>>>Basic income guarantees you a monthly starting salary above the poverty line for the rest of your life
If the poverty line stayed constant, basic income is a no-brainer. But basic income makes the cost of goods rise. Demand for goods increases, but supply diminishes. Nobody will do the crap jobs without higher pay, raising the price of everything. Basic income is impossible.
What about machines doing most of the jobs so there are only a few jobs left? The value the machines generate would be enough to generate the basic income. Why is it impossible?
Machines cost money to develop and buy. They will only replace a class of worker/task once the value exists.
It's very expensive to develop a machine that can replace sewing workers (DARPA is working on one because the US military has a need for it). It hasn't yet created any value because fabric is ridiculously complicated for robots but comparatively very easy for humans to manipulate). So far, the sewing robot is neither very useful nor very valuable (since it is still orders of magnitudes more expensive than fabric workers).
If low-paying work is less desirable than it is now, companies will have to deal with the game theory reactions of how consumers react to there being a shortage of fast food workers, bus boys, valets, etc. There is a certain amount of slack that consumers will absorb, either in resources (time, money, effort) expended. IKEA makes you bus your own tables like a cafeteria. I imagine if bus boys and fast food workers suddenly became more rare / expensive, companies would ask their customers to inconvenience themselves to maintain their profit margins / economic viability.
So, I, programmer, will be forced to work 12 hours per day to keep robots firmware up to date, while everybody else will enjoy free ride? Sorry, it will not work: I will chose free ride too.
Why not just decrease number of working hours to say 2 per day, but for everybody, instead?
> Sorry, it will not work: I will chose free ride too.
Maybe you would, but I think most people would rather have a job and be fabulously wealthy relative to those surviving on UBI alone. See: all the people who work 60h a week in SF making $200k instead of chilling at a bank working 35h for $80k.
Politics will tell people that they will raise basic income to win election. To raise income, they will raise taxes, so I will work 80h for $20K instead of $200K.
It's not a joke: post-USSR countries already have exactly this problem.
Taxes will eat that income with easy: 50% tax on firm, 50% tax on worker before salary, 30% tax on worker after salary, 18% tax into basic income fund, 20% VAT, and hundreds of other, smaller taxes.
Alternatively - under UBI - you may decide to work 6 hours per day, and enjoy the earned income in addition to the regular Basic Income payment, all the while knowing that you can leave (or switch employer) any time without fear of destitution.
You would still face the same issue since, you make more money you may have a nicer apartment or house. You would then still be trapped in that job to maintain your chosen lifestyle.
Yes but that is entirely your choice. If you want the freedom to leave a job on a whim then you likely are not going to be spending money on a home that is too expensive to live in without working.
I think that is what they meant. When machines make all things so that they are basically free, then it might work. Until then, doing UBI would cause supply shortages and higher prices.
It's difficult with a free market. If income goes up for everyone, people can spend more on basic necessities. Robot owners will make prices higher to maximize profit.
A few solutions:
1)Have the government set prices for basic necessities.
2)The government owns companies that produce basic necessities.
3)Replace capitalism.
But those increasing prices for robot labor are (partially) fed into the basic income, so UBI receivers will have more to spend.
There is a cycle and how quickly it cycles will be determined by how quick the various parts move.
Not all robot owners will increase their prices just as fast and people will not buy from the overtly expensive sellers.
Similar to the economic cycle we already have.
I certainly don't have an economics degree though.
If we are literally at 100% robot labor, a basic income could be a resource dividend. Basically, the argument for really strong property rights is that it encourages utilization of resources (and thus makes them broadly available to the economy).
With 100% robot labor, utilization of a resource is purely a political decision. The idea that we should give outsize rewards to historical incumbents for their historical incumbency becomes sort of silly.
Capitalism is going away, no matter what, once we have massive unemployment due to automation.
You think people are just going to accept starvation? Shit will get real, real fast.
And most people aren't as articulate or reasonable as the people on this site.
There will be massive violence.
A better way to look at UBI is that it's not about giving poor people money. Its about keeping the fabric of society together and preventing revolutions once automation hits fully.
When robots can produce most of the necessary life goods (food, energy, clothing and other manufacturing, medicine), one of the following will happen: (1) robots will be more expensive than humans, and nothing will change (unlikely), (2) there will be a monopoly on robot labour, resulting in an increase of inequality and eventually war (semi-likely), (3) there will be a competition on robot labour, resulting in a sharp fall of prices for basic goods (likely), (4) governments buying (some) robot labour and offering the goods to citizens for free (likely).
(3) and (4) would be nice, but (2) can happen with an oligopoly as well as with a monopoly. Working machines are already owned or controlled by a small number of companies.
Citation needed. Demand for some goods will possibly decrease: like payday loans or bankruptcy law. Demand for luxury goods won't change at all: yachts, private jets. But even the demand for Big Macs probably won't change all that much. Apply the same exercise to a bunch of other sundry cases: buying a house, life-saving medication, buying a smartphone. You will quickly realize that you cannot categorically state that "demand for goods increases". And more precisely, it is almost impossible to demonstrate that demand will increase the same amount for all kinds of goods. You really need to investigate how much demand will increase for each particular kind of good.
> Supply diminishes.
Citation needed. One thing for which supply will likely diminish: consumer debt assets. Since presumably the introduction of basic income will lead to a decrease in consumer debt. But "goods" in general? What basis do you have for saying this?
> Nobody will do the crap jobs without higher pay, raising the price of everything.
Citation needed. Business owners are very interested in replacing crap jobs with automation. Also, in general, the crappiest jobs today are done by illegal immigrants, who presumably wouldn't be receiving basic income in the future.
More people buying stuff increases demand - econ 101. If more people aren't buying stuff, why bother giving them the money? Of course prices will rise.
The only way this isn't equivalent to the government printing money is the money comes out some rich people/company's savings accounts where it wasn't being spent anyway.
We are taking about "basic" needs here. All your argument then must imply that UBI or NOT UBI, "basic needs" must be denied to part of the population or else they get too expensive.
And as almost all will agree, that's not only logically wrong, it's also morally wrong.
Everybody understands that UBI is a solution to meeting "basic" needs, the contentious part is the "universal".
I don't need basic income. If I received free money that I don't need, I might decide to double my cheese consumption. If many people like me do this, then the price of cheese will go up, hurting poor people.
What is the difference between money "you don't need" and money you do need? If, instead of receiving basic income, you received a pay raise, is that money you do or don't need?
Money "you don't need" is an economic absurdity.
The only people who double their cheese consumption are people who really like cheese. And if basic income helps you and others truly express their passion for cheese, more power to you. Poor people will eat something else.
What's the difference, from an economic standpoint? The original poster is saying that some people want cheese and other people need cheese, therefore the people who need cheese will not get what they don't need?
There's something absurd in this argument. No one's going to double their cheese consumption, just because they got money "they don't need", and no one is going to starve because the price of cheese went up.
But also, whatever problem we think we are debating here, it exists with or without basic income.
To clarify my point (although from what you wrote I think you got it right):
The argument that "basic needs" prices will rise (which was what my OP gave) because of UBI must be false, since being "basic needs", they already must be provided to anyone anyway.
In any case, even if a big part of the population didn't had access to "basic needs" the argument would be that: "we can't allow them to have those basic needs or else their price will increase to the rest of us". Than that, is morally wrong.
I hope now it is totally clear what I meant above.
If I had a magic wand and could give everyone everything, I'd do it.
But my wishes don't overcome basic supply and demand. Unless there's a lot more goods suddenly being produced, prices will rise if more people want them and can pay for them, which will tend to cancel the benefits of UBI.
It seems like you read neither my post nor the article itself. The article was proposing redistribution of income, so it's definitely NOT equivalent to the government printing money. And in my post, I listed several cases of stuff people will buy less of and other stuff people will not buy more of in a basic income society.
I'm not sure if you're purposefully ignoring the main issues with UBI, but in case you're not: the most important stuff (things like food, rent, clothing, energy, medicine, basic services) will have more demand (from all the people who can't afford these right now), and less supply (because a lot of these are done with low-paid labour - definitely clothing, food and basic services, along with things like garbage collection and construction). This will completely change how the society works.
So if the supply of low paid labor drops, and the demand rises, the value of low paid labor increases. The reason those jobs have been filled with low paid labor is the workers had no other choice.
In this situation they'd end up well rewarded for their work, and those workers with more spending power has traditionally been great for the economy.
Lot's of things have completely changed how society works, why shouldn't society change?
... but are still getting those things through means-tested programs, for the most part. The UBI doesn't mean more people get fed; it means fewer strings attached to where they choose to live and what food they choose to eat and whether they can get a side job to supplement (google "welfare cliff".)
Yes, the price of yachts won't increase, but who cares?
Do a simple thought experiment. Imagine there are 1 million poor. They, and everyone else, receive $12K per year. The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation. That's $12 Billion more now competing for a fixed amount of goods. What would any company/retailer/landlord do if they immediately sold out of everything they had? They'd raise prices until supply and demand were in equilibrium again. And thus the very things the poor need are the things the prices will increase the most, by virtue of them competing to purchase those items.
I'm not saying it's fair or right. But it is reality.
You didn't read the article. The only people who receive net $12k per year are those who have zero income. Everyone else receives net <$12k per year, because some of their income is taxed in order to finance basic income.
> The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation.
Incorrect. Who are you to dictate to people how to spend that money? "All" is not the amount they will spend, and "basic needs" is not the only thing they will spend it on. They will save some of it. And they will spend some (maybe close to all) of that money on paying off debt. There is $747 billion in credit card debt, $1.14 trillion in auto loans, and $1.28 trillion in student loads. And some of it will go to everything else: alcohol, video games, travel, etc.
And by the way, how many Big Macs do you think people want to buy? How many houses do you think they want to buy? How many trips do you think they want to take?
> That's $12 Billion more now competing for a fixed amount of goods.
Definitely not $12 Billion, as I have demonstrated above. And there is no such thing as a "fixed amount of goods" in economics.
Of course prices will change. But they will change in healthy ways. The idea that there's some sort of feedback loop present here that causes basic income to cancel out its own effects is completely unfounded.
You said we are going to give $12 billion to the poor
There is $747 billion of credit card debt in the United States. Much of that comes from lending in the past to the poor to finance their basic needs.
$747 billion > $12 billion
It is possible that all of 1 year's basic income entirely goes toward paying off credit card debt. In this scenario:
1) The poor receive a much needed benefit from basic income: they get to pay off their credit card bills.
2) There is no change in demand on basic goods whatsoever.
3) This significant paying down of debt leads to consumer interest rates going down, which further helps the poor.
So here is one scenario that is a counterexample to your claim that this can "any other change hurts the poor". This is an example which helps the poor.
You are forgetting that people have the freedom to do what they want with their money. When prices go up for one thing, they spend their money in other ways.
Healthy ways for prices to change:
1) The price change is stable, rather than runaway. It happens once, and that's it, but we continue to pay basic income year after year. This is expected, if we keep the money supply fixed.
2) The price change eventually leads to an increase in wages for the poor, which have been stagnant for decades.
Yes but that's irrelevant. What will really happen is, as I said earlier, a combination of saving/investing, spending, and paying off debt. (Obviously, what else can you do with money?) Spending on basic needs is not the only option. They are not forced to do so. And don't underestimate just how much debt the American poor have, and how much they can benefit from relieving their debt.
Sorry. I must have mis-understood your argument about why prices would change. I thought you were positing that the recipients might spend all the UBI on retiring credit card debt, causing prices to not change. I thought that to be exceptionally unlikely.
Upon re-reading, I still read your words that way.
I was just giving one scenario, though unlikely, in which consumer spending does not increase whatsoever. It is likely that a large fraction, maybe even a majority, of basic income would go to paying off debt rather than consumer spending.
Given that there is such a huge amount of personal debt out there, the poor have the freedom to allocate their basic income between spending and paying off debt for many years. And when prices go up for certain things, they might reallocate their income to other things.
Paying off debt is good. Once it's paid off, that money will probably go to goods and services (if you say the poor will save it instead, they weren't that poor to begin with).
So your scenario of paying off debt for one year just pushes the inevitable out one year.
And that one time price change will cancel out the benefit of the UBI. It has to, otherwise companies are not getting the most profit they can (they won't do that), or we magically have unending goods and services. Supply and demand can't be overcome in a market economy of scare resources.
Raising the minimum wage eventually has a similar effect. Ask yourself why a loaf of bread isn't $0.05 any more (it surely was sometime in the past 200 years). The obvious answer is inflation. But why? Why did prices increase over time? What economic pressure caused that?
> So your scenario of paying off debt for one year just pushes the inevitable out one year.
There is enough debt out there that the poor can spend many years paying it off.
> Raising the minimum wage eventually has a similar effect. Ask yourself why a loaf of bread isn't $0.05 any more (it surely was sometime in the past 200 years). The obvious answer is inflation. But why? Why did prices increase over time? What economic pressure caused that?
Milton Friedman and Anna Schwartz wrote A Monetary History of the United States, 1867-1960, where they made the claim "inflation is always and everywhere a monetary phenomenon" [1] Thus, the reason why a loaf of bread isn't $0.05 anymore is because of the expansion of money supply, not because of raising minimum wage. The article suggests financing basic income through tax revenues -- and even doing so without raising the deficit. It is not suggesting expanding money supply. Milton Friedman himself even supported the kind of basic income described in the article, which he called a "negative income tax" [2]
I too think your economic arguments are pretty far off from a likely scenario, so I'll try to say a little bit in counter.
In your example, $12bn goes to people who are 'poor'. You imagine all of this will be spent on scarce consumer resources and housing, creating increasing cost for those items.
You make a number of assumptions that have to be teased out before we can know how likely that scenario is:
1. Poor people will just spend any additional income.
2. Poor people will not have housing mobility and therefore be subject to rising prices for housing.
3. Consumer goods are scarce and supply will not increase based on increased demand.
1. has shown to be (surprisingly?) untrue in basic income trials so far. Read about India's Basic Income experiments at resources like this: http://www.salon.com/2015/01/25/sponsored_by_my_husband_why_... It turns out poor people use income security to accrue useful economic assets that have sustained financial benefits. Food security also improves. In addition, research into economic security shows that money worries vastly lower IQ (google for Sendhil Mullainathan and Eldar Shafir to learn more). So the data we have so far is pretty uniformly the opposite of your narrative here.
2. This to me seems pretty obviously false, or at least likely to at most be a small impact net of the money. Poorer families must choose between job proximity, communities, schools, all kinds of things, often with less than one month of safety money. Mobility is extraordinarily low in these circumstances. Guaranteed payments will vastly increase mobility for this community, allowing them to purchase property in economically appealing areas while expanding the number of jobs they take. This will at most redistribute people. Perhaps slumlords will raise rents immediately, but they will find two things: tenants who stay can pay, lowering their own costs, and tenants who don't like prices will move much more quickly. Liquidity in markets is good for efficiency. I don't think you can tell a compelling story about harm to poor renters with UBI here, it's just not sound reasoning.
3. This seems like a very silly assertion to make. Automated factories and low-labor-cost factories around the world would cheerfully sell 5x the consumer goods they manufacture now, and prices will decrease as demand increases. Perhaps the increased demand for factory workers would drive some additional jobs. But, a) I'm not sure what scarce resource you imagine will drive inflationary costs, and b) the India research shows spending goes into a pretty diverse basket of things, education, food security, investment and housing among others.
Try this experiment: imagine we gave everyone a UBI of $1 Billion per year. Sure, it's rediculous, but think of the ramifications (changes in prices in particular). If you could chart how much you give everyone (from 0 to $1 billion) vs the amount prices would change, you'd have some continuous upward movement. Maybe linear, maybe not. The point is giving everyone $1 billion obviously will increase prices. But there isn't some point along that line where it suddenly jumps. It's not like giving everyone $35K per year has no impact, but $35,100 does. It all has an impact, scaled by the amount given.
Again, I think you're assuming that at the far left of that 'linear' chart people spend solely on scarce goods. Research shows that isn't so. I think the actual chart would look like a tiny price bump which went mostly flat until some critical amount, well over $12k a year, was reached, at which point we'd see something like what you're describing.
Let's assume that basic income will cause net income to go up for the poor (otherwise, what's the point?) But let's also assume that prices on certain goods will go up (a totally reasonable assumption).
Then let's measure wealth in terms of "Big Macs". As in, how many Big Macs can you buy in one year? If basic income causes this number to go up for you... then you've benefitted from basic income, regardless of how much the price of a Big Mac increased.
If your income goes from zero to non-zero... you definitely benefit. Because with zero income, you can buy zero Big Macs. But with non-zero income, you can buy non-zero Big Macs... no matter how much the price of a Big Mac goes up. And the number of Big Macs you can buy will be greater than one... Big Macs won't cost $12,000 in this scenario. That would be ridiculous.
So we can use this as a framework to analyze how basic income impacts society. Then it is obvious that basic income benefits the poorest in society. But you are right, it may harm some people. However, it requires a much more rigorous analysis than you are providing.
With that thinking, the government should just turn on the printing presses and hand money out. People who had zero now have non-zero. Surely Big Macs can't go to $12,000, right?
You haven't read the article. Printing presses are not in consideration here. The whole point was that basic income is redistributive: basic income is financed by income tax.
I wasn't saying the article said printing presses would be used. But taking money that wasn't being spent (all that money corporations and the rich have stowed away) and giving it to people that will spend it is equivalent - lots of money that's not in circulation entering circulation. You end up with more money in circulation either way, with the ramifications that come with it (inflation).
True. So where do all of these new businesses get their employees? They'll have to compete for them by raising wages (which would be good). Except people have somewhat less incentive to work now that they're getting some free money, so the wages have to be raised even more to get them to work. That translates directly into higher prices.
Each individual piece of UBI sounds good. But when the whole system gets put together, it doesn't balance out. It can't.
Sure - if you assume these goods have a fixed quantity. For example, I'm willing to bet McDonald's is capable of making many, many, many more big macs than they currently do.
They've simply pegged their supply chain to the amount of demand they currently see while minimizing costs and trying to optimize profit.
Almost all industries get significant savings the larger they scale. There's very real reason to think many industries would get cheaper if they were suddenly trying to produce a multiple of the same product.
> Demand for luxury goods won't change at all: yachts, private jets.
Are you sure about that? Who will be bearing the tax burden to pay for UBI? Are not those the people who are currently buying yachts and private jets?
Business jet usage may decline as well as a substantial part of that usage is to generate income and growth for their businesses. With higher taxes, there is less incentive to risk money to grow your business further, putting negative pressure on business aviation.
It is unlikely that the kind of income tax increase suggested in the article will have a material impact on the extremely wealthy.
But that's beside the point. I was trying to answer the claim that "demand for goods will only go up" with examples of goods where demand stays the same or goes down. So whether demand for luxury goods stays the same or goes down, you are only reinforcing my point.
The resources that are being spent on luxury goods will be converted to resources spent on food.
That's called economics 101. Supply and demand. If you take money away from rich people, they will have less money to spend on rich people things, and the world will produce less of those things.
Many civilized countries have some form of basic income, but not directly. As soon as we are supporting people, rent, food, we are providing some sort of basic income. An income that is probably to low, which they can get away with because it's not expressed in €.
Disagree. I've tried some really bad ideas that rightfully died very quickly. The world doesn't need more junk that no one needs or wants, whether that be plastic or digital.
I'm wondering what effect good virtual reality with a Metaverse as described in Snowcrash and Ready Player One will have on society.
There is a potential that a large percentage of people will be happy with their virtual life even if they are poor in real life (as soon as the virtual reality is good enough to spend pretty much all of your time there).
If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up spending that $1k on either housing, bills or food.
So you will still need a job if you want all three of those things, not sit around and contemplate what you should do with your life.
It's sort of like how the ACA raised the overall price of insurance.
Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
A UBI would end up selectively helping those who need it and not putting money in the pocket of those who don't (in general). The UBI would have to be paid by taxes -- more than $1000 per month would come from those who are well off and less than $1000 per month would come from those in need.
Your theory that the cost of food would go up if people had more money is out of whack.
Nobody is denying anybody anything. Everyone is free to work, and compensation for your work fulfills your basic needs. A better system for human society has yet to be invented.
1) Americans currently consume (not necessarily eat) 3800 kcals/day of food without basic income. Are you saying that basic income will make that number go up?
2) The American housing market is very messed up and far from a free market, so any prediction up or down is very difficult. I predict that Basic Income will cause a bunch of people to move from high cost cities like NYC & SF into low cost areas so that they can live comfortably on the basic income. So there will be pressures both up and down on prices. But point #1 still stands. Right now most Americans already have a place to live, and basic income isn't going to cause people to go out and buy a second house so the effects are only going to be at the margin.
3) According to most economists, inflation is always a monetary phenomenon. If you print money to pay for UBI, inflation will go up. If you take from the rich to give to the poor, inflation will stay constant.
I don't understand this reasoning. Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life. If (2) is true and we introduce UBI, then there will be more demand for the basic necessities of life (coming from all the people who were unable to afford them before), which will in itself result in inflation (which, btw, doesn't measure the total supply of money, but overweights the basic necessities of life and underweights e.g. the stock market). If you combine that with the decreased motivation of people to work (resulting in lower supply), the resulting inflation will be massive.
Prove that it will be "massive". How much? The numbers are important here. I am willing to accept that some prices will go up. But I don't think it's "massive" and some are claiming that there's runaway inflation in this scenario. There isn't.
We've also had a deflationary enviroment for quite some time. We need inflation.
> Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life.
We have discovered the source of the misunderstanding.
(2) was true, which means we need a UBI or welfare and we already have welfare, so (1) is now also true.
What we are discussing is replacing welfare with a UBI, which increases the incentive to find work over welfare because unlike welfare you don't lose the UBI when you get a job.
> So you're saying that everyone who's promoting UBI is actually just doing it to incentivise poor people to work?
What I'm saying is that is a primary difference between a UBI and the status quo. Giving money (or less efficient money-equivalent things) to poor people is not, because we already do that.
Except when they're caught short during a natural disaster, Walmart is not supply-constrained. If they sell more they'll order more and factories will make more. The problem is (3) people don't always have the money to buy, which limits the size of that market.
Inflation happens when the market can't adjust fast enough or they hit real supply constraints (such as real estate in big cities).
This is not the way supply and demand work. If there is a short-term spike in demand, there is a temporary increase in price, which creates profits for suppliers. Increased profits draw more supply. In the medium to long run, price is driven to marginal cost (plus a market return on assets employed), and excess profit is eliminated (again, "excess" meaning that beyond market rates of risk adjusted asset returns).
The idea that food prices would dramatically increase is kind of strange, because it requires that we have no way to increase supply of food production, despite our demonstrable history of doing exactly that through productivity increases. We had less farmland in 2012 than ten years prior, but the value of output doubled during the same time, so supply is in no way constrained.
> 1) Americans currently consume (not necessarily eat) 3800 kcals/day of food without basic income. Are you saying that basic income will make that number go up?
I think they were referring to the cost of food, not the calories.
It's not necessarily for propaganda purposes, but I agree that this is a highly nonstandard terminology and it's not obvious to me that it improves anyone's ability to communicate.
Thank you. If my seizing my neighbor's extra car because I do not have one is theft, it is still theft if I convince a majority to pass a law take it for me. And it is enforced with the threat of (or actual) violence against my neighbor, if my neighbor refuses.
Negative. Theft is a crime. Crime is defined by the criminal law. If you choose to have your own personal criminal law, so that you can call whatever you like theft, that's up to you, but if you're going to do that with language, you can claim anything is anything.
Okay, we disagree. (*edit: we disagree about taxes being theft). But that is what I enjoy about communicating with other intelligent people, we can discuss ideas and not have to agree.
Much of this is intertwined in Libertarianism, Austrian Economics, and even Minarchy/Anarchy.
I obey the laws of the jurisdiction that I reside in, but that does not mean that I am not trying to actively change those laws for what I perceive as "the better"...
I search for as close an approximation to "the best way" as I can, understanding that humans are fallible by nature.
For entertainment, I am re-reading the book A Lodging of Wayfaring Men, a fictional book by Paul Rosenberg. While it is in severe need of editing (self-published?) I find it entertaining enough to re-read to get excited/stimulated about the possibilities of correcting systems that I consider to be operating very inefficiently, or flat out wrong.
Theft is a crime committed by another citizen. Redistribution of wealth is a "social program" committed by the State. See, with language, you can justify anything. One can make anything legal or illegal. It all depends on which Entity is saying those words. That's the nature of political power...
"A traitor is everyone who does not agree with me."
---George III of the United Kingdom
You would not have been in a position to earn any of the money you have without public infrastructure paid for by taxes. Maybe you would have been successful under an anarchy, but I doubt that is the case for the majority of HN'ers, and my best guess is that your ideological position would crumble pretty quickly if you were forced to live in the world which you ostensibly desire. Fortunately for everyone I can't see that happening without massive death and destruction.
Right -- so those 7 states listed in the article have alternative forms of tax (corporate income tax, oil-production taxes, etc.). Are you opposed solely to personal income taxes (while still supporting alternative forms of tax), or are you opposed to all taxation?
Personal income tax only. In general, I believe individuals are the best deciders on how to spend their money, but I do not deny that gov has a responsibility to defend life, liberty and property. If it can't do that with the voluntary support of it's citizens (aka owners) then it deserves to be replaced. Fortunately we have a pretty awesome system to do exactly that.
I was too glib (wrong) in my second response to the assertion that my statement implies all social policies are theft.
I see; fair enough :). I'm not personally opposed to personal income tax, but I'm from a country that leans a little more to the left overall and the benefits of my taxation are evident. It's also less vexing; the tax comes directly out of my paycheque -- I never see that money. My understanding is that in the USA, one has to annually perform a federal tax return?
I'm not exactly pro-income tax either, but (governed effectively!) personal income tax has always seemed to me like a least-worst solution to funding a government and a country's public infrastructure. It's not great, but it provides the least opportunity for mass rorting (although that no longer seems to be true, the more I think on it). I could be convinced that other solutions work :).
Thanks :) Yes, every year we are expected to fill out a bunch of paperwork (generally between 1 and 100 pages) and hand it in by a certain date "or else". The bureaucracy that interprets this paperwork (imho) is a total waste of money (on the personal income tax side), and the time_cost*every_taxpayer is absurd.
For most people, their employer took out (in excess) taxes all year and sent them in, so they get a refund (after the paperwork ritual) on the loan they made to the gov with 0% interest.
I'm not a fan on taxes on things you own because it means you don't _really_ own them. For example a person who owns a piece of property but can not pay the property tax. It gets taken from them by force if necessary, hence they never really owned it. At the very least we should carve out an exemption for property you live on. Transaction taxes don't have that problem.
You know we had hospitals, housing assistance and food assistance before the personal income tax right? A personal income tax is just one way we fund gov services, there are plenty of other options that don't require a gun to the head.
Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state level personal income tax.
You say taxation is theft. Anarchists say that the fact that you have any property that can be taxed is theft. This is a matter of opinion, not an indisputable fact.
Such a statement is only meaningful if the rules and systems that distribute wealth are sufficiently orderly and broadly considered fair. In a system considered to be significantly arbitrary or rigged, the whole concept of ownership is seriously weakened.
Because this will give income to people who don't have amount of money right now. They will also come in market to buy things. So total number of people buying stuff will increase.
I have the theory that if you give money to everybody, prices will go up because sellers will figure they can increase the price of everything without it negatively affecting sales, since every buyer simply has more money to spare, no excuses.
> I have the theory that if you give money to everybody, prices would go up because sellers will figure they can increase the price of everything without it negatively affecting sales, since every buyer simply has more money to spare, no excuses.
That's how monopoly markets work. But if you're a grocery store and you realize everybody now has $4 more in their pockets, you can't start charging $5 for an apple when the store across the street is still charging $1.
You'll definitely start charging $2, otherwise you would not have stayed in business for long.
If you keep the same price, but everyone is charging 4x as much, you are losing, because everyone else needs 4x less customers to make the same profit as you, not to mention the work involved.
> If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up spending that $1k on either housing, bills or food.
They don't get $1000/month for "basic needs", they get $1000/month for whatever they want. It's completely unconditional.
Which means people wouldn't go out and buy twice as much food as they currently eat because they suddenly have a pile of money that can only be used for buying food. Unless they are currently starving, which hardly anyone in the US is, they would buy the same amount of food that they do now and there would be no inflation in the price of food.
And anything with the effect of increasing nominal housing prices without reducing the ability of people to buy housing is excellent because it allows you to increase the housing stock without reducing nominal housing prices and causing existing homeowners to go underwater on their mortgages. In other words you can build more housing to cancel out the effect without NIMBYs fighting you and thus allow more people to own homes.
> It's sort of like how the ACA raised the overall price of insurance.
The primary driver of increasing insurance premiums wasn't the subsidy, it was the requirement that insurance companies take people with preexisting conditions. Suddenly a million sick people are making insurance claims who previously had no insurance, what did you think was going to happen to premiums?
> Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
Only if you want them to pretend to look for a job and never find one. And you want to create a poverty trap because actually taking a job doesn't actually increase the amount of money in their pocket because the government withdraws an equivalent amount of benefits.
Long term this may indeed happen but in the short term, it seems unlikely. Like with school vouchers, if I ran a private for-profit school and knew my students suddenly had an extra $X,000 to spend on tuition, my short term move would understandably be to raise tuition at least some percentage of that amount. If the market responds in a couple of years by forcing me to dial it back, so be it, but in the meantime I've made more money without having to provide more services.
In this context "long term" is the time it takes for the market to respond by building more schools or housing or whatever, which generally takes a low single digit number of years (like one). To which the response then becomes, so what?
And that's assuming your argument is true, which in general it isn't. If you raise prices then some of your customers will go elsewhere. That's why sellers don't raise prices already. If you raise prices and your competitors don't, even if your customers have extra money, people can still count and a dollar is still a dollar. The profit-maximizing strategy isn't to raise prices, it's to expand capacity as quickly as possible (which in many cases is immediate) so that you can make your existing profit across more customers who can now afford your product, without losing them to competitors with lower prices.
It feels ambitious to suppose an equilibrium state for schooling to be met within a year. I'd buy two or three.
Is it the case that existing private schools have much excess capacity? Frequently the argument for private schools is smaller class sizes; a rapid influx of new students without new, excellent teachers defeats the purpose. Presumably new classrooms would need to be constructed and so on.
If you receive a $5,000 voucher and your private school jacks up tuition by let's say $1,000, it is unlikely many parents are going to disrupt their routines and children's routines to reclaim that amount, especially since they are feeling relief from a net $4K tuition break. Tuition has effectively decreased, so why rock the boat?
Suppose you're right and a $5000 voucher will cause a $1000 increase in tuition for three years, after which new schools will open and the competition causes tuition to fall again.
So as a parent, for the first three years I'm up net $4000/year and $1000/year is going to build new school capacity to meet increased demand, and thereafter I get the whole $5000/year. Am I supposed to be unhappy about this?
You are basically saying that what happens in the short term is not relevant, but as taxpayers, a lot of people will be upset by profiteering in the manner I described, even if it is only for 1-3 years.
Or from another angle- what will prevent an ever increasing amount of tuition such as happened with the higher education system? "We need to raise the voucher to $10,000 now…"
It's not really profiteering. Expanding capacity costs money. That's where the money is going.
And what you're getting at is one of the reasons that a UBI is better than vouchers.
Suppose you create a $5000 education voucher and there was previously a school with a tuition of $4000. That is now over; they might as well charge $5000. And if there is a higher quality school charging $10,000 and people whine that the voucher doesn't cover it and have the value of the voucher increased, now every school will charge $10,000, because that is the only way to get the whole voucher and there is no reason not to.
But suppose you replace that with $10,000/year in cash like a UBI. Can all schools now raise tuition to the entire amount? Obviously not, because all else equal people will still prefer the $7500/year school so they can spend the remaining $2500 on whatever they want.
UBI still will have some short term profiteering effects. A slum lord who knows his tenants are uniformly $1K/mo richer is going to raise the rent short term. You seem to be assuming everyone is automatically acting in their long term best interest. "Oh neat, I'm going to raise the rent $500 and plow it into new apartments and renovations so five years from now I'm still competitive!" Vs. "I'm going to raise it $500 and buy a BMW!" I just don't see it not happening. I agree that long term it will hash out.
There is always going to be that one guy who responds to any change by going on a bender and smashing his own property. Tomorrow they won't be competitive. That sounds like self-correction.
> Suddenly a million sick people are making insurance claims who previously had no insurance, what did you think was going to happen to premiums?
This is what I mean.
From a business point of view, suddenly everyone has an extra $1000.
They were buying stuff from you until now, there's no reason not to try to drive the price up to see how much more you can charge now.
If enough businesses will do that, it will reach a critical mass where the ones charging old prices are the idiots left behind.
So if literally everyone has an extra $1000, nobody has an extra $1000.
A bit different with insurance, since the government forced insurance companies to accept all these people, so they increased prices. I'll ignore the fact that they were still making enough profit to just accept the losses, because people are greedy and they will always want all the profit they can get.
For example, let's say someone starts with 0$, and is given 1k$.
Is this person better off than they were before? Yes! Their wealth has increased by infinity. It does not matter if inflation was 100%, because 100% is less than infinity.
Also, you can get rid of inflation, by taking the money way from someone else. You aren't adding money to the system. You are redistributing it.
> From a business point of view, suddenly everyone has an extra $1000.
It's not "suddenly everyone has an extra $1000", it's "suddenly the average person with insurance is sicker". It's like what happens if you want to buy fire insurance in an area with a higher incidence of wildfires. The reason insurance costs more there isn't inflation.
> They were buying stuff from you until now, there's no reason not to try to drive the price up to see how much more you can charge now.
Except that you have competitors who are happy to take all your business by selling at the existing price which is already profitable.
> So if literally everyone has an extra $1000, nobody has an extra $1000.
If literally everyone has an extra $1000 then you must have printed the money, which isn't what anyone is proposing.
And even then is still not true, because printing $1000 for each person is still wealth redistribution from creditors to debtors.
So I get where you're going with this, but the businesses are still competing with one another in a free market.
So yes, you're right that if all the avocado farmers in California decided to engage in price fixing because they know that more money exists and that they can get it, they probably can. But it presupposes highly monopolistic behavior that doesn't seem very likely to work for most markets. Especially if it's easy to become an entrepreneur.
The business, after all, makes a profit as long as their price is above their cost. So unless their costs go up, competition keeps prices down.
Now, I think you're half right -- prices will go up, but it's not because of gouging by middlemen or traditional inflation. It will be because as people drop out of the labor market, the really undesirable jobs will become more costly to fill.
But that strikes me as a much more fair free market than what we have now. Yes, you will have to pay more to have your garbage picked up in front of your house. Why? Because as it turns out, you would much rather be doing whatever you do than deal with a thousand people's garbage. Maybe they should be getting paid more than you, in a voluntary free market.
So I imagine it will be sort-of inflation, but almost better described as a rebalancing of the economy. Jobs that humans can do much more easily than robots will get higher salaries. Jobs that are enjoyable get lower salaries. Overall, salary spread across jobs becomes much smaller.
But I don't think it's necessarily likely to be some kind of overall inflation, it's a redistribution of wealth accomplished by simultaneous direct transfer of wealth through the UBI, in addition to a redistribution of power accomplished by allowing "Nothing" to be an option that employers have to compete against.
> But it presupposes highly monopolistic behavior that doesn't seem very likely to work for most markets.
Higher education costs expanded to absorb the extra money from the student loans thrown at them, healthcare costs increased as more consumers started competing for a fixed supply of appointment slots, hospital beds and medical services.
> Higher education costs expanded to absorb the extra money from the student loans thrown at them
That's because they're catastrophically stupid industry-specific interest rate subsidies. A dollar for tuition is then less expensive than a dollar for anything else, so everyone conspires to buy things with the cheap government money that isn't available when used for anything else. And that process is highly inefficient because it's basically a huge implicit fraud scheme to redirect subsidized student loan money to things that aren't strictly education, which no one can admit to out loud or explicitly negotiate for because it's illegal to use the money for that. Then it's, look how expensive "education" has become!
A UBI doesn't do that because it doesn't restrict what you can use the money for.
> healthcare costs increased as more consumers started competing for a fixed supply of appointment slots, hospital beds and medical services.
In part this is the same thing (here is a huge pile of money that you can only use for healthcare, now everyone go swamp the doctor's office at the same time). And the rest of it is temporary because no one knew the law was coming ahead of time so now we need some time to increase the supply of healthcare providers.
> because it's basically a huge implicit fraud scheme to redirect subsidized student loan money to things that aren't strictly education, which no one can admit to out loud or explicitly negotiate for
I agree, but how does showing up with a wad of cash instead of a check from a student loan agency increase your negotiating power? Large number of international students today (Chinese and Saudi until recently) paid cash and yet had little say on football teams, new administrative buildings or spending in general. The university system just goes out and borrows whatever it feels like, the debt service is added to expenses.
UBI also removes the advantage of centralized negotiating power that's beneficial in industries like healthcare. With Medicare or a private insurance company the $500 list price for doctor's exam can be negotiated down to $99. With UBI it's the consumer against doctor's office, whch historically did not play out well due to massive information disadvantage.
> I agree, but how does showing up with a wad of cash instead of a check from a student loan agency increase your negotiating power?
Because cash you can spend somewhere else.
Suppose you like football. If the money is "student loans" then you can spend it by attending a school with a big fancy college football stadium and subsidized tickets for students. If the the money is cash then you can use it to go to that school instead of a less expensive one with no football stadium, or you can go to the less expensive school and use the money to buy NFL season tickets.
So when the money is student loans, people have only the first option and all the schools have to build big fancy football stadiums to attract students. But you can't do that on a per-student basis. And you can't directly buy college football tickets with student loan money but you can launder it through administration to subsidize them. So everybody who attends that school ends up paying for football even if all they really wanted was an education, and then people have to consider the quality of the school's football team when choosing schools instead of only the quality of their professors. It would have been better to have just let the students who like football use the money to buy NFL tickets.
And so on for twelve other categories of student loan money laundering colleges have to engage in to attract students.
> UBI also removes the advantage of centralized negotiating power that's beneficial in industries like healthcare. With Medicare or a private insurance company the $500 list price for doctor's exam can be negotiated down to $99.
There is no reason you can't use your UBI money to buy private insurance.
And the only reason the list price for those things is $500 is that everybody knows the scam. The buyer for the insurance company wants to look like a great negotiator to his boss, so the doctor's office claims everything costs five times as much as they actually want and the buyer gets to look like a big hero for whacking it down so much.
And in general insurance makes things cost more for the same reason colleges with fancy football stadiums are more expensive. People don't ask whether something is worth the cost when they're spending somebody else's money. If you're paying out of your own pocket, you ask if knowing the result of some test is really worth $1200 of your money. If the insurance company is paying for it, you run all the tests whether you need them or not.
About health costs, things will become more expensive if every person has to negotiate for themselves. People who have a medical problem, want the problem fixed. They don't have the time or ability to find a good alternative. An insurance or government is in a much better position, because they have the time and expertise to shop for an alternative beforehand and make it an all or nothing proposition for the producer.
You're making the argument for medical licensing, not the argument for single payer. People don't know which doctors are quacks so the government has to step in. But money is a different question -- if we required doctors to provide prospective patients with a standardized price schedule it would be trivial for patients to see which doctor charges $100 and which charges $200.
If you have government or insurance pay for everything (and then pay everyone the same amount) the buyer still doesn't know which doctor provides the best care, but now doctors have the incentive to provide no more than the bare minimum care because they aren't allowed to charge any more for better quality/convenience/atmosphere for the same procedure.
> is excellent because it allows you to increase the housing stock without reducing nominal housing prices and causing existing homeowners to go underwater on their mortgages
So is inflation, and the real estate markets are usually the first to adjust.
Your view of housing is this commodity that's in low supply only because we don't have enough manpower to build more. In reality anyone with a knack for cheap housing can become a proud homeowner in Detroit, Baltimore, rural parts of Mississippi or Kansas relatively on the cheap. Kansas will even throw in some free land grants, so a homeowner and a landowner, living the dream.
People don't want just any cheap housing. They want proximity to their work, in a good school district for their kids, with quick access to transportation, cool restaurants and coffee shops within walking distance. The supply of those will still be constrained.
> People don't want just any cheap housing. They want proximity to their work, in a good school district for their kids, with quick access to transportation, cool restaurants and coffee shops within walking distance. The supply of those will still be constrained.
The supply of those is artificially constrained. There is no practical limit to housing density when you can build vertically.
The problem is you have people who just took out a $1,000,000 mortgage and would sooner murder you with an axe than see the value fall to $600,000 because the local housing supply increased. But if you have something to exert upward pressure on nominal housing prices then you can build new housing stock and have nominal prices stay the same. Inflation and inflation-like effects are great for this because it means nominal housing prices stay the same while real housing prices fall, which is the only real way for more people to own a home.
> There is no practical limit to housing density when you can build vertically.
Why not? Higher structures require deeper and more complex foundations, more reinforced concrete and steel, extra precautions for strong winds and earthquakes. Setting up proper elevator systems, plumbing, air venting, noise isolation, electrical wiring and natural gas hookups is also subject to more restrictive building code (and for a good reason). This is before we get into the costs of underground/overground parking, which has additional weight and reinforcement requirements of its own.
And even when you follow everything to the book, you might still mess up, i.e. Millenium Tower in San Francisco.
You can buy a house on the prairie or a mobile home on the cheap, but except for major real estate downturns you rarely see a high-rise condo on the cheap. Even when it is (Miami circa 2008) the price often comes with exorbitant HOA fee to keep the amenities running.
> Higher structures require deeper and more complex foundations, more reinforced concrete and steel, extra precautions for strong winds and earthquakes. Setting up proper elevator systems, plumbing, air venting, noise isolation, electrical wiring and natural gas hookups is also subject to more restrictive building code (and for a good reason). This is before we get into the costs of underground/overground parking, which has additional weight and reinforcement requirements of its own.
None of which is insurmountable, as evidenced by the fact that such buildings actually exist. Now compare the rent in a high rise in Chicago with the same style of building in San Francisco or NYC. The cost difference isn't because of the cost of the building.
We can take turns naming even more expensive high rises, but the goal is to show that increase in high rises leads to drastic overall decrease in cost of living. Manhattan, in theory, should be dirt cheap as far as $/sq.ft. due to massive supply, and it's not. Neither is Singapore or Shanghai. There's a natural price floor for such buildings, and it's not yet competitive with pricing on cheaper options, such as suburban detached, suburban attached or mobile homes.
Pending a discovery of cheaper construction materials or methods we probably won't see massively cheaper high rises.
> Manhattan, in theory, should be dirt cheap as far as $/sq.ft. due to massive supply, and it's not.
Because it's supply and demand. The demand is very high in Manhattan. What we would expect is that anywhere there is such high demand that the price is higher than the construction cost, there would be new construction (increase in supply) until prices fall to meet the construction cost. In other words the cost of an apartment in any city should have the same floor (unless every inch of the city is already covered in high rises) because new apartments would be built until the rent falls below the construction cost of building more apartments.
But we don't see that because of zoning regulations that prohibit it. (And in part because of property taxes that discourage construction; land value tax is better in cities.)
> But we don't see that because of zoning regulations that prohibit it.
Are you sure that's the one and only answer? There are some cities with very lax zoning regulations, Dallas or Houston come to mind. And yet we don't see a massive migration from suburbs to the high rises. Are there any cities that could serve as examples to support your theory? It's not like residential high-rises are a recent phenomenon.
You'd have to do a bit more explanation on property taxes - governments stand to collect more property taxes per sq.ft. of land used from high rises than from detached single-family, so a municipality is generally interested in cramming more units into a land lot, not less. How do property taxes discourage construction?
> There are some cities with very lax zoning regulations, Dallas or Houston come to mind. And yet we don't see a massive migration from suburbs to the high rises.
Have you actually compared rents in cities like Houston to the same sized apartments in cities with more restrictive zoning? They're lower in Houston.
The reason people don't live in high rises in Texas cities is that they're so sprawled they don't need vertical construction. San Francisco has almost five times the population density of Houston even though Houston has almost three times as many people.
> How do property taxes discourage construction?
They discourage the property owners. If you own a ten story building on a lot zoned for twenty, adding the extra ten floors looks a lot more attractive before you subtract out the additional property taxes you'll owe forever if you do it.
This is a compounding problem because the property taxes are based on the property value but the property value is based on scarcity, so if housing units become scarce then property values (and thus property taxes) go up and you have to charge higher rents to justify new construction. Which allows rents to go even higher because there is less new construction which further increases property taxes and requires even higher rents to justify new construction and so on
> If you own a ten story building on a lot zoned for twenty, adding the extra ten floors looks a lot more attractive before you subtract out the additional property taxes you'll owe forever if you do it.
By that logic one should bulldoze the existing 10-story building and stick to owning dirt lots, realizing enormous property tax savings along the way.
The reason you don't see entire cities converted into dirt lots is that in reality things don't work that way.
The developer that builds condos doesn't really have an opinion on property taxes because paying those will be up to condo owners. The developer that builds apartment towers intended for rent doesn't care because the rental operator will take over, and the assessment of a rental property is a function of existing cashflows and comparables, subject to change when assessed at too high of a value.
> property values (and thus property taxes) go up and you have to charge higher rents to justify new construction
In reality large-scale commercial build-outs do not depend on financing from existing renters. A property operator (the principal) typically contributes some cash but also brings in a variety of outside investors. The rest of the sum is raised via fixed-interest debt and is one of the largest areas of US commercial banking. As a rental property reaches stabilization point, the principal conducts another round of outside investments, this time in somewhat worse investor terms, as the property is de-risked and has relatively stable cash flows. The money is used to pay down the commercial loan to a reasonable LTV.
When the plans for a new project show up on the horizon, the fundraising cycle begins again, with principal contributing some "skin in the game", outside investors participating in the first round, and numbers from existing properties being used in a presentation deck sent to the bank in order to secure a new commercial loan.
If everybody financed by raising rents on existing renters, than apartments by some aggressively growing operators (let's say Avalon Bay) would be extremely expensive, while exact same apartments owned by conservatively stable operators (let's say Essex Property Trust) would be extremely cheap. We do not see that imbalance in the marketplace.
> By that logic one should bulldoze the existing 10-story building and stick to owning dirt lots, realizing enormous property tax savings along the way.
It's not that rent < property tax, it's that new construction cost < net present value of future rent < new construction cost + net present value of additional property tax.
> The developer that builds condos doesn't really have an opinion on property taxes because paying those will be up to condo owners.
Net present value of expected future property tax comes out of what the buyer will pay the builder for the condo, and the builder doesn't build the condo when the price he can sell it for falls below the construction cost.
> In reality large-scale commercial build-outs do not depend on financing from existing renters.
How you finance construction has nothing to do with it.
For most people that $1000 is taken away by taxation and UBI is income neutral for them.
>Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
No, it's not. If you don't believe me read what Milton Friedman wrote about subject. Friedman suggested UBI or negative income tax because they would not distort markets the way welfare programs do.
Social welfare programs create incentive traps where people have marginal effective tax rates as high as 80-90%. You work and your welfare drops accordingly. Here in Finland marginal effective tax rate in some cases is higher than 100%.
UBI is not adding money to the system. No new dollars would be printed. So there would be little to no effect on inflation. It's moving around existing money via taxation and redistribution.
Under this scheme there wouldn't be any incentive for a business to raise their prices. Imagine that UBI is implemented and imagine it's effects on a business in a mid-sized city, say a restaurant. The business now has an additional 50,000 potential customers, people who can afford to eat out more often due to UBI.
How should the restaurant owner react? He can raise his prices. But that exposes him to competitors who keep their prices the same. He can lower his prices. In which case he will earn less money per plate, but he now has a pool of 50,000 new customers to draw on, so he can make more money on volume. A good restaurateur would lower his prices proactively and try capture a large chunk of this new, larger market of customers.
The point is it's easy to see how UBI could cause prices to go down, and not just up. It's simplistic and misleading to assert that all businesses will start price gouging in response to a UBI. Populations are more complicated that this, and markets are dynamic.
This article seems really out of touch, and anybody mentioning the 'UBI' experiment in Manitoba Canada as a success or in a positive light I can hardly trust about the experiments I haven't read about. When we Canadians did an experiment it failed!
This article seems really out of touch, and anybody mentioning the 'UBI' experiment in Manitoba Canada as a success or in a positive light I can hardly trust about the experiments I haven't read about. When we Canadians did an experiment it failed!
UBI is attempting to cloak itself in free market rhetoric, but it's bullshit.
Yes it may "incentivize" some individuals to work, but only by disincentivizing others. It takes money from top wealth producers, discouraging their labor, and gives it to people who aren't producing as much wealth, effectively subsidizing unproductive work. This will make everyone poorer in the long run.
The struggling artist meme is an appeal to emotion. The struggling artists and entrepreneurs are struggling for a reason -- the market does not want their goods or services! They should fail as quickly as possible, not continue to drag on producing things people don't want.
I'll concede that the welfare state has perverse incentives which trap people in poverty, but there are better ways to address it other than doubling down on the mother of all wealth redistribution schemes.
I think that's unlikely, though it depends on a lot of factors (UBI is a pretty general concept, and the specific implementation and numbers matter). It may reduce aggregate GDP, but that's not the same as making everyone poorer, since distribution matters when determining that. If, to take an exaggerated example, the top 10% of earners have their income multiplied by 10x and everyone else's goes down by 5%, "everyone has gotten richer" according to some kind of aggregate metric, but in reality 90% of actual people have gotten poorer. Most economists no longer believe that these kinds of situations are automatically self-correcting through "trickle-down economics", in which just getting out of the way of wealth-creation at the top inevitably lifts all boats.
> Most economists no longer believe that these kinds of situations are automatically self-correcting through "trickle-down economics", in which just getting out of the way of wealth-creation at the top inevitably lifts all boats.
I'm not trying to be argumentative, but did many economists ever take this idea seriously? I always thought trickle-down economics was just political rhetoric.
Your comment makes an excellent point. If our economy really was organized around incentivizing production, there are many things we could do to that end. In addition to a 100% inheritance tax, we could also surely implement policies that discouraged most types of rent-seeking and the passive growth of wealth that has allowed the richest in our country to become even richer without having to produce anything.
Except that an inheritance tax creates a large disincentive for people with children to create wealth, when passing that wealth on to their progeny is their motivation for creating it.
Like being an absentee landlord. If owning and renting out property you do not live at and are only collecting passive income from was made illegal, way more people would be able to afford housing and it would solve a lot of equality issues. The whole practice is literal rent-seeking and only concentrates capital in the hands of a small minority.
Presumably the 100% inheritance tax includes all assets including property. This is a recipe for violent revolution with a dystopian outcome as history tells us.
What are the better ways to address the perverse incentives that trap people in poverty?
Also, do you think the current distribution of incomes is proportional to how much wealth is produced? Does an executive who makes a hundred times as much as a skilled worker work a hundred times harder, or produce a hundred times as much value for people, in some measurable way?
> the market does not want their goods or services! They should fail as quickly as possible, not continue to drag on producing things people don't want.
Interesting, you are saying getting money from doing nothing disincentivizes. You mean like through any multiplicative process like investing and interest bearing processes? So you only support additive income? I'm with you! let's get rid of multiplicative income and we solve the wealth distribution problem. You can only make 14 thousand times the average man if you work 14 thousand times harder.
... which also disincentivizes work more than UBI, because why work a low-wage job for that minimum income when you can get it for nothing instead? whereas with UBI it's always in addition.
I would have to see something backing that up since unpaid internships would not be just the province of the well off and employers would have some incentive to raise wages where I don't think UBI would do that. You also assume for every $ I get from work would be deducted from my payment which isn't true for a lot of negative income tax schemes.
I make well above the basic income, so I presume most UBIs would be a net cost to me.
However, I cannot imagine that a UBI-related tax would in any way disincentivize me from working, especially if it's applied across incomes.
In fact, even for someone like me, I think the UBI would provide just a bit more emotional security -- knowledge that if a job or investment risk I took didn't pay out, there would still be food and housing for my family.
Going from anecdotes, it is at least as easy to imagine a future in which better art and writing are created than can be created now as lifestyle security is extended to more creative people.
I am not sure if basic income works. But I am certain that assuming everyone is lazy and won't want to work if they don't strictly need to for survival is not how people work. Market-oriented thinking seems to assume this. But I think that most people want to have a purposeful life and achieve things.
I do expect it will influence the number of bullshit jobs that exist to keep people at work. And it might influence the lowest income and most mechanical types of work. Which is fine if we can automate and mechanize those. But I don't expect a lot of effect on more intellectual work.
>>>It would not be new money, just money shifted from one location to another. This means that the value of each dollar has not changed. The dollar itself has only changed hands.*
There is no sure fire way to reduce the value of a dollar then to redistribute it to people that didn't work for it. The fact that you have to work for the dollar is the thing that gives the dollar value.
> There is no sure fire way to reduce the value of a dollar then to redistribute it to people that didn't work for it. The fact that you have to work for the dollar is the thing that gives the dollar value.
Citation needed. The value of the dollar is actually determined by:
See Laffer curve. Redistribution will make people work less (i.e. less total output), so assuming the money supply doesn't change, inflation will occur.
The Laffer curve deals with output from labor. When you tax someone you reduce the money they get per unit work, i.e. their wage. If the wage is too low they might not find it worth doing the work. If I'm a paid shill/some job and I'm taxed 99%, I might stop shilling because the effort outweighs my salary.
Regarding automation, see the lump of labour fallacy. Humans will just switch to tasks that aren't automated (this has always been happening and it's happening now). If humans are not needed at all, then we've reached utopia/post-scarcity society.
Humans don't work less because of the hedonistic treadmill. For example, most HNers have enough food and other things to survive which might be considered paradise by people 500 years ago (famines were common back then). Historically, poverty often meant death from starvation.
Our standards of living have been constantly going up, so even though there are productivity gains we end up working more. Of course, that's a voluntary choice so I don't see anything wrong with that.
In a post-scarcity society food/etc is very cheap and thus even poor people can afford sufficient food even if they don't work much (this is already true for developed countries).
Even a small amount of charity would provide anybody who can't work at all with sufficient food. Just like how today data storage in hard drives is dirt cheap; and we can provide billions of bytes of storage at nominal cost.
Looking at current society, starvation and mass famines have decreased greatly. Malnutrition is the next concern.
So, in some sense we may have reached post-scarcity for food for a large portion of human population. But there is still scarcity for quality and healthy food, such as fruits and vegetables.
Money can be thought of as a claim check on labor. You work doing something valuable and get money. You spend some and save some. What you have saved/invested and not spent and passed on to someone else still has value.
In the snowboarder's case, someone worked for that money and gifted it to them. Totally consistent if you don't overly focus on the "YOU have to work for it" but rather "SOMEONE has to work for it"
Im confused by your claim "There is no sure fire way to reduce the value of a dollar..."
The dollar has lost 97% of its value since the federal reserve was created. To me, having a federal reserve is a sure fire way to reduce the value of a dollar.
I would rather work today for pre-1965 quarters made of silver than a dollar today. The pre-1965 quarter will buy a gallon of gas. The dollar today will require three to buy that same gallon. Proof is in the pudding as they say. The currency is the problem.
UBI is inefficient--taxing someone and then giving them money. NIT (negative income tax) makes more sense and can actually have the same effect as UBI depending on the slabs.
Those are good points, but there are ways to fix that.
There's no reason why NIT needs to involve large amounts of paperwork. NIT only involves income, so a person simply needs to give their income (unlike taxes, which are much more complicated).
The NIT would presumably have a minimum amount given even if you earn 0$. That amount can be given to everybody can't do the paperwork. Then, the amount remaining above that can be distributed as a NIT.
Basically, give UBI to people who can't do the paperwork to cover them. The rest can use NIT.
The time lag is not a necessary property of the tax system. The NIT can be done on a monthly basis.
Anyways, this is just an implementation issue. Either way they both redistribute money.
My interpretation of that episode was that the guest was largely _for_ UBI, so long as it replaced many of the current safety net / welfare programs (it is simpler to administer, doesn't require large bureaucracies to verify eligibility, and doesn't dis-incentivize people from getting a job and working their way up as do disability, unemployment insurance, section 8, food stamps, etc).
My interpretation was that the host wasn't sold on the idea nor on the low estimated tax increases required to fund a UBI (IIRC the guest stated 3-10% increases in income taxes and the host speculated more like 20+%).
Funny how all the proponents of a Universal 'Basic' Income aren't proposing instead to make every 'Basic' item 'Free'.
After all, if you believe their rhetoric, giving someone $500/mo should be the same as giving them free bread, eggs, milk, some clothes and some movie tickets.
I wonder why... Maybe, the reality is that over time our 'Basic' needs increase. In certain parts of the world shoes are still considered a luxury whereas in others, Nikes and Adidas are considered 'basic'. 50 years ago car ownership was a luxury even in most 'developed' nations, as were televisions. Now they're considered 'Basic'.
The reality is, the people touting UBI as a way forward suffer from having a thoroughly static and isolated view of the world. They fail to see that value creation is what's important, and drives society to further itself. As value creation goes up, the definition of 'basic' increases with it. I'm not for a minute advocating that the current system is anywhere near perfect - the wealthiest in our population are questionable value creators while at the same time there are value creators scraping by in the world so the way we reward people needs a rethink.
I don't profess to know how to solve the poverty crisis and I very much want it to be solved as a citizen of the world. What I do know is that the only way to do it will involve reforming education so that future generations are inspired to advance humankind and create value in the process.
>Funny how all the proponents of a Universal 'Basic' Income aren't proposing instead to make every 'Basic' item 'Free'.
>After all, if you believe their rhetoric, giving someone $500/mo should be the same as giving them free bread, eggs, milk, some clothes and some movie tickets.
It's not "funny", it's the core part of basic income that separates it from state-run socialism. Not making a determination about what is or isn't basic is one of the key points. You give a person their $500 each month and let them determine what it should be spent on. What is basic for one person may not be for another.
Go back to 1950s USA where average annual salary was just over $3000 - if I told you back then I'd give you $500 a month - almost twice the average salary where do you think we'd all be now? Would we be even here?
Now take your $500 a month and project forward another 50-60 years. What do you think it'll buy you then and why?
By picking a monetary amount - be it $50, $500 or $1000 it IS absolutely making a determination about what's basic. And its doing it based on the living standards and cost of living of today. That's a large part of why its so flawed.
It seems to me it'd have to be specified as a formula based on the "poverty threshold" and "inflation." I really can't imagine just throwing out a number and expecting it to be unchanged for decades.
The precise amount will not be enshrined in the constitution. It will be most likely adjusted periodically to ensure subsistence without removing the motivation to work.
We do need a better way to measure value people create. For example, many geniuses (inventors, thinkers, etc) who do not have business skills live poor while creating more value than many CEOs that can manage, negotiate, raise funds, have connections, etc.
Business people do create value too by connecting people, making things happen, etc., but often their value output is overrated.
Many actors and musicians and sport peopl are overrated too vs doctors who save lives. They worth a lot only because of economy of scale. Everyone knows them and they monetize their followers.
In some way it is a fair world, because we all put in nearly about the same conditions. Well, except our place of birth and genetics, which we have no choice over. But everything else is up to us, which kind of makes it fair because we compete in the same conditions. However, maybe it is a time for a new system. Why not?
As far as the education, the nature will do its miracle. New generations will change everything, they will know what to do because they born in new world.
Everything will work out on its own as it should. It is happening.
You are conflating fairness vs. justice. The world is far from fair -- genetics, place of birth, medical conditions, accidents, etc will always exist like you mention.
The moral/civil question is what is the role of government in an unfair world?
Most governments opt to head down the justice route predominately (e.g. the US's Justice System holding 1/3 of our government powers) while creating a myriad of "fairness" regulations (e.g. welfare programs). The ultimate problem with this approach is people will rarely agree on what is fair. There is no set definition and wants/desires change over time -- even needs do to (like needing a cell phone now vs 20 years ago). This ever evolving definition of fairness is what ensures this debate will rage on indefinitely.
There's an entire philosophy based on the work of John Rawls [0] that codifies the conflation of these ideas [1]. It's not at all a simple matter to strive for justice in an unfair world. Some libertarian folks elsewhere in this discussion have brought up the idea that taxes are theft. On the opposite end of that spectrum, I've heard it argued that property rights are a form of violence. What does it mean for the rights of an individual if, in a hypothetical future, all arable land is owned, fenced off, tended by drones, and guarded with extreme prejudice? A Mad Max-style dystopia sprinkled with little walled gardens.
I watched a documentary about the ICRC. They asked sellers to come to a village somewhere in Congo and gave the villagers coupons so that they could buy what they needed the most and exchanged the coupons for money. They created something like a temporary UBI for a village and a market for different needs. A family bought mattresses, another family corrugated sheets, another clothes, and so on.
If you give people basic items for free this will go bad. You know the horror stories in development aid how people sell away the stuff they got for free.
A friend of mine works in welfare (a state worker) and has told me most people there don't really need anything. They simply take whatever they can, and they sell or trade what they don't need.
And what's even worse: many people turn violent if you don't give them whatever they ask for. So they had to put policemen there all day because they had hit the state workers many times.
You know, I'm a socialist, but these kinds of stories really make me turn libertarian there for a moment.
Capitalism is going away, no matter what, once we have massive unemployment due to automation.
You think people are just going to accept starvation? Shit will get real, real fast.
And most people aren't as articulate or reasonable as the people on this site.
There will be massive violence.
A better way to look at UBI is that it's not about giving poor people money.
Its about keeping the fabric of society together and preventing revolutions.
Alternatively the government tells the robots to lock up the poor rioters, so the rich can keep spending their money in peace. There will be violence on both sides. Still this is all hypothetical, all we did was make some neural nets be able to classify some images, there is still a ridiculous amount of work to do.
Capitalism is surprisingly adept at evolving. I don't think it's "going away, no matter what". I'm also skeptical of the "automation apocalypse" that everyone is talking about. MY predicition is there is going to be a massive shift in blue collar work such that basic programming will become a trade to deal with the exponentially growing software maintenance problems.
"Capitalism is going away, no matter what, once we have massive unemployment due to automation"
No.
1)
The Industrial Revolution saw a considerably greater degree of automation than we are seeing now.
'Single Engines' replaced dozens of workers, some cases 100's.
Think 'weaving machine' vs. 'individual weavers'.
The 'automation' we have today is mostly 'soft' - do you think MS Word actually replaced 'Secretaries'? Or was it a confluence of things, including the fact that we now have 'Executive Assistants' which do much more than Secretaries ever did.
And what happened during the Industrial Revolution? Wages rose! Unemployment never really went down.
You know all those 'servants' in 'Downton Abbey' - the ultimately left to get higher paying jobs.
I should add - this had also a lot to do with the labour movement.
2)
The major source of 'job loss' in Industrialized countries is not 'automation' - it's 'outsourcing' to India and China.
'Automation' has been going on in a very aggressive way for over 200 years - and yet we still have fairly low levels of unemployment.
Entire new sectors have developed: entertainment, professions, services. There were 5 channels in 1950 and now 500. There weren't many pro athletes in the 1900's - now their are tons - and massive industries around them. We didn't really provide much in terms of healthcare in 1900 - now maybe 20% of the economy is healthcare. Very few used to go to University, let alone finish highschool - now education is a massive industry.
There is always 'work' that can be done so long as we can improve each others lives.
So - the question of 'UBI' comes down to how we decided to spread the surpluses. Do we give some surpluses to those who are not directly contributing?
Hint: we already do. Especially in socialized countries - we give massive subsidies to non-working people: healthcare, parks, security, all sorts of other services. Power subsidies (electricity is subsidized here in Quebec). We just don't give them spending money.
I think UBI is an interesting idea, but a dangerous one as well.
I live in Montreal, many of the people in my neighbourhood are 'artists' - photographers, actors - but really they all work full time in services.
You can get a 1/2 decent, small but respectable flat around here for $400 a month - and I don't mean grungy. It's entirely possible to live decently off $1K a month (remember healthcare is already paid for by other members of society).
I feel that with UBI - my neighbourhood would fall flat - because everyone would quit their service jobs (or work a lot less) - because they only need UBI + a little bit of extra cash - i.e. '1 day work weeks' - I think would be the preferred mode of existence for vast numbers of the young people around here. They would live a 'very low materialism' style of living, and be happy with it.
I think a 'means tested' form of UBI (not really 'Universal' ...) instead of welfare would be better.
In America - a better idea than UBI might simply be to make sure that everyone has access to healthcare, in a slightly-more-socialized way. I don't mean 'single payer' - but something. Having better healthcare for everyone would put people on a much more equal/fair footing - AND probably be good for the economy directly/indirectly. Solve that problem and you're already a huge step forward in trying to provide for better social outcomes.
I feel that with UBI - my neighbourhood would fall flat - because everyone would quit their service jobs (or work a lot less)
Could you explain why you mean by "fall flat"? Do you mean that the businesses that currently employ the service workers would close because they would be unable to find anyone to work for them? It seems likely that they'd need to increase the wages paid for unrewarding positions, but that this might be offset by the greater number of locals who can afford to patronize them.
I live in Montreal, many of the people in my neighbourhood are 'artists' - photographers, actors - but really they all work full time in services.
'1 day work weeks' - I think would be the preferred mode of existence for vast numbers of the young people around here.
Presumably when you say "1 day work week", you do not include the time spent working on the projects personally important to these people? I view it as a strong positive that more young people would have more time to pursue their artistic interests, and presume they would do so. There may be negatives that should be carefully considered, but don't you see this as something we should strive for?
They would live a 'very low materialism' style of living, and be happy with it.
So more art gets created, the lifestyle is less materialic, and people are overall happier? And you are arguing against this idea? Would I be right to guess that you are not currently working a poorly paid job you hate in the service industry while trying to find time to pursue the art you love? I don't mean that last question as an actual attack, but I do wonder if your self-interest might be different than that of the majority of your neighbors.
"Could you explain why you mean by "fall flat"? Do you mean that the businesses that currently employ the service workers would close because they would be unable to find anyone to work for them? It seems likely that they'd need to increase the wages paid for unrewarding positions,"
No.
Coffee Shops etc. already run on pretty low margins -> they'd be out of business. Any business wherein labour is a significant input cost and where wages are low enough that people would quite - would shut down - and that's a lot of businesses.
"So more art gets created, the lifestyle is less materialic "
That's a choice we can make today - we don't need massive government intervention to make that decision for us.
It also means a significantly reduced output:
The value of the 'art' getting created is significantly lower than the 'service' they provide making coffee - or else that art would be getting created.
It's easy to prove: if their are were 'worth something' to you and I, we'd be buying it. We're not. But we will however hire them to make coffee for us.
"Would I be right to guess that you are not currently working a poorly paid job you hate in the service industry while trying to find time to pursue the art you love? I don't mean that last question as an actual attack, but I do wonder if your self-interest might be different than that of the majority of your neighbors."
I don't care what my neighbours 'aspirations' are.
It is not their right to take my money to pursue their aspirations.
If they want to make art that nobody wants to buy, that's fine by me, but I should not have to pay for their rent so they can do that.
They can serve coffee, get a better job, make better art that people want to buy - it's entirely their choice, they are entirely capable.
They can have whatever lifestyle they want to build for themselves.
If they are handicapped, or ill, that's another story, but otherwise, their life is their job, not mine.
Coffee Shops etc. already run on pretty low margins -> they'd be out of business.
Possibly, assuming nothing else changes, and they can't raise their prices or automate so as to require less labor. But others are claiming that the problem with UBI is that all the prices would go up, presumably including those at the coffee shop. And if everyone in the neighborhood had another $1000 per month to spend, don't you think that at least some of the coffee shops would see increased business?
The value of the 'art' getting created is significantly lower than the 'service' they provide making coffee - or else that art would be getting created.
Maybe, but this bothers me in two ways.
First, it assumes only those with the surplus money to buy art are allowed to determine the value of art to society, and that those will the inability to pay for art have no say. Isn't it fair to allow these non-rich art lovers to democratically vote for policies that result in more art?
Second, it implies that the value of art can be completely judged by its market value of at the time it was created. The more creative geniuses we have serving coffee to rich folk, the fewer works of art we'll have in the future. Obviously most artists aren't geniuses, but I think this tradeoff at least merits some consideration.
if their are were 'worth something' to you and I, we'd be buying it. We're not. But we will however hire them to make coffee for us.
There is lots of art I appreciate and would like to encourage, but I don't have money to support it. I've never felt comfortable paying someone to make me hot beverages --- I'd much prefer self-service and greater automation.
I don't care what my neighbours 'aspirations' are.
Perhaps that's the big difference in our views. I care tremendously about whether those sharing my society feel they are living fulfilling lives. UBI might not be the best way to accomplish this, but I guess I hadn't considered that you might not consider this to be a benefit.
So what would happen if all the artists quit their coffee shop jobs?
1) coffee shop pay would go up in the short term. Perhaps some artists would come back for $20 an hour. Perhaps some stay at home moms would start working as the pay could justify childcare.
2) some coffee shops would turn into robot booths. Put in money get out coffee. There is very little technical need for humans in a coffee shop. Maybe 1 person to keep people behaving well and prevent someone from pooping on the table. 0 reason a human needs to pour coffee in a cup or wash dishes or sweep the floor.
Seems not a bad outcome. I doubt that many people find meaning in pouring coffee. I think it would be a net gain to all.
> Capitalism is going away, no matter what, once we have massive unemployment due to automation. You think people are just going to accept starvation?
Let's for the sake of the argument assume this is true. But if people really believe this - why don't they stop producing kids (and advocate other people to do so, too)? I find it really crueling to produce children that will have such a useless and crueling life.
Or even better, make the minimum wage $150/hour. Why not?
Or maybe you are suggesting that it should be lowered? (It's already above the poverty line for an individual in the US.)
Problem #1: Minimum wage locks some people out of the workforce. If you aren't disabled, but your skills don't rise the value of 2x of the minimum wage (wage + payroll taxes + benefits), then you are locked out of finding any legal work. If you start to raise the minimum wage much higher than it already is, you will start to make some forms or work and some industries economically unfeasible.
Problem #2: Disability most definitely does not "work great". If you take disability, you can be charged with a felony for every seeking work again. It is a side-track to poverty for the remainder of your life, despite the fact that you may be re-employable at some time in the future (possibly due to innovations in technology or changes in the workforce). Additionally, despite the name of the program, not everyone who accepts "disability" (SSDI) is incapable of working. After trade deals like NAFTA, there is a structural change in some industries and regions that qualifies workers in that industry (usually ones where the trade deal is expected to offshore jobs) for "disability" even though their body and mind are perfectly capable of working again. It would be better to give them a UBI-like program which doesn't dis-incentivize them to permanently leave the workforce.
We have safety nets like "Section 8" (housing vouchers), "Food stamps" (grocery vouchers), unemployment insurance (UBI-like fixed payments), but each of these is a step function. As soon as you get a job that pays above the cut-off range, you lose the benefits and can have a net loss in purchasing power. A UBI to replace these programs is superior because there would no longer be a penalty for finding a job or making above the cut-off.
Although basic income is obviously a well-worn topic, this article seems a bit more substantive than average. So we'll try downweighting this thread less than we usually do for well-worn topics.
It's good to hear confirmation that you're doing this sort of thing. May I suggest surfacing this drag coefficient to the UI, so that people know what you've done?
It looks pretty sleazy when a young thread with high engagement (comments and upvotes) nonetheless slides to the second page.
That's just how HN works. Story rank is determined not only by upvotes and submission time, but by numerous other factors including active moderation. We're unlikely to publish all that because doing so would increase two bad things: attempts to game the site, and meta nitpicking. Those are bad in their own right and eat up the resources we have for making HN better, so it's in the community interest to minimize them.
The approach we've taken re transparency on HN is not to make all the data public but rather to answer users' questions about how the site works or what's going on in specific cases. That seems to be the optimum.
I wonder what effect an enacted basic income in the USA would have on immigration. UBI is going to be life or death in a vastly automated world, so we mind as well figure out how to solve the side issues of implementation.
Merely a way to control people. It's dishonest to pretend that it's for everyone, the first thing that will happen if you wrong the power structure is it will withdraw funding.
Not that I am particularly worried, this will never happen in the United States. China on the other hand, I bet they would love to tie this to their human scoring system.
"...if you wrong the power structure is it will withdraw funding."
I have the same fear, that this would be a tool used to encourage conformance. If not initially, then in time. Even in the US (but as you say, we're not likely to adopt basic income in the US.)
One would hope, however, that this would become a basic right, and not one that can be revoked for any reason whatsoever, even criminal convictions (perhaps especially criminal convictions.)
Would not the equal protection clause of the 14th amendment apply here? UBI, once granted to all, could not be taken away from individuals or groups in the way you are suggesting.
Automation will not reduce overall jobs same way industrialization did not do that. Automation will create more jobs in services instead. Basic income is crazy socialist dream that was tested in communism already and it failed.
Aaah, yes, automating the job of 2000 workers on a car construction line will certainly be replaced by 2000 service jobs. And those jobs will not be requiring higher education that these workers don't have, right.
Also, basic income is a concept coming straight from liberalism. The comparison to communism isn't even remotely accurate.
It was same with industrialisation. All the crying that factories will destroy economies and cause massive unemployment which didn't do. It did a lot of good instead.
Well, there was basic income in some communist countries and it failed on a social level.
Communism is the government telling you what your job is and giving you a minimal amount of resources and prohibiting you from earning a single extra dollar, and your choices are either take it or escape to West Germany.
A basic income is the government unconditionally giving you enough money that you don't starve. Then if you want to e.g. own a car or send your kids to college or live in a city, you have to go out and get a job, which you can do however you like.
Not really. That was replacing human workers with new machines. New factories were needed to build those new machines. New supply chains were needed to supply those factories. New materials were being used in manufacturing.
Replacing those human workers required so many new things that it created a vast number of new job, much more than were lost.
Now we are tending to replace human works with old machines. Take a self-driving truck. That's just a normal truck (an old machine), with some computers (old machines) added, some motors (old machines) added to actuate the controls, and some sensors (old machines) added to provide input to the software.
Note that not many new physical things are required for self-driving trucks. The novelty is in the combination, and in custom software and some custom electronics. Custom software and electronics do not generate many jobs--it takes the same number of programmers and electrical engineers regardless of whether you are making one truck or a billion trucks. For the non-new physical things needed, like motors to move controls, orders go up at motor factories and maybe they have to add a shift and so that creates some jobs. But the motor factory is likely highly automated, and so adding a shift just represents a handful of jobs.
Basic income is very different than traditional communism in that it keeps with the basic capitalist infrastructure.
In fact, basic income is much more capitalistic than existing social safety net systems because it maintains the assumption that if disadvantaged people are actors in the market, that the overall system will be more efficient than specific government-specified handouts.
Really the question underlying basic income and safety nets in general is to what extent every citizen in a modern society should have access to goods, regardless of their contribution. Once society has decided how much access such citizens should have, welfare vs basic income becomes a question of efficiency and optimization as opposed to ideology.
As for automation not reducing overall jobs--as someone who works in automation I don't see how it will magically create more service jobs. There are few jobs today that employ large numbers of people that are not in danger of being replaced by automation--and the whole point of automation and efficiency is to minimize the number of people required to maintain the system. I do think service jobs become the way people become gainfully employed in an automation world, but that society will need to expand its definition of what is a job worthy of recompense--for example someone could decide to become an artist, and actually have that be a renumerative profession.
>Really the question underlying basic income and safety nets in general is to what extent every citizen in a modern society should have access to goods, regardless of their contribution
Absolutely this. And if we're honest with ourselves - if someone will die for want of something relatively cheap that the state can easily provide (like food, water, shelter, or antibiotics), can you really justify condemning them to death because they can't afford it? Sure, you want to encourage people to contribute to society, but do you really want that encouragement to be the threat of annihilation?
You assume that robots/algorithms will never be as good at some jobs as a worker with median abilities. This is a very strong (and likely wrong in the long term) assumption to make.
At least I doubt it will happen in this millennium. We have much more real problems today. The world is in a bad place and instead of trying to save resources, make it a better place for our kids, we focus on providing more social benefits. I have been living with people with difficult financial situation for a while and the last thing they needed was handouts. They wanted jobs, work, way to interact with people and learn new things. Not free money.
It would work for a certain period of time until inflation catches up.
You could keep raising the basic income to keep pace, but it would require raising it more every time and sooner than the last time (exponential). Inflation can be quite damaging because not everything inflates at the same rate. For example salaries are pretty slow to inflate compared to the prices for things like gas or food. This is why a mason could afford to buy a car outright on their salary in the 1950s but almost everyone needs an auto loan to buy a car today.
You could try to stop inflation using price controls but this almost always leads to supply shortages. For an example look at rent ceilings in NYC, or the way grocery stores functioned in eastern bloc socialist countries. They had plenty of cash and prices were very cheap but there was nothing on the shelves to buy.
tl;dr Basic income would just create a new $0 mark.
My hunch is that costs of services will increase while consumables remain flat. Australia has a complex minimum wage system, but 20 AUD is typical and on the order of 15 USD. The result is that services such house cleaners, laundromats and car detailing are order 3 times expensive as in the US, however produce and imported goods (Australia continues to systematically kill off its domestic manufacturing capability) are more or less comparable with US prices.
Maybe its just a SV thing, but having my (share) house maintained by an army of Latinos for a fraction of my income makes me feel incredibly uneasy. The other one that gets me are the car washes along El Camino where white people drink coffee as their cars are tended to by Latinos.
Basic income will kill businesses that rely on cheap labour, as suddenly incremental incentive to work will be minimal at $9/hour (why work only to double my anual income?). To restore the incentive wages will also need to rise, and the net result will be more expensive services accessed by a smaller percentage of the highest earners.
I think that depends on how unpleasant the job is. Doubling your income sounds pretty good, actually.
On the margin, basic income gives people a bit more freedom to make their own choices. I think the price for services in Silicon Valley would go up, but I suspect more because people can take basic income with them when moving somewhere cheaper. With the extra money, low wage/low cost places are likely to become more popular.
New money would most definitely have to be introduced. In the US we introduce new money into the system every year by having a fed govt budget deficit.
This isn't a necessary condition, it's just the easier route to take politically, and if there is one thing we can agree upon, its that our new administration doesn't give a damn about criticism, so we at least stand a chance with such a proposal.
Inflation comes from too much money chasing too few goods. How it works is different in each market. Real estate in big cities is supply-constrained but many other goods and services aren't, given time to adjust.
In particular, there's little reason to believe that basic income would be bad for Walmart. They'd sell more and their workers would be better off.
There's no reason for price controls and they wouldn't help.
There will be many effects (some positive, some negative) but I think you need to use your imagination more, and don't assume that what we have today is somehow natural.
On the margin this is increased freedom, security, and buying power for people at the bottom. How they would use it is hard to predict, but I think we can look at retirees to get some idea about which areas of the country become more popular.
While I don't disagree that inflation would affect the purchasing power of a UBI, I think you discount the fact that a fairly significant percentage of the US is already on some form of safety net or welfare program.
Whether it be "food stamps" (vouchers for food, reimbursed as governments like a UBI), SSDI disability (fixed payments due to work disability or structural changes in an industry), unemployment insurance payments (temporary fixed payments), Social Security (long-term fixed payments), Section 8 housing (vouchers for housing), etc, there are plenty of examples where the issues you raise are already affecting the recipients. I've heard anecdotally that many doctors have ceased accepting MedicAid (suggesting that medical inflation has already outpaced the government's ability to reimburse).
I think your argument should focus more on why the UBI is not any better than the morass of existing programs, some of which have disincentives for people getting off of the program. I'm not yet convinced is is either better or worse, but I don't think inflation is a deal-killer for UBI because it's already an existing issue in currently running programs.
Almost everyone here seems to be discussing the economic challenges of UBI, but so far I haven't seen much mention of the political challenges. UBI is a completely unworkable concept in the U.S.A and likely many European countries as well. American citizens will be literally shooting eachother in the streets before they accept such a massive wealth redistribution mechanism, and that resistance will be mostly made up of the masses that could benefit from it, to say nothing of the powerful that will leverage the full extent of their influence to prevent their gains from being redistributed.
Americans do not trust that the government has their best interests in mind, ergo Americans do not want to have their money taken away from them to pay for government programs.
And, as evidenced by the actions of our Republican and Democratic party legislators, by the NSA and FBI ... the US government does not have my best interests in mind.
The government doesn't have a single mind. Every agency has different goals and motivations. Sometimes they are even contradictory. We can choose where we want more government involvement and where we don't.
Yes, these systems that are mismanaged by bureaucrats & politics. It's not like our water is safe & people who wish to manage water on their own property are prosecuted by the state.
A government, while being a necessity, is not to be trusted. The Founding Fathers understood that, and they made it clear to others. A government is a mechanism that is prone to deterioration over time, and it takes a substantial effort to keep it in a shape in which it protects people's interests rather than its own.
Also, from the historical prospective, governments are the ones who are responsible for most killings of people on a large scale. How, then, can an intelligent person trust a government?
> How, then, can an intelligent person trust a government?
Because that's just the better option. Somebody is always going to gather a lot of power with a big organization.
The choice you get is between an organization whose purpose is to serve the masses (democratic goverment) and organizations whose purpose is to serve very elites (corporations, organized crime).
Regarding your specific point regarding killing people: I think you are oversimplifying here. With the opium wars and the subsequent flooding of china with opium, British trading companies probably already firmly hold the record for killing people on a large scale. For more recent examples, I would point towards the commercial part of the US Industrial-Military complex.
But yes, the government is then frequently instrumentalized to do the actual killing. I would assume this to become harder the stronger and more democratic a government is.
It's useful to think of what sort of institutions are required for social stability before you need them. It's semi-likely that Americans will be shooting each other in the streets anyway, and so when they get tired of it and are ready to say "Never again...let's fix the root problem so we never get to this point again", there are options whose consequences have been explored.
Recall the history of labor unions in the U.S. The AFL-CIO was formed in 1886. The 1890s and early 1900s featured strikes where there actually was shooting in the streets, widespread rioting, bomb-throwing anarchists, and general pubic and social unrest. It took 2 world wars and a great depression before the U.S. got to the "golden age" of labor union capitalism that certain people want to recreate today.
If you don't test out possible solutions on a small scale before the old social order disintegrates, you get things like the Communist Bloc, where revolutionaries overthrow the old system, but then install a new system that sounds good in theory but really doesn't work in practice.
I've heard convincing arguments[1] from economists that we should convert our existing "safety net" and "welfare" programs to simple UBI (aka BIG).
The argument tends to circle around the fact that the existing programs dis-incentivize getting off disability or Section 8 because the recipient is penalized in a step-function way (as soon as they get a job, they may become ineligible or could be charged with a crime). A well crafted UBI such that it's an income tax rebate (not to be confused with tax credits or tax deductions) to replace the many smaller safety-net / welfare programs eliminates the disincentive for people to get off these specialized programs that already exists.
While I don't think Americans are well informed enough to make a rational decision (and will likely be swayed by emotion), I think there are reasonable arguments for UBI / BIG.
I worry that you just made it even more politically untenable.
"You are taking away my retirement I earned and giving it to everyone?"
"Don't touch my medicaid!"
"They are trying to kill the soup kitchens; look at these children we feed."
Or whatever. There is such aggressive fighting for scraps that no one wants to make a big-picture shift that might have unknown societal repercussions.
This is the biggest challenge to UBI becoming a serious mainstream topic in the United States IMHO. It takes me hours of conversation explaining UBI to any of my southern/conservative family members to get to a point where they at least acknowledge that it isn't just a fancy word for socialism... and even then they still don't like it.
Granted, I'm their left coast liberal silicon valley nephew so they aren't really interested in anything I have to say anyway.. but maybe thats the point. To a lot of Americans it just sounds like free liberal hand outs, no matter how much data/math/science/economics go into it.
Hopefully smarter people than I can figure out how to message UBI to that part of America.
I haven't listened to this episode yet, but it's worth noting that Milton Friedman was advocating for this very position in the 1960s. Here's the relevant clip from Free to Choose:
Off-topic, but Americans literally are shooting each other in the streets. More americans have died in gun homicides than died in all wars since, and including WW2. Include suicides, and gun violence exceeds all US war deaths ever.
It's all about the packaging. Politicians are masters of selling any X positioned in a way masses accept it, most popular wrappers make use of keywords like "tax break", "children" or "patriot". The primary obstacle against UBI is that it removes the powerful mechanism of wealth extraction lobbyists frequently use: the tax breaks.
For example, say you're healthcare lobbyist and you want to boost your business selling drug X, but patients who need X cannot afford the amount you want to charge. What do you do? Lower the price? No, you will lobby for making expenses on X tax-deductible. If you succeed, you will be forcefully taking money from people who don't need X, giving them to a person who needs X, who has no choice but give it to you. This has happened with healthcare, education, housing, etc. (and nobody is shooting anyone on the streets)
UBI removes the need for tax breaks, reducing lobbyists' ability to direct consumer spending, and that's why it won't be implemented any time soon.
Eve if the American people were willing to accept UBI, it still wouldn't work the way proponents hope it will.
Let's assume for the sake of argument that the US Congress actually passed a UBI bill that was simple, elegant, and did not have a bunch of complicated amendments tacked onto it. Let's say they passed a bill stipulating that every person in the United States would get a check from the government every month, and that every check would be for the same amount. Let's also assume that the bill replaces every other welfare program with UBI, like the libertarian proponents of UBI hope will happen.
Even if that happened (and it certainly would not), it would only be a matter of time before it gets messed up. There are a lot of reasons the current system is the way it is. There are many reasons the voters would want some people to get more money than others under UBI, and many of them would be convincing. For example, should single mothers get more UBI money? What about cutting benefits for convicted felons? What about more UBI money for people in high-cost-of-living cities like New York and San Francisco? What about more UBI money as a form of affirmative action for certain racial groups? People will vote for some of those changes.
We would therefore end up re-creating a lot of our current welfare programs within UBI, for the same reasons we created those programs in the first place. Tyler Cowen has written more persuasively on this topic here: http://marginalrevolution.com/marginalrevolution/2013/11/wha...
UBI proponents have a few questions to answer: how can we afford it, how will it work, and how can they prevent it from being turned back into our current welfare programs under a different name? And how can they prevent the voters from simply voting to give themselves more money, thereby bankrupting the government?
Yes, far less able. Most voters aren't on welfare, and they aren't interested in increasing welfare payments. If every voter got money from the government, things would be very different.
I really hate to get into a debate about semantics, but that is not what "able" means. =)
I think I understand your position better now, though. It's not so much about whether voters can vote themselves more money - it's about whether they have the incentive to. I don't agree, because I think shared interest in the stability of the system would be a strong opposing force, but I can see where you're coming from.
Along the same lines I don't see people considering the new power base this would provide the people who controlled it. Do you really think it would stay simple with no requirements or controls and corresponding government agencies to oversee it. That agency will be scary.
UBI is talked about, but is probably a long way off. But it's important to get the conversation started. We already have massive wealth redistribution in the U.S., in the form of Social Security, Medicare, Medicaid, etc., which make up 70% of the federal budget. UBI isn't about spending more but spending differently.
That's a research project, not a sustainable program. The putative benefits of UBI would only apply if it successfully takes the place of the "safety net" of programs already enacted.
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[ 3.8 ms ] story [ 287 ms ] threadIf the poverty line stayed constant, basic income is a no-brainer. But basic income makes the cost of goods rise. Demand for goods increases, but supply diminishes. Nobody will do the crap jobs without higher pay, raising the price of everything. Basic income is impossible.
It's very expensive to develop a machine that can replace sewing workers (DARPA is working on one because the US military has a need for it). It hasn't yet created any value because fabric is ridiculously complicated for robots but comparatively very easy for humans to manipulate). So far, the sewing robot is neither very useful nor very valuable (since it is still orders of magnitudes more expensive than fabric workers).
If low-paying work is less desirable than it is now, companies will have to deal with the game theory reactions of how consumers react to there being a shortage of fast food workers, bus boys, valets, etc. There is a certain amount of slack that consumers will absorb, either in resources (time, money, effort) expended. IKEA makes you bus your own tables like a cafeteria. I imagine if bus boys and fast food workers suddenly became more rare / expensive, companies would ask their customers to inconvenience themselves to maintain their profit margins / economic viability.
Why not just decrease number of working hours to say 2 per day, but for everybody, instead?
Maybe you would, but I think most people would rather have a job and be fabulously wealthy relative to those surviving on UBI alone. See: all the people who work 60h a week in SF making $200k instead of chilling at a bank working 35h for $80k.
It's not a joke: post-USSR countries already have exactly this problem.
A few solutions: 1)Have the government set prices for basic necessities. 2)The government owns companies that produce basic necessities. 3)Replace capitalism.
All the solutions above have its drawbacks.
There is a cycle and how quickly it cycles will be determined by how quick the various parts move. Not all robot owners will increase their prices just as fast and people will not buy from the overtly expensive sellers. Similar to the economic cycle we already have.
I certainly don't have an economics degree though.
With 100% robot labor, utilization of a resource is purely a political decision. The idea that we should give outsize rewards to historical incumbents for their historical incumbency becomes sort of silly.
You think people are just going to accept starvation? Shit will get real, real fast.
And most people aren't as articulate or reasonable as the people on this site.
There will be massive violence.
A better way to look at UBI is that it's not about giving poor people money. Its about keeping the fabric of society together and preventing revolutions once automation hits fully.
> Demand for goods increases.
Citation needed. Demand for some goods will possibly decrease: like payday loans or bankruptcy law. Demand for luxury goods won't change at all: yachts, private jets. But even the demand for Big Macs probably won't change all that much. Apply the same exercise to a bunch of other sundry cases: buying a house, life-saving medication, buying a smartphone. You will quickly realize that you cannot categorically state that "demand for goods increases". And more precisely, it is almost impossible to demonstrate that demand will increase the same amount for all kinds of goods. You really need to investigate how much demand will increase for each particular kind of good.
> Supply diminishes.
Citation needed. One thing for which supply will likely diminish: consumer debt assets. Since presumably the introduction of basic income will lead to a decrease in consumer debt. But "goods" in general? What basis do you have for saying this?
> Nobody will do the crap jobs without higher pay, raising the price of everything.
Citation needed. Business owners are very interested in replacing crap jobs with automation. Also, in general, the crappiest jobs today are done by illegal immigrants, who presumably wouldn't be receiving basic income in the future.
The only way this isn't equivalent to the government printing money is the money comes out some rich people/company's savings accounts where it wasn't being spent anyway.
And as almost all will agree, that's not only logically wrong, it's also morally wrong.
I don't need basic income. If I received free money that I don't need, I might decide to double my cheese consumption. If many people like me do this, then the price of cheese will go up, hurting poor people.
Money "you don't need" is an economic absurdity.
The only people who double their cheese consumption are people who really like cheese. And if basic income helps you and others truly express their passion for cheese, more power to you. Poor people will eat something else.
There's something absurd in this argument. No one's going to double their cheese consumption, just because they got money "they don't need", and no one is going to starve because the price of cheese went up.
But also, whatever problem we think we are debating here, it exists with or without basic income.
The argument that "basic needs" prices will rise (which was what my OP gave) because of UBI must be false, since being "basic needs", they already must be provided to anyone anyway.
In any case, even if a big part of the population didn't had access to "basic needs" the argument would be that: "we can't allow them to have those basic needs or else their price will increase to the rest of us". Than that, is morally wrong.
I hope now it is totally clear what I meant above.
But my wishes don't overcome basic supply and demand. Unless there's a lot more goods suddenly being produced, prices will rise if more people want them and can pay for them, which will tend to cancel the benefits of UBI.
In this situation they'd end up well rewarded for their work, and those workers with more spending power has traditionally been great for the economy.
Lot's of things have completely changed how society works, why shouldn't society change?
... but are still getting those things through means-tested programs, for the most part. The UBI doesn't mean more people get fed; it means fewer strings attached to where they choose to live and what food they choose to eat and whether they can get a side job to supplement (google "welfare cliff".)
Less Yachts, more food factories.
Increased demand CAUSES increased supply.
Do a simple thought experiment. Imagine there are 1 million poor. They, and everyone else, receive $12K per year. The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation. That's $12 Billion more now competing for a fixed amount of goods. What would any company/retailer/landlord do if they immediately sold out of everything they had? They'd raise prices until supply and demand were in equilibrium again. And thus the very things the poor need are the things the prices will increase the most, by virtue of them competing to purchase those items.
I'm not saying it's fair or right. But it is reality.
> They, and everyone else, receive $12k per year.
You didn't read the article. The only people who receive net $12k per year are those who have zero income. Everyone else receives net <$12k per year, because some of their income is taxed in order to finance basic income.
> The poor (and those just above them on the economic ladder) will spend all of that on basic needs: food, housing, clothing, transportation.
Incorrect. Who are you to dictate to people how to spend that money? "All" is not the amount they will spend, and "basic needs" is not the only thing they will spend it on. They will save some of it. And they will spend some (maybe close to all) of that money on paying off debt. There is $747 billion in credit card debt, $1.14 trillion in auto loans, and $1.28 trillion in student loads. And some of it will go to everything else: alcohol, video games, travel, etc.
And by the way, how many Big Macs do you think people want to buy? How many houses do you think they want to buy? How many trips do you think they want to take?
> That's $12 Billion more now competing for a fixed amount of goods.
Definitely not $12 Billion, as I have demonstrated above. And there is no such thing as a "fixed amount of goods" in economics.
Of course prices will change. But they will change in healthy ways. The idea that there's some sort of feedback loop present here that causes basic income to cancel out its own effects is completely unfounded.
And what is a 'healthy way' for prices to change for basic needs? They aren't going to drop. Any other change hurts the poor.
You said we are going to give $12 billion to the poor
There is $747 billion of credit card debt in the United States. Much of that comes from lending in the past to the poor to finance their basic needs.
$747 billion > $12 billion
It is possible that all of 1 year's basic income entirely goes toward paying off credit card debt. In this scenario:
1) The poor receive a much needed benefit from basic income: they get to pay off their credit card bills.
2) There is no change in demand on basic goods whatsoever.
3) This significant paying down of debt leads to consumer interest rates going down, which further helps the poor.
So here is one scenario that is a counterexample to your claim that this can "any other change hurts the poor". This is an example which helps the poor.
You are forgetting that people have the freedom to do what they want with their money. When prices go up for one thing, they spend their money in other ways.
Healthy ways for prices to change:
1) The price change is stable, rather than runaway. It happens once, and that's it, but we continue to pay basic income year after year. This is expected, if we keep the money supply fixed.
2) The price change eventually leads to an increase in wages for the poor, which have been stagnant for decades.
I think it's about 1 / googol.
Upon re-reading, I still read your words that way.
Given that there is such a huge amount of personal debt out there, the poor have the freedom to allocate their basic income between spending and paying off debt for many years. And when prices go up for certain things, they might reallocate their income to other things.
So your scenario of paying off debt for one year just pushes the inevitable out one year.
And that one time price change will cancel out the benefit of the UBI. It has to, otherwise companies are not getting the most profit they can (they won't do that), or we magically have unending goods and services. Supply and demand can't be overcome in a market economy of scare resources.
Raising the minimum wage eventually has a similar effect. Ask yourself why a loaf of bread isn't $0.05 any more (it surely was sometime in the past 200 years). The obvious answer is inflation. But why? Why did prices increase over time? What economic pressure caused that?
> So your scenario of paying off debt for one year just pushes the inevitable out one year.
There is enough debt out there that the poor can spend many years paying it off.
> Raising the minimum wage eventually has a similar effect. Ask yourself why a loaf of bread isn't $0.05 any more (it surely was sometime in the past 200 years). The obvious answer is inflation. But why? Why did prices increase over time? What economic pressure caused that?
Milton Friedman and Anna Schwartz wrote A Monetary History of the United States, 1867-1960, where they made the claim "inflation is always and everywhere a monetary phenomenon" [1] Thus, the reason why a loaf of bread isn't $0.05 anymore is because of the expansion of money supply, not because of raising minimum wage. The article suggests financing basic income through tax revenues -- and even doing so without raising the deficit. It is not suggesting expanding money supply. Milton Friedman himself even supported the kind of basic income described in the article, which he called a "negative income tax" [2]
[1] https://en.wikipedia.org/wiki/Monetarism
[2] https://en.wikipedia.org/wiki/Milton_Friedman#Social_securit...
In your example, $12bn goes to people who are 'poor'. You imagine all of this will be spent on scarce consumer resources and housing, creating increasing cost for those items.
You make a number of assumptions that have to be teased out before we can know how likely that scenario is:
1. Poor people will just spend any additional income.
2. Poor people will not have housing mobility and therefore be subject to rising prices for housing.
3. Consumer goods are scarce and supply will not increase based on increased demand.
1. has shown to be (surprisingly?) untrue in basic income trials so far. Read about India's Basic Income experiments at resources like this: http://www.salon.com/2015/01/25/sponsored_by_my_husband_why_... It turns out poor people use income security to accrue useful economic assets that have sustained financial benefits. Food security also improves. In addition, research into economic security shows that money worries vastly lower IQ (google for Sendhil Mullainathan and Eldar Shafir to learn more). So the data we have so far is pretty uniformly the opposite of your narrative here.
2. This to me seems pretty obviously false, or at least likely to at most be a small impact net of the money. Poorer families must choose between job proximity, communities, schools, all kinds of things, often with less than one month of safety money. Mobility is extraordinarily low in these circumstances. Guaranteed payments will vastly increase mobility for this community, allowing them to purchase property in economically appealing areas while expanding the number of jobs they take. This will at most redistribute people. Perhaps slumlords will raise rents immediately, but they will find two things: tenants who stay can pay, lowering their own costs, and tenants who don't like prices will move much more quickly. Liquidity in markets is good for efficiency. I don't think you can tell a compelling story about harm to poor renters with UBI here, it's just not sound reasoning.
3. This seems like a very silly assertion to make. Automated factories and low-labor-cost factories around the world would cheerfully sell 5x the consumer goods they manufacture now, and prices will decrease as demand increases. Perhaps the increased demand for factory workers would drive some additional jobs. But, a) I'm not sure what scarce resource you imagine will drive inflationary costs, and b) the India research shows spending goes into a pretty diverse basket of things, education, food security, investment and housing among others.
Let's assume that basic income will cause net income to go up for the poor (otherwise, what's the point?) But let's also assume that prices on certain goods will go up (a totally reasonable assumption).
Then let's measure wealth in terms of "Big Macs". As in, how many Big Macs can you buy in one year? If basic income causes this number to go up for you... then you've benefitted from basic income, regardless of how much the price of a Big Mac increased.
If your income goes from zero to non-zero... you definitely benefit. Because with zero income, you can buy zero Big Macs. But with non-zero income, you can buy non-zero Big Macs... no matter how much the price of a Big Mac goes up. And the number of Big Macs you can buy will be greater than one... Big Macs won't cost $12,000 in this scenario. That would be ridiculous.
So we can use this as a framework to analyze how basic income impacts society. Then it is obvious that basic income benefits the poorest in society. But you are right, it may harm some people. However, it requires a much more rigorous analysis than you are providing.
All this money going into food, means that businesses would enter the market.
That is called supply and demand.
Increased demand CAUSES increased supply. Read an econ 101 textbook.
Each individual piece of UBI sounds good. But when the whole system gets put together, it doesn't balance out. It can't.
They've simply pegged their supply chain to the amount of demand they currently see while minimizing costs and trying to optimize profit.
Almost all industries get significant savings the larger they scale. There's very real reason to think many industries would get cheaper if they were suddenly trying to produce a multiple of the same product.
Are you sure about that? Who will be bearing the tax burden to pay for UBI? Are not those the people who are currently buying yachts and private jets?
Business jet usage may decline as well as a substantial part of that usage is to generate income and growth for their businesses. With higher taxes, there is less incentive to risk money to grow your business further, putting negative pressure on business aviation.
But that's beside the point. I was trying to answer the claim that "demand for goods will only go up" with examples of goods where demand stays the same or goes down. So whether demand for luxury goods stays the same or goes down, you are only reinforcing my point.
The resources that are being spent on luxury goods will be converted to resources spent on food.
That's called economics 101. Supply and demand. If you take money away from rich people, they will have less money to spend on rich people things, and the world will produce less of those things.
http://www.chicagotribune.com/business/ct-video-games-jobs-e...
"Happiness has gone up for this group, despite employment percentages having fallen"
So you will still need a job if you want all three of those things, not sit around and contemplate what you should do with your life.
It's sort of like how the ACA raised the overall price of insurance.
Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
Prove me wrong.
Your theory that the cost of food would go up if people had more money is out of whack.
That's both economical and morally wrong.
Those without jobs get state assistance for the basic needs.
No need to give everyone a basic income.
2) The American housing market is very messed up and far from a free market, so any prediction up or down is very difficult. I predict that Basic Income will cause a bunch of people to move from high cost cities like NYC & SF into low cost areas so that they can live comfortably on the basic income. So there will be pressures both up and down on prices. But point #1 still stands. Right now most Americans already have a place to live, and basic income isn't going to cause people to go out and buy a second house so the effects are only going to be at the margin.
3) According to most economists, inflation is always a monetary phenomenon. If you print money to pay for UBI, inflation will go up. If you take from the rich to give to the poor, inflation will stay constant.
I don't understand this reasoning. Look, only one of the following can be true: (1) everyone can buy basic necessities of life, in which case nobody is poor and we don't need UBI, or (2) not everyone can buy the basic necessities of life. If (2) is true and we introduce UBI, then there will be more demand for the basic necessities of life (coming from all the people who were unable to afford them before), which will in itself result in inflation (which, btw, doesn't measure the total supply of money, but overweights the basic necessities of life and underweights e.g. the stock market). If you combine that with the decreased motivation of people to work (resulting in lower supply), the resulting inflation will be massive.
We've also had a deflationary enviroment for quite some time. We need inflation.
You won't get lower supply because of the automation, because that's the reason you are giving basic income in the first place.
John no longer needs to drive it's truck, the truck is gonna drive itself.
We are spending less money on yachts and more money on food.
The Yacht factories get torn down, and replaced with food factories.
We have discovered the source of the misunderstanding.
(2) was true, which means we need a UBI or welfare and we already have welfare, so (1) is now also true.
What we are discussing is replacing welfare with a UBI, which increases the incentive to find work over welfare because unlike welfare you don't lose the UBI when you get a job.
What I'm saying is that is a primary difference between a UBI and the status quo. Giving money (or less efficient money-equivalent things) to poor people is not, because we already do that.
Inflation happens when the market can't adjust fast enough or they hit real supply constraints (such as real estate in big cities).
The idea that food prices would dramatically increase is kind of strange, because it requires that we have no way to increase supply of food production, despite our demonstrable history of doing exactly that through productivity increases. We had less farmland in 2012 than ten years prior, but the value of output doubled during the same time, so supply is in no way constrained.
I think they were referring to the cost of food, not the calories.
People are still buying the same basic things they did before.
The money is simply shifted around from the rich to the poor?
I have been studying this in my free time for the last decade or so, and do not have a ready list of sources handy, but here are a few I gathered in the last 30 minutes, should you be curious as to why I think this way: https://mises.org/library/taxation-robbery https://en.wikipedia.org/wiki/Taxation_as_theft
A very short list of sites containing general backgrounders: https://mises.org/ http://www.ronpaulcurriculum.com/ http://tomwoods.com/ https://www.freemansperspective.com/
A short list of sources on this direction of thinking to start with: https://en.wikipedia.org/wiki/Ludwig_von_Mises https://en.wikipedia.org/wiki/Friedrich_Hayek https://en.wikipedia.org/wiki/Murray_Rothbard
Much of this is intertwined in Libertarianism, Austrian Economics, and even Minarchy/Anarchy.
I obey the laws of the jurisdiction that I reside in, but that does not mean that I am not trying to actively change those laws for what I perceive as "the better"...
I search for as close an approximation to "the best way" as I can, understanding that humans are fallible by nature.
For entertainment, I am re-reading the book A Lodging of Wayfaring Men, a fictional book by Paul Rosenberg. While it is in severe need of editing (self-published?) I find it entertaining enough to re-read to get excited/stimulated about the possibilities of correcting systems that I consider to be operating very inefficiently, or flat out wrong.
"A traitor is everyone who does not agree with me." ---George III of the United Kingdom
Then you can call the tax man a thief and shoot him.
Unless you're rich, taxation benefits you, you brainwashed idiot.
http://www.usatoday.com/story/money/personalfinance/2013/03/...
I was too glib (wrong) in my second response to the assertion that my statement implies all social policies are theft.
I'm not exactly pro-income tax either, but (governed effectively!) personal income tax has always seemed to me like a least-worst solution to funding a government and a country's public infrastructure. It's not great, but it provides the least opportunity for mass rorting (although that no longer seems to be true, the more I think on it). I could be convinced that other solutions work :).
For most people, their employer took out (in excess) taxes all year and sent them in, so they get a refund (after the paperwork ritual) on the loan they made to the gov with 0% interest.
I'm not a fan on taxes on things you own because it means you don't _really_ own them. For example a person who owns a piece of property but can not pay the property tax. It gets taken from them by force if necessary, hence they never really owned it. At the very least we should carve out an exemption for property you live on. Transaction taxes don't have that problem.
Otherwise you're an idiot.
Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no state level personal income tax.
That's how monopoly markets work. But if you're a grocery store and you realize everybody now has $4 more in their pockets, you can't start charging $5 for an apple when the store across the street is still charging $1.
If you keep the same price, but everyone is charging 4x as much, you are losing, because everyone else needs 4x less customers to make the same profit as you, not to mention the work involved.
You'll run out of supply soon enough, too.
If I'm buying apples wholesale for $.50 and selling them retail for $1, how many apples does it take for me to go out of business?
> You'll run out of supply soon enough, too.
Are people now eating more apples than farmers can grow?
Couldn't you just inflation adjust the $1000 as the prices for those needs increase?
Ok here we go.
> If everyone gets $1000 every month guaranteed for "basic needs", the prices for those basic needs will increase accordingly. And independently. So you'll end up spending that $1k on either housing, bills or food.
They don't get $1000/month for "basic needs", they get $1000/month for whatever they want. It's completely unconditional.
Which means people wouldn't go out and buy twice as much food as they currently eat because they suddenly have a pile of money that can only be used for buying food. Unless they are currently starving, which hardly anyone in the US is, they would buy the same amount of food that they do now and there would be no inflation in the price of food.
And anything with the effect of increasing nominal housing prices without reducing the ability of people to buy housing is excellent because it allows you to increase the housing stock without reducing nominal housing prices and causing existing homeowners to go underwater on their mortgages. In other words you can build more housing to cancel out the effect without NIMBYs fighting you and thus allow more people to own homes.
> It's sort of like how the ACA raised the overall price of insurance.
The primary driver of increasing insurance premiums wasn't the subsidy, it was the requirement that insurance companies take people with preexisting conditions. Suddenly a million sick people are making insurance claims who previously had no insurance, what did you think was going to happen to premiums?
> Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
Only if you want them to pretend to look for a job and never find one. And you want to create a poverty trap because actually taking a job doesn't actually increase the amount of money in their pocket because the government withdraws an equivalent amount of benefits.
And that's assuming your argument is true, which in general it isn't. If you raise prices then some of your customers will go elsewhere. That's why sellers don't raise prices already. If you raise prices and your competitors don't, even if your customers have extra money, people can still count and a dollar is still a dollar. The profit-maximizing strategy isn't to raise prices, it's to expand capacity as quickly as possible (which in many cases is immediate) so that you can make your existing profit across more customers who can now afford your product, without losing them to competitors with lower prices.
Is it the case that existing private schools have much excess capacity? Frequently the argument for private schools is smaller class sizes; a rapid influx of new students without new, excellent teachers defeats the purpose. Presumably new classrooms would need to be constructed and so on.
If you receive a $5,000 voucher and your private school jacks up tuition by let's say $1,000, it is unlikely many parents are going to disrupt their routines and children's routines to reclaim that amount, especially since they are feeling relief from a net $4K tuition break. Tuition has effectively decreased, so why rock the boat?
Suppose you're right and a $5000 voucher will cause a $1000 increase in tuition for three years, after which new schools will open and the competition causes tuition to fall again.
So as a parent, for the first three years I'm up net $4000/year and $1000/year is going to build new school capacity to meet increased demand, and thereafter I get the whole $5000/year. Am I supposed to be unhappy about this?
Or from another angle- what will prevent an ever increasing amount of tuition such as happened with the higher education system? "We need to raise the voucher to $10,000 now…"
And what you're getting at is one of the reasons that a UBI is better than vouchers.
Suppose you create a $5000 education voucher and there was previously a school with a tuition of $4000. That is now over; they might as well charge $5000. And if there is a higher quality school charging $10,000 and people whine that the voucher doesn't cover it and have the value of the voucher increased, now every school will charge $10,000, because that is the only way to get the whole voucher and there is no reason not to.
But suppose you replace that with $10,000/year in cash like a UBI. Can all schools now raise tuition to the entire amount? Obviously not, because all else equal people will still prefer the $7500/year school so they can spend the remaining $2500 on whatever they want.
This is what I mean.
From a business point of view, suddenly everyone has an extra $1000.
They were buying stuff from you until now, there's no reason not to try to drive the price up to see how much more you can charge now.
If enough businesses will do that, it will reach a critical mass where the ones charging old prices are the idiots left behind.
So if literally everyone has an extra $1000, nobody has an extra $1000.
A bit different with insurance, since the government forced insurance companies to accept all these people, so they increased prices. I'll ignore the fact that they were still making enough profit to just accept the losses, because people are greedy and they will always want all the profit they can get.
For example, let's say someone starts with 0$, and is given 1k$.
Is this person better off than they were before? Yes! Their wealth has increased by infinity. It does not matter if inflation was 100%, because 100% is less than infinity.
Also, you can get rid of inflation, by taking the money way from someone else. You aren't adding money to the system. You are redistributing it.
It's not "suddenly everyone has an extra $1000", it's "suddenly the average person with insurance is sicker". It's like what happens if you want to buy fire insurance in an area with a higher incidence of wildfires. The reason insurance costs more there isn't inflation.
> They were buying stuff from you until now, there's no reason not to try to drive the price up to see how much more you can charge now.
Except that you have competitors who are happy to take all your business by selling at the existing price which is already profitable.
> So if literally everyone has an extra $1000, nobody has an extra $1000.
If literally everyone has an extra $1000 then you must have printed the money, which isn't what anyone is proposing.
And even then is still not true, because printing $1000 for each person is still wealth redistribution from creditors to debtors.
So yes, you're right that if all the avocado farmers in California decided to engage in price fixing because they know that more money exists and that they can get it, they probably can. But it presupposes highly monopolistic behavior that doesn't seem very likely to work for most markets. Especially if it's easy to become an entrepreneur.
The business, after all, makes a profit as long as their price is above their cost. So unless their costs go up, competition keeps prices down.
Now, I think you're half right -- prices will go up, but it's not because of gouging by middlemen or traditional inflation. It will be because as people drop out of the labor market, the really undesirable jobs will become more costly to fill.
But that strikes me as a much more fair free market than what we have now. Yes, you will have to pay more to have your garbage picked up in front of your house. Why? Because as it turns out, you would much rather be doing whatever you do than deal with a thousand people's garbage. Maybe they should be getting paid more than you, in a voluntary free market.
So I imagine it will be sort-of inflation, but almost better described as a rebalancing of the economy. Jobs that humans can do much more easily than robots will get higher salaries. Jobs that are enjoyable get lower salaries. Overall, salary spread across jobs becomes much smaller.
But I don't think it's necessarily likely to be some kind of overall inflation, it's a redistribution of wealth accomplished by simultaneous direct transfer of wealth through the UBI, in addition to a redistribution of power accomplished by allowing "Nothing" to be an option that employers have to compete against.
Higher education costs expanded to absorb the extra money from the student loans thrown at them, healthcare costs increased as more consumers started competing for a fixed supply of appointment slots, hospital beds and medical services.
That's because they're catastrophically stupid industry-specific interest rate subsidies. A dollar for tuition is then less expensive than a dollar for anything else, so everyone conspires to buy things with the cheap government money that isn't available when used for anything else. And that process is highly inefficient because it's basically a huge implicit fraud scheme to redirect subsidized student loan money to things that aren't strictly education, which no one can admit to out loud or explicitly negotiate for because it's illegal to use the money for that. Then it's, look how expensive "education" has become!
A UBI doesn't do that because it doesn't restrict what you can use the money for.
> healthcare costs increased as more consumers started competing for a fixed supply of appointment slots, hospital beds and medical services.
In part this is the same thing (here is a huge pile of money that you can only use for healthcare, now everyone go swamp the doctor's office at the same time). And the rest of it is temporary because no one knew the law was coming ahead of time so now we need some time to increase the supply of healthcare providers.
I agree, but how does showing up with a wad of cash instead of a check from a student loan agency increase your negotiating power? Large number of international students today (Chinese and Saudi until recently) paid cash and yet had little say on football teams, new administrative buildings or spending in general. The university system just goes out and borrows whatever it feels like, the debt service is added to expenses.
UBI also removes the advantage of centralized negotiating power that's beneficial in industries like healthcare. With Medicare or a private insurance company the $500 list price for doctor's exam can be negotiated down to $99. With UBI it's the consumer against doctor's office, whch historically did not play out well due to massive information disadvantage.
Because cash you can spend somewhere else.
Suppose you like football. If the money is "student loans" then you can spend it by attending a school with a big fancy college football stadium and subsidized tickets for students. If the the money is cash then you can use it to go to that school instead of a less expensive one with no football stadium, or you can go to the less expensive school and use the money to buy NFL season tickets.
So when the money is student loans, people have only the first option and all the schools have to build big fancy football stadiums to attract students. But you can't do that on a per-student basis. And you can't directly buy college football tickets with student loan money but you can launder it through administration to subsidize them. So everybody who attends that school ends up paying for football even if all they really wanted was an education, and then people have to consider the quality of the school's football team when choosing schools instead of only the quality of their professors. It would have been better to have just let the students who like football use the money to buy NFL tickets.
And so on for twelve other categories of student loan money laundering colleges have to engage in to attract students.
> UBI also removes the advantage of centralized negotiating power that's beneficial in industries like healthcare. With Medicare or a private insurance company the $500 list price for doctor's exam can be negotiated down to $99.
There is no reason you can't use your UBI money to buy private insurance.
And the only reason the list price for those things is $500 is that everybody knows the scam. The buyer for the insurance company wants to look like a great negotiator to his boss, so the doctor's office claims everything costs five times as much as they actually want and the buyer gets to look like a big hero for whacking it down so much.
And in general insurance makes things cost more for the same reason colleges with fancy football stadiums are more expensive. People don't ask whether something is worth the cost when they're spending somebody else's money. If you're paying out of your own pocket, you ask if knowing the result of some test is really worth $1200 of your money. If the insurance company is paying for it, you run all the tests whether you need them or not.
If you have government or insurance pay for everything (and then pay everyone the same amount) the buyer still doesn't know which doctor provides the best care, but now doctors have the incentive to provide no more than the bare minimum care because they aren't allowed to charge any more for better quality/convenience/atmosphere for the same procedure.
So is inflation, and the real estate markets are usually the first to adjust.
Your view of housing is this commodity that's in low supply only because we don't have enough manpower to build more. In reality anyone with a knack for cheap housing can become a proud homeowner in Detroit, Baltimore, rural parts of Mississippi or Kansas relatively on the cheap. Kansas will even throw in some free land grants, so a homeowner and a landowner, living the dream.
People don't want just any cheap housing. They want proximity to their work, in a good school district for their kids, with quick access to transportation, cool restaurants and coffee shops within walking distance. The supply of those will still be constrained.
The supply of those is artificially constrained. There is no practical limit to housing density when you can build vertically.
The problem is you have people who just took out a $1,000,000 mortgage and would sooner murder you with an axe than see the value fall to $600,000 because the local housing supply increased. But if you have something to exert upward pressure on nominal housing prices then you can build new housing stock and have nominal prices stay the same. Inflation and inflation-like effects are great for this because it means nominal housing prices stay the same while real housing prices fall, which is the only real way for more people to own a home.
Why not? Higher structures require deeper and more complex foundations, more reinforced concrete and steel, extra precautions for strong winds and earthquakes. Setting up proper elevator systems, plumbing, air venting, noise isolation, electrical wiring and natural gas hookups is also subject to more restrictive building code (and for a good reason). This is before we get into the costs of underground/overground parking, which has additional weight and reinforcement requirements of its own.
And even when you follow everything to the book, you might still mess up, i.e. Millenium Tower in San Francisco.
You can buy a house on the prairie or a mobile home on the cheap, but except for major real estate downturns you rarely see a high-rise condo on the cheap. Even when it is (Miami circa 2008) the price often comes with exorbitant HOA fee to keep the amenities running.
None of which is insurmountable, as evidenced by the fact that such buildings actually exist. Now compare the rent in a high rise in Chicago with the same style of building in San Francisco or NYC. The cost difference isn't because of the cost of the building.
Pending a discovery of cheaper construction materials or methods we probably won't see massively cheaper high rises.
Because it's supply and demand. The demand is very high in Manhattan. What we would expect is that anywhere there is such high demand that the price is higher than the construction cost, there would be new construction (increase in supply) until prices fall to meet the construction cost. In other words the cost of an apartment in any city should have the same floor (unless every inch of the city is already covered in high rises) because new apartments would be built until the rent falls below the construction cost of building more apartments.
But we don't see that because of zoning regulations that prohibit it. (And in part because of property taxes that discourage construction; land value tax is better in cities.)
Are you sure that's the one and only answer? There are some cities with very lax zoning regulations, Dallas or Houston come to mind. And yet we don't see a massive migration from suburbs to the high rises. Are there any cities that could serve as examples to support your theory? It's not like residential high-rises are a recent phenomenon.
You'd have to do a bit more explanation on property taxes - governments stand to collect more property taxes per sq.ft. of land used from high rises than from detached single-family, so a municipality is generally interested in cramming more units into a land lot, not less. How do property taxes discourage construction?
Have you actually compared rents in cities like Houston to the same sized apartments in cities with more restrictive zoning? They're lower in Houston.
The reason people don't live in high rises in Texas cities is that they're so sprawled they don't need vertical construction. San Francisco has almost five times the population density of Houston even though Houston has almost three times as many people.
> How do property taxes discourage construction?
They discourage the property owners. If you own a ten story building on a lot zoned for twenty, adding the extra ten floors looks a lot more attractive before you subtract out the additional property taxes you'll owe forever if you do it.
This is a compounding problem because the property taxes are based on the property value but the property value is based on scarcity, so if housing units become scarce then property values (and thus property taxes) go up and you have to charge higher rents to justify new construction. Which allows rents to go even higher because there is less new construction which further increases property taxes and requires even higher rents to justify new construction and so on
By that logic one should bulldoze the existing 10-story building and stick to owning dirt lots, realizing enormous property tax savings along the way.
The reason you don't see entire cities converted into dirt lots is that in reality things don't work that way.
The developer that builds condos doesn't really have an opinion on property taxes because paying those will be up to condo owners. The developer that builds apartment towers intended for rent doesn't care because the rental operator will take over, and the assessment of a rental property is a function of existing cashflows and comparables, subject to change when assessed at too high of a value.
> property values (and thus property taxes) go up and you have to charge higher rents to justify new construction
In reality large-scale commercial build-outs do not depend on financing from existing renters. A property operator (the principal) typically contributes some cash but also brings in a variety of outside investors. The rest of the sum is raised via fixed-interest debt and is one of the largest areas of US commercial banking. As a rental property reaches stabilization point, the principal conducts another round of outside investments, this time in somewhat worse investor terms, as the property is de-risked and has relatively stable cash flows. The money is used to pay down the commercial loan to a reasonable LTV.
When the plans for a new project show up on the horizon, the fundraising cycle begins again, with principal contributing some "skin in the game", outside investors participating in the first round, and numbers from existing properties being used in a presentation deck sent to the bank in order to secure a new commercial loan.
If everybody financed by raising rents on existing renters, than apartments by some aggressively growing operators (let's say Avalon Bay) would be extremely expensive, while exact same apartments owned by conservatively stable operators (let's say Essex Property Trust) would be extremely cheap. We do not see that imbalance in the marketplace.
It's not that rent < property tax, it's that new construction cost < net present value of future rent < new construction cost + net present value of additional property tax.
> The developer that builds condos doesn't really have an opinion on property taxes because paying those will be up to condo owners.
Net present value of expected future property tax comes out of what the buyer will pay the builder for the condo, and the builder doesn't build the condo when the price he can sell it for falls below the construction cost.
> In reality large-scale commercial build-outs do not depend on financing from existing renters.
How you finance construction has nothing to do with it.
For most people that $1000 is taken away by taxation and UBI is income neutral for them.
>Giving money/help selectively to those who need it right now (and can prove it, i.e. no job but looking for one) is still better than UBI.
No, it's not. If you don't believe me read what Milton Friedman wrote about subject. Friedman suggested UBI or negative income tax because they would not distort markets the way welfare programs do.
Social welfare programs create incentive traps where people have marginal effective tax rates as high as 80-90%. You work and your welfare drops accordingly. Here in Finland marginal effective tax rate in some cases is higher than 100%.
You are talking about inflation. Inflation happens when you increase the money supply.
There is a very easy way to give people a bunch of money without increasing the money supply.
This easy way is called "taking the money away from someone else" aka you pay for it with "taxes".
Under this scheme there wouldn't be any incentive for a business to raise their prices. Imagine that UBI is implemented and imagine it's effects on a business in a mid-sized city, say a restaurant. The business now has an additional 50,000 potential customers, people who can afford to eat out more often due to UBI.
How should the restaurant owner react? He can raise his prices. But that exposes him to competitors who keep their prices the same. He can lower his prices. In which case he will earn less money per plate, but he now has a pool of 50,000 new customers to draw on, so he can make more money on volume. A good restaurateur would lower his prices proactively and try capture a large chunk of this new, larger market of customers.
The point is it's easy to see how UBI could cause prices to go down, and not just up. It's simplistic and misleading to assert that all businesses will start price gouging in response to a UBI. Populations are more complicated that this, and markets are dynamic.
Yes it may "incentivize" some individuals to work, but only by disincentivizing others. It takes money from top wealth producers, discouraging their labor, and gives it to people who aren't producing as much wealth, effectively subsidizing unproductive work. This will make everyone poorer in the long run.
The struggling artist meme is an appeal to emotion. The struggling artists and entrepreneurs are struggling for a reason -- the market does not want their goods or services! They should fail as quickly as possible, not continue to drag on producing things people don't want.
I'll concede that the welfare state has perverse incentives which trap people in poverty, but there are better ways to address it other than doubling down on the mother of all wealth redistribution schemes.
I think that's unlikely, though it depends on a lot of factors (UBI is a pretty general concept, and the specific implementation and numbers matter). It may reduce aggregate GDP, but that's not the same as making everyone poorer, since distribution matters when determining that. If, to take an exaggerated example, the top 10% of earners have their income multiplied by 10x and everyone else's goes down by 5%, "everyone has gotten richer" according to some kind of aggregate metric, but in reality 90% of actual people have gotten poorer. Most economists no longer believe that these kinds of situations are automatically self-correcting through "trickle-down economics", in which just getting out of the way of wealth-creation at the top inevitably lifts all boats.
I'm not trying to be argumentative, but did many economists ever take this idea seriously? I always thought trickle-down economics was just political rhetoric.
We need a 100% inheritance tax! That way the wealth isn't going to people who didn't produce it!
Then you redistribute that money to schools and training programs and small businesses to give opportunities to anyone to become a wealth producer!
This improves the entire human race and not just the rich trust fund babies who haven't produced anything in their lives.
I'm totally with you on this.
Also, do you think the current distribution of incomes is proportional to how much wealth is produced? Does an executive who makes a hundred times as much as a skilled worker work a hundred times harder, or produce a hundred times as much value for people, in some measurable way?
You are forgetting about what the artist wants.
... Friedman and Hayek both advocated for a UBI.
http://www.theatlantic.com/politics/archive/2014/08/why-aren...
Minimum guaranteed income is different than basic income.
However, I cannot imagine that a UBI-related tax would in any way disincentivize me from working, especially if it's applied across incomes.
In fact, even for someone like me, I think the UBI would provide just a bit more emotional security -- knowledge that if a job or investment risk I took didn't pay out, there would still be food and housing for my family.
In direct contravention of your story about artists, I recommend you read this article by Ann Bauer about how being rich is nearly necessary to make it as a novelist: http://www.salon.com/2015/01/25/sponsored_by_my_husband_why_...
Going from anecdotes, it is at least as easy to imagine a future in which better art and writing are created than can be created now as lifestyle security is extended to more creative people.
I'm not a fan of UBI - but it's not 'bullshit' in the manner it's presented.
UBI is really a 'negative income tax' - and it was first proposed by 'Milton Freeman' - a super-duper free market capitalist.
If you take progressive taxation, then make the lower ends negative - you have UBI. The concept came from economists - not socialists.
But yes - it is being promoted as 'yet another form of redistribution' - but it is in many ways more economically sensible than some other ideas.
'Milton Freeman' would be 'God's Voice of Economics' :) :)
I do expect it will influence the number of bullshit jobs that exist to keep people at work. And it might influence the lowest income and most mechanical types of work. Which is fine if we can automate and mechanize those. But I don't expect a lot of effect on more intellectual work.
https://medium.com/basic-income/wouldnt-unconditional-basic-...
>>>It would not be new money, just money shifted from one location to another. This means that the value of each dollar has not changed. The dollar itself has only changed hands.*
There is no sure fire way to reduce the value of a dollar then to redistribute it to people that didn't work for it. The fact that you have to work for the dollar is the thing that gives the dollar value.
Citation needed. The value of the dollar is actually determined by:
1) Foreign exchange markets
2) Debt markets
Regarding automation, see the lump of labour fallacy. Humans will just switch to tasks that aren't automated (this has always been happening and it's happening now). If humans are not needed at all, then we've reached utopia/post-scarcity society.
Humans don't work less because of the hedonistic treadmill. For example, most HNers have enough food and other things to survive which might be considered paradise by people 500 years ago (famines were common back then). Historically, poverty often meant death from starvation.
Our standards of living have been constantly going up, so even though there are productivity gains we end up working more. Of course, that's a voluntary choice so I don't see anything wrong with that.
Even a small amount of charity would provide anybody who can't work at all with sufficient food. Just like how today data storage in hard drives is dirt cheap; and we can provide billions of bytes of storage at nominal cost.
Looking at current society, starvation and mass famines have decreased greatly. Malnutrition is the next concern.
So, in some sense we may have reached post-scarcity for food for a large portion of human population. But there is still scarcity for quality and healthy food, such as fruits and vegetables.
Wait, so then how does inheritance work? Like, your grandmother worked for it, but you just snowboard all year long. What am I missing here?
The guy or gal snowboarding all year is renting a chalet, buying a ski pass, buying gear and food and generally spending money in the local economy.
In the snowboarder's case, someone worked for that money and gifted it to them. Totally consistent if you don't overly focus on the "YOU have to work for it" but rather "SOMEONE has to work for it"
The dollar has lost 97% of its value since the federal reserve was created. To me, having a federal reserve is a sure fire way to reduce the value of a dollar.
I would rather work today for pre-1965 quarters made of silver than a dollar today. The pre-1965 quarter will buy a gallon of gas. The dollar today will require three to buy that same gallon. Proof is in the pudding as they say. The currency is the problem.
There's no reason why NIT needs to involve large amounts of paperwork. NIT only involves income, so a person simply needs to give their income (unlike taxes, which are much more complicated).
The NIT would presumably have a minimum amount given even if you earn 0$. That amount can be given to everybody can't do the paperwork. Then, the amount remaining above that can be distributed as a NIT.
Basically, give UBI to people who can't do the paperwork to cover them. The rest can use NIT.
The time lag is not a necessary property of the tax system. The NIT can be done on a monthly basis.
Anyways, this is just an implementation issue. Either way they both redistribute money.
[0] http://www.econtalk.org/archives/2017/01/michael_munger_3.ht...
My interpretation was that the host wasn't sold on the idea nor on the low estimated tax increases required to fund a UBI (IIRC the guest stated 3-10% increases in income taxes and the host speculated more like 20+%).
After all, if you believe their rhetoric, giving someone $500/mo should be the same as giving them free bread, eggs, milk, some clothes and some movie tickets.
I wonder why... Maybe, the reality is that over time our 'Basic' needs increase. In certain parts of the world shoes are still considered a luxury whereas in others, Nikes and Adidas are considered 'basic'. 50 years ago car ownership was a luxury even in most 'developed' nations, as were televisions. Now they're considered 'Basic'.
The reality is, the people touting UBI as a way forward suffer from having a thoroughly static and isolated view of the world. They fail to see that value creation is what's important, and drives society to further itself. As value creation goes up, the definition of 'basic' increases with it. I'm not for a minute advocating that the current system is anywhere near perfect - the wealthiest in our population are questionable value creators while at the same time there are value creators scraping by in the world so the way we reward people needs a rethink.
I don't profess to know how to solve the poverty crisis and I very much want it to be solved as a citizen of the world. What I do know is that the only way to do it will involve reforming education so that future generations are inspired to advance humankind and create value in the process.
>After all, if you believe their rhetoric, giving someone $500/mo should be the same as giving them free bread, eggs, milk, some clothes and some movie tickets.
It's not "funny", it's the core part of basic income that separates it from state-run socialism. Not making a determination about what is or isn't basic is one of the key points. You give a person their $500 each month and let them determine what it should be spent on. What is basic for one person may not be for another.
Now take your $500 a month and project forward another 50-60 years. What do you think it'll buy you then and why?
By picking a monetary amount - be it $50, $500 or $1000 it IS absolutely making a determination about what's basic. And its doing it based on the living standards and cost of living of today. That's a large part of why its so flawed.
We do need a better way to measure value people create. For example, many geniuses (inventors, thinkers, etc) who do not have business skills live poor while creating more value than many CEOs that can manage, negotiate, raise funds, have connections, etc.
Business people do create value too by connecting people, making things happen, etc., but often their value output is overrated.
Many actors and musicians and sport peopl are overrated too vs doctors who save lives. They worth a lot only because of economy of scale. Everyone knows them and they monetize their followers.
In some way it is a fair world, because we all put in nearly about the same conditions. Well, except our place of birth and genetics, which we have no choice over. But everything else is up to us, which kind of makes it fair because we compete in the same conditions. However, maybe it is a time for a new system. Why not?
As far as the education, the nature will do its miracle. New generations will change everything, they will know what to do because they born in new world.
Everything will work out on its own as it should. It is happening.
The moral/civil question is what is the role of government in an unfair world?
Most governments opt to head down the justice route predominately (e.g. the US's Justice System holding 1/3 of our government powers) while creating a myriad of "fairness" regulations (e.g. welfare programs). The ultimate problem with this approach is people will rarely agree on what is fair. There is no set definition and wants/desires change over time -- even needs do to (like needing a cell phone now vs 20 years ago). This ever evolving definition of fairness is what ensures this debate will rage on indefinitely.
There's an entire philosophy based on the work of John Rawls [0] that codifies the conflation of these ideas [1]. It's not at all a simple matter to strive for justice in an unfair world. Some libertarian folks elsewhere in this discussion have brought up the idea that taxes are theft. On the opposite end of that spectrum, I've heard it argued that property rights are a form of violence. What does it mean for the rights of an individual if, in a hypothetical future, all arable land is owned, fenced off, tended by drones, and guarded with extreme prejudice? A Mad Max-style dystopia sprinkled with little walled gardens.
[0] https://en.wikipedia.org/wiki/John_Rawls
[1] https://en.wikipedia.org/wiki/Justice_as_Fairness
If you give people basic items for free this will go bad. You know the horror stories in development aid how people sell away the stuff they got for free.
And what's even worse: many people turn violent if you don't give them whatever they ask for. So they had to put policemen there all day because they had hit the state workers many times.
You know, I'm a socialist, but these kinds of stories really make me turn libertarian there for a moment.
(This in Europe)
I wouldn't spend any of my UBI on any of those things.
No.
1)
The Industrial Revolution saw a considerably greater degree of automation than we are seeing now.
'Single Engines' replaced dozens of workers, some cases 100's.
Think 'weaving machine' vs. 'individual weavers'.
The 'automation' we have today is mostly 'soft' - do you think MS Word actually replaced 'Secretaries'? Or was it a confluence of things, including the fact that we now have 'Executive Assistants' which do much more than Secretaries ever did.
And what happened during the Industrial Revolution? Wages rose! Unemployment never really went down.
You know all those 'servants' in 'Downton Abbey' - the ultimately left to get higher paying jobs.
I should add - this had also a lot to do with the labour movement.
2)
The major source of 'job loss' in Industrialized countries is not 'automation' - it's 'outsourcing' to India and China.
'Automation' has been going on in a very aggressive way for over 200 years - and yet we still have fairly low levels of unemployment.
Entire new sectors have developed: entertainment, professions, services. There were 5 channels in 1950 and now 500. There weren't many pro athletes in the 1900's - now their are tons - and massive industries around them. We didn't really provide much in terms of healthcare in 1900 - now maybe 20% of the economy is healthcare. Very few used to go to University, let alone finish highschool - now education is a massive industry.
There is always 'work' that can be done so long as we can improve each others lives.
So - the question of 'UBI' comes down to how we decided to spread the surpluses. Do we give some surpluses to those who are not directly contributing?
Hint: we already do. Especially in socialized countries - we give massive subsidies to non-working people: healthcare, parks, security, all sorts of other services. Power subsidies (electricity is subsidized here in Quebec). We just don't give them spending money.
I think UBI is an interesting idea, but a dangerous one as well.
I live in Montreal, many of the people in my neighbourhood are 'artists' - photographers, actors - but really they all work full time in services.
You can get a 1/2 decent, small but respectable flat around here for $400 a month - and I don't mean grungy. It's entirely possible to live decently off $1K a month (remember healthcare is already paid for by other members of society).
I feel that with UBI - my neighbourhood would fall flat - because everyone would quit their service jobs (or work a lot less) - because they only need UBI + a little bit of extra cash - i.e. '1 day work weeks' - I think would be the preferred mode of existence for vast numbers of the young people around here. They would live a 'very low materialism' style of living, and be happy with it.
I think a 'means tested' form of UBI (not really 'Universal' ...) instead of welfare would be better.
In America - a better idea than UBI might simply be to make sure that everyone has access to healthcare, in a slightly-more-socialized way. I don't mean 'single payer' - but something. Having better healthcare for everyone would put people on a much more equal/fair footing - AND probably be good for the economy directly/indirectly. Solve that problem and you're already a huge step forward in trying to provide for better social outcomes.
Could you explain why you mean by "fall flat"? Do you mean that the businesses that currently employ the service workers would close because they would be unable to find anyone to work for them? It seems likely that they'd need to increase the wages paid for unrewarding positions, but that this might be offset by the greater number of locals who can afford to patronize them.
I live in Montreal, many of the people in my neighbourhood are 'artists' - photographers, actors - but really they all work full time in services.
'1 day work weeks' - I think would be the preferred mode of existence for vast numbers of the young people around here.
Presumably when you say "1 day work week", you do not include the time spent working on the projects personally important to these people? I view it as a strong positive that more young people would have more time to pursue their artistic interests, and presume they would do so. There may be negatives that should be carefully considered, but don't you see this as something we should strive for?
They would live a 'very low materialism' style of living, and be happy with it.
So more art gets created, the lifestyle is less materialic, and people are overall happier? And you are arguing against this idea? Would I be right to guess that you are not currently working a poorly paid job you hate in the service industry while trying to find time to pursue the art you love? I don't mean that last question as an actual attack, but I do wonder if your self-interest might be different than that of the majority of your neighbors.
No.
Coffee Shops etc. already run on pretty low margins -> they'd be out of business. Any business wherein labour is a significant input cost and where wages are low enough that people would quite - would shut down - and that's a lot of businesses.
"So more art gets created, the lifestyle is less materialic "
That's a choice we can make today - we don't need massive government intervention to make that decision for us.
It also means a significantly reduced output:
The value of the 'art' getting created is significantly lower than the 'service' they provide making coffee - or else that art would be getting created.
It's easy to prove: if their are were 'worth something' to you and I, we'd be buying it. We're not. But we will however hire them to make coffee for us.
"Would I be right to guess that you are not currently working a poorly paid job you hate in the service industry while trying to find time to pursue the art you love? I don't mean that last question as an actual attack, but I do wonder if your self-interest might be different than that of the majority of your neighbors."
I don't care what my neighbours 'aspirations' are.
It is not their right to take my money to pursue their aspirations.
If they want to make art that nobody wants to buy, that's fine by me, but I should not have to pay for their rent so they can do that.
They can serve coffee, get a better job, make better art that people want to buy - it's entirely their choice, they are entirely capable.
They can have whatever lifestyle they want to build for themselves.
If they are handicapped, or ill, that's another story, but otherwise, their life is their job, not mine.
Possibly, assuming nothing else changes, and they can't raise their prices or automate so as to require less labor. But others are claiming that the problem with UBI is that all the prices would go up, presumably including those at the coffee shop. And if everyone in the neighborhood had another $1000 per month to spend, don't you think that at least some of the coffee shops would see increased business?
The value of the 'art' getting created is significantly lower than the 'service' they provide making coffee - or else that art would be getting created.
Maybe, but this bothers me in two ways.
First, it assumes only those with the surplus money to buy art are allowed to determine the value of art to society, and that those will the inability to pay for art have no say. Isn't it fair to allow these non-rich art lovers to democratically vote for policies that result in more art?
Second, it implies that the value of art can be completely judged by its market value of at the time it was created. The more creative geniuses we have serving coffee to rich folk, the fewer works of art we'll have in the future. Obviously most artists aren't geniuses, but I think this tradeoff at least merits some consideration.
if their are were 'worth something' to you and I, we'd be buying it. We're not. But we will however hire them to make coffee for us.
There is lots of art I appreciate and would like to encourage, but I don't have money to support it. I've never felt comfortable paying someone to make me hot beverages --- I'd much prefer self-service and greater automation.
I don't care what my neighbours 'aspirations' are.
Perhaps that's the big difference in our views. I care tremendously about whether those sharing my society feel they are living fulfilling lives. UBI might not be the best way to accomplish this, but I guess I hadn't considered that you might not consider this to be a benefit.
1) coffee shop pay would go up in the short term. Perhaps some artists would come back for $20 an hour. Perhaps some stay at home moms would start working as the pay could justify childcare.
2) some coffee shops would turn into robot booths. Put in money get out coffee. There is very little technical need for humans in a coffee shop. Maybe 1 person to keep people behaving well and prevent someone from pooping on the table. 0 reason a human needs to pour coffee in a cup or wash dishes or sweep the floor.
Seems not a bad outcome. I doubt that many people find meaning in pouring coffee. I think it would be a net gain to all.
Let's for the sake of the argument assume this is true. But if people really believe this - why don't they stop producing kids (and advocate other people to do so, too)? I find it really crueling to produce children that will have such a useless and crueling life.
Problem #2: Disability most definitely does not "work great". If you take disability, you can be charged with a felony for every seeking work again. It is a side-track to poverty for the remainder of your life, despite the fact that you may be re-employable at some time in the future (possibly due to innovations in technology or changes in the workforce). Additionally, despite the name of the program, not everyone who accepts "disability" (SSDI) is incapable of working. After trade deals like NAFTA, there is a structural change in some industries and regions that qualifies workers in that industry (usually ones where the trade deal is expected to offshore jobs) for "disability" even though their body and mind are perfectly capable of working again. It would be better to give them a UBI-like program which doesn't dis-incentivize them to permanently leave the workforce.
We have safety nets like "Section 8" (housing vouchers), "Food stamps" (grocery vouchers), unemployment insurance (UBI-like fixed payments), but each of these is a step function. As soon as you get a job that pays above the cut-off range, you lose the benefits and can have a net loss in purchasing power. A UBI to replace these programs is superior because there would no longer be a penalty for finding a job or making above the cut-off.
Although basic income is obviously a well-worn topic, this article seems a bit more substantive than average. So we'll try downweighting this thread less than we usually do for well-worn topics.
It looks pretty sleazy when a young thread with high engagement (comments and upvotes) nonetheless slides to the second page.
The approach we've taken re transparency on HN is not to make all the data public but rather to answer users' questions about how the site works or what's going on in specific cases. That seems to be the optimum.
Not that I am particularly worried, this will never happen in the United States. China on the other hand, I bet they would love to tie this to their human scoring system.
I have the same fear, that this would be a tool used to encourage conformance. If not initially, then in time. Even in the US (but as you say, we're not likely to adopt basic income in the US.)
One would hope, however, that this would become a basic right, and not one that can be revoked for any reason whatsoever, even criminal convictions (perhaps especially criminal convictions.)
Also, basic income is a concept coming straight from liberalism. The comparison to communism isn't even remotely accurate.
Well, there was basic income in some communist countries and it failed on a social level.
Communism is the government telling you what your job is and giving you a minimal amount of resources and prohibiting you from earning a single extra dollar, and your choices are either take it or escape to West Germany.
A basic income is the government unconditionally giving you enough money that you don't starve. Then if you want to e.g. own a car or send your kids to college or live in a city, you have to go out and get a job, which you can do however you like.
Not really. That was replacing human workers with new machines. New factories were needed to build those new machines. New supply chains were needed to supply those factories. New materials were being used in manufacturing.
Replacing those human workers required so many new things that it created a vast number of new job, much more than were lost.
Now we are tending to replace human works with old machines. Take a self-driving truck. That's just a normal truck (an old machine), with some computers (old machines) added, some motors (old machines) added to actuate the controls, and some sensors (old machines) added to provide input to the software.
Note that not many new physical things are required for self-driving trucks. The novelty is in the combination, and in custom software and some custom electronics. Custom software and electronics do not generate many jobs--it takes the same number of programmers and electrical engineers regardless of whether you are making one truck or a billion trucks. For the non-new physical things needed, like motors to move controls, orders go up at motor factories and maybe they have to add a shift and so that creates some jobs. But the motor factory is likely highly automated, and so adding a shift just represents a handful of jobs.
In fact, basic income is much more capitalistic than existing social safety net systems because it maintains the assumption that if disadvantaged people are actors in the market, that the overall system will be more efficient than specific government-specified handouts.
Really the question underlying basic income and safety nets in general is to what extent every citizen in a modern society should have access to goods, regardless of their contribution. Once society has decided how much access such citizens should have, welfare vs basic income becomes a question of efficiency and optimization as opposed to ideology.
As for automation not reducing overall jobs--as someone who works in automation I don't see how it will magically create more service jobs. There are few jobs today that employ large numbers of people that are not in danger of being replaced by automation--and the whole point of automation and efficiency is to minimize the number of people required to maintain the system. I do think service jobs become the way people become gainfully employed in an automation world, but that society will need to expand its definition of what is a job worthy of recompense--for example someone could decide to become an artist, and actually have that be a renumerative profession.
Absolutely this. And if we're honest with ourselves - if someone will die for want of something relatively cheap that the state can easily provide (like food, water, shelter, or antibiotics), can you really justify condemning them to death because they can't afford it? Sure, you want to encourage people to contribute to society, but do you really want that encouragement to be the threat of annihilation?
https://en.wikipedia.org/wiki/Shadow_work
> (Craig Lambert) includes the rise of technology and robotics as forces leading to the growth of shadow work
You could keep raising the basic income to keep pace, but it would require raising it more every time and sooner than the last time (exponential). Inflation can be quite damaging because not everything inflates at the same rate. For example salaries are pretty slow to inflate compared to the prices for things like gas or food. This is why a mason could afford to buy a car outright on their salary in the 1950s but almost everyone needs an auto loan to buy a car today.
You could try to stop inflation using price controls but this almost always leads to supply shortages. For an example look at rent ceilings in NYC, or the way grocery stores functioned in eastern bloc socialist countries. They had plenty of cash and prices were very cheap but there was nothing on the shelves to buy.
tl;dr Basic income would just create a new $0 mark.
Maybe its just a SV thing, but having my (share) house maintained by an army of Latinos for a fraction of my income makes me feel incredibly uneasy. The other one that gets me are the car washes along El Camino where white people drink coffee as their cars are tended to by Latinos.
Basic income will kill businesses that rely on cheap labour, as suddenly incremental incentive to work will be minimal at $9/hour (why work only to double my anual income?). To restore the incentive wages will also need to rise, and the net result will be more expensive services accessed by a smaller percentage of the highest earners.
On the margin, basic income gives people a bit more freedom to make their own choices. I think the price for services in Silicon Valley would go up, but I suspect more because people can take basic income with them when moving somewhere cheaper. With the extra money, low wage/low cost places are likely to become more popular.
In particular, there's little reason to believe that basic income would be bad for Walmart. They'd sell more and their workers would be better off.
There's no reason for price controls and they wouldn't help.
On the margin this is increased freedom, security, and buying power for people at the bottom. How they would use it is hard to predict, but I think we can look at retirees to get some idea about which areas of the country become more popular.
Whether it be "food stamps" (vouchers for food, reimbursed as governments like a UBI), SSDI disability (fixed payments due to work disability or structural changes in an industry), unemployment insurance payments (temporary fixed payments), Social Security (long-term fixed payments), Section 8 housing (vouchers for housing), etc, there are plenty of examples where the issues you raise are already affecting the recipients. I've heard anecdotally that many doctors have ceased accepting MedicAid (suggesting that medical inflation has already outpaced the government's ability to reimburse).
I think your argument should focus more on why the UBI is not any better than the morass of existing programs, some of which have disincentives for people getting off of the program. I'm not yet convinced is is either better or worse, but I don't think inflation is a deal-killer for UBI because it's already an existing issue in currently running programs.
Also, from the historical prospective, governments are the ones who are responsible for most killings of people on a large scale. How, then, can an intelligent person trust a government?
Because that's just the better option. Somebody is always going to gather a lot of power with a big organization.
The choice you get is between an organization whose purpose is to serve the masses (democratic goverment) and organizations whose purpose is to serve very elites (corporations, organized crime).
Regarding your specific point regarding killing people: I think you are oversimplifying here. With the opium wars and the subsequent flooding of china with opium, British trading companies probably already firmly hold the record for killing people on a large scale. For more recent examples, I would point towards the commercial part of the US Industrial-Military complex.
But yes, the government is then frequently instrumentalized to do the actual killing. I would assume this to become harder the stronger and more democratic a government is.
Recall the history of labor unions in the U.S. The AFL-CIO was formed in 1886. The 1890s and early 1900s featured strikes where there actually was shooting in the streets, widespread rioting, bomb-throwing anarchists, and general pubic and social unrest. It took 2 world wars and a great depression before the U.S. got to the "golden age" of labor union capitalism that certain people want to recreate today.
If you don't test out possible solutions on a small scale before the old social order disintegrates, you get things like the Communist Bloc, where revolutionaries overthrow the old system, but then install a new system that sounds good in theory but really doesn't work in practice.
The argument tends to circle around the fact that the existing programs dis-incentivize getting off disability or Section 8 because the recipient is penalized in a step-function way (as soon as they get a job, they may become ineligible or could be charged with a crime). A well crafted UBI such that it's an income tax rebate (not to be confused with tax credits or tax deductions) to replace the many smaller safety-net / welfare programs eliminates the disincentive for people to get off these specialized programs that already exists.
While I don't think Americans are well informed enough to make a rational decision (and will likely be swayed by emotion), I think there are reasonable arguments for UBI / BIG.
[1] http://econlog.econlib.org/archives/2017/01/munger_on_the_b....
"You are taking away my retirement I earned and giving it to everyone?"
"Don't touch my medicaid!"
"They are trying to kill the soup kitchens; look at these children we feed."
Or whatever. There is such aggressive fighting for scraps that no one wants to make a big-picture shift that might have unknown societal repercussions.
This is the biggest challenge to UBI becoming a serious mainstream topic in the United States IMHO. It takes me hours of conversation explaining UBI to any of my southern/conservative family members to get to a point where they at least acknowledge that it isn't just a fancy word for socialism... and even then they still don't like it.
Granted, I'm their left coast liberal silicon valley nephew so they aren't really interested in anything I have to say anyway.. but maybe thats the point. To a lot of Americans it just sounds like free liberal hand outs, no matter how much data/math/science/economics go into it.
Hopefully smarter people than I can figure out how to message UBI to that part of America.
https://youtu.be/82SG_EpCsVs?t=1524
And a 1968 clip from an interview with William Buckley Jr.:
https://www.youtube.com/watch?v=xtpgkX588nM
http://www.politifact.com/punditfact/statements/2015/aug/27/...
Which I guess is the point of the war on drugs, but that hasn't worked out so well.
For example, say you're healthcare lobbyist and you want to boost your business selling drug X, but patients who need X cannot afford the amount you want to charge. What do you do? Lower the price? No, you will lobby for making expenses on X tax-deductible. If you succeed, you will be forcefully taking money from people who don't need X, giving them to a person who needs X, who has no choice but give it to you. This has happened with healthcare, education, housing, etc. (and nobody is shooting anyone on the streets)
UBI removes the need for tax breaks, reducing lobbyists' ability to direct consumer spending, and that's why it won't be implemented any time soon.
Let's assume for the sake of argument that the US Congress actually passed a UBI bill that was simple, elegant, and did not have a bunch of complicated amendments tacked onto it. Let's say they passed a bill stipulating that every person in the United States would get a check from the government every month, and that every check would be for the same amount. Let's also assume that the bill replaces every other welfare program with UBI, like the libertarian proponents of UBI hope will happen.
Even if that happened (and it certainly would not), it would only be a matter of time before it gets messed up. There are a lot of reasons the current system is the way it is. There are many reasons the voters would want some people to get more money than others under UBI, and many of them would be convincing. For example, should single mothers get more UBI money? What about cutting benefits for convicted felons? What about more UBI money for people in high-cost-of-living cities like New York and San Francisco? What about more UBI money as a form of affirmative action for certain racial groups? People will vote for some of those changes.
We would therefore end up re-creating a lot of our current welfare programs within UBI, for the same reasons we created those programs in the first place. Tyler Cowen has written more persuasively on this topic here: http://marginalrevolution.com/marginalrevolution/2013/11/wha...
UBI proponents have a few questions to answer: how can we afford it, how will it work, and how can they prevent it from being turned back into our current welfare programs under a different name? And how can they prevent the voters from simply voting to give themselves more money, thereby bankrupting the government?
I think I understand your position better now, though. It's not so much about whether voters can vote themselves more money - it's about whether they have the incentive to. I don't agree, because I think shared interest in the stability of the system would be a strong opposing force, but I can see where you're coming from.
Why not just cut out the middle-man (government bureaucracy) and provide someone with a monthly income from your own pocket?
This could be accomplished by individuals with high income (like many here), or by voluntarily pooling your money together.