether UBI makes sense economically, not whether people like money, which is almost indisputable
One interesting corollary of this is that speeding up the recirculation of money increases the money supply and slowing it down decreases it, just as though some central bank was actually printing or destroying money. This is particularly relevant right now, when a lot of countries seem to be running the metaphorical money printers flat out and the circulation of money has been temporarily impaired by extremely limited things to spend it on.
How is taxing the local economy to spend in the local economy (and some abroad) a net benefit? That's just transfer payments with some friction loss.
Taxing the rich, who have a lower marginal propensity to consume and consume locally, and transferring to the poor, who have a higher marginal propensity to consume and to do so locally, increases the local velocity of money.
IE, tax a wealthy NYer, transfer to a poor Appalachian, and the Appalachian economy sees a small boost.
That's development aid with extra steps then. Granted, you might argue that it's more efficient than regular development aid since it's bottoms up, not top down, but still. It's not going to re-circulate in the same economy that it's taxed out of.
The goal is to remove food stamps, income insurance (the dole, welfare, whatever you want to call it), rent subsidies, etc. All replaced with a single cash payment. Fewer programs, no income validation, no enforcement action after the fact, etc.
This also has the benefit of reducing friction on the consumption side. No need to exchange food stamps for cash at 50% face value in order to by beer, just take some of the cash and buy beer. Empower individuals to live how they want.
> No need to exchange food stamps for cash at 50% face value in order to by beer, just take some of the cash and buy beer. Empower individuals to live how they want.
It's been that way for quite a long time in Germany, cash is the default, vouchers are only a thing in rare cases where the cash component (~400Euros/month; rent, healthcare, utilities etc are paid directly) is reduced by more than 30% due to penalties so people can still buy food. Generally, people get cash and are free to spend it as they see fit.
A large problem with "cash only" (e.g. rent etc not paid directly) is that there's a significant number of people who are unable to handle money. I know, because I live next to some of them. If you give them 1100 euros instead of 400 in cash + 700 in rent and healthcare payments, you'll get plenty of people who spend their 1100 euros on things other than rent. And in that case, you'll either have to accept that they'll become homeless (and we won't accept that), or you have to still pay their rent directly, on top of whatever cash you give them.
If I was working full-time and could live comfortably off that plus extra UBI, I think the majority of people would spend it on more luxurious goods (phones, laptops, drugs, etc.) which are mostly ran by/on outside/blackmarket economies...
We're not sure of the magic number/ratio between "person will use UBI for basic, locally-sourced needs" vs. "person will use UBI for 'wants', sourced elsewhere" and I think there's so many factors that it will be hard (almost impossible) to come up with a palpable answer.
A guy who goes and buys a nice new luxury TV from a local Best Buy is still supporting local businesses indirectly because that Best Buy is going to have multiple contracts with local businesses for services.
What UBI skeptics seem to be avoiding, ignoring, or unaware of, is just how prevalent this situation already is. Most of the UBI fans I know want to replace the overlapping, redundant, and inefficient welfare systems currently in place with a simple, efficient, and universal benefit.
Yes, with UBI we're basically taxing ourselves to pay ourselves, it will hurt productivity and will cause inflation.
But at least in a country like Germany, where I live, that is already happening for decades via our ever-growing, convoluted, amounts of government welfare programs, subsidies and redistribution schemes.
A UBI would then at least have the benefit of cutting out the bureaucrat middle man.
If this expense is compensated by extra taxes on individuals then it is pointless.
If it means making sure that unemployed people receive a guaranteed minimum income then it already exists.
If it means merging all benefits into a single one then it is just a simplication and also already exists, e.g. recently in the UK.
UBI, as in 'everyone gets a payment', only makes sense if there is a source of wealth that does not depend on people to tap into. That's why it is often discussed in the context of massive automation, because then it has merit (basically robots work and you receive their 'wages').
In my example, which is what this trial does, it is plainly unaffordable.
That's a good summary of UBI, actually: It's great, please let's not get bogged down on details like financing.
Assuming we could obtain reliable proof that UBI reduces productivity and/or increases inflation, that doesn't necessarily imply that it's an undesirable policy. The economy exists to serve humanity, not to maximize productivity or minimize inflation. It's certainly possible that a policy could provide an overall benefit to humanity while simultaneously reducing economic productivity and/or increasing inflation by some amount.
They provide lower bounds on the amount of time you can offer a guaranteed income without adverse effects on people's employment. Going to an extreme, if you offer people a 40 year UBI and they don't quit, then that's pretty damn strong evidence. 3 years offers some evidence; for particular subpopulations with short time horizons, if they keep on working for three years on UBI, I'd bet almost arbitrary amounts of money they'll keep on working indefinitely.
> No. If you make $1k from a job and $1k from a pilot program each month, you spend the $1k from the pilot on legitimate bills and now you have $1k to spend however you like. The study can't trace that money. (This isn't to say everyone on UBI uses it for drugs, rather, it's to point out that you cannot deduce they don't just by tracing the way the transfer payments are spent)
I believe these studies rely on self-reported alcohol etc consumption. The issues with self-reported consumption are already well-known and well-characterized.
> No kidding. You gave someone several thousand dollars no strings attached in a situation where neither taxes nor inflation would rise as a result.
These things are always worth verifying. One of the criticisms against a UBI is that it'll create a population of depressed losers who never interact with society. If people's lives and happiness are improved, that addresses that criticism.
> What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions.
Could anything short of a full UBI implementation work as proof for you? If not, can you suggest what would? If, say, you took a random selection of 1000 people and promised them a lifelong UBI, and their labor force participation and levels of happiness stayed the same over the first ten years of the program, would that serve as proof to you?
I think that isn't a correct assumption either.
40 yeas is a long time. Longer than many HN readers here have been alive.
In the last 40 years, how many times has the government performed an about-face on some economic policy or whatever? Too many times for someone to just throw away their career until sufficient time has passed that is becomes part of society. That may take an entire generation (see Social Security in the US, which now is a permanent fixture).
That could be a generation or longer before knowing the actual effects, and by then (as-with Social Security) it'll be practically too late to make a course correction.
1) Even now, plenty of people take into account the possible dissolution of Social Security or (more likely) changes to its benefit formula in their financial planning.
2) Longer time horizons could always have a hypothetical effect. You say a half century of a policy can't predict a hundred years of a policy; someone can just as well say a hundred years of a policy can't predict two hundred years of a policy.
In the long run, though, we're all dead, and the economic landscape is going to be so radically different in a century that it's pointless to predict how a particular policy will fare then. Someone in 1934 making predictions of the effects of Social Security in 2034 would be so far off as to not even be wrong. See, for example, Alf Landon's criticisms of the program then, which don't correspond at all with what its critics today don't like about it.
It wasn't that 40 years of policy won't be enough to convince people to trust in said policy - it's the "promise" of a 40 year policy that isn't enough to convince people to trust in said policy.
Just telling people to trust the policy will be held strong for a least the next 40 years will not automatically convince people to quit their jobs and all the other possible outcomes of UBI. People who've grown up and spent a major portion of their life without UBI will likely remain skeptical, and mostly will not depend wholly on it for income.
Rather, it will, possibly take a generation of people growing up with UBI all their life before we start to see the actual societal changes UBI might affect. By then, it might be too late to make a change since there will be a generation of people who've come to depend on the government's hand for their basic needs.
This argument reads like a strawman, and is detached from reality.
The argument about the risk of people quitting their job because of basic income is based on the idea that those who are forced to work shitty jobs to have a source of income (i.e., wage slavery) won't have to subject themselves to it if they already have a source of income.
More importantly, people who live in wage slavery don't have careers, they have a job. They are bound to an activity or even an employer who ensures they have a paycheck as long as they do their job. I mean, do you honestly believe that a minimum wage job doing non-specialized tasks that anyone anywhere can do and can replace you in a moment's notice counts as a career? Of course it isn't. It's just something you do to pay the bills. Do you honestly believe no one would quit that as soon as they have a way to pay the bills?
> No. If you make $1k from a job and $1k from a pilot program each month, you spend the $1k from the pilot on legitimate bills and now you have $1k to spend however you like.
Your take on the program is very disingenuous, specially in the way you try to frame the old job as being the provider of all the brand new goodies and luxuries and fancy spending while the new source of income adds nothing more beyond taking care of the expenses that were already taken care of.
Suffice to say, I'd participants were stuck with their old income, they wouldn't be able to afford anything, would they?
Basic income supplies an income baseline. That means people cease to be tied to a repulsive job just to make ends meet. How they generate disposable income is up to them. With basic income you're free to pick high-reward but low-paying jobs, or even no job at all if you are willing to live a frugal life. That's the kind of change that will be studied in these programs.
Everyone has been saying that everything will be so much more expensive if we just dumped money onto the market. Well that already happened, did anything got more expensive? Stocks, but what else?
If things became more expensive, then people can compete to reduce that price in the market. For some reason detractors of UBI have a micro focus on the demand side of equation.
Yes, but some skeptics really do object to UBI on moral-based reasons - indolence, buying drugs, laziness, and the joy of work and all that. If it turned out that all the money went to drugs and people got depressed, it would be a good argument against UBI.
I don't think there is a good argument against UBI that they'll accept. But of course, they don't answer the real question which is who's gonna do all the producing?
The ones producing are clearly gonna be the ones being taken advantage of on UBI, even if it works 100% as expected.
Nobody will have to produce anything they don’t want to, now that the UBI removes the fear of where their next meal will come from. I know I personally would still want to produce things to take home MORE than the UBI.
So,oOption A is that you "donate" more goods into the system than the UBI you are consuming, which is all fine and dandy for the rest of us. Option B is that you are consuming more value that you are donating, which is less fun for the rest.
So, some people will need to overproduce in order for the people who under-produce to get their UBI worth of goods. Mind you, this isn't different than the current state of affairs. The big question for me is how would the introduction of UBI ultimately affect that ratio, given that you would be less disincentivized to stay with the underproducing group?
The “given” is backwards. Compared to existing means-tested welfare systems, UBI funded by additional high-end taxes provides less disincentive to move out of the underproducing group.
If the minimum support level provided by UBI is used (in whole or in part) to offset and reduce minimum wage, it also reduces the barriers to people moving immediately to a less-inderprodicing level, and eventually up and out of the underproducing group.
You can get rid of minimal wage with or without UBI. In fact Germany just recently introduced minimum wage - there was none before. The lack of it was clearly not regarded as boon to the society. The barrier effect is minimal, if any.
I think everything would still work out fine with a UBI because we’d still have the most market forces at play (compared to all other social welfare/safety net/redistribution schemes). If it turns out the UBI is too high, the people who produce will have to raise prices for goods to find equilibrium again. If it’s not, prices will stay the same (or drop). Overall though, it’s the most efficient way to make sure nobody starves, even those who for some reason or other just can’t compete in the future economy.
I think once we have a UBI people will look back to the days before it like we look back at the hunter-gatherer days today, “I can’t believe in the early 21st century everybody HAD to work, just to survive!”
But we're so many lightyears away from that situation. Our resources are very much limited. If people don't keep producing, we just stagnate and decay. We're nowhere near the point we need to be.
From what I see, it's madness. The economics make zero sense.
For example ; Canada. The Federal Government. (All of this speaks of the Federal Government).
https://www.canada.ca/en/department-finance/services/publica...
2019 Federal Revenue? $312B. That's from taxes, income from oil, any and all Federal revenue.
Now. UBI. Universal Basic Income. That means everyone over 17 gets it, as an example. That also means it must cover the basics. That you can live on it.
That's the whole point of UBI, and being "free to choose career paths", and all that other blather.
That, to me, means $2k/month. Maybe that will scale, up AND down, depending upon where you live. But let's just go with $2k/month. Or $24k/year.
Stats Canada says, out of almost 40M Canadians, around 30M are 18 and older.
What's $24k30M? 720B.
So.. the entire Federal Revenue is less than 1/2 of what UBI might cost.
Now bear in mind, that there was a deficit* in Canada, about $20B. And there is currently a debt in Canada, of about 1.1T. The GoC will say it's less, 800B, but that's if they 'use assets of 300B and deduct that from actual debt", which is meaningless, because interest on debt is on 1.1T.
Right now, 8% of Federal Revenue pays just the interest on that debt. If interest rates go up, say in a year or two.. so goes up that payment.
My point is that one year of UBI, would almost DOUBLE the ENTIRE FEDERAL DEBT. A Federal Debt that arose after decades, not one year.
If you half UBI? Now it's not basic income, it's just a supplement.
And you absolutely, positively can't get that money from taxes. About 25% of people's income is taxed (yes, that's an average), that's gas tax, income tax, federal sales tax, tax on alcohol, and other such things. My point here is, you can't just double the tax.
And, the above Federal Revenue? There is a pie chart, just under 50% of Federal Revenue came from personal tax.
You could increase taxes on business, but are you going to tax 100% of their profit? Because that still won't cover it.
Let's tax the rich you say! Well, most money is invested. For example:
https://financialpost.com/executive/posthaste-canadas-3-mill...
Note, that's ONLY 8.7 trillion. UBI is 720B for one year.
And, what are you going to do?
Seize people's real estate? Then what? Sell it again? To whom? Certainly not the people you just seized it from.
Are you going to tax ... what? Because, "wealth" is real estate, stocks, companies one owns, land, more. Are you going to seize stocks? Then what? Hold on to them? How does that fund UBI?
Are you going to seize companies? Great! Now that software company, valued at 100B, is worth $1, because the original owners are out, and they were the magic, and a government isn't going to be able to run something like that.
None of the logic behind UBI seems to make sense to me. I can't see where the cash is coming from.
This doesn't even include things like inflation, loss of productivity, or 100 other little things that are "just going to work themselves out".
Your post doesn't mention:
- Savings from scrapping other welfare programs
- Decreased healthcare and law enforcement costs and other economic benefits of bringing millions of people out of poverty
- Massive stimulus leading to increased government revenue
I'm not saying it would be cheap, but your post only includes the costs and not the benefits.
[0] https://www.macleans.ca/politics/ottawa/what-would-a-guarant...
For example, why is my post too high. I state simply, "here are the number of people over 18" and "here is the amount to pay".
You say "Oh, that's too high." What?. Why! Why is it too high. What part of it. It is very, very, very simple math.
Instead, you quote an article from Macleans. Yet that article says Ontario's (not Canada's) UBI program suggested at the time, wasn't really UBI! And that on top of that, it was a flawed study!
In other words, you linked to an article showing how wrong Ontario was. How does this support the assertion that my costs are too high. The Macleans article even supports my position, because it discusses how 'reverse taxation' and 'excluding people' is not UBI, but instead modified, partial welfare. It's not universal, which is the much of the point of UBI.
You say, scrapping other welfare programs. Well, we must look at provincial numbers here, for that is a provincial responsibility.
Here is an example of the costs associated with welfare, child support, and more at the provincial level. And this is Ontario, Canada's most populous province:
https://www.thestar.com/politics/provincial/2019/04/11/socia...
https://www.ontario.ca/page/public-accounts-2018-19-annual-r... (Scroll down to Expense)
"Children's and Social services sector"
So yup, $17B.
What about EI, you say? The savings there? Well, it works as a cash positive. It is paid for by separate EI taxes (paid by employer and employee), has its own fund, and so if you axe EI?
You have to remove $21B from the federal revenue from $312B to $291B. And I should note, that EI covers things like retraining, so you'd actually lose some social programs, if you just axed EI, and moved to UBI all by itself.
So let's just take Ontario, and try to work out welfare for all the provinces. Here's where it gets a little bit complex. In Canada, we have equalization payments. Part of Federal tax is paid to the 'have not' provinces, which are poorer, and therefore need extra capital to maintain an equal quality of life.
This means that some of the federal budget, of that $321B income, is also being used along with provincial funds, to fund things like welfare in some provinces. That means if, say, NewFoundLand pays $x for its welfare budget, maybe even 50% of that revenue might come from the Federal Government.
But, let's just be quick and easy about this, and say Ontario has about 40% of Canada's population (15M), and that the "over 18" bit scales. So, 17B x 2.6 = $44B.
Of course, the "Children's and Social services sector" isn't just about welfare. For example, EI handles retraining, including some 'back to school' programs. That would vanish if it was just dropped, with a move to UBI. And maybe that's OK! But the point is there, and valid, and means it isn't a perfect change-over.
Which means it applies to a generic budget for a huge "Children's and Social services sector" category.
But OK. We've reduced the cost of UBI from $720M to a wonderful $676B. You don't remove EI, because if you remove EI, you remove EI tax.
The other benefits? Sure, they exist, at least, probably. I think they do, too.
Yet.. what does that have to do with paying for it? Understand here, the sheer cost I'm discussing. Please do the math. Please discuss how to pay for it fully.
Because things like "stimulus" and "reduced law enforcement costs" are .. what? Going to equal 4x the entire federal budget? You're literally going to switch to UBI, and the Federal Government will see its budget grow 4x?
How?
In most versions of the plan I've seen, the cost is not as simple as (population over 18) * (monthly amount). If you're looking for a breakdown of the math, check this out:
https://d3n8a8pro7vhmx.cloudfront.net/bicn/pages/57/attachme...
- universal - basic
Basic costs met. Paid to EVERYONE.
Part of the "cost saving measures" are "not using complex schemes to determine eligibility to programs".
Further, if all you're wanting to do is guarantee a minimum income, that's not UBI! Not even remotely! It's simply a form of welfare, and shifting taxation under the guise of UBI.
Further, the whole concept of "I'm on EI, or I'm on welfare, but if I start working my income will drop, so what's the point" is another core concept of UBI.
When you start whittling away at these core concepts, when you bring back in the 'should this person get it' judgement and work to evaluate, prosecute if fraudulent, side of things? When you bring back in "Your income drops if you have other income" side of things?
You're just invaliding the entire point of it all.
It's not UBI.
So when people discuss UBI, please don't start talking about something entirely non-UBI.
I've offered up a modified proposal, with links showing actual experts and politicians debating merits and drawbacks, including budgetary analysis. Because there isn't enough money for a naive UBI, we have to make compromises including increasing complexity and risk of fraud, but the general principle remains the same and the benefits are still there. And we already have fraud and complexity - these would be greatly reduced under the proposal, just not completely eliminated.
Based on comments like "I'm on EI, or I'm on welfare, but if I start working my income will drop, so what's the point," I can see that you haven't fully understood the structure of the proposal. There's no way that getting a job would net you less income.
I'm not invalidating anything. Please don't get caught up in semantics.
Canada has a fiat currency. Thus the Canadian government can set the interest rate on federal debt to zero.
http://multiplier-effect.org/modern-money-theory-how-i-came-...
Permanent ZIRP (zero interest rate policy) is probably a better policy since it reduces the compounding of debt and the tendency for the rentier class to take over more of the economy
Further, where is the pressure to pay back debt, if there is no interest. When not just run up the debt forever? Just use the banks to create more and more cash, forever? And who cares about the effect on other parts of the economy.
What bothers me with things like this, is they are all band-aids. And not even thought out, as far as I can tell, with how the rest of the economy is going to have to function. To change. To be modified, to fit the new.
I'm OK with change. I don't mind a new system. I see the coming issues with increased automation, agree something will have to be done, but just slapping a patch here and there isn't feasible at times.
You have to remodel the whole, to fit the new.
All I can see here, is "let's just change this", and "who cares what happens elsewhere".
Yet, why would I, as a banker, lend to the government at all? For no profit? And with no ability to force repayment, and no pressure on the government (interest payments) to repay, or even stop borrowing more?
You're definitely missing something, because private lenders are perfectly free to charge interest. ZIRP applies only to federal debt.
"Yet, why would I, as a banker, lend to the government at all?"
Currency issuers never need to borrow. That is an incorrect statement of why Federal debt exists. Federal debt is a savings instrument, and as Europe and other negative interest rate debt has shown, there is still a market for savings instruments even at the zero lower bound.
https://www.bloomberg.com/news/articles/2019-08-15/negative-...
"Negative-Yielding Debt Hits Record $16 Trillion on Curve Fright"
As I understand it, the Canadian Federal debt is held through a variety of instruments, quite a lot of it domestically. EG, Royal Bank, TD Bank, etc.
Whether it is bonds, or some other instrument, they all pay interest. That debt exists, is owed, and yet you're saying "Just don't pay that interest"?
I don't think that's what you mean. I think you're being somewhat terse in your responses here.
For example, maybe you mean "As time passes, and new debt replaces the old". Or, "Stop issuing debit in way $x, and instead, do it in way $y".
Yet the GoC surely does not pay interest for zero reason, or cause. Clearly, there is some reason for using these instruments, such as, getting lenders to ... lend.
If you are advocating an entire policy shift, with massive ramifications to the overall method in which the GoC raises, and treats debt ; OK.. fine. Yet entire economic model shifts aren't easily conveyed by the terseness I'm seeing here.
And the articles you are pointing to, aren't really helpful, nor describe precisely what shift-in-thought you're referring to.
I'm saying it's wrong to create federal bonds with an interest rate that is far different from zero.
The rules are different between currency issuers (nations with a fiat currency) and currency users (citizens, municipalities, provinces, nations on the gold standard).
Currency issuers have a unique ability to guarantee that you will hold an exact amount of the currency on a given date. No currency user can make that guarantee.
Because currency issuers can guarantee repayment on debt in their own currency, the repayment risk on the debt is strictly and exactly zero. Thus the interest rate on that debt should always be very close to zero if not exactly zero.
The fact that Canadian government debt pays high interest rates merely tells you that the government did things wrong in the past.
Two things.
First? Interest also represents the reduction in value of the currency unit, over a period of time.
I keep a few thousand hidden around the house. In case of need. Yet, each year... even with 4%, 2%, whatever inflation, that $3000 is worth less. It has less value.
Interest exists for three reasons. Risk, as you talk about above, but also as profit for being nice enough to lend capital, and lastly to combat inflation.
Why would people park their money, and lose both value in that money due to inflationary pressures, AND, make 0% on that capital when they could literally park it many other places and make even double digits?
It seems odd to me, that you completely ignore the for-profit motive in money lending, and the inflation issues in lending. As if they simply do not exist. Even in down markets, historical a wise lender (like a massive bank, which tends to lend to a federal level goverment) makes more by parking that capital elsewhere.
In terms of the Canadian Government paying 'high interest rates', I merely stated that it pays 'market interest rates'.
There are provincial taxes, budgets, etc. SO when I say '25% of people's income is taxed', that's federal tax.
I don't think this is perfect. Proof is hard to come by in social "science". But this seems a lot better than most other ubi "studies" to me...
For example a government interested in reducing CO2 emissions could introduce a tax on motor fuel of say £1/litre and balance that with an increase of the basic income of £75/month.
I believe that a more efficient govt would requires fewer funds, so both together would be most ideal.
If we could provide for all with lower taxes, would that be ok?
The problem I see today is the inability to have nuanced, fact based conversations about the issues
The mindset of holding things constant is pretty short sighted in a world where things are radically changing. We have to reinvent and adjust our societies as we go along and learn from our collective experiences. Trials like this help us collect data about the consequences of complex interventions and seem to be a useful way to test the waters.
To me economics is about natural law, which is inescapable. Money is value and it is not nature's way to give something of value for nothing.
They absolutely could result in the participants quitting their jobs, or just spending the money on booze and drugs and becoming unproductive and unhappy.
This appears to not be the case so far, so the results may justify a larger-scale, longer-term program, which may eventually provide enough evidence for a smaller nation or state to take the leap of rolling out a full-fledged UBI.
You're interested in the scalability of the thing, but we're still in the proof-of-concept phase, merely trying to deduce whether or not the idea actually has any potential, or if it's completely dead-on-arrival.
So what are the questions that such a trial could answer?
* How spending/lifestyle habits of bounded windfall recipients compare with non-recipients
* Whether receiving free money makes individuals happier or more productive over a three year period.
By that measure couldn’t we say the Capitalism pilot program has failed? Sure productivity is ever increasing and business productivity per employee is at historic highs...but all that productivity has only resulted in a larger wealth gap with all the benefits going to the investor class and net negative to workers whose real wages have been stagnant for decades?
Well if capitalism is responsible for all the good it must be responsible for all the bad, like industrial warfare like WWI and WWII.
Per-capita violence has been in steady decline for this time period.
“Per captia” violence? That is a hell of a qualifier you need.
This is a really good point. But it will apply to the government program as well. Just because we have such a program at full scale, doesn't guarantee anything.
* The UBI might not always be above the poverty line
* The UBI might be terminated at any time, or after an election (That can be partly covered with proper laws, but nobody would go that far without trying it out in the first place)
* The UBI might get strings attached, like "needs to work parttime", etc.
All in all, it's a chicken egg problem. The thing is: If I have saved maybe a million in cash, UBI would encourage me to just stop working. Period. UBI will cover a good chunk of the basic living expenses (especially if you don't have to live near hotspots due to work anymore) and then the investment winnings of my savings would cover me for life.
That of course is still possible without UBI, but UBI just makes it that much more approachable, since you don't depend on investment to stay afloat. I.e. "I need to win with my investments for this to work" becomes "If I want to buy me something besides food and rent, I need to make good investments". Those two are like day and night.
I am not convinced that UBI will result in overall improvements. I would love UBI and it would enable me to stop working more quickly. Will I still provide value to humanity? Very likely, I have lots of ideas for what to do. Will I still provide value to the economy? Not nearly as much as before. That alone tells me that UBI is probably not a good idea, because it empowers the middle-class to retire early, doesn't do much for the poor (instead of a shitty job, they can now do nothing, except paint and sing perhaps, i.e. being creative; but they will still be poor nontheless) . It also doesn't do anything for the rich.
You'd already be "encouraged" to take a lower-paying part time and/or less stressful job. But most millionaires aren't going to be satisfied with the downgraded lifestyle that would entail.
doesn't do much for the poor
It does a lot for the poor. It lets them earn additional money without worrying about losing benefits, which is a big problem with current welfare systems. And more importantly it gives them negotiating power; they can walk away from abusive employers without the worry of homelessness or hunger.
Feels unsustainable to me.
That doesn’t mean it’s not worth it.
Common arguments in favor of these studies -
"They prove people don't quit work on UBI!"
- No, they prove that people who are in a program that is very clearly temporary will not end their careers for a short pilot program. This means nothing.
"They prove people won't spend it on drugs, booze, and lotto tickets!"
- No. If you make $1k from a job and $1k from a pilot program each month, you spend the $1k from the pilot on legitimate bills and now you have $1k to spend however you like. The study can't trace that money. (This isn't to say everyone on UBI uses it for drugs, rather, it's to point out that you cannot deduce they don't just by tracing the way the transfer payments are spent)
"The studies prove people's life and happiness improved because of UBI!"
- No kidding. You gave someone several thousand dollars no strings attached in a situation where neither taxes nor inflation would rise as a result.
What UBI skeptical people want to know is where is the proof that we can afford to tax ourselves to pay ourselves, where is the proof that it won't hurt long term productivity, and where is the proof that it doesn't cause inflation. A 120 person 36 month trial program cannot answer any of these questions.