I'll say at least that from where we are now we just had by far the greatest natural experiment we could ever hope for and UBI stands invalidated. Those who still want to push it have a much greater burden of proof, and I'm a bit nervous about UBI programs getting rolled out without proper validation and where that will take us.
Originally this was a strategy devised by Otto von Bismark, a Prussian conservative who thought providing concessions to workers might help keep the communists out of Germany. He succeeded.
Over time, it turned out that social benefits can actually be quite effective for other reasons too.
Today, many OECD countries are explicitly social-democratic. Some countries claim to not be socialist at all, but still do have some (possibly more limited) social programs (eg in education and health care).
Why do people keep misusing the definition of socialism. Do workers own the means of production? If not, it's not socialism. Now I'm not a socialist but I'd like the words we use to have meaning so that we all know what we're collectively talking about.
Social benefits and social democracy != socialism, people should just use that term instead.
For so many instances of the word "social", it's difficult to see how we can't just tack -ism at the end and be happy.
A negative income tax is most definitely not UBI. You still have to work to get it, therefore it's not universal. It's a pure wage subsidy program.
UBI keeps the means of production in the hands of those who already hold them.
In particular it was as close as you're ever going to get to being "universal". For obvious reasons, every other experiment I've ever seen made or proposed was not, and I think that's a pretty significant aspect to the idea.
Tack that onto a snarled global supply chain, and it's very difficult to pull meaningful outcomes from the noise: did people increase luxury and discretionary purchases just because they could, or were they influenced by an early glut of staple food purchases? Did people increase discretionary spending to entertain children and compensate for a lack of time spent outdoors and socializing? Did they purchase more expensive foodgoods for similar reasons?
I am not a particular proponent of UBI. But I don't think we (meaning us laypeople on HN) are going to be able, from our vantage point, to draw a useful conclusion from the last 30 months' economic activity. It's simply too weird.
I'm not aware of anybody who claims that people won't quit their jobs if you (1) make them stay indoors and (2) give them money, and (3) invert the economy (justifiably!) for 6 months.
The claim that UBI advocates make is that UBI, when actually applied, is just a negative income tax. Alaska has one, and it doesn't make people quit their jobs.
What about the hoards of people who took the opportunity to stop working at soul crushing jobs and who went and learned a new skill that lead to an actual career?
What about the armies of new artists and creators? The pandemic brought about a slew of new, successful, medium sized educational channels on YouTube.
Restaurants can't find employees because a lot of their previous employees took a year or two off and improved themselves and are now making better money at better jobs.
Did some people piss the money away? Sure. But the explosion of artists, creativity, and self improvement, says that the experiment was a success, and it was only a handful of payments.
Likewise, research is needed to determine under what circumstances people best benefit from UBI and UBI like programs.
We already know that hope is one of the most important factors when it comes to the success of UBI programs. People who have hope for the future, who believe they can improve their lot in life, do great with UBI programs. They go to school, get new jobs, save to buy a house, they plan for the future.
People without hope will spend money on short term indulgences.[1]
One interesting thing is that UBI tends to increase hope, it gives people a stable foundation to fall back on while making improvements in their life. Think about how founders from wealthy families are willing to take risks to make money, until they find something that sticks. Having a real life financial cushion means people can pivot until they find something that works for them.
UBI isn't going to be perfect, some people will leech off the system and do nothing. Some people just aren't motivated. But those people are likely already not doing anything with life, and paying someone enough $ to keep them housed and fed so they aren't living on the street or stealing food is a net financial savings for society anyway.
[1] The most striking examples are people who grew up in neighborhoods that have extremely short life expectancies. If most everyone you know died before they got to 30, why would you ever save up money to buy a house on a 30 year mortgage? If someone's world view is that they are probably going to die in the next few years, of course they are going to spend all their money on indulgences, that is in fact a very rational thing to do! The solution is to show people an out, a way to escape that world view, yelling at people "you are wrong, open a savings account!" doesn't work, especially if friends and family are dying at a steady rate all around.
Laziness has always been a capitalist codeword for "noncompliant worker."
Also, you have to look at the bigger picture here. We can't just put our blinders on and ignore the conditions of this natural UBI experiment, as you are putting it. There was no sense that with this UBI--it wasn't--they were going to be productive members of some socialist society. No, it was a moment where people felt like it was their turn to exploit a system that has been exploiting them since they were children.
I agree with the sentiment that in this context, under the current conditions created by corporate capitalism, UBI would be a horrible idea. It would be better for the people in the long run if they --we--we're out in the streets than packed away in some small rat hole of an apartment, suckling on the corporate dole.
Not coming out for or against UBI, but... isn't that the whole point of universal basic income? That there's no means testing, and everyone qualifies, even grifters?
I feel like your underlying assumption is that "if UBI leads people to leave their jobs, UBI has obviously failed", whereas it's literally the very goal of UBI to reduce (or even eliminate, in the case of "full" basic income) the need to hold a job just to have enough income to merely survive. You can argue that's a bad goal if you want, but expecting everyone to continue working despite receiving free money is kind of missing the entire point of handing out that money.
Btw, just because people act a certain way in a short period of time (especially during a time that was so out of the ordinary) that doesn't mean they'd act the same way for ~half a century. Sure some fraction of them might, but lots of people would get bored and try new things. Having nothing to do for months or even a year or two can be fun and exciting for some, but that doesn't mean they'd love the idea of having nothing to do for the rest of their lives. People get bored, people want luxury, people want variety, people want fulfilment, people have kids to raise, etc.
Without significantly raising taxes on the people who decide to continue to work, how can this be paid for? Genuine question.
And if it’s that hard to find employees, companies will just have to pay a LOT for labor, most of which still goes to taxes, but also causes prices to go up because the company’s costs are so high. Which causes COL to increase because all products have higher costs. Which means “basic” income needs increases, driving up costs, etc etc.
It's not obvious at all; in fact the tax percentage is meaningless on its own. People get too hung up on tax rates instead of focusing on purchasing power and quality of life. It's almost like adding zeros to the currency. The only thing that matters is your purchasing power (which comes from your net income), not your gross income or what percentage tax that corresponded to. Like if (in today's economy) you pay me $10M/year and I have to pay 90% of that in taxes, I would happily work for you. If you pay me $10k/year, I wouldn't even work for you if my "tax" rate was -100%.
Is there a way to make the math work out? Honestly, I don't know. Maybe it's impossible, maybe it's practical, or maybe it would come with so much baggage that we'll prefer the status quo. What I do know is that the people who declare the answer is obvious consistently arrive at that conclusion by artificially constrain the problem in some way that is in no way obviously implied by the premises, like "you can't raise taxes significantly", or "you can't touch defense spending", or "we won't decrease healthcare costs", or numerous other things.
1. in an economy where 30% (or whatever) of people aren't working and the remaining are getting taxed higher % of their income to fund the people who are not working, how is the living standard of the people who are working go up?
2. A sense of "fairness" factors into this as well. People are known to reject "unfair" deals, even though the said unfair deal would still give them strictly positive values.
2. The "fairness" that's relevant here is a function of (say) "net income/expended effort", not "tax rate". People get mad that others who put similar effort earn a lot more net income than them, not a lot more gross income.
For example, if before UBI a worker on average was producing one car, and assuming that after UBI half the working population quits their job, that worker now needs to produce two cars for everyone to maintain their standard of living. Except since that additional car must go to the UBI recipient, in other words his income was taxed, his quality of life does not go up despite becoming more productive. So either he needs to become more productive through than one more car so that he can raise his own standard of living, or he just won’t do it.
Where will these higher paying jobs come from? Are they coming from automation or by virtue of UBI being implemented? If it's the former, if I'm 2x more productive, why should I have to give up 0.8x of that productivity to non-workers? Moreover, why should I stay in a jurisdiction that taxes me the productivity gains, as opposed to another jurisdiction that lets me keep all the gains?
>2. The "fairness" that's relevant here is a function of (say) "net income/expended effort", not "tax rate". People get mad that others who put similar effort earn a lot more net income than them, not a lot more gross income.
Is there any research to suggest that people only care about net income/effort rather than gross? It seems pretty obvious in this thread that at least some people are care about the gross income/effort, as evidenced by the disdain of people on UBI as lazy weed smokers.
Given any amount of UBI people will be able to fix their costs below that and put the rest toward speculation.
I don’t know of a way to fix UBI right at cost because there is so much variability for a person’s costs.
Presumably, UBI would be a single number nationwide. For example, a politically acceptable minimum quality of life in the middle of Mississippi or whatever is cheapest. There is no worrying about people’s variable costs. If they want to live somewhere more expensive, they work for it.
How is this any different from other social programs like Social Security or Welfare?
There's no reason the tax rate would have to hit that number, or anywhere close to that number. I'd like to see math that supports it. Most math I've seen suggests a far more modest increase in taxes.
I don’t see a situation where people would be comfortable where workers pay more taxes so people can choose not to work.
There’s not enough billionaires (yet) to tax at 90% to cover this.
I think a more reasonable approach to UBI is to reduce costs for staple goods to such a low rate that it doesn’t cost as much and the need to work is reduced without raising taxes or introducing a freeloader problem. This is positive outcome of AI and cheap energy (think Star Trek).
The lower classes just worked and took drugs (soma) so they could withstand working.
Of course Huxley was writing sci-fi but it does fit into human nature of kind or messing around if possible. Look at chimps… they basically just gather food, sex, and lounge about. We aren’t too far evolved from chimps.
I think this alpha and beta framing is a useful one. I just watched the John Carmack keynote where he is talking about the Oculus operating system, and in it he is seething that the team around him is not valuing simple and piling complexity and its resulting slowness. In a world where only the people who were truly interested in innovation were working with him, I expect that the accidental complexity would be minimized, and the efficiency of his work would go through the roof even more than it has. Trying to make everyone as productive as possible turns out to have large negative effects on those who are as driven for innovation and those people are so productive that this is a net loss long term.
But the Canadian study had troubling minorities of participants who did not report improvements on certain metrics. For example, about 20% of the participants had the same or less motivation to find a better job. 20% reported the same or worse general health. About 17% had the same or worse mental health status. 11% had worsened anxiety. About 40% had the same or worsened ability to repay debt.
Although that means that for the majority of participants, it improved those metrics, I wonder what it would mean if you scaled this to millions of people. Clearly, UBI does not improve the life of every single participant. There is the problem of what happens to people whose lives are worsened under UBI. Should they go off of it? What if they have no alternative? Another problem that these studies don't account for is what happens when people leave good paying jobs to go on UBI. The participants of these studies are usually people in bad financial shape such as the Canadian one. There may be a study out there where this is accounted for but imagine if a number of people leave the job market to go on UBI and then their lives worsen under UBI. Will they go back to working or will they be unable to work? It could really change the calculations about how it is all paid for if people choose to reject good paying jobs for UBI.
I suppose the rebuttal is that even if some on UBI show deterioration, the majority do not so it is overall better than what is now. But again, is this really guaranteed to hold once scaled to millions and when it is open to everyone? The LA trial above is only available to people in a household with below poverty level income.
> (And all the while complaining about "the billionaires" and how unfair the system was.)
It is an unfair system. That's valid criticism. The solution isn't throwing money at people indiscriminately. We have a broken healthcare system. Why not fix that first? Why not fix the water supplies in places like Flint? Why not create and administer more national parks, or feed the people in this country who are starving? Why not give the money in a targeted way, to solve the poverty issues UBI advocates claim to address? If you give money with no strings attached, how do you know it won't be squandered?
The problem is that the UBI advocates have the same mindset as the deadbeats, they'd rather take the money and burn it. They don't care about development, they'd rather buy votes. UBI is just nihilism politically manifested
edit: there's two kinds of people who advocate for UBI: rich people who are completely out of touch with average joe, and regular people who want free money
As an opposite view: If you look at Maslow's hierarchy of needs[1] , you'll see that there are a lot of rungs up the ladder past the bottom one. The average person doesn't need to know who Maslow is, they have the needs just the same.
The bottom 1 or 2 rungs are the hardest to reach. If you help people up, they'll be able to climb the rest of the way themselves. Equality of opportunity and all that.
Sure, some people choose to rot at the level they're at, but most people want to have ALL their needs met, and will keep climbing.
This is borne out by UBI trials. People do in fact do slightly less commercial work, but instead of lazing around, they'll typically go to school, or take care of children.
The overall short term loss of productivity is fairly low. Longer term we don't know for sure since we've never run long enough experiments. I'd predict that those people who went to school would be more productive in the work force later, and the children who got more time invested in them by their parents also do better later in life.
You are absolutely right that the free-rider effect exists. But based on my own life experiences at least, I think the free riders would be outnumbered by the climbers by quite a margin. What's your experience here?
[1] https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs
> The bottom 1 or 2 rungs are the hardest to reach.
I'm all for helping people reach the bottom two rungs through targeted spending. UBI is indiscriminate, if our goal is the bottom two rungs specifically why not target the spending for those instead of just giving free money?
> Sure, some people choose to rot at the level they're at, but most people want to have ALL their needs met, and will keep climbing.
I don't agree with this. Apparently (according to the article) Maslow based his theory off of people like Einstein or Spinoza. People like this are the exception, not the rule. The goal is to find these people and give them the opportunity to grow. Throwing money at people indiscriminately is an inefficient way of solving this problem
> You are absolutely right that the free-rider effect exists. But based on my own life experiences at least, I think the free riders would be outnumbered by the climbers by quite a margin. What's your experience here?
My experience is that most people aren't climbers. If you're fortunate enough to be surrounded only by climbers and no one else, you're a lucky person.
From the standpoint of personal development, the world can only have so many people like Einstein or Spinoza. The solution to this isn't throwing money at everyone, the solution (imo) is building up a more effective public education system* so that exceptional people are given the opportunity to grow to their fullest potential regardless of socioeconomic status.
*edit: I'll add that there's a lot of unexplored territory here and not enough experimentation. I think that something like online education (think khan academy) offers an inexpensive and scalable method of disseminating knowledge. The Internet has helped here. But only so many people will take advantage of the opportunities given. Instead of throwing money at people indiscriminately, why not pay people to take online classes and get certifications (and have a way of testing in person that prevents cheating)? This way the money has strings attached and we know that the spending will lead to a more educated populace
That does sound like conventional common sense, but this is a situation where common sense actually isn't. It turns out that attempting to target too specifically can quickly turn into a logistic nightmare.
(Next part YMMV, this is very high level, see your local laws/systems for details)
Many welfare systems already just give people money directly, because the assumption in western countries is pretty much that most people over 18 are quite capable of managing their own money as is, and can do so better than any centralized socialist committee.
Those who cannot might be placed under adult guardianship/ward of the court (depending on where you this system has many different names), at which point in time the guardian/ward can (assist in) mak(ing) fine grained decisions.
Some systems do have some amount of limited targeting, and most of them are means tested. Most modern welfare is a kind of Conditional basic income.
One path to understanding why people propose an UNconditional basic income is the discovery of the welfare trap: The means testing that your common sense tells you is supposed to ensure that only people who need it temporarily get welfare, actually traps them in welfare semi-permanently.
If you're not working, your expenditure is lower as well, since you don't need a car or tools, and things don't wear out as much. This can easily be a swing of something like €500-€1000 or more. Say you are a rational actor, you have €1000/mo welfare [1], and you can get a job for €1500/mo [2], should you take it?
Answer: No. You will have less net remaining at the end of the month, or might even run out of cash entirely. And... unfortunately many welfare systems take savings into account wrt means testing as well, so you don't have a runway. Thus, the trap is complete. [3]
If you drop the conditionality of the payments, the trap evaporates. So the outcome of giving people money unconditionally is ironically that more rational actors will actually get a job and not need it anymore. [4] [5]
Ok, that's answer one, and it's getting pretty long. I'll put other answers in another comment, if I get to it.
[1] Typical amount for a single adult in .nl
[2] This is presumably one reason why EU nation minimum wages are often a bit over Eur 1500. This does help mitigate somewhat, but it's still a dicey proposition.
[3] This is obviously something of a toy problem. IRL means testing and subsidies can be a bit more intelligent, but when researching you'll find that the underlying issue definitely there.
[4] This is somewhat borne out in real world tests. However, the tests I give most credibility to -while some people do start working- also see some people dropping out of the commercial working population to put more effort into childcare and/or go back to school, as well as free riders (because there are always free riders). The net result is that roughly the same amount of people keep working. One can argue over exact definition of working population, quality of working population, effect on crime rate... etc. But if you'd expect the amount of workers to drop precipitously, that doesn't tend to happen.
[5] This -then- also explains how you pay for UBI. You can tax people post-hoc once they're working again. This is how a similar proposal [6] by the Nixon Administration would have actually ended up working, sadly that proposal didn't pass.
> I don't agree with this.
You don't? Interesting, can you provide examples?
Myself, I don't know many (sane/rational) people who...
1) Don't want to eat, have shelter, or sleep.
2) Don't want to be secure in their persons, be employed, have money and be healthy
3) Don't want any friends/lovers/family.
4) Don't care about themselves, don't want to be respected, and hate freedom.
5) Have never studied or practiced or otherwise put effort into improving themselves or learning anything new in their entire life.
On the other hand, I have seen people of many different professions all fill in this hierarchy in their own way : eg. Farmers, programmers, truck drivers, airline pilots, industrial machine operators, mechanics, driving instructors, used car salesmen, bankers, managers, professors, train conductors... etc. Though every person is a bit different and thus their needs, wants, and ambitions, and their means of achieving them will differ too.
All these professions pretty much demand that you are constantly working up to the self-actualization level. (If only to keep up with the continuous march of progress.)
Perhaps you know people in some of these professions (or others) too?
I'm not being facetious here - isn't that entirely the point of UBI? That nobody works unless they genuinely want to work?
When you do cash relief in lump sums and without any long term reliability, the above effects are diminished.
So, it might be the case that these are exactly the people who are motivated and can realize huge benefits from a little extra cash as they're trying to start their career. The obvious negative alternative is that they're coming from vulnerable backgrounds, and having easy cash in their pocket might lead them back to the same troubles that they are trying to escape from. Well, I guess that's the reason for the pilot program!
3) spent the money on toys, crypto, stocks, and other assets that have now cratered.
I do wonder if asset bubbles will be a significant unintended consequence of basic income. Would it stabilize over time?
Speculative assets differ from most forms of gambling in very important ways:
1: they lack expiration dates (last year's lottery ticket is not gonna become a winner tomorrow night)
2: even if their value diminishes they still maintain a miniscule probability of 'going to the moon.'
Mix in real stories of folks becoming overnight millionaires along with a guaranteed future check that you can use to cover needs while you are flexing your diamond hodl hands and you've got an addictive recipe to destroy any functioning marketplace.
Trying to stop it thru regulations is going to net you another metric ton of complexity and unintended consequences.
We live in a world of limited resources. Those resources have dynamic & personalized value depending on an arbitrary context at a moment in time. Money is the best worst abstraction we have to quantify and reason about those values. Printing more money doesn't make assigning values to things any easier, it actually complicates it by destroying the unit of account.
Just 1 link of many stories if you google it.. https://www.clickondetroit.com/consumer/help-me-hank/2022/07...
1) Consumer debt: https://fred.stlouisfed.org/series/CCLACBW027SBOG
2) Labor participation: https://fred.stlouisfed.org/series/CIVPART
3) Inflation rate (look at 5 year): https://tradingeconomics.com/united-states/inflation-cpi
Yeah... "just an extra couple thousands dollars". The government pumped in excess of 4 trillion dollars into the market going directly to people [0]. Only 20% of these people spent their second and third check on necessary expenses [1]. So by grade school mathematics 80% of the money was spent on non-necessities.
You don't honestly believe this didn't contribute to inflation? YOLOing money via robinhood, buying electronics, car payments (0% APR loans were everywhere and flying off the shelves), trips, etc. This all contributes to inflation by pumping more money into the system. These people didn't save their money. They spent it like it was going out of style. The result of an overheated economy is...inflation.
Then you pair this with supply constraints induced by government incompetence, large amounts of money printed to buy back treasuries and bail out banks, etc. In total, there is so much extra money in the system we are probably going to see inflation for a while.
I live in a low COL area and my grocery bill has gone up almost 100%. My friends in California have seen that much or more. Gas prices have just tripled in my area. "bogus right wing propaganda" is the ultimate cop-out to such an important issue. Burying your head in the sand and blaming your favorite boogeyman isn't going to make your grocery bill cheaper.
Sources added because LMGTFY:
[0] https://www.nytimes.com/2021/11/24/magazine/pandemic-aid.htm...
[1] https://www.forbes.com/sites/zackfriedman/2021/06/01/heres-h...
UBI is not only more humane but also creates less overhead than the alternative of the government having to figure out not only how to allocate the funds, but how to actually distribute it to people that need it. Welfare is a complex system and there's a lot of available funding to different "targeted programs" but the burden of knowledge is placed on the people who need the assistance to seek those out. I find that burden unreasonable.
> There is of course some concern about how you'd implement a negative income tax
The machinery for this already exists due to the EITC. Expanding it to people with employment is a valid concern, but tax rebates based on income are not a totally foreign idea.
So this may be true, but I think there's good reason to think UBI is more efficient than most aid programs for much the same reason free markets are usually more efficient than planned economies. Targeted systems tend to suffer from a few inefficiencies:
1. The bureaucracy consumes a large amount of money employing people and maintaining infrastructure
2. The burden placed on recipients of the money to ensure they meet the requirements lowers the efficiency of the aid. Even a few hours of appointments a month can end up being very costly in practical terms when you're poor.
3. The more the aid is constrained (e.g. a special card etc.) the higher the likelihood that it doesn't meet the need of the recipient as well as cash would.
The attentive reader may not all three of these inefficiencies are coming from the state's desire to more information about people's needs and wants. I can speak from firsthand experience that each of this issues can drop efficiency substantially.
We must also consider that many targeted programs are... not well considered, shall we say. We've known for decades that putting hard cliffs on benefit based on eligibility criteria is disastrous and yet it keeps happening. I have more than one disabled friends stuck in poverty wage they'll lose medicaid and instantly go bankrupt. This is wildly inefficient.
This is even assuming the eligibility criteria make sense in the first place, which is not a given. All that said, you could still be right, but I think there's enough possible upside it's still worth looking at very seriously.
Giving a person money and then telling them to invest it wisely is not necessarily the worst idea ever.
The risky part is that you're giving the money to random people; as opposed to smart, promising entrepreneurs.
The question becomes what's the risk of free riding & unwise investment, through indifferent investment through to people who indeed invest wisely.
Personally I think that -in most of the OECD- the average/net risk already lies somewhat on the wise investment side. (slightly out on a limb: else how could the economy grow to begin with?)
Anything less than "UBI is a guaranteed for life amount that will cover rent, medical care, food, water, electricity, heat/ac, and internet" is going to skew the incentives to the point of uselessness.
Once you reach a point where you can simply exist for the rest of your life worry free is when you reap the benefits.
- Substance abuse is an area of concern
- Why do we have 'free money' campaigns in times of raging inflation?