In India I have tested this in my own small way, by giving money to some known poor people. My experience has been that typically women utilize the money far more effectively than men. May be India is a bit peculiar in terms of feelings of entitlement being higher among men.
That is just welfare, if done on a governmental level, or charity, if you do it individually.
For it to be a true experiment about UBI, you would have to find an area that's somewhat autonomous, provide everyone indiscriminately with the same amount of money that would suffice for maintaining their basic living needs and guarantee the income for at least a certain period of time. Otherwise, well, good for you for helping the needy but it doesn't have anything to do with universal basic income.
That wouldn't have much to do with universal basic income either unless the money being provided was somehow extracted from the very same group of people. Giving away someone else's money is of course more likely to "work".
It's fairly close, it's just the "local rich" for whom the UBI is an additive rather than their main income source has been abstracted for donations. Based on the assumption that there'd be a semi-stable taxation system in place when people are earning more through trade/working, it'd be a reasonable way to test, no?
To what desired effect did the women utilize the money "far more effectively" than the men?
Without knowing the purpose of their spendings I can only assume that you morally approve one over the other (which would put a big dent in your flippant "feelings of entitlement being higher among men" theory).
Now that's an interesting idea. Starting a UBI in a poor country has to be an awful lot cheaper than starting it in a rich one with a high cost of living; a small charity can do a comparatively large amount of good.
The ideal would be to give it to the entire population of a small, poor island nation. You could then get a very good idea of its impacts without worrying too much about perverse incentives and other outcomes. It's unclear to me how this study is going to deal with people moving into the UBI villages.
Looks like the study participants are fixed at the beginning of the experiment. People who move out keep their cash, people who move in don't get anything.
Remember that this is an experiment so to do good cannot be assumed. The hope is that enough people will use the security of UBI to build up some productive enterprise and elevate the wealth of the whole community, but there is a (very small) risk that everyone will just be idle consumers who will be in trouble when the experiment ends.
I consider it a major advantage of UBI that it permits freeloading. A lot of activity that would raise quality of life later, is a pure cost right now. Like studying for example, or starting a business that isn't yet profitable, or writing a novel.
But then the BI might not be enough to support families. It's a tricky problem.
Edit: the point being that children are the ones who suffer most from poverty, and investing in them has the most long term potential. But of course we don't want people to have kids just for the money, hence the difficulty.
I don't think having children is a natural right which society has the obligation to subsidize. Perhaps an additional subsidy should be provided for those who have children when the study begins, but no new children should receive that benefit.
Children are society's future. I think society needs to incentivize people to have children - otherwise our population will gradually decline to zero (developed countries already have birth rates well below replacement, only immigration is keeping them out of decline).
Sure, but only in the sense that they're the ones who will be living it. Fewer children doesn't mean society won't have a future. It just means they'll each have more resources.
The world is not at risk of underpopulation. If that were actually a serious concern, we could take measures to mitigate it but all evidence points to there being plenty of people in the world already. Some wealthy countries might have declining populations, but there are plenty of countries with overpopulation to offset that.
> Many of the social benefits a working Western society wants depends upon a growing population, like social security.
To be clear, they depend on a growing labor force.
However, the whole reason to investigate UBI is that we're likely nearing a future where labor is not a dominant factor of production. It seems unlikely that we'll have full employment in the future, particularly if there's UBI.
In an economy where labor is not a necessary constraint or driver of production, it seems entirely unclear why having a growing population (without a growing labor force) would be beneficial.
Not to mention that for the forceable future there are plenty of countries desperate to export excess populations. If you need to increase the population, there's no need to subsidize it.
>> "I don't think having children is a natural right which society has the obligation to subsidize."
Whether society subsidises it or not people are going to continue procreating, many irresponsibly (don't have financial ability to support their children). However are you arguing then that these children who happen to be born into poverty should then be left in it without government/societal help?
> However are you arguing then that these children who happen to be born into poverty should then be left in it without government/societal help?
First of all, UBI should ideally be enough to eliminate poverty. Parents might have to make some sacrifices to take care of the children (forgoing personal luxuries or taking a low wage job). Once the child is of age, they would receive their own basic income so there wouldn't necessarily be a cycle of poverty.
Moreover, we should incentivize child transfers by subsidizing adoption.
I think the UBI should cover the majority of families but there are still going to be irresponsible people out there. You're definitely right that the children should get out of poverty once they are old enough to receive their own UBI but I think there should still be some sort of program in place to protect the children of irresponsible parents throughout their childhood. I'm not sure of the best way to do that but overall their is probably a net benefit for society as poverty will inevitably lead to crime and physical/mental health issues.
You have to be careful to not stimulate child birth that way. In South Africa there is a stipend paid for each child (called social grants). It's debatable but many claim it does encourage poor mothers to have even more children (the stipend isn't enough to support each child fully [3]- it's about $20 per month), and is sometimes used for other purposes.[1][2]
On the other hand, maybe you want to incentivize pregnancy. Most developed countries are losing population (the only exceptions are those with large-scale immigration).
A fertility rate of 2 would be necessary just to replace the current population, without any growth (assuming that all children reach adulthood and breed in turn, which is a big assumption for some of these countries).
Pretty much every jump in the intervening years is directly attributable to political turmoil (e.g., war) rather than any real decline in the amount of oil available. Note that today's moderately higher prices are in an environment with active war going on in Syria and Iraq, historically two of the largest producers. If it weren't for that, oil prices might well have dropped below 1946 prices (again, in constant dollars).
Similar graphs hold for other commodities.
According to the pundits in the 1970s, we were supposed to be at the "Soylent Green" stage long before now. We aren't.
Old Man Malthus claimed that we were on the verge of the Soylent Green world (though of course he didn't call it that) way back in 1798.
Oh, I was thinking more like trees, biodiversity, and water honestly. Sharks, plankton, etc. Even if oil became scarce, energy doesn't look like an issue in my lifetime, there's always coal and nuclear.
1) You have absolutely no basis for that statement
2) Fossil aquifers aren't the only sources of water. The aren't even the primary source of water, other than in specific geographically-limited regions.
In Kenya the fertility rate is 4.46, and that's after a period of decline and not especially high by regional standards. I don't think you want to drive that up...
(that's part of a wider problem with trying to draw any inferences about how a basic income might work in a developed country from this. It's perfectly reasonable to believe the results and the appropriate design might be precisely opposite)
>How will you decide who to give the basic income to?
>We'll choose the communities mostly for operational reasons. We're experts at delivering cash in very poor rural areas, and that's likely what we'll do with the pilot. Within the communities, we want to test a universal basic income, so we will enroll all full-time residents of a community.
So, they aren't incentivizing baby making between families. But there may be between communities. That said, as people are elevated socioeconomically birthrate tends to decrease.
The article says 10-15 years. Certainly not permanent, but I think it can be considered 'a long time'. Knowing it will come to an end eventually likely will have an influence though.
A very similar idea to basic income has been tried and failed miserably because it ends up as employer subsidies.
If you are willing to work for X money a year, and you get a basic income of Y money a year, then you will be willing to work for X - Y money per year if other conditions don't change. This is will end up as tax-payers subsidizing corporations in the long run.
Basic income reduces the supply of labor because it reduces the employee's need for income. Basic income increases the velocity of money, increasing the demand for labor. In a competitive market this should cause labor prices to rise.
(They're also listing fee-less Alternative Donation Options there, but I can't quite figure out how to use those to donate to this specific experiment.)
Q:Do the Poor Waste Transfers on Booze and Cigarettes?
A: No
Measurement: Survey asking how much money you spend on alchol.
Justification: For more sophisticated gaming and to deliver the mostly negative and insignificant results we observe, households would need to remember how much they reported at the last survey (often one year ago), and report a similar but slightly lower number. This seems unlikely.
JUST LOL. With shoddy logic like that, I can make everything to sound like a great idea.
One factor that can't be measured is what competitive advantage they will have over others and how much of an impact that will have on their quality of life.
Isn't one of the more interesting benefits of a UBI supposed be that it frees the people getting it to be madly productive in their passionate interests?
As Sam Altman said in a recent podcast (and I paraphrase here)..."its ok of 90% of UBI recipients sit around and smoke pot all day as long as 10% create awesome new things for society...its a net benefit."
Are these 6000 Kenyans in the technical position to create a new vision and application that benefits the world society? Can they build the next AirBnB or Uber?
I'm not saying they can't, of course...just wondering if the cultural and technical infrastructural differences between Africa and the US/Europe would create experimental distortions.
[edit] ok..AirBnb and Uber were probably poor examples and with more thought it makes sense the the effects would be much more localized in this case.
I guess what I was trying to say is that the 10% have a lot of work to do if they have to carry the weight for the other 90%.
They don't need to innovate relative to our lives to be innovative overall. Kenya has its own economic system quite different enough from what we are used to. It is likely they will focus locally on tangible opportunities.
I mean... AirBnB or Uber? If some of them set up schools or other things that benefit the local community as a whole, wouldn't that be far better than someone developing some app or something and probably moving to the West and earn shitloads of money?
You're making the assumption that creating the next AirBnB or Uber is something society needs. Let's say you give people UBI and they are happy to sit around talking, smoking pot, playing amateur sports etc. Provided that the UBI can continue to be funded doesn't the fact that these people are now happier than before make the program a success?
"just wondering if the cultural and technical infrastructural differences between Africa and the US/Europe would create experimental distortions."
everything is tied into the conditions under which it arises. whatever the "cultural and technical infrastructural" conditions are, there would still be people freed to be "madly productive in their passionate interests."
whatever their economy and culture demand, people with more free time will be better able to fulfill those needs, right? the people best able to assess that are the people within the local economy and culture.
6000 people is not an small sample size at all. I work at one of the research centers that evaluated the impact of Give Directly, and a sample size of 6000 is not small in any case.
I'd like to point out that Libertarians do not support basic income. In this instance, the argument is simply that basic income is a better system then the current welfare system.
I am libertarian, and support UBI, though not necessarily via state taxation and administration. Pragmatically, though, that is how it would need to be instituted in the real world, even if it could possibly work differently in my personal libertarian fantasyland.
I'd say that a significant fraction of all libertarians don't want to admit that their fantasyland and the real world are so far apart that they will never meet in any living human's natural lifespan, and therefore resist any idea which would tend to empower government to a greater extent in the long run.
By my personal estimation, UBI is necessary to avoid the accelerating concentration of more economic power into fewer hands, until the common man again becomes a "useless eater" that must be disposed of for the sake of efficiency. I fear that without it, or something like it, class-based warfare is inevitable, and war is more damaging to liberty than the welfare state. Given the choice between backing a step away from the way I wish the world could work, and running ten steps in any direction in a blind panic, I choose the one controlled step.
I think UBI is a band-aid on a bullet wound which is the notion of capitalism (note that I see markets as independent from the concept of private ownership of capital/land). All it does is delay the inevitable collapse of capitalism under its own weight.
The better solution is to try to decouple capital ownership from individuals, corporations, or states. I'm not sure how that can be best achieved but honestly I think automating the economy itself may be the best approach. It can be done in a piecemeal fashion, but it's a question of whether the capital owners will give up the reigns of power to machines to decide how best to fulfill demands of people. I'm not so much arguing for the nonsensical approach of Jacque Fresco because his notion requires engineering wants of people and the abolition of money. For me, money and prices are good aggregators for demand, they just need to be adjusted in their use cases (probably away from capital speculation), but even an automated economy would need something akin to a price and a unit for which the price is measured in. Otherwise, how are goods created? I don't see happy thoughts and wishing being viable means to ration in any economy.
> I think automating the economy itself may be the best approach
That is subjecting ourselves from total control of the machines from the bare start.
Not saying this automation is inherently bad - it may be much better than any alternative - but simply automating away throws away all the diversity that can help us get into a good system.
Well I agree but if you want the world to be like the Mall of America where you can buy just about anything then you have to turn it all over to machines. Basically, we have to become like the people in Wall-E. Always consuming, never really thinking, and the majority of decisions being made by machines. I'm not saying I want that future, but you can't continue down the path of the excesses of consumerism without paying the price in some way (loss of personal autonomy to machines is one price of many to pay).
With a UBI/capitalist economy, you would still have monetary constraints on the individual consumers (just like today) and there would still be monetary constraints on raw materials/commodities (just like today).
Just the opposite actually. UBI will entrench capitalism as the basis for the economy, and rightly so, into the post-labor future. It will put the final nail in the coffin of already the already obsolete ideologies of socialism/communism/anarchism.
Capitalism: Hey, Socialism. Remember how you worked your ass off
trying to make Communism happen? From each according to ability,
to each according to need?
Socialism: Ahhhh. Don't remind me.
Cap: Check out what I did, as a hobby, after going home from work.
Soc: You... bastard.
Cap: To each according to need, from each according to how awesome I am.
Soc: I hate you. You are literally the worst. Most of those
people aren't even *working*.
Cap: I'd love to talk more, but I need to be on Mars soon,
on a rocket built without taxes.
Soc: Yeah, you'd better run! Jerk.
"It will put the final nail in the coffin of already the already obsolete ideologies of socialism/communism/anarchism."
I doubt that very much considering that most of the western world is in some form of social democracy (Fabian-like socialism). If anything, capitalism is on it's last legs due to the fact it's unable to continue to exist without turning humans into the hover-pod marshmallow people from Wall-E. A species that has to consume everything in sight without any natural check to its growth will inevitably be constrained by the physical limitations of its environment and it's technologies.
Social democracy is very much based on capitalism, and it can't support it's social programs without taxing gains of the capitalistic economies.
Inserting the word "social" into "social democracy" is the greatest propaganda trick socialists have ever pulled. It lets them take credit for an existing, functional system that they want to destroy. It's classic bait and switch.
If anything, "capitalist democracy" is a far more accurate term.
"The idea isn’t new. As Frum notes, Friederich Hayek endorsed it. In 1962, the libertarian economist Milton Friedman advocated a minimum guaranteed income via a “negative income tax.”"
This is missing perhaps the most controversial part of the Universal Basic Income: that it's funded by the same population that it's helping. This isn't a fair test because it's being funded by "outside" money, from a much richer source (investors and donors from the richest country on earth). It's a charity moreso than a real investigation of Universal Basic Income.
A more realistic test would be to take those 6,000 Kenyans, tax them in some way (e.g. take 2x from 3,000 people), then distribute the money equally. And it would have to be done in one localized area to take care of the homogeneity problem (if the money is too sparsely distributed, prices won't reflect the new money distribution).
As much as they talk about how scientifically the study must be done, and the rigorous testing, it seems that there are some holes in the experiment.
I would rather have a world UBI funded by world-level income and capital taxes. The richer countries owe places like Kenya big for centuries of extractive imperial policies.
British colonization of Kenya started in the mid-19th century and ended in 1962. Before that the Arabs and Portuguese were only able to control the coasts. So "centuries of extractive imperial policies" is a bit of hyperbole.
Do the Italians owe the French compensation for Julius Caesar's campaigns? This game can go on forever.
I would dearly love to see the note I signed to assume that debt.
Nobody owes anybody anything for the things their great-grandparents did. Or for the things their grandparents did. Or for the things their parents did. Or for the things their siblings do. Life happens right now, not 10, 20, 50, 100, or 1000 years ago.
The problem with worldwide UBI is the same as nationwide UBI. The cash is just a token to split up complicated market-clearing trades into a collection of simple half-trades. You still need the goods and services to be produced and distributed. If you take a million US dollars and give it to a Kenyan, that Kenyan would still have to send some of it right back to New York to fill up a cargo ship and send it to Nairobi, because the local markets aren't equipped to handle that ripple in the money supply.
Rather than taking the money, and moving it, you have to take the productivity and move it. You would have to industrialize Kenya to the same extent as the US. You would have to pave it with the same roads, wire it with the same cables, police it with the same cops (or maybe better cops), do business with the same contract law. I think the reason Kenya is still Kenya after the colonial period is because it does not wan't to be the 51st state of the US, or another member state of the EU. And it does not yet have enough robots operating there to sustain a meaningful UBI.
Worldwide UBI means worldwide industrialization and uniform business laws. You can't just screw with the money and expect it to work.
That is what matters to you, it's not the only important way to use this concept. Charity has fucked up the world in many places many times. This is a chance to stop that.
Most of the discussion of UBI that I've seen posits it as something to replace the social safety net. The social safety net is obviously not paid for by the people it helps (except in some small way, perhaps), so why would UBI be? True, part of the social safety net is inevitably returned to the richer portions of the population through their own share, but inevitably the net flow is towards the poorer population.
Perhaps partially. But their real income can be inferred from how many goods they consume, and I don't think anyone would dispute they get to consume more goods in the short and long run with food stamps than without them.
Eventually, they pay for it all, and the amount of goods they consume declines as well as productive capacity flees or is shuttered when taxes become punitive. The sovereign goes bankrupt because it has to spend more than it can get in revenue, leading to debt that can only be inflated away. The Soviet Union had bread lines at the end; we've seen this movie before.
Given the inevitable rise of autonomy and the move away from labour being necessary to produce goods and services, what would you have us do then? If we reach a point where we automate more jobs than can be replaced, we either face rampant poverty or we have to move to a system like UBI. It's certainly socialism adjacent, but I wouldn't consider it Soviet style communism.
If we live in a world where everything is free and no one has to work we are living in a zoo. This is one pole of the spectrum, a pole which you would have us move closer to. To avoid being mastered by someone or something else you need to be a necessary part of the world and provide for yourself. The human response to automation should be to augment ourselves with technology, not become dependent on technology. If we lose control over our own personal affairs eventually we will be enslaved.
As to your claim of rampant poverty, it is true. However if we surrender our welfare to automation, humans will all be in poverty compared to the control exerted over us by the machines, and what we could have achieved if we remained free. If we continue to strive for personal independence, some of us will remain free. If we give in to subsistence dependence, we as a species will be enslaved.
So basically you think it is best (of likely options) that the majority of humans should not have basic needs met so that the remainder can reflect on how free and unenslaved they are. That is quite cynical.
I could never subscribe to such a dystopian outlook of the future. Sure, we could augment ourselves with tech, but that will not ultimately stop things like automation in transport. Millions of jobs are set to be made redundant and there is no clear replacement for them. No amount of tech augmentation to ourselves is going to fix that. More importantly, we are still trying to understand what a majority of humans would do if their basic needs were cared for. That's the purpose of studies like this. Humanity has never truly broken free of its evolutionary bond to fighting for the resources it needs to survive, it just changed what resources it fights over. This is truly uncharted territory and UBI is currently the only viable idea on the table to deal with it.
I expect a relatively small percentage would be interested in dangerous chemical highs if they aren't leading miserable lives they need to escape from. Myself, in that situation would likely spend my time socializing, playing games, consuming various media, and generating some amount of my own content.
On a larger scale, I expect that if half the population didn't/couldn't work, but was allowed to live comfortably anyway, there would be a considerable increase in experimental creativity and social functions. We'd all essentially go out and find things to do together and alone.
The social security net isn't paid for by the people it helps at the time they're receiving the benefits. It is designed on the principle that many of the benefits are temporary subsidies which some of the recipients are going to pay back in future out of higher taxes (or have already paid far more in their taxes for years). Obviously there's some net rich to poor transfer, but the main point is that both social security and UBI have direct costs to people who are actively buying making stuff, making stuff and investing in creating jobs in the American economy, which may or may not be greater than the economic gains from poorer people continuing to spend in downturn, not defaulting on their loans and being able to afford to sort out their health problems or relocate to somewhere with jobs, depending on how efficient the redistribution is. This, on the other hand, is just giving 6000 people money that local economy wouldn't have otherwise seen. Of course the community is likely to be better off overall, and even the rich people are going to think it's a totally brilliant idea because they're net gainers too.
Studying the effect of large scale outside cash injections into a community is not a remotely plausible proxy for studying the economic effects of a redistribution scheme.
UBI should ideally be funded by taxes on the savings by coroporations due to automation and outsourcing which reduces demand for local workers. Then it would truly scale with the times.
Alaska is doing it based on a natural resource tax. Justin Trudeau in Canada just did an experiment as well - not sure where their funda come from.
I think companies taking advantage of a public good should be taxed and the result redistributed as UBI. Personally on an unrelated note I'd try to tax non-biodegradable materials like plastic and the huge amounts of carbon being released from the ground... but that's near impossible to do politically to any great degree.
Unfortunately, it is impossible to isolate a community in modern society.
One way or another the funds will leak, for example, IS funded income being used by Kenyans to buy Chinese TVs.
That money will take a long way to come back to Kenya or US, but there may be a positive net effect even if it doesn't.
This is missing perhaps the most controversial part of the Universal Basic Income: that it's funded by the same population that it's helping
I prefer the idea of basic income taking the place of debt for the creation of money. This way the tax is in the form of inflation, and everyone gets to directly benefit from the creation of new money instead of just the banks and those blessed by the banks.
That's how it was handled in some of Heinlein's stories. The government calculated the value of new goods and services that had become available, then issue that amount of new money as direct payments to the people. Done correctly (yeah, right), that wouldn't be inflationary at all (although it seems like you'd also need some mechanism to claw the money back if the economy shrank).
> A more realistic test would be to take those 6,000 Kenyans, tax them in some way (e.g. take 2x from 3,000 people), then distribute the money equally.
Not at all. The theory of UBI is that in the West we're wealthy enough that we produce way more than we need. Ergo, we can afford to give everybody the basics. Doing the same experiment in a much poorer context would produce a very different outcome.
As an aside, I think your theory of ownership is throwing your intuitions off. You seem to think of all resources as being owned entirely by some set of current individuals. That's certainly the default model in the US, but that's not the only way to look at it.
Much of the wealth in the US was created by previous generations or in large part derived from that inheritance. Instead of capriciously assigning that to current individuals based on blood ties and other luck, you can also look at that as being a joint inheritance. Thus, something like the UBI can be viewed not as taking from individual A to give to individual B, but to use our joint inheritance to make sure everybody has the minimum necessities of survival.
I hasten to add that I don't see either of these models as "right". Fitting the complexities of a modern economy into a primate's model of territoriality will never work all that well. But there's historical precedent in things like the Spanish ejido, the Aztec calpulli, and English commons.
That's the thing about the Universal Basic Income, the "controversy" is always phrased in terms of: "Oh but will this really help people?" or "Oh, but people will just sit and do nothing and that's not good" and always carefully avoids: "Hey, who will pay for all of this?"
I have never witnessed a single discussion about basic income where "Hey, who will pay for all of this?" isn't practically the first question out of everyone's mouth. Stop framing the discussion as underhanded/deceptive.
As an experiment to see if it's economically viable, yes it's flawed. But to explore possible benefits it still has value. What originally made me more open to the idea was reading about a similar (I think) experiment and all the indirect outcomes like kids staying in school instead of working to support their families, more families with one parent often with the children, etc.
And that's valuable, sure. My point is more a question of if it's truly a "Universal Basic Income" experiment, it should be done so that it's paid for by the taxpayers of that same system. My suspicion is that such a program would dissolve fairly quickly because the tax burden falls squarely on people who have worked the hardest to pay their own bills and to provide for their own family. If they suddenly have to lower their quality of life, or their kids' quality of life to pay for someone who they perceive as not working very hard, then the system gets difficult.
It's much simpler to make money appear out of thin air (as it effectively is when you take millions of dollars from rich folks in California) and distribute it in Africa. But if you have to take money some folks' pockets in Africa to give to their neighbors, that to me is a more 1-to-1 comparison at what happens for a UBI.
Why do you think UBI would be paid for by people who need it most? My assumption is that it would be paid for with a combination of cuts to social programs (i.e. those replaced by UBI) and more progressive taxes and/or corporations. So in effect it still will be "rich folks" paying for UBI.
Depends on whether you pay for it mostly from increased taxes or cuts to benefits. It's certainly possible to design a UBI programme where comfortably middle class families are the chief beneficiaries and existing state handout recipients, (i.e. "poor folks") the chief losers. And it's certainly true that many of UBI's most prominent proponents on the right are also amongst the most prominent opponents of any attempt to raise taxes on the rich...
Yeah, I guess that assumption is an optimistic one. I tend to mostly think of UBI as a left/progressive issue. I only have a passing familiarity with what folks on the right think about UBI but mostly historically, not present day. Got any links handy to help me broaden my horizons?
I don't know why you're being upvoted. Your argument, to me, is meaningless.
Basic income is about having enough money to eat and get shelter, without ANY need to work - and see what happens to human beings in that condition. If the same human being has to fund its own basic income, what's the point?
Basic income, to me, HAS to be funded by someone other than the recipient. Otherwise, it's no experiment at all.
I get the "point" of UBI, but there is the problem of who pays for it. The answer of "other folks" is very difficult, and to me, the most controversial part of it, which is what I said.
To make sure we have the same premise, Universal, by definition, means everyone within a certain boundary (e.g. citizen of a country, city, state, whatever) receives the money, regardless of their income, location, etc?
To be functional, the money that is doled out needs to be collected from somewhere. It isn't that each specific person needs to fund themselves, but the set of people that receive the "Universal" basic income needs to generate the income needed to pay for it. If an outside set of people pays for it, then it's not a universal basic income, it's something else -- it's taking money from one set of people to give to another. I believe the whole idea of UBI is that everyone gets that same money.
The real problem is the collection problem: if you have a set of these 3,000 people who receive, say, $100/mo (made-up number), then I think a true test of Universal Basic Income is that the income has to come from that same set of 3,000 people.
In what way is that meaningless? I think it's a valid question to ask.
It is an experiment. If the experiment shows a big enough benefit (increase in productivity, reduced costs on healthcare, improvements on education, etc) then, you start thinking where is that money coming from.
But we don't need to run an experiment to know that giving 6000 people regular income will make them generally better off; that's obvious, especially in the context of a developing country.
We need to run an experiment to identify whether redistributing tax money to everybody equally and unconditionally results in better outcomes than various other existing or proposed systems of needs-based handouts, which is a completely different scenario, not least because for a significant proportion of people in the experiment this is going to represent a reduction in their current incomes or other benefits.
> The real problem is the collection problem: if you have a set of these 3,000 people who receive, say, $100/mo (made-up number), then I think a true test of Universal Basic Income is that the income has to come from that same set of 3,000 people.
That clearly isn't how a real UBI would work. If you literally take $100/month from everyone and then give it back to them, nothing happens. It would have zero effect.
The way UBI works in practice is that everyone gets a fixed amount of money and then everyone pays a fixed percentage in taxes, so that more of the UBI is funded by the wealthier people who pay more taxes. Which is what the experiment is doing.
In theory to make it accurate they should also impose a "tax" on the participants based on how much money they make from external sources, i.e. if one of the participants has a job paying $200/month and we want to emulate a 20% tax rate then they get a $100/month UBI but the funders take back $40 (20% of $200) as "tax" to "fund" it. Obviously that wouldn't work if someone had above average income (i.e. they made $1000/month in Kenya and would have a "tax" exceeding the UBI) because nobody would volunteer for a study that cost them money. But you could at least see what a UBI would do for poorer populations, which would seem to be the interesting question, because for richer people it just looks a lot like any other "take from the rich and give to the poor" welfare program.
Right, I'm not saying that everyone pays themselves $100/mo; clearly that's not going to do a thing. I'm saying that I think the same set of people who receive the money should be taxed to pay for it. The thing of UBI is that it will be paid by your average person who isn't wealthy, it will be paid by the upper middle class.
Your example of people volunteering for a study that costs them money is exactly the problem that I am describing, and for a system such as this to work, that's how it would end up--taxes go up for people who this doesn't benefit, and as much fun as it is to assume that "other rich people" will pay for it, it doesn't work that way. That's why I think a better test is to select a group of people to self-fund their own UBI -- some people pay $140 and receive $100. Others pay $20 and receive $100.
> The thing of UBI is that it will be paid by your average person who isn't wealthy, it will be paid by the upper middle class.
That's generally how all taxes work. The people with more money than average pay more than average and the people with less money than average pay less than average. But the people who make $1 more than average are only suffering a net loss of $.20, whereas the people who make $100,000 more than average are paying net $20,000.
> That's why I think a better test is to select a group of people to self-fund their own UBI -- some people pay $140 and receive $100. Others pay $20 and receive $100.
In other words what you think we should do is to actually make it a law somewhere?
You contradict yourself. You've just responded to the meaning of his post after stating its lack thereof. Please be more precise in your insults, and perhaps be less dismissive overall.
Worse than the lack of civility in your response is that you've attracted people to vote for it. Thus your comment is appearing before more useful ones below, which actually show why parent's objections are counterproductive, or at best, concerns for a later time (since he wants to load too many unknowns into a single study.)
As automation replaces larger portions of previously human-held positions, it could either be taxed on behalf of or socialized for investment by the basic income receiving communities.
Granted the ideal scenario for that is a long way off, but the incentives don't have to be.
The problem is that basic income is not enough. Most of the people who will receive it will still need and want more. This means they will still be looking for work, and will be willing to accept lower wages, because they have the basic income. This will in turn drag down wages for everyone and end up as a tax-payer subsidy for employers - effectively, part of wages will be paid by the government/tax payers through basic income.
Why are you trying to test both the motor AND the battery at the same time?
Test one, then the other. Isolate the variables; change as little as possible at a time to test your hypothesis, which in this case is: Just giving people guaranteed money for a long time is the best way to help them.
Thing I'd be most worried about is protecting those communities from other violent people and/or mad influx of people trying to join those communities. Island cultures might be better - more isolated.
PS - I did think of an answer to "why not cash?" but it's something that's also addressable: Bulk purchasing advantage. AFAIK, it's more cost-efficient to feed 1000 people all at once than one at a time.
A very similar idea to basic income has been tried and failed miserably because it ends up as employer subsidies.
If you are willing to work for X money a year, and you get a basic income of Y money a year, then you will be willing to work for X - Y money per year if other conditions don't change. This is will end up as tax-payers subsidizing corporations in the long run.
It depends what you mean my 'enough to live on', because you can live on very little or no income, but you won't live well. At our current state we cannot provide enough for everybody for free, this might be possible in the future, but not for the next 50 years. Basic income does not fit well with our current system, it would be wiser to invest that money into useful projects such as free healthcare, education, transportation in my opinion.
Generally in Western countries, the groups that pay in and take out are quite disparate.
The universal basic income would be paid for by the upper and middle classes, and taken by the working class.
At least in the UK these groups are seperated enough that there's very little socialization between them, very little overlap in voting preferences, etcetera. Different cultures, within the same country.
No sarcasm intended here: Is the highest abstracted benefit of Universal basic income (other than the benefit to those that receive the basic income) that you cut out the middle person in social welfare distribution?
Partly. As an example, well-intentioned midcentury relief workers did a lot of damage to minority communities (like you see in Malcolm X's autobiography). Eliminating means testing and data collection saves money and is significant for the people involved in the program.
There are a lot of labor market benefits as well; one of the big problems with means-tested programs is that they screw up the tax structure at the low end of the income scale. If your options are being jobless receiving welfare or getting a job that forces you out of welfare, there's a large disincentive to seek work. You would be paying an effective tax rate of ~100% by losing that payment.
Further, beyond streamlining operations, it also allows people to spend on what they need/want the most. Today, if you would rather have less housing vouchers and more food stamps? Too bad. UBI would allow people to spend their "basic living" money in the best way they see fit.
I would say that cutting out the middle person is part of how you pay for UBI. To me the highest benefit of UBI is that people wouldn't need to work/struggle to live anymore.
Not a lifetime (they may say for life, but most are actually restricted to 20-30 years), but in the US some state lotteries do this. $500-$5k a week or a month for a few decades.
While lotteries in the US often advertise the lump sum winnings, many are actually paid out in installments over a few decades.
What happens is that winners demand the full lump sum. For the lotteries that offer it, the lump sum is less than the total winnings paid out over the years. (Something like 10% less.)
This has created a niche for businesses to crop up where the company will give you the lump sum total due, with a nice chunk extracted for themselves.
> This has created a niche for businesses to crop up where the company will give you the lump sum total due, with a nice chunk extracted for themselves.
What prevents these businesses from approaching these Kenyian people?
I'd wager the gross value is too low to be worth the effort of going out there. I'm assuming a basic income for these rural Kenyans would be a very small amount in USD.
> What happens is that winners demand the full lump sum. For the lotteries that offer it, the lump sum is less than the total winnings paid out over the years. (Something like 10% less.)
Hence proving the intuition that the people who buy lottery tickets are bad at math.
US lotteries advertise the total of the payments. They usually also offer, themselves, a much smaller lump sum amount that roughly matches the money needed to create an annuity to pay the installments (it's usually closer to 50% of the advertised jackpot than 90%).
The businesses I'm aware of will offer a lump sum up front for assignment of any annuity.
All other considerations aside, isn't this going to create some form of inflation? At least in the beginning (first couple years), I would think that a greater monetary mass (everyone has more money) would see an increased price tag on goods? I am no economist, just wondering what others take is on this?
It would do exactly that. Scarcity is relative, so giving everyone in the world a basic income will simply raise the prices of basic goods such that many again would be unable to afford them even on a basic income. The best way to end hunger is to grow more food, not to give everyone more money.
That really isn't true though. You can find the data on this almost everywhere: we produce enough food to feed the entire world's population more than adequately, but it doesn't get to the people that need it because of poverty. [1]
You're advocating for demand-side stimulus by giving everyone money to spend on goods without increasing the productive capacity of the economy. This led to stagflation in the USA in the 1970s. There are other examples such as Venezuela today where simply giving out money does not improve welfare if the supply of goods and services does not grow as well.
That is only true if competition between the sellers of those goods is broken or there truly is a global shortage of all types of goods that can fulfill a basic need.
If and only if the competing sellers also raise their prices in step with yours. But that's generally not how the price rises for food, even for restaurants. It's more they're in line with imperfect competition where MR >= MC and in most cases MR is only but a fraction higher than MC (say 1-5% if we take grocery store business accounting profits as a measure which is around 1%). Basically, food markets aren't very profitable businesses compared to technology or entertainment where you have various legal restrictions on supply. There's nothing stopping a firm from starting up their own farms, bakeries, and the like. So, unless you can show me that MC for all firms is going to rise in step with each other versus demand for supply of food I can't say your argument holds water. I'm not saying there won't be a rise in the price, but rather than the rise in the price will be negligible for food. Now, for services or any other product I'd say you're right. And we'll see many goods come out of reach for the proof despite the injection of money. But that would likely be goods like housing and services of any kind like Internet or phone utilities. But for the rest of the economy, there's not much incentive to raise the price unless your costs of covering the extra demand is killing your bottom line. If it doesn't then you don't care either way.
For locally produced goods that will partially offset the gains. Ultimately, though, the money entering the economy comes from elsewhere and should cause good and services from that elsewhere to flow to the place receiving the donations.
It's true. At its most simple, the Price level can be though of as (Quantity of Money) / (Quantity of Goods), and all goods' prices more or less rise and fall with the Price level. Don't forget, though, that some of the goods purchased by people with newfound spending power might be imported (thus increasing the denominator in that equation and lowering the price level), some of the money might be saved or invested abroad (lowering the numerator in that equation), or it might have some stimulative effect on the economy (one can only hope!), thus raising the denominator.
The net effect will probably still be inflation, especially in the short term, but with the poorer population having a greater share of the purchasing power.
The Quantity of Money isn't increasing. In other words, GiveDirectly isn't printing cash, only transferring the fixed quantity of cash from those with too much to those with too little.
They are paying for the program with taxes from the rich? I had thought the startup was paying for it, or coordinating funds from charitable organizations.
"Taxes" from the rich? No, where did you get that idea. They are "donations" from the rich. Most of us who are reading HN are probably rich, and can (and should) easily donate at the GiveDirectly web site.
There are a couple of directions to examine this question.
First, from the supply of money and how it is used. While everyone will have more money, that doesn't necessarily mean that each unit of currency will be worth much less. One characteristic of being in poverty is needing things that you cannot purchase. If you need $1000 worth of stuff and you are given $100 or even $900 you are paying not only the nominal price of those goods but a very real and a very felt opportunity cost of not getting some other needed good. IOW, it makes sense to be nearly as careful and frugal as it was before you got your windfall.
Once you get past the threshold of 'needed' items and into 'important' items the calculus changes a bit and when you move from that to 'nice to have' it changes even further. It is easy to imagine inflation running a bit wild if a community of middle class people were all given a million dollars, for example. Look at the gold rush or the recent oil boom towns.
From the other direction, the demand for money and time from this population. Sellers who know that a population has an influx in cash might try to demand more for it. They will have trouble because that extra cash still mean a lot as examined above and they will need to compete with others for that cash. Where things will really change are people that don't need cash from this population but time in the form of labor. People who employ the poverty stricken have a distinct advantage that other employers do not have in their negotiations -- the other party is bargaining for their life. If they don't work this week they may not eat next week. This causes those in poverty to sell their time for a loss as long as that loss is not as much as the loss they'd see if they didn't work at all...and it is hard to imagine a greater loss than the pain and risk of death of starvation, homelessness, or lack of medical care for yourself and your family.
Under basic income, however, this calculus changes dramatically. Suddenly these people have a much stronger bargaining position. They are now negotiating for gain rather than loss. Employers now have to entice them to work. They have to pay their employees more than their time is worth to them for other activities like recreation or education or spending time with their family. It is not all bad; thanks to basic income it is easier to reach the gain vs. loss threshold but it will likely be more than what they can get away with when the alternative for the employee is pain or death. These employers might eat some of this cost but some will likely be pushed onto their customers. Some jobs might be lost altogether because people are not willing to pay enough for a service to make up the difference. These tend to be low value add jobs since they were, in effect, subsidized by desperation.
These three effects will lead to some inflation but, unless basic income can push people from 'need to have' to 'nice to have', a big jump, I think it will be held in check.
I think the biggest unsolved question about ubi is will prices increase? There is no meaningful test if this question unless the test is conducted truly universally (I.e. this experiment will not resolve this). The potentially devastating consequence of increasing prices due to ubi is that it might relatively drag down individuals in the lowest income tiers (yes, even though they are also getting money).
The title of the article is COMPLETELY WRONG. UBI is universal. You don't just give it to the poor. Everyone gets it. That's an important part of the point.
They are giving this money to poor villages. I wonder if that is going to provide a good testing ground? Do these people even have access to "higher-level" activities? If not then these people will just do what all the nay-sayers say they will do. Nothing. But not b/c they won't, but b/c they can't.
The point that makes universal basic income (UBI) unconvincing IMO is that it relies on a reality that it actually subverts, i.e. money. I'm not saying that we should eliminate money or provide UBI in a different, subsidiary, form. But maybe it is worth thinking on what the meaning of money, economy, markets, loans, etc will be in a world where there is a UBI.
There already is a long term UBI scheme in Kenya's poorest region around Lake Turkana if anybody wants to see what the desperate poor do with the money.
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[ 0.26 ms ] story [ 303 ms ] threadLooking forward to the results of this test.
That is just welfare, if done on a governmental level, or charity, if you do it individually.
For it to be a true experiment about UBI, you would have to find an area that's somewhat autonomous, provide everyone indiscriminately with the same amount of money that would suffice for maintaining their basic living needs and guarantee the income for at least a certain period of time. Otherwise, well, good for you for helping the needy but it doesn't have anything to do with universal basic income.
Without knowing the purpose of their spendings I can only assume that you morally approve one over the other (which would put a big dent in your flippant "feelings of entitlement being higher among men" theory).
It's great that this is going to be ran at scale, and over a long period of time - the hardest part is going to be waiting on the results!
Will the basic income be extended to a child or will children be left poor while their parents get BI?
If babies get added to the BI payroll, doesn't this incentivize baby making?
Edit: the point being that children are the ones who suffer most from poverty, and investing in them has the most long term potential. But of course we don't want people to have kids just for the money, hence the difficulty.
Sure, but only in the sense that they're the ones who will be living it. Fewer children doesn't mean society won't have a future. It just means they'll each have more resources.
The world is not at risk of underpopulation. If that were actually a serious concern, we could take measures to mitigate it but all evidence points to there being plenty of people in the world already. Some wealthy countries might have declining populations, but there are plenty of countries with overpopulation to offset that.
Many of the social benefits a working Western society wants depends upon a growing population, like social security.
To be clear, they depend on a growing labor force.
However, the whole reason to investigate UBI is that we're likely nearing a future where labor is not a dominant factor of production. It seems unlikely that we'll have full employment in the future, particularly if there's UBI.
In an economy where labor is not a necessary constraint or driver of production, it seems entirely unclear why having a growing population (without a growing labor force) would be beneficial.
Not to mention that for the forceable future there are plenty of countries desperate to export excess populations. If you need to increase the population, there's no need to subsidize it.
Whether society subsidises it or not people are going to continue procreating, many irresponsibly (don't have financial ability to support their children). However are you arguing then that these children who happen to be born into poverty should then be left in it without government/societal help?
First of all, UBI should ideally be enough to eliminate poverty. Parents might have to make some sacrifices to take care of the children (forgoing personal luxuries or taking a low wage job). Once the child is of age, they would receive their own basic income so there wouldn't necessarily be a cycle of poverty.
Moreover, we should incentivize child transfers by subsidizing adoption.
If they're so irresponsible, why would giving them more money necessarily help the children to live a better quality of life?
[1] http://www.sowetanlive.co.za/news/2012/05/25/misuse-of-socia...
[2] http://www.iol.co.za/news/south-africa/grants-used-to-suppor...
[3] http://www.parent24.com/Baby/Toddler_1-2/care_nutrition/The-...
Compare:
https://www.cia.gov/library/publications/the-world-factbook/...
A fertility rate of 2 would be necessary just to replace the current population, without any growth (assuming that all children reach adulthood and breed in turn, which is a big assumption for some of these countries).
Why does world population "need to decline"?
I suppose the alternative is to eat resources at the replacement rate - this is what sustainability is supposed to be about.
Or perhaps some new technology will fix it.
No, we aren't (running out of resources).
The price of oil today is moderately higher (in constant dollars) than it was in 1946, but only moderately so.
http://inflationdata.com/articles/charts/inflation-adjusted-...
Pretty much every jump in the intervening years is directly attributable to political turmoil (e.g., war) rather than any real decline in the amount of oil available. Note that today's moderately higher prices are in an environment with active war going on in Syria and Iraq, historically two of the largest producers. If it weren't for that, oil prices might well have dropped below 1946 prices (again, in constant dollars).
Similar graphs hold for other commodities.
According to the pundits in the 1970s, we were supposed to be at the "Soylent Green" stage long before now. We aren't.
Old Man Malthus claimed that we were on the verge of the Soylent Green world (though of course he didn't call it that) way back in 1798.
But like rainforests are going away real quick.
2) Water doesn't actually get used up.
2) Aquifers do.
(that's part of a wider problem with trying to draw any inferences about how a basic income might work in a developed country from this. It's perfectly reasonable to believe the results and the appropriate design might be precisely opposite)
>We'll choose the communities mostly for operational reasons. We're experts at delivering cash in very poor rural areas, and that's likely what we'll do with the pilot. Within the communities, we want to test a universal basic income, so we will enroll all full-time residents of a community.
- from the actual fund-raising page - https://givedirectly.org/basic-income
So, they aren't incentivizing baby making between families. But there may be between communities. That said, as people are elevated socioeconomically birthrate tends to decrease.
Edited to add: https://en.wikipedia.org/wiki/Income_and_fertility
People will act differently if they know their needs will be provided for them for life as opposed to a few years.
If you are willing to work for X money a year, and you get a basic income of Y money a year, then you will be willing to work for X - Y money per year if other conditions don't change. This is will end up as tax-payers subsidizing corporations in the long run.
https://en.wikipedia.org/wiki/Speenhamland_system
(They're also listing fee-less Alternative Donation Options there, but I can't quite figure out how to use those to donate to this specific experiment.)
That's a bold assertion. Care to back this up? Because you know, I have an entire peninsula full of people to demonstrate that this is false.
Q:Do the Poor Waste Transfers on Booze and Cigarettes?
A: No
Measurement: Survey asking how much money you spend on alchol.
Justification: For more sophisticated gaming and to deliver the mostly negative and insignificant results we observe, households would need to remember how much they reported at the last survey (often one year ago), and report a similar but slightly lower number. This seems unlikely.
JUST LOL. With shoddy logic like that, I can make everything to sound like a great idea.
As Sam Altman said in a recent podcast (and I paraphrase here)..."its ok of 90% of UBI recipients sit around and smoke pot all day as long as 10% create awesome new things for society...its a net benefit."
Are these 6000 Kenyans in the technical position to create a new vision and application that benefits the world society? Can they build the next AirBnB or Uber?
I'm not saying they can't, of course...just wondering if the cultural and technical infrastructural differences between Africa and the US/Europe would create experimental distortions.
[edit] ok..AirBnb and Uber were probably poor examples and with more thought it makes sense the the effects would be much more localized in this case.
I guess what I was trying to say is that the 10% have a lot of work to do if they have to carry the weight for the other 90%.
everything is tied into the conditions under which it arises. whatever the "cultural and technical infrastructural" conditions are, there would still be people freed to be "madly productive in their passionate interests."
whatever their economy and culture demand, people with more free time will be better able to fulfill those needs, right? the people best able to assess that are the people within the local economy and culture.
It's a very capitalist solution to a post-labor world.
I'd say that a significant fraction of all libertarians don't want to admit that their fantasyland and the real world are so far apart that they will never meet in any living human's natural lifespan, and therefore resist any idea which would tend to empower government to a greater extent in the long run.
By my personal estimation, UBI is necessary to avoid the accelerating concentration of more economic power into fewer hands, until the common man again becomes a "useless eater" that must be disposed of for the sake of efficiency. I fear that without it, or something like it, class-based warfare is inevitable, and war is more damaging to liberty than the welfare state. Given the choice between backing a step away from the way I wish the world could work, and running ten steps in any direction in a blind panic, I choose the one controlled step.
The better solution is to try to decouple capital ownership from individuals, corporations, or states. I'm not sure how that can be best achieved but honestly I think automating the economy itself may be the best approach. It can be done in a piecemeal fashion, but it's a question of whether the capital owners will give up the reigns of power to machines to decide how best to fulfill demands of people. I'm not so much arguing for the nonsensical approach of Jacque Fresco because his notion requires engineering wants of people and the abolition of money. For me, money and prices are good aggregators for demand, they just need to be adjusted in their use cases (probably away from capital speculation), but even an automated economy would need something akin to a price and a unit for which the price is measured in. Otherwise, how are goods created? I don't see happy thoughts and wishing being viable means to ration in any economy.
That is subjecting ourselves from total control of the machines from the bare start.
Not saying this automation is inherently bad - it may be much better than any alternative - but simply automating away throws away all the diversity that can help us get into a good system.
I doubt that very much considering that most of the western world is in some form of social democracy (Fabian-like socialism). If anything, capitalism is on it's last legs due to the fact it's unable to continue to exist without turning humans into the hover-pod marshmallow people from Wall-E. A species that has to consume everything in sight without any natural check to its growth will inevitably be constrained by the physical limitations of its environment and it's technologies.
Inserting the word "social" into "social democracy" is the greatest propaganda trick socialists have ever pulled. It lets them take credit for an existing, functional system that they want to destroy. It's classic bait and switch.
If anything, "capitalist democracy" is a far more accurate term.
http://www.theatlantic.com/politics/archive/2014/08/why-aren...
(meant to post this on parent comment, but it works just as well here as an illustration.)
A more realistic test would be to take those 6,000 Kenyans, tax them in some way (e.g. take 2x from 3,000 people), then distribute the money equally. And it would have to be done in one localized area to take care of the homogeneity problem (if the money is too sparsely distributed, prices won't reflect the new money distribution).
As much as they talk about how scientifically the study must be done, and the rigorous testing, it seems that there are some holes in the experiment.
Do the Italians owe the French compensation for Julius Caesar's campaigns? This game can go on forever.
Nobody owes anybody anything for the things their great-grandparents did. Or for the things their grandparents did. Or for the things their parents did. Or for the things their siblings do. Life happens right now, not 10, 20, 50, 100, or 1000 years ago.
The problem with worldwide UBI is the same as nationwide UBI. The cash is just a token to split up complicated market-clearing trades into a collection of simple half-trades. You still need the goods and services to be produced and distributed. If you take a million US dollars and give it to a Kenyan, that Kenyan would still have to send some of it right back to New York to fill up a cargo ship and send it to Nairobi, because the local markets aren't equipped to handle that ripple in the money supply.
Rather than taking the money, and moving it, you have to take the productivity and move it. You would have to industrialize Kenya to the same extent as the US. You would have to pave it with the same roads, wire it with the same cables, police it with the same cops (or maybe better cops), do business with the same contract law. I think the reason Kenya is still Kenya after the colonial period is because it does not wan't to be the 51st state of the US, or another member state of the EU. And it does not yet have enough robots operating there to sustain a meaningful UBI.
Worldwide UBI means worldwide industrialization and uniform business laws. You can't just screw with the money and expect it to work.
Think about it like this, does Bill Gates live next to a poor person? Would Basic Income in his area tell you much about basic income in the US?
As to your claim of rampant poverty, it is true. However if we surrender our welfare to automation, humans will all be in poverty compared to the control exerted over us by the machines, and what we could have achieved if we remained free. If we continue to strive for personal independence, some of us will remain free. If we give in to subsistence dependence, we as a species will be enslaved.
On a larger scale, I expect that if half the population didn't/couldn't work, but was allowed to live comfortably anyway, there would be a considerable increase in experimental creativity and social functions. We'd all essentially go out and find things to do together and alone.
Studying the effect of large scale outside cash injections into a community is not a remotely plausible proxy for studying the economic effects of a redistribution scheme.
Alaska is doing it based on a natural resource tax. Justin Trudeau in Canada just did an experiment as well - not sure where their funda come from.
I think companies taking advantage of a public good should be taxed and the result redistributed as UBI. Personally on an unrelated note I'd try to tax non-biodegradable materials like plastic and the huge amounts of carbon being released from the ground... but that's near impossible to do politically to any great degree.
I prefer the idea of basic income taking the place of debt for the creation of money. This way the tax is in the form of inflation, and everyone gets to directly benefit from the creation of new money instead of just the banks and those blessed by the banks.
Not at all. The theory of UBI is that in the West we're wealthy enough that we produce way more than we need. Ergo, we can afford to give everybody the basics. Doing the same experiment in a much poorer context would produce a very different outcome.
As an aside, I think your theory of ownership is throwing your intuitions off. You seem to think of all resources as being owned entirely by some set of current individuals. That's certainly the default model in the US, but that's not the only way to look at it.
Much of the wealth in the US was created by previous generations or in large part derived from that inheritance. Instead of capriciously assigning that to current individuals based on blood ties and other luck, you can also look at that as being a joint inheritance. Thus, something like the UBI can be viewed not as taking from individual A to give to individual B, but to use our joint inheritance to make sure everybody has the minimum necessities of survival.
I hasten to add that I don't see either of these models as "right". Fitting the complexities of a modern economy into a primate's model of territoriality will never work all that well. But there's historical precedent in things like the Spanish ejido, the Aztec calpulli, and English commons.
It's much simpler to make money appear out of thin air (as it effectively is when you take millions of dollars from rich folks in California) and distribute it in Africa. But if you have to take money some folks' pockets in Africa to give to their neighbors, that to me is a more 1-to-1 comparison at what happens for a UBI.
Basic income is about having enough money to eat and get shelter, without ANY need to work - and see what happens to human beings in that condition. If the same human being has to fund its own basic income, what's the point?
Basic income, to me, HAS to be funded by someone other than the recipient. Otherwise, it's no experiment at all.
To make sure we have the same premise, Universal, by definition, means everyone within a certain boundary (e.g. citizen of a country, city, state, whatever) receives the money, regardless of their income, location, etc?
To be functional, the money that is doled out needs to be collected from somewhere. It isn't that each specific person needs to fund themselves, but the set of people that receive the "Universal" basic income needs to generate the income needed to pay for it. If an outside set of people pays for it, then it's not a universal basic income, it's something else -- it's taking money from one set of people to give to another. I believe the whole idea of UBI is that everyone gets that same money.
The real problem is the collection problem: if you have a set of these 3,000 people who receive, say, $100/mo (made-up number), then I think a true test of Universal Basic Income is that the income has to come from that same set of 3,000 people.
In what way is that meaningless? I think it's a valid question to ask.
We need to run an experiment to identify whether redistributing tax money to everybody equally and unconditionally results in better outcomes than various other existing or proposed systems of needs-based handouts, which is a completely different scenario, not least because for a significant proportion of people in the experiment this is going to represent a reduction in their current incomes or other benefits.
That clearly isn't how a real UBI would work. If you literally take $100/month from everyone and then give it back to them, nothing happens. It would have zero effect.
The way UBI works in practice is that everyone gets a fixed amount of money and then everyone pays a fixed percentage in taxes, so that more of the UBI is funded by the wealthier people who pay more taxes. Which is what the experiment is doing.
In theory to make it accurate they should also impose a "tax" on the participants based on how much money they make from external sources, i.e. if one of the participants has a job paying $200/month and we want to emulate a 20% tax rate then they get a $100/month UBI but the funders take back $40 (20% of $200) as "tax" to "fund" it. Obviously that wouldn't work if someone had above average income (i.e. they made $1000/month in Kenya and would have a "tax" exceeding the UBI) because nobody would volunteer for a study that cost them money. But you could at least see what a UBI would do for poorer populations, which would seem to be the interesting question, because for richer people it just looks a lot like any other "take from the rich and give to the poor" welfare program.
Your example of people volunteering for a study that costs them money is exactly the problem that I am describing, and for a system such as this to work, that's how it would end up--taxes go up for people who this doesn't benefit, and as much fun as it is to assume that "other rich people" will pay for it, it doesn't work that way. That's why I think a better test is to select a group of people to self-fund their own UBI -- some people pay $140 and receive $100. Others pay $20 and receive $100.
That's generally how all taxes work. The people with more money than average pay more than average and the people with less money than average pay less than average. But the people who make $1 more than average are only suffering a net loss of $.20, whereas the people who make $100,000 more than average are paying net $20,000.
> That's why I think a better test is to select a group of people to self-fund their own UBI -- some people pay $140 and receive $100. Others pay $20 and receive $100.
In other words what you think we should do is to actually make it a law somewhere?
Worse than the lack of civility in your response is that you've attracted people to vote for it. Thus your comment is appearing before more useful ones below, which actually show why parent's objections are counterproductive, or at best, concerns for a later time (since he wants to load too many unknowns into a single study.)
As automation replaces larger portions of previously human-held positions, it could either be taxed on behalf of or socialized for investment by the basic income receiving communities.
Granted the ideal scenario for that is a long way off, but the incentives don't have to be.
Why are you trying to test both the motor AND the battery at the same time?
Test one, then the other. Isolate the variables; change as little as possible at a time to test your hypothesis, which in this case is: Just giving people guaranteed money for a long time is the best way to help them.
Thing I'd be most worried about is protecting those communities from other violent people and/or mad influx of people trying to join those communities. Island cultures might be better - more isolated.
PS - I did think of an answer to "why not cash?" but it's something that's also addressable: Bulk purchasing advantage. AFAIK, it's more cost-efficient to feed 1000 people all at once than one at a time.
If you are willing to work for X money a year, and you get a basic income of Y money a year, then you will be willing to work for X - Y money per year if other conditions don't change. This is will end up as tax-payers subsidizing corporations in the long run.
https://en.wikipedia.org/wiki/Speenhamland_system
The universal basic income would be paid for by the upper and middle classes, and taken by the working class.
At least in the UK these groups are seperated enough that there's very little socialization between them, very little overlap in voting preferences, etcetera. Different cultures, within the same country.
There are a lot of labor market benefits as well; one of the big problems with means-tested programs is that they screw up the tax structure at the low end of the income scale. If your options are being jobless receiving welfare or getting a job that forces you out of welfare, there's a large disincentive to seek work. You would be paying an effective tax rate of ~100% by losing that payment.
The results could be useful for scientific purposes (even though the sample is somewhat biased towards people buying lottery tickets).
While lotteries in the US often advertise the lump sum winnings, many are actually paid out in installments over a few decades.
What happens is that winners demand the full lump sum. For the lotteries that offer it, the lump sum is less than the total winnings paid out over the years. (Something like 10% less.)
This has created a niche for businesses to crop up where the company will give you the lump sum total due, with a nice chunk extracted for themselves.
What prevents these businesses from approaching these Kenyian people?
Hence proving the intuition that the people who buy lottery tickets are bad at math.
The businesses I'm aware of will offer a lump sum up front for assignment of any annuity.
[1] http://www.worldhunger.org/articles/Learn/world%20hunger%20f...
If I can produce my good for $10 and sell for $20 and my competition sells for $15, what will a consumer do? What will I do in response?
The net effect will probably still be inflation, especially in the short term, but with the poorer population having a greater share of the purchasing power.
There are a couple of directions to examine this question.
First, from the supply of money and how it is used. While everyone will have more money, that doesn't necessarily mean that each unit of currency will be worth much less. One characteristic of being in poverty is needing things that you cannot purchase. If you need $1000 worth of stuff and you are given $100 or even $900 you are paying not only the nominal price of those goods but a very real and a very felt opportunity cost of not getting some other needed good. IOW, it makes sense to be nearly as careful and frugal as it was before you got your windfall.
Once you get past the threshold of 'needed' items and into 'important' items the calculus changes a bit and when you move from that to 'nice to have' it changes even further. It is easy to imagine inflation running a bit wild if a community of middle class people were all given a million dollars, for example. Look at the gold rush or the recent oil boom towns.
From the other direction, the demand for money and time from this population. Sellers who know that a population has an influx in cash might try to demand more for it. They will have trouble because that extra cash still mean a lot as examined above and they will need to compete with others for that cash. Where things will really change are people that don't need cash from this population but time in the form of labor. People who employ the poverty stricken have a distinct advantage that other employers do not have in their negotiations -- the other party is bargaining for their life. If they don't work this week they may not eat next week. This causes those in poverty to sell their time for a loss as long as that loss is not as much as the loss they'd see if they didn't work at all...and it is hard to imagine a greater loss than the pain and risk of death of starvation, homelessness, or lack of medical care for yourself and your family.
Under basic income, however, this calculus changes dramatically. Suddenly these people have a much stronger bargaining position. They are now negotiating for gain rather than loss. Employers now have to entice them to work. They have to pay their employees more than their time is worth to them for other activities like recreation or education or spending time with their family. It is not all bad; thanks to basic income it is easier to reach the gain vs. loss threshold but it will likely be more than what they can get away with when the alternative for the employee is pain or death. These employers might eat some of this cost but some will likely be pushed onto their customers. Some jobs might be lost altogether because people are not willing to pay enough for a service to make up the difference. These tend to be low value add jobs since they were, in effect, subsidized by desperation.
These three effects will lead to some inflation but, unless basic income can push people from 'need to have' to 'nice to have', a big jump, I think it will be held in check.
http://www.economist.com/news/middle-east-and-africa/2165738...
UK's DFID and Equity bank in Kenya pay out $50/mth to 10,000+ villagers there.